Thames Water has made a new proposal to increase water prices by 40% and pledged to spend more on environmental projects, but questions remain over whether it will have the funding needed to make it happen.
Power companies are set to cut their daily spending to spend an extra £1.1bn on environmental projects over the five years between 2025 and 2030. This brings the total plan spending to £19.8bn.
By cutting spending in other areas, bills will only rise by 40% instead of the feared 56%.
Thames Water's main daily expenses are staff, maintenance, energy and raw materials. The Standard understands that Thames Water is not planning any job cuts.
It also proposed a further £1.9bn of “potential investment” to reduce sewage spills, which, if implemented, would increase the bill by £19 to reach £627 by 2029-30. become.
Chris Weston, CEO of Thames Water, said: As part of the regular ongoing discussion on PR24, he updated PR24 to provide more projects that benefit the environment.
“We will continue to discuss this matter with regulators and stakeholders.”
Regulator Ofwat is expected to respond to the plan on June 12th and say whether it has “intent” to approve it.
Thames Water submitted initial plans to Ofwat in October, including a 40% increase in tariffs. Alongside this plan, he was aiming to raise £750m from his nine shareholders.
However, shareholders withdrew from the funding last month, saying Ofwat would not provide the “necessary regulatory support” for its five-year plan, making it “uninvestable”.
The question of whether Thames will get the money is by no means certain, given that the difference between Thames shareholders and Ofwat was over “regulatory support” such as fines for sewage spills.
If funding is not provided, the Thames could be nationalized through a special management regime. Parent company Kemble defaulted on some of its debt last week due to funding suspension.
Liberal Democrat MP for Richmond Park Sarah Olney said today she would introduce a bill to move the River Thames into special administration.
Mr Olney said: “This plan is a travesty and the government must step in now to hold this big polluting company accountable.
“That's why today I'm introducing legislation in Parliament that will immediately place the River Thames in a special administrative region and force us to clean up the mess.”
Thames Water shareholders declined to comment on the plans.
Gary Carter, national director of the GMB union, said: “It's not the people who are struggling to pay their bills who are going to save the Thames from the financial mess they have created.
“Shareholders, who have held on to millions of dollars in property since privatization, must step aside to give the company a chance to turn things around.
“Customers cannot be expected to pay £627 a year for Thames Water’s past failures.
“Previous owners have taken profits as large dividends rather than making the necessary investments.”
