Thames Water could make 'public pay for its failures' amid proposals to hike bills by 44%
As well as being saddled with huge debts, the company has also come under intense scrutiny after missing sewage spill and leakage targets.
Jacob Rees-Mogg says Thames Water ‘must fail’
Campaigners have accused Thames Water of making the "public pay for its failures" following proposals to raise customers’ bills by more than £50 a month.
The water company warned bills could surge by 44% because it wants to increase spending by £1.1 billion while revealing another potential £1.9 billion investment in its network.
The utility giant – Britain’s biggest water firm, with 16 million customers in London and the Thames Valley region – faces crumbling under the weight of £15 billion of debt.
Matthew Topham, lead campaigner at We Own It, said: “It’s absurd. A company with a complete monopoly over an essential service — something you cannot live without — has got itself to the point of insolvency.
“And today, its latest business plan proposes raising bills by 44% in real-terms in just five years.
“Let’s be clear: this is an attempt by the reckless shareholders behind this business to get you, the public, to pay for its failures. That is unacceptable.”
Thames Water has faced huge public scrutiny for sewage spills into the nation's waterways.
It comes as the firm's shareholders pulled a £500 million emergency funding package that was due to be paid at the end of April.
The company had £2.4 billion cash available as of March, enough for it to remain solvent for the next 15 months.
Mike Keil, chief executive of the Consumer Council for Water, said: “On the surface the proposal for more investment from Thames Water is a positive step for its customers that have endured some of the worst customer service in the sector.
“We should not lose sight of the fact that only 16% of its customers thought the company’s proposed bill rises in its five-year plan were affordable.
“This announcement appears to offer nothing to ease the fears of those already struggling to pay.”
Thames Water is ring-fenced from its holding company Kemble, which has a £190 million loan due for refinancing by the end of this month – a debt that the group has already warned it will not be able to repay.
Thames Water is said to be in ongoing discussions with its existing shareholders – which include the Universities Superannuation Scheme (USS), China’s sovereign wealth fund, a Canadian pension fund and the BT Pension Scheme.
Ofwat is due to give its initial decision on the proposed business plan, known as PR24, on June 12.
Liberal Democrat Treasury spokeswoman and MP for Richmond Park, Sarah Olney said:
“All Thames Water are doing is throwing more money down the drain. Ministers must ensure millions of households have a water company able to keep the taps running, and actually invest to end the sewage crisis.
"It would be an absolute disgrace if customers are forced to foot the bill for Thames Water's shambolic failings. Ofwat cannot allow these bill hikes to go ahead.
“The Liberal Democrats will be tabling a Bill in Parliament on Monday, which would immediately put Thames Water into Special Administration.
“This is the only way Thames Water can become a financially safe company which cares about the environment.”
Thames Water chief executive Chris Weston said: “Our business plan focuses on our customers’ priorities.
“As part of the usual ongoing discussions relating to (the business plan), we’ve now updated it to deliver more projects that will benefit the environment.
“We will continue to discuss this with our regulators and stakeholders.”
