INSOLVENCY specialists have been appointed by ministers to prepare for the potential collapse of crisis-hit Thames Water.
FTI Consulting has been brought in as an administrator in case Britain’s biggest water utility fails to secure funding from lenders.
Contingency plans could see Thames Water placed into a special administration regime (SAR), meaning it would be put into an insolvency process.
Environment Secretary Steve Reed signed off the appointment, which would still need to be approved in court.
But campaigners have called on the government to apply for a special administration regime and take Thames Water into public ownership.
We Own It lead campaigner Sophie Conquest said: “The special administration regime is there to protect customers from the worst failures of the private sector and should have been enacted months ago.
“By sitting on his hands for so long, Steve Reed is siding with the profiteers and polluters.
“Recent research shows that the cost of public ownership could be close to zero.
“This solution could also save the public £3-5 billion a year, making publicly owned water a source of income for the Treasury.”
She urged Mr Reed to “change course and do it quickly” by taking Thames Water into special administration, slashing its debt and transferring it into permanent public ownership.
River Action CEO James Wallace said: “Thames Water is Britain’s worst serial polluter whose current privatised ownership causes massive debt at exorbitant interest.
“Using special administration to bring it back under government control will slash borrowing costs and ensure the utility is managed for the public good and not private profit.
“Thames Water is a liability to its customers and our nation’s water security. The sooner this government gets a grip, the better for our rivers and communities.”
GMB national secretary Andy Prendergast said: “Thames Water has been sacrificed on the altar of privatisation.
“It’s sinking without a trace under a deluge of debt, while huge amounts of cash from inflated customer bills have flooded out to directors, shareholders and loan servicing.
“If you want an advert for why private companies shouldn’t be involved in certain sectors; this is it. Yet another damning indictment of Thatcher’s terrible legacy.”
Thames Water, which has 16 million customers, remains locked in talks over a rescue funding deal with a number of senior creditors.
In June, private equity firm KKR pulled out of plans to inject around £4bn of cash into the financially stricken company in a bid to keep it afloat.
A Department for Environment, Food & Rural Affairs (Defra) spokeswoman said: “The government will always act in the national interest on these issues.
“The company remains financially stable, but we have stepped up our preparations and stand ready for all eventualities, including applying for a special administration regime if that were to become necessary.”
Thames Water chairman Sir Adrian Montague recently said the firm was still in “crisis mode” as it seeks to avoid special administration measures.
A Thames Water spokeswoman said: “Our focus remains on a holistic and fundamental recapitalisation, delivering a market-led solution which includes targeting investment grade credit ratings and returning the company to a stable financial foundation.
“Constructive discussions with our many stakeholders continue.”
FTI Consulting has been contacted for comment.
