THAMES WATER’S mismanagement is “beyond a joke” and billpayers should not have to shoulder the burden, campaigners charged after reports surfaced that the firm is plotting a 56 per cent rise in bills.
The water supplier is expected to publish a revised business plan to regulator Ofwat.
In its original plan in October, the firm said that it would raise customer bills by 40 per cent and fund an investment programme worth £18.7 billion to fix its crumbling network, which saw sewage spills increase five-fold last year.
But Thames Water said Ofwat imposed regulations on the plan that made it “uninvestable.”
Shareholders had previously requested a deal on penalties for river pollution and poor customer service.
Investors withdrew a £500 million emergency package that was due this month, while the company sits on £14.7bn worth of debt.
In 2007, Thames Water came under the ownership of a consortium led by Australian financial services group Macquarie.
After a decade under its leadership, debt jumped to £10.8bn, while billions were paid in dividends to shareholders.
Current shareholders include Canadian pension fund Omers and the sovereign wealth fund of Abu Dhabi.
The Times reported that annual bills could rise to £700 over the next five years.
Louise Reddy, Surfers Against Sewage policy officer, said: “Billpayers should not bear the burden of water company mismanagement. It’s beyond a joke.
“We’ve been paying water companies for decades to deliver on environmental services, yet they've continued to siphon these funds into shareholders’ pockets while regulators turned a blind eye.”
GMB national officer Gary Carter said: “Shareholders have funnelled off billions, all as infrastructure was left to rot.”
We Own It spokesman Matthew Topham said: “It is Thames Water’s reckless shareholders and creditors who must be made to pay the price of their failure — with the business transferred to the public as compensation.”
He said that the firm should be “transferred to local councils to run and anti-sewage campaigners, workers and local residents should be given a seat on its board.”
Plans to renationalise the firm are reportedly being drawn up by the Treasury under the codename Project Timber.
The Department for Environment, Food and Rural Affairs said it is preparing “for a range of scenarios across our regulated industries — including water.”
It comes as Southern Water executive George Eykyn complained that water companies are unfairly being painted with a “bad guy narrative” after the company planned to raise customer bills by 60 per cent over the next five years.
Water campaigner Feargal Sharkey told the Times: “Apparently reinvigorated by its own arrogance, Southern Water now pleads for sympathy and understanding — oh, and more cash.”
