Thames Water, serving 16 million customers in London and south-east England, is seeking approval for further bill increases amidst ongoing customer concerns. The company’s appeal to the UK’s competition regulator comes as it struggles financially, with a £3bn debt deal pending.
Thames Water Seeks Higher Bill Increases Amid Financial Struggles
Thames Water, a company serving 16 million customers in London and south-east England, is appealing to the UK’s competition regulator for permission to raise customer bills even higher than previously approved. The move has sparked a furious reaction from campaigners who argue that the company’s track record on service delivery and customer complaints raises questions about its ability to manage increased funding.
Thames Water is a British water and sewerage company that serves over 15 million customers across the Thames Valley region.
The company was privatized in 1989 and is currently owned by Brookfield Infrastructure.
Thames Water operates one of the largest networks of pipes, pumping stations, and treatment works in the UK, managing over 73,000 miles of water mains and 77 sewage treatment works.
The company invests heavily in maintaining and upgrading its infrastructure to meet growing demand and improve customer service.
The water company had initially sought to increase bills by 59% over the next five years, but was granted only a 35% rise by Ofwat, the water regulator for England and Wales. Thames Water claims that this increase is insufficient to fund the necessary improvements to its services, including reducing controversial discharges of sewage into Britain’s rivers and seas.
Sewage discharge refers to the release of wastewater from sewage treatment plants into water bodies.
This process involves treating and processing human waste, industrial effluent, and stormwater runoff before releasing it back into the environment.
According to the World Health Organization (WHO), inadequate sewage management is responsible for 80% of global water pollution.
Inadequate treatment can lead to the spread of diseases such as cholera, typhoid, and dysentery.
Effective sewage discharge management requires proper infrastructure, regular maintenance, and adherence to environmental regulations.
However, critics argue that the company’s proposed increases are excessive and will unfairly burden customers who are already facing steep bill rises. ‘two fingers to customers’ given its history of dumping billions of litres of sewage into rivers, Feargal Sharkey, a clean water campaigner and former lead singer of The Undertones, described Thames Water‘s appeal as.
The appeal process is separate from the company’s current financial struggles, which have led it to seek a £3bn debt deal. A court judgment on this package is expected early next week, and if approved, would allow existing creditors to add to Thames Water‘s debt pile of around £19bn. The company has warned that without this funding, it will collapse by 24 March.
The Consumer Council for Water, which represents consumers’ rights, has expressed concerns about the proposed bill increases. Its chief executive, Mike Keil, stated that while customers want investment in water services, they also expect value for their money. He questioned why Thames Water should be trusted with even more of billpayers’ money given its poor track record on service delivery.
Liberal Democrat MP Charlie Maynard has also spoken out against the proposed increases, arguing that a 35% rise over five years is already far too high. He suggested that putting Thames Water into special administration would allow for a reset of the company’s balance sheet and ensure that bills are spent on fixing the sewage network rather than lining the pockets of creditors.
The appeal to the CMA has been described as a ‘desperate bid’ by Thames Water to rake in more cash from the public, given its own debt struggles. Campaigners are calling for the government to take action and bring Thames Water into special administration, paving the way for permanent public ownership.
In 2021, Thames Water was placed into special administration due to severe operational and financial challenges.
The company faced significant issues with leakage, customer service, and debt repayment to the Environment Agency.
The special administration allowed for a more flexible approach to addressing these problems.
Under this arrangement, Thames Water's operations were taken over by an administrator, who oversaw improvements in efficiency and compliance.
This move aimed to protect customers' interests while ensuring the company's long-term sustainability.
- theguardian.com | Thames Water launches appeal for permission to raise bills even higher
