Thames Water's future is becoming increasingly uncertain after its business plans are said to be “uninvestable” and vital funding is withheld.
The water utility continues to negotiate with regulator Ofwat to tackle its £18bn debt as investors in the company propose to invest around £3bn over several years.
However, feedback from regulators has made Thames Water's business plans “uninvestable” if implemented.
Negotiations are currently underway to prevent the company from going bankrupt, which could lead to nationalization.
Shareholders said in a statement that Thames Water's plans would be the biggest ever investment program for a UK water company, with total debt equivalent to £18bn, and they said they would “not take any cash out of the business” until further improvements were made. '' he explained that he had promised. to its finances.
They said Ofwat was currently not prepared to provide the business plan with the “necessary regulatory support” and would subsequently withhold funding.
A spokesperson for Ofwat said the feedback was aimed at “protecting” its service to customers “irrespective of the issues faced by shareholders” and that investments in this area must be fair to customers. Ta.
He also explained that more than £4.5 billion has already been pumped into the sector and a draft decision by the regulator is expected to be published in June.
This follows the announcement that shareholders will provide £750m of funding, of which £500m is expected to be provided by the end of March.
The financing came with a number of conditions, which shareholders say have not been met.
A statement released on behalf of shareholders explained: “Shareholders and Thames Water have been working with regulator Ofwat for over a year on how to address the complex challenges facing the business.
“These include both meeting current funding needs and the urgent need for significant investment to improve performance.
“These discussions led to the submission of a business plan that includes an investment program of over £18 billion, the largest ever for a UK water company, to improve customer service and environmental standards.”
It added: “To support this unprecedented investment, shareholders have committed to supporting a further £3.25bn of investment, on top of the £500m provided last year, and will continue to support the business until the restructuring is achieved. He promised not to take any cash with him.
“This was a solution that addressed the root cause of Thames Water’s challenges without incurring any taxpayer funding.
“However, despite more than a year of negotiations with regulators, Ofwat is not prepared to provide the regulatory support needed for a business plan that will finally address the issues facing Thames Water. ”
It added: “As a result, shareholders are not in a position to provide further funding to Thames Water.”
“Shareholders intend to work constructively with Thames Water, Ofwat and the Government on how to deal with the impact of Ofwat’s decision.”
Chris Weston, CEO of Thames Water, said: “Despite this announcement, we would like to reassure our customers that it is business as usual at Thames Water. ” he said.
“Our 8,000 staff remain committed to working with our supply chain partners to deliver services for the benefit of our customers, communities and the environment.”
