Ministers work up Thames Water plan as regulator retains watch on sector money owed
M
inisters have regarded to allay fears across the influence of Thames Water doubtlessly going beneath because the regulator vowed to work with the sector to take care of its debt ranges.
Work and Pensions Secretary Mel Stride stated there have been “contingency plans in place for any eventuality” as Thames Water battles to finance the £14 billion of debt on its books following rate of interest rises.
It comes as a number of studies urged issues about Thames Water’s funds had now broadened to different companies within the business.
The Times cited a Whitehall supply as saying: “A lot of these companies are highly geared and struggling.
“There is a worst case scenario where other companies end up in the same place as Thames Water.”
The Government has contingency measures for precisely the form of circumstances that will play out right here but to be seen
A Government supply identified that business regulator Ofwat raised the difficulty in December in its 2021/22 Monitoring Financial Resilience report, with Thames Water, Southern, Yorkshire, SES and Portsmouth talked about.
Thames Water is looking for to lift money from buyers because it struggles beneath a £14 billion debt pile, with the Government stated to be laying the groundwork for the agency’s emergency nationalisation.
The utility big is the UK’s greatest water provider, serving folks throughout London and the South East.
In an announcement on Wednesday night, Ofwat stated it has been “clear that Thames Water has significant issues to address” and that it wanted to “improve their financial resilience”.
But the watchdog stated the water sector remained a pretty funding alternative.
A spokesman stated: “Ofwat will continue to keep companies’ financial resilience under close scrutiny and work with companies to ensure they take action to ensure that they have the financial backing to deliver for customers and the environment.”
Senior Conservative Cabinet minister Mr Stride instructed Sky News’ The Take With Sophy Ridge programme that he couldn’t touch upon the “financial position of a private company” when requested about Thames Water’s place.
But he stated that “water will continue to flow” regardless of the end result.
“The Government has contingency measures for exactly the kind of circumstances that may play out here yet to be seen. And that’s basically where we are with it,” he added.
On Channel 4 News, Mr Stride, a former Treasury minister, stated he “disagreed” with a suggestion that water privatisation had not labored within the nation’s monetary curiosity.
“I don’t think it has been an absolute disaster,” he instructed the broadcaster.
Thames Water, having confirmed it’s working with shareholders to safe the money it wants, has stated it requires “further equity funding” on prime of the £500 million it raised simply three months in the past.
On Tuesday, Thames Water chief government Sarah Bentley stepped down with fast impact amid mounting worries over the monetary stability of the corporate.
The agency is now reportedly racing to lift £1 billion from buyers to shore up its funds, with AlixPartners stated to be advising the agency on turnaround plans.
Thames Water – owned by a consortium of pension funds and sovereign wealth funds – has come beneath stress in recent times over its poor efficiency in tackling leaks and sewage contamination, whereas dealing with criticism for handing out massive rewards to prime bosses and shareholders.
The group’s shareholders embody Chinese sovereign wealth fund China Investment Corporation, UK personal pension fund the Universities Superannuation Scheme, and Abu Dhabi Investment Authority subsidiary Infinity Investments.