In a bid to survive its funding crisis, Thames Water has proposed a £1.1 billion spending boost and an additional potential £1.9 billion investment in its network over the next five years to 2030. The plans, submitted to regulator Ofwat, could see average customer bills increase by around 44% by 2030.
As Britain’s biggest water firm serving 16 million customers in London and the Thames Valley region, Thames is battling to stay afloat with £15 billion of debt on its books. Its new £19.8 billion business plan earmarks extra funds for environmental projects after Ofwat imposed regulations that made its original £18.7 billion proposal from October “uninvestable”.
Thames CEO Chris Weston said the updated plan “focuses on our customers’ priorities” and will “deliver more projects that will benefit the environment”, following discussions with regulators and stakeholders.
The company’s investors have refused to provide the cash to plug its funding gap. This has prompted speculation the government could effectively nationalise Thames by taking on its debt burden. The firm had £2.4 billion cash available in February to remain solvent until next year.
Under the revised proposals, bills would initially match the previously planned 40% five-year increase before the potential additional £1.9 billion outlay leads to around 44% total hike by 2030.
Thames is preparing to approach lenders to fund the spending plans, which could mean taking out a new loan, after shareholders withdrew a £500 million emergency funding package due at the end of April.
The sewage scandal-hit utility has drawn criticism for missing sewage spill and leakage targets, compounding scrutiny over its financial mess. Liberal Democrat Sarah Olney blasted the “shambolic failings” and said her party will table a Bill in Parliament on Monday to immediately place Thames into special administration.
Ofwat is due to give its initial decision on the proposed business plan, known as PR24, on June 12.
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