Thames Water issues: ‘Absolutely nothing’ will occur with clients’ payments, says minister
Thames Water clients have been assured that “absolutely nothing” will occur to their payments or provide, because the closely indebted agency scrambles to boost money from traders to forestall collapse.
Ministers have continued efforts to reassure the general public as Britain’s largest water firm struggles beneath a £14bn debt pile, with the federal government mentioned to be laying the groundwork for the firm’s emergency nationalisation.
Health minister Neil O’Brien informed Sky News: “They are still in the process of finding further resources from their own shareholders and that’s the first place they should look to, obviously.
“Of course the federal government does have contingency plans if this does turn out to be an issue.”
Politics Live: Boris Johnson allies to be named in special report on interference in partygate probe
Mr O’Brien refused to say if the utility agency might be taken into public possession as a final resort, insisting he was “not able” to disclose what the contingency plans are.
But in a message to Thames Water clients he mentioned that regardless of the consequence: “Absolutely nothing is going to happen in terms of either their bills or their access to water, we have contingency plans – like we do in all of these network utilities – to manage any difficult situations.”
Several stories on Thursday steered issues about Thames Water’s funds had now broadened to different companies within the trade.
Industry regulator Ofwat responded: “Over the last day or so, there has been a lot of commentary about financial resilience in the water sector with considerable focus on Thames Water in particular.”
It added: “Overall, the sector is continuing to attract international capital and is especially attractive to long term investors such as pension funds. Indeed, there has been an additional equity injection of around £2bn since 2020, with companies acting to strengthen their financial position.
“Ofwat will proceed to maintain firms’ monetary resilience beneath shut scrutiny and work with firms to make sure they take motion to make sure that they’ve the monetary backing to ship for patrons and the setting.”
On Wednesday, Thames Water said it was working “constructively” with shareholders to secure extra cash.
The company, which serves 15 million households, said that it needs “additional fairness funding” on top of the £500m it raised just three months ago.
The statement came after Sky News revealed the government is discussing placing Thames Water into a special administration regime (SAR) that would effectively take the company into temporary public ownership if it collapses.
Such an insolvency process is rare and was used when the vitality provider Bulb collapsed in 2021, sparking issues that it might value taxpayers billions of kilos.
Click to subscribe to the Sky News Daily wherever you get your podcasts
Rebecca Pow, the water minister, didn’t say how a lot a authorities bailout might value when pressed on the matter by Labour within the Commons.
She insisted the water sector as a complete is “financially resilient” and the federal government is assured that Ofwat is “working closely with any company that would be facing financial stress”.
Read extra:
Ministers weigh contingency plan for collapse of Thames Water
Pressure on ‘rip off’ water industry unlikely to go away any time soon
Kemi Badenoch, the enterprise secretary, admitted she is “very concerned” by the scenario.
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 huge rewards to high bosses and shareholders.
On Tuesday, Thames Water chief govt Sarah Bentley stepped down with immediate effect amid mounting worries over the monetary stability of the corporate and criticism of her £1.6m pay packet regardless of the corporate’s environmental efficiency.