Britain’s water watchdog is set to refuse the UK’s largest water company’s request to ramp up consumer bills by over half of what they currently are.
Thames Water, which serves more than 16million customers in London and the Thames Valley, requested a bill rise of 59 per cent from the regulator - as it scrambles to solve up to £15billion of debt.
But Ofwat has rejected the increase and described the company’s turnaround plans as “fag-packet figures” devised by bosses who appear determined to “sit on a deckchair on the Titanic”, according to draft plans seen by The Guardian.
The decision will be delayed until 11 July because of the general election. Thames Water refused to comment on the regulator’s plans as it would be “premature”.
Southern Water has also requested the highest increase in bills among the utility companies of 91 per cent to £915 a year, while Wessex Water has requested a 50 per cent increase to £822 a year.
In March, Thames Water’s chief executive Chris Weston refused to rule out bill increases of up to 40 per cent for customers.
Labour urged the government and regulators to “do everything in their power to stabilise” Thames Water, with Jeremy Hunt saying that the Treasury will monitor the situation “very carefully”.
While Mr Weston said that the company would be able to cover its operating costs until next year, he admitted there was a “possibility” of the firm going into special administration if extra money is not invested.
When asked on Sky News if bills could be hiked to fill the gap, Mr Weston replied: “I don’t think we have been at all secretive about that.
“But the plans that we have put forward – which are very much in accordance with what customers are asking us to do – require an investment of around £20bn in that 2025-2030 period, and that would result in a bill (increase) of around 40 per cent.”
An Ofwat spokesperson said: “Thames Water is a business with a regulatory capital value of £19billion, £2.4billion of liquidity available, annual regulated revenue of £2billion and a new leadership team.
“They must continue to pursue all options to seek further equity. Safeguards are in place to ensure that services to customers are protected, regardless of issues faced by the shareholders.”
