Timber!

 

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

 

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

 

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

 

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

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

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

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

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

Boris Johnson has quite rightly summoned Thames Water bosses to City Hall, to give them a bollocking for flooding part of the Central Line yesterday.

The London Evening Standard reports that the mayor was “absolutely seething” after contractors broke a 24-inch mains pipe as they tried to fix a leak, leaving 300 passengers stranded underground and bringing 24 hours of chaos to the Central line.

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

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.