Thames Water Is Shite

Thames Water's £3bn Debt Lifeline: What It Means for Customers

2025-02-18T12:13:00.005+00:00

In a dramatic turn of events, Thames Water, Britain's largest water company, has been granted a £3 billion debt lifeline, staving off imminent financial collapse. The High Court approved the emergency loan, which will be provided by existing creditors, offering a temporary reprieve for the utility giant grappling with a staggering £16 billion debt pile.

The company had warned that it would run out of cash by March 24th, raising fears of potential disruption to water services for its 15 million customers across London and the South East. The approved loan will be disbursed in two tranches: an initial £1.5 billion to support operations until September 2025, and a second tranche of the same amount, contingent on the company's appeal to increase customer bills beyond the current regulatory limits.

This financial rescue package comes with a hefty price tag. The loan carries a 9.75% interest rate, raising concerns about the long-term sustainability of the company's debt burden and the potential impact on customer bills. Experts estimate that the interest payments alone could amount to £800 million over the loan's 2.5-year term.

The situation has reignited the debate about the future of Thames Water and the broader issue of private ownership in the water industry. Critics argue that the company's financial woes are a direct consequence of years of mismanagement and excessive dividend payouts to shareholders, while neglecting crucial infrastructure investments.

The government has been closely monitoring the situation, with contingency plans in place for potential renationalisation should the company fail to secure its long-term financial stability. However, the approved loan offers a window of opportunity for Thames Water to address its underlying problems and implement a sustainable turnaround strategy.

The implications for customers remain uncertain. While the immediate crisis has been averted, the long-term impact of the debt lifeline on water bills is a major concern. The company's bid to raise prices beyond the allowed limits could lead to significant increases for households already struggling with rising living costs.

The future of Thames Water hangs in the balance. The £3 billion loan provides a temporary solution, but the company faces significant challenges in tackling its debt burden and restoring public trust. The coming months will be crucial in determining whether Thames Water can chart a course towards long-term financial health and ensure reliable, affordable water services for its customers.

Timber!

2024-02-29T13:07:00.005+00:00

Thames Water, the UK's largest water company, finds itself at a critical juncture. With a debt pile of £14 billion and widespread criticism over sewage dumping, the company is grappling with financial challenges. To avoid a potential multibillion-pound taxpayer bailout, Thames Water has embarked on a lobbying campaign, seeking concessions from both the government and the industry regulator, Ofwat.

The Key Asks

1. Bill Increases: Thames Water aims to increase bills by 40% by 2030. This would give the company much-needed financial breathing room and prevent a takeover by court-appointed special administrators.

2. Dividend Payouts: Despite its financial woes, Thames Water wants to continue paying dividends to shareholders. However, new government rules introduced last year scrutinize dividend issuance, especially for companies performing poorly against financial and environmental targets.

3. Lower Fines: Thames Water hopes for more leniency around regulator fines. By securing "regulatory easements," the company could alleviate some of the financial pressure.

The Alarming Scenario

If Thames Water fails to meet its debt obligations, the government or Ofwat could invoke the special administration process. Under this process, administrators would step in to manage the company. To prevent this, Thames Water must strike a delicate balance between financial stability and regulatory compliance.

The Role of Ofwat

Ofwat, as the industry watchdog, plays a crucial role. The company seeks a deal that allows it to charge customers more while avoiding a takeover. But Ofwat must weigh the public interest against Thames Water's financial viability.

Project Timber: Contingency Plans

The Department for Environment, Food and Rural Affairs (Defra) has contingency plans in place for Thames Water's potential collapse, known as Project Timber. These plans involve seeking "regulatory easements" to ease the burden of hefty fines.

Shareholder Injection

Thames Water's parent company, Kemble Water Holdings, has raised £500 million. Shareholders are willing to inject over £3 billion more, contingent on regulatory approvals. The company's ability to issue dividends is a critical factor in this equation.

Striking a Delicate Balance

Thames Water faces a daunting challenge: balancing the interests of shareholders, customers, and the public. As the lobbying efforts continue, the outcome will shape the future of water management in the UK.

In the end, the question remains: Can Thames Water navigate these treacherous waters without capsizing?

Government Tries To Avoid Nationalisation of Thames Water

2023-07-06T11:17:00.003+01:00

The UK government is considering whether to take Thames Water into public ownership, but ministers believe that the company can be saved from collapse without resorting to nationalization.

Thames Water is the largest water and sewerage company in England, and it serves 15 million people. The company has been struggling financially in recent years, and it is currently £14 billion in debt.

The government has been considering a number of options for bailing out Thames Water, including taking the company into public ownership. However, ministers believe that there are other ways to save the company without resorting to nationalization.

One option is to place Thames Water into a special administration regime. This would allow the government to take control of the company without actually nationalizing it. The government would then be able to restructure Thames Water's finances and put it on a more sustainable footing.

Another option is for the government to provide Thames Water with a financial bailout. This would allow the company to pay off its debts and continue to operate as a private company.

The government is still considering its options, and it is not yet clear what it will do to save Thames Water. However, ministers believe that the company can be saved without resorting to nationalisation.

In a statement, the Department for Business, Energy and Industrial Strategy said that it is "committed to working with Thames Water to ensure that it can continue to deliver essential services to customers." The statement added that the government is "confident that Thames Water can avoid falling into public ownership."

Thames Water: How The UK's Largest Water Supplier Ended Up In Debt

2023-07-03T11:52:00.002+01:00

Thames Water is the largest water supplier in the UK, serving over 15 million customers in London and the Thames Valley. But despite its size and profitability, the company is also heavily in debt. As of March 2023, Thames Water's debt stood at £14.3 billion, which is almost a quarter of the total debt of all the privatised water companies in England and Wales.

So how did Thames Water end up in so much debt?

There are a number of factors, but one of the main reasons is that the company has been aggressively borrowing money in order to pay dividends to shareholders. In the past decade, Thames Water has paid out over £10 billion in dividends, which is more than it has spent on investment in its infrastructure.

This strategy of prioritizing dividends over investment has led to a decline in the quality of Thames Water's infrastructure. The company has been fined multiple times for water quality violations, and it has been forced to undertake a number of emergency repairs to its ageing pipes.

The debt burden is also making it difficult for Thames Water to invest in its infrastructure. The company has said that it needs to invest £15 billion over the next decade in order to maintain its infrastructure and meet future demand. However, with so much debt, it is unclear how Thames Water will be able to afford these investments.

In other words, it's fucked!

Thames Water on the Verge of Bankruptcy

2023-06-28T11:54:00.005+01:00

Thames Water, the company that supplies water to millions of people in London and the southeast of England, is on the verge of bankruptcy. The company has been struggling financially for years, and its problems have been compounded by the recent drought.

Thames Water has been criticized for its poor performance. In recent years, the company has been fined for a number of environmental violations, and it has also been accused of overcharging customers.

The company's financial problems have worsened in recent months. The drought has reduced water levels in the Thames River, which has forced Thames Water to import water from other sources. This has increased the company's costs, and it has also led to water shortages in some areas.

Thames Water is now facing a cash crunch. The company has said that it needs £1 billion in new funding in order to avoid bankruptcy. However, it is unclear where this money will come from.

The government has said that it is willing to provide some financial assistance to Thames Water, but it is not clear how much money the government will provide. The government has also said that it is considering selling Thames Water to a private company.

If Thames Water goes bankrupt, it would be a major blow to the water supply in London and the southeast of England. The company supplies water to over 15 million people, and it is responsible for maintaining over 6,000 miles of water mains.

It is unclear what would happen if Thames Water goes bankrupt. The government would likely have to step in and take over the company's operations. However, this could be a costly and time-consuming process.

In the meantime, Thames Water customers should be prepared for potential water shortages and service disruptions. The company has said that it is doing everything it can to avoid bankruptcy, but it is clear that the company is in serious financial trouble.

Will I get money back from Thames Water?

If Thames Water goes bankrupt, it is possible that customers could get some money back. The company has a Customer Guarantee Scheme that is designed to make fixed payments to customers when the company does not deliver against its core standards of service. These payments are normally made automatically by crediting your Thames Water account within a month of the issue.

However, it is important to note that the Customer Guarantee Scheme is not a guarantee that you will get all of your money back. The amount of money that you receive will depend on the specific circumstances of your case.

If you are concerned about the possibility of Thames Water going bankrupt, you should contact the company directly to find out more about your rights as a customer.

Thames Water Fined £1

2014-07-22T09:29:00.001+01:00

As per International Business Times:

"Ofwat has fined Thames Water just £1 after the regulator found that the group misreported sewer flooding data in 2010 which, in turn, impacted the amount the firm charged customers.

Ofwat, formally known as The Water Services Regulation Authority, confirmed in a statement that Thames Water agreed to "pay a package worth £86m [€109m, $147m] to customers and the communities it serves."

However, out of that total value, only £7m will be given back to customers. A total of £2m will be placed in a fund to help those who are having difficulty paying their bills, while the remaining £5m will "support additional community projects such as local programmes to better protect rivers and improve the natural environment."

The bulk of the "pay package" (£79m) actually constitutes a promise to reduce Thames' regulatory capital value (RCV )- which refers to asset costs and investment that has been put into the water company – in order to "benefit customers for years to come."

RCV is used for setting bills so, if this number is reduced, consumer bills will be lower."

Thames Water Applies For Price Hike

2013-08-12T12:15:00.003+01:00

Thames Water have applied to water regulator Ofwat to charge customers a one-off surcharge of £29 pounds. Thames Water claim that they have been forced to deal with "unquantifiable" costs that they were not aware of when Ofwat set price limits back in 2009.

The increased costs include:

Increases in bad debt as a result of the economic downturn
Increases to Environment Agency charges
The costs of operating and maintaining the additional 40,000 km of sewers that were transferred to Thames Water by the government in October 2011
Costs of land acquisition and other preparatory work required for the construction of the Thames Tideway Tunnel

In the real world, companies that are eager to maintain/increase their profits seek to improve customer service, undercut the competition (ie charge less) in order to attract more customers and cut their cost base. In the delusional world of water supply, Thames Water simply opt for the easiest option namely that of charging their hapless customers more for their water. Ofwat will make its decision within 3 months.

There is of course another option, outwith cutting their cost base, they could reduce the dividends paid to their shareholders.

Will they do this?

Will they fark!

Taxing Times For Thames Water

2013-06-10T12:46:00.002+01:00

Sky News reports that Thames Water paid no corporation tax and received £5M credit from the Treasury, whilst increasing its charges to customers by 6.7%.

By happenstance Jonson Cox, chairman of regulator Ofwat, said that the high profits and tax-reducing corporate structures of some water companies were "morally questionable".

Companies are perfectly at liberty to avoid tax. However, given that Thames Water reduces part of its tax bill by tax allowances on its investment program, it is ironic that Thames Water saw leakage of 646 million litres a day, up from 637 million litres (blamed on the cold weather).

Thames Water Lifts Hosepipe Ban

2012-06-13T16:31:00.000+01:00

Thames Water has lifted its hosepipe ban.

Maybe next year they will have fixed all their leaks, so that a ban will not be necessary?

Thames Water Gets Bollocking From Boris

2012-06-08T13:06:00.000+01:00

Two million litres of water had to be pumped out of tunnels between Stratford and Mile End, before full services could be restored yesterday.

Mr Johnson, apart from wanting an explanation and assurances that Thames Water won't screw up again, also wants guarantees that Thames Water is “up to speed” in coping with the Olympics.

Good luck with that then!

Hosepipe Ban Remains

2012-05-01T11:44:00.000+01:00

Thames Water, the company with "obscene leakage rates", has told the Telegraph that the hosepipe ban will remain despite the fact that this was wettest April since records began in 1910.

Richard Aylard, director of sustainability and external affairs for Thames Water, said they were aware of the "irony" that heavy rain had set in after the hosepipe ban was announced.

"We had more than double the rain we would expect for the last month.

In fact, it hasn't really stopped raining since we and six other companies imposed 'hosepipe bans' on April 5.

We are alive to this irony, and our contribution to the endless talking point that is the British weather."

Thousands of homes face a renewed risk of flooding after heavy rain lashed Britain overnight, and the rain looks set to continue.

Question For Thames Water

2012-04-23T11:37:00.000+01:00

About this "drought" and hosepipe ban, really given that it's pissing down and will continue to do so for the coming week?

Thames Water's Obscene Leakage Rates

2012-04-07T12:02:00.000+01:00

As hosepipe bans come into force (note, the water companies will not be enforcing these bans) it is worth noting that Thames Water, which serves 8.8 million customers, met its leakage targets over the past six years.

However, its leakage rates account for around 25% of the 2.6 billion litres it supplies a day to customers. In fact the leakage rate is five times higher than the 5% that will be saved by the hosepipe ban.

Thames Water leaks are enough to fill Wembley Stadium every 36 hours.

New Scientist’s environment consultant, Fred Pearce, said:

"Thames Water’s leakage rates are obscene.
Regulators and planning inspectors have been telling them for decades to get their act together – but the company’s efforts are sporadic and sometimes grudging."

Oh, and by the way, Thames Water increased its prices by 6.7% at the end of March.

Could it be possible that its "leakage targets" are not particularly challenging?

Thames Water Wastes Water

2012-03-17T12:08:00.000+00:00

Thames Water sees a quarter of its total supplies wasted through leaks and burst pipes, despite hitting its Ofwat target to reduce leaks last year.

Thames Water has also been criticised for the amount of time it takes to repair leaks.

Figures obtained show that of 441 recent leaks in its area, just 210 were repaired within the five days promised by Thames Water, while 48 had still not been repaired after 20 days.

In one case Jeremy Gompertz QC reported a leak from a mains pipe into the basement of his flat in Highbury, north London, on nine separate occasions between December last year and February.

“It’s outrageous that when we’re threatened with water restrictions because of drought they can’t be bothered to come and remedy a leak which has been running for two months,” said Mr Gompertz, 41.

Elsewhere John Tamplin, a financial adviser from Henley-on-Thames, had to wait two days before Thames Water dispatched engineers to repair a burst pipe sending water gushing up through the paved drive of his home. The incident came just days after Oxfordshire was declared to be in a state of drought.

Mr Tamplin, 55, said: “I was just amazed that Thames Water could be so wasteful with the water when they are telling us to economise and look after this valuable resource.”

Thames Water has now apologised for the amount of time it takes to visit and repair leaks. A spokesman said: “We fix leaks in order of priority to prevent as much water as possible from being wasted.

However, we recognise that in some cases the speed we fix leaks isn’t good enough. We are continually working to improve that.”

The firm, which last year made an operating profit of £600 million, pointed out it had cut leakage from its pipes by a third since its peak in 2004 and has invested millions of pounds in repairing leaks in recent years.

Source The Telegraph

Charges Up

2009-06-29T10:22:00.000+01:00

"Thames Water said this week that it is pushing up water bills by 17%, it was accompanied by the usual stuff about overhauling our Victorian pipes. Thames Water is owned by Macquarie Bank, known as Australia's "millionaire factory" – an antipodean version of Goldman Sachs. I think we can guess where the money will trickle to."

Source The Guardian

Customer Care - Not!

2009-05-21T11:16:00.002+01:00

Sent to Thames Water "customer services" and their CEO on 17 May. Needless to say, no one has bothered to answer:

"4 March 2009 you wrote to me advising that you owed me £120.74, and requesting that I ring you to obtain the credit.

26 March 2009 I rang and gave all necessary information, eg bank details, I was advised that the credit would be processed.

16 May 2009 I received a letter from you referring to my call of 26 March, asking for my utility bills.

16 May I rang your offshore third party "help" centre to ask why it took over 8 weeks to query the call I made in March, and why the credit had not been paid.

I asked 3 times as to why it took 8 weeks to send the letter, the first two times your "help" centre operative claimed to be looking up the details; the third time I asked she deliberately cut me off (note I know the difference between an accidental cut off and a deliberate one).

Please answer the following:

1 Why is there over an 8 week gap between my call and your letter?

2 Why do you need utility bills to process the credit repayment?

3 Why did you not ask for these when I called in March?

4 Why have you not credited my bank account with the money you owe me?

You have 24 hours for someone based in the UK (not your foreign third party call centre) to take ownership of this problem, to come back to me and resolve it to my satisfaction.

Failure to do so will result in me adding this story to my site www.thameswaterisshite.com I will also advise my many contacts in the media as to your incompetence.

BTW, do you really think that outsourcing your "help" centre to a disinterested, incompetent foreign third party really improves customer "care"?

The clock is ticking."

Advice To Thames Water

2009-05-20T10:07:00.002+01:00

Work to your customers' timeframe wrt answering complaints, not your timeframe!

Splashing Out

2008-07-28T10:02:00.002+01:00

The Guardian reports that the three executive directors at Thames Water shared almost £1M in bonuses last year.

David Owens, the chief executive, received a bonus of almost £662K taking his overall remuneration package to almost £823K.

Stephen Shine, chief operating officer, and Mark Braithwaite, chief financial officer, received bonuses of £192,600 and £130,700 respectively.

No doubt the owners of 15,000 properties in Merton that were without water yesterday for seven hours, because of a major burst on Merton High Street, will be pleased to hear this.

More Bursts

2008-03-05T11:14:00.002+00:00

Cherry Orchard Road and part of Lower Addiscombe Road is closed for emergency works after a water main burst flooding the basements of two homes.

Thames Water got permission from Croydon Council to start emergency works on the site about 2pm today.

They have been replacing the Victorian water mains along Cherry Orchard Road for the past few weeks.

Ali Badel. 51, the owner of Euro Dry Cleaners on Cherry Orchard Road says his business is being affected by the road works and that neither he nor any of the other businesses along the road were informed about the works.

"Nobody can come into the shop because the road is closed and they cannot drive their cars down here.

"We were not given any information about this; if we had been then at least we could be prepared. It is fairly amazing. This is the second time my business has been disrupted by Thames Water works."

Councillor Andrew Price said:

"Given that these works to Victorian mains are over 100 years overdue, the patience of the people of Addiscombe is being severely stretched by this further disruption".

Thames Water apologised to customers and road users for the disruption.

A spokesman said:

"We are working through until the road works have been completed, we are working as quickly as we can and hopefully they will be completed as soon as possible. This is an emergency repair and we had to get on the site as soon as possible."

Source The Croydon Guardian

Perversity

2008-01-11T11:51:00.000+00:00

In a rather perverse move, given the water shortage that the UK faces in the summer and the amount of water wasted by leaks, Thames Water is planning to sell off a reservoir for housing.

Needless to say the residents of Reading, where the sell off is planned, are less than happy.

Full story here.

Complaints Soar

2007-10-31T10:31:00.000+00:00

The UK water watchdog said today that written complaints to water companies increased by nearly 31 pct this year, with billing and charging concerns making up half of the complaints.

Figures compiled by the Consumer Council for Water showed that 78 pct of the 241,000 complaints came from customers of Macquarie Bank's Thames Water, United Utilities PLC and Severn Trent PLC.

Customers of Portsmouth Water, Yorkshire Water, Dee Valley Water, Folkestone and Dover Water and Tendring Hundred Water filed the lowest number of complaints per 10,000 customers.

Yve Buckland, national chair of the Consumer Council for Water, said:

"Water customers are becoming increasingly demanding of their companies. They see water companies making good profits and expect service, if not improving, then at the very least delivered to a good, consistent and reliable standard. They also want complaints dealt with 'right first time'.

We will be pushing water companies to improve these figures and provide a much better level of customer service, comparable with the best in other service sectors."

Source Hemscott

This story comes as no surprise to me!

Thames Water Faces Record Fine

2007-09-28T11:36:00.000+01:00

Thames Water could be fined a record £12.5m by industry regulator Ofwat for misreporting and poor customer service.

The water company faces a £11.1m fine for misreporting regulatory information and a further £1.4m fine for poor processes and systems that led to customers receiving unsatisfactory services.

Ofwat chief executive Regina Finn said: "Water is a monopoly business and until we see a competitive market developing, Ofwat must protect customers by regulating the companies' prices and quality of service.

advertisement"To do this we need complete, accurate and reliable information. Misreporting of information damages our ability to regulate the industry and therefore to protect customers."

The news is likely to be cheered by consumer groups which have spent the past year attacking water companies for failing to meet leakage targets while making huge profits.

Water bills have increased by seven per cent this year - well in excess of inflation - to take the average water and sewerage bill to £312 in England and Wales.

The proposed fine follows Ofwat's investigation last year into Thames Water's reporting of its customer service performance.

The regulator said that Thames acted responsibly by informing Ofwat of the misreporting, taking steps to investigate the situation itself, co-operating with the review and reimbursing customers the amount they should have received following poor service by the company in the past.

Ofwat stressed that there is no evidence of fraud by Thames Water, Britain's largest water company, and that the investigation did not find any evidence of deliberate misreporting.

Thames Water said the proposed fine was "totally disproportionate", and revealed plans to challenge it.

Ofwat said: "The proposed fine is appropriate given the seriousness of the misreporting and customer service failures by Thames, while also being fair and proportionate and taking account of the steps Thames has taken to remedy the situation."

Source The Telegraph

Mayor Submits Appeal Against Thames Water

2007-08-24T11:16:00.000+01:00

London Mayor Ken Livingstone submitted an appeal to the UK High Court against Thames Water Utilities' proposed desalination plant in Becton, in the east of the capital.

Livingstone is appealing last month's approval to build the facility, saying the government didn't give "proper consideration to the Mayor's case" and hasn't properly examined alternatives to the plant, the mayor's press office said in an e-mailed statement today.

"Thames Water should be fixing more leaks rather than finding expensive ways to spend Londoners' money on making fresh water," Livingstone said in the statement.

"Adding 200 million pounds to Londoners' water bills to spend on technology more appropriate for the desert is simply a disgrace. I cannot sit back and allow this to happen."

Source Reuters

Mosquito Menace

2007-08-10T16:11:00.000+01:00

In Hounslow, more than 1,000 residents living close to the Mogden Sewage Treatment Centre are suing Thames Water over the insect menace. Neil Stockdale of Hugh James Solicitors, representing the residents, said:

"Our case is Thames Water should have realised that it had to carry out works to tackle this problem as far back as 1988 but failed to do so."

Source The Independent

Water Back

2007-08-03T09:37:00.001+01:00

Congratulations to Thames Water for managing to restore my water supply yesterday, within the time frame that they promised.

It seems to be working fine.