BNR – Thames Water was said to be having trouble raising the funds required to cover its massive £14 billion debt burden.
Water costs could increase in 2025 to pay for the expenses of enhancing suppliers’ services, according to the head of the regulator Ofwat. The measure comes after the largest suppliers were heavily chastised for their past performance on water contamination and leak sealing.
Many are also significantly in debt, with Thames Water presently facing a government takeover. Ofwat Director David Black disputed the agency had failed to adequately oversee the sector.
He did, however, concede that there were a few tough lessons to be learned. He also acknowledged being angry over the high CEO salaries in the water business.
Despite the critiques, Black predicted that customer bills would grow as firms strived to make improvements. “We expect companies will request increases in bills at the next price review to fund large investment programmes.”
Former Environment Secretary George Eustice predicted on Wednesday that bills will climb by around £42 in 2025.
However, such forecasts evaporated into thin air after the Times revealed expected hikes of up to 40%. Eustice disputed the number, claiming it would be “far lower.”
Water UK stated that any increases would be up to the regulator.
Debt of Thames Water
Thames Water was said to be having trouble raising the funds required to cover its massive £14 billion debt burden.
The company has been heavily chastised for wastewater spills and leaks, and it faces severe pressure to enhance its services.
Thames might be placed in a “special administration regime” if it is unable to acquire the funds, according to Black. Thames has till the “early part of next year” to get the money, he said.
When asked if consumers would have to pay up the cost if funding was not available, he said, “No.”
Ofwat says it continues to wait to see how Thames Water intends to address its finances, and that the firm will need to acquire “substantial” funds. Talks are now underway to get the additional funds.
The regulator has been accused of failing to adequately monitor the sector.
However, Black stated that firms were accountable for their financial arrangements, not Ofwat, which was entrusted with consumer protection.
Last week, Thames Water received a fine of £3.3 million for pouring undiluted wastewater into rivers near Gatwick Airport in 2017.