Indebted UK water supplier proposes massive bill hike

Indebted UK water supplier proposes massive bill hike
by AFP Staff Writers
London (AFP) Aug 28, 2024

Britain's largest water supplier Thames Water on Wednesday said it needs to massively increase what it charges customers, saying that spending cuts proposed by the industry regulator were "not tenable".

The company -- dogged by financial troubles -- proposed a more than 50 percent increase in bills over the next five years to finance what it says are "much needed" investments.

Regulator Ofwat has already rejected an initial proposition by the company to increase bills by 44 percent by 2030, deeming that certain proposed expenses were "not well justified".

And in its recommendations for water companies last month, Ofwat proposed capping bill hikes at 23 percent over the next five years, and imposing spending limits. It will make a final decision in December, following a consultation.

Thames Water, which serves around 16 million homes and businesses in London and elsewhere in southern England, has been riddled with debt and has faced fines and criticism over failures to plug raw-sewage discharges in rivers.

Thames Water has now said that the proposed spending cuts would make it harder to attract investors.

Bills could rise by as much as 59 percent by 2030, bringing them to an average of GBP 696 ($920) a year, it said in its response to Ofwat.

While it rejected spending cuts and "unachievable" targets, Thames Water said it would accept "many" Ofwat recommendations including water performance commitments.

"The money we're asking for from customers will be invested in new infrastructure and improving our services for the benefit of households and the environment," said Thames Water CEO Chris Weston.

"They are not being asked to pay twice, but to make up for years of focus on keeping bills low," Weston added.

He also said the company would introduce an "improved social tariff for those struggling to pay", increasing the number benefiting from the support by nearly 70 percent.

Thames Water was placed under close regulatory scrutiny by Ofwat in July, with an independent supervisor set to monitor progress of the company's recovery plan.

The company is owned by a consortium of shareholders including Canada's Ontario Municipal Employees Retirement System and the British Universities Superannuation Scheme.

The company's precarious situation has fuelled months of speculation about the need for a potentially costly public bailout if it fails to find the private financing it needs.

British water companies, privatised since 1989, have also been under fire for several years for allowing the discharge of large quantities of sewage into rivers and the sea, due to under-investment in a sewage system that largely dates back to the Victorian era.