Who will save Thames Water?
By Niladri Singh
The British government and water regulator Ofwhat are drawing up contingency plans to bring the country’s biggest water supplier, Thames Water under a ‘special administration regime’, effectively under state ownership should it fail.
The company which caters to 27 per cent of the British population is under a 14 billion pound debt. It has been heavily criticized over its ‘five-year high leakage rate’ and a series of sewage contamination alongside mounting bills for the public. It has also faced public scrutiny over handing out big bonuses to bosses and shareholders.
On June 27, Thames Water CEO, Sarah Bently stepped down with immediate effect and forgo her bonus over the company’s handling of sewage pills. Despite her payout, her total earnings still racked up to £1.5 million.
In 2022, water companies in England alone released raw sewage into rivers and the sea 301,091 times, an average of 825 times a day according to data from the Environment Agency.
Thames Water is owned by a number of pension funds and sovereign wealth investors including the BT pension scheme, the Canadian funds Omers and British Columbia Investment Management Corporation, the China Investment Corporation and the UK lecturers’ pension fund USS.
Australian bank Macquarie, its former owner was accused of asset stripping as it extracted billions in shareholder dividends while Thame’s debt soared.
The company is now in dire need of keeping up with infrastructure and workforce to stop it from collapsing. It is currently headed by joint interim chief executives - Alastair Cochran and Cathryn Ross.
Henley Mermaid, a clean water campaign group said, “It doesn’t matter much who the chief executive of Thames Water is, it’s the system that is rotten to the core.”
Speaking to the House of Commons on Wednesday, water minister Rebecca Pow said that the water sector is “financially resilient’ and refused to comment on the situation with Thames Water.
She added that customers “will not be impacted” if the company goes under “and there is a process in place if necessary to move us to the next stage.”
In 2021, when energy supplier Bulb faced a similar crisis, the government rescued it through the same ‘special administration regime’, continuing to supply gas and electricity to its 1.7 million household customers. It was purchased by rival company Octopus Energy a year later.
It has been reported that water bills in the UK could rise by an average of 25 per cent between 2025-2030. Prices could increase from an average of about £450 to £680, plus inflation, in parts of the country.
Water quality and sewage are set to be big issues for several voters around the country during election season.
Darren Jones, Labour MP who chairs the parliamentary business and trade committed told BBC4’s Today programme, “These companies have been allowed to not invest for the future, even though we know in many ways what we needed them to do for the future, and the regulators have allowed them to get away with it.”
The question still remains, whether the company goes under or the government applies the ‘SAR’ will it be the public that bears the brunt of failed corporate behaviour and poor regulation?