Thames Water asks watchdog to let it charge even higher bills
Thames Water is asking the competition regulator to allow it to charge customers even more over the coming years than had previously been granted.
The company has already been allowed a 35 per cent rise in consumer bills over the next five years by water regulator Ofwat, after Thames had previously lobbied for a 59 per cent hike.
Now, it wants the Competition and Markets Authority to review Ofwat’s decision, a move that chairman Adrian Montague said is “in the interests of our customers and the environment”.
The move is likely to spark further controversy among politicians and consumer groups, who have already expressed outrage at Thames’s upcoming bill increases.
Those have come as the company has actively tried to defend paying large bonuses to senior executives while it has seen worsening performance on sewage pollution.
The company even threatened to increase the salaries of its top directors if Ofwat follows through on plans to limit bonus payments.
Thames is also on the verge of financial collapse.
It has racked up a roughly £19bn debt pile, and only has enough cash to see it to March 24.
It is waiting for a court decision in the coming days which would allow it to take out another £3.3bn loan from a selection of large hedge funds, asset managers and other lenders.
They include Abrdn, Apollo Global Management, Elliott Investment Management, Invesco and M&G.
The emergency loan has an unusually high interest rate of 9.75 per cent over two-and-a-half years.
It is designed as a temporary measure to keep it operating while it finds a new source of permanent funding.
Mr Montague said the appeal is aimed at “putting the business on a long-term stable footing so we can succeed in our turnaround, and build and maintain an infrastructure that supports growth and can withstand the effects of climate change”.
He said Ofwat’s current allowance will “impact our ability” to fund the improvements needed to its vast network of pipes, sewers and drains, which are creaking from a severe lack of investment over recent decades.
If Thames does not get the emergency loan it will likely fall into Government hands until officials can find a new owner.
Mike Keil, chief executive of the Consumer Council for Water, said: “Customers of Thames Water are already facing steep bill rises and they will be incensed the company now has the temerity to pursue an even larger increase.
“This is a company which has a poor track record on service delivery and customer complaints, so people will rightly question why it should be trusted with even more of billpayers’ money.
“People want investment to improve services but they also expect value for money and to be treated fairly.”
It comes after Ofwat launched an investigation into Thames Water over concerns it will not complete more than 100 environmental schemes funded by customers.
The regulator said earlier this week that it will probe whether delays to the plans mean England’s largest water firm has breached its licence.
The schemes were aimed at making improvements to water companies’ environmental impact, such as through upgrades to sewage treatment works and reducing wastewater spillages.
Thames pledged to carry out 812 schemes as part of a wider national programme between 2020 and 2025, to meet national regulations.
But Ofwat said it was told by the utilities giant that it would be unlikely to complete more than 100 of these schemes by the end of March deadline.
Press Association