Investors of Thames Water are begging Keir Starmer to intervene as Britain’s biggest supplier crumbles under crippling fines and could be facing collapse.
The stricken company is drowning under huge debts and the threat of further fines for pollution incidents.
It was hit last month with a record £123million in fines for sewage spills and dividend payments, by the industry regulator Ofwat.
The fine, which is the largest the watchdog has ever issued, follows two ‘big and complex’ investigations by the regulator.
Ofwat said Thames Water would pay £104.5million for the wastewater breaches and a further £18.2 million for breaking rules on dividend payments.
It said the fines would be paid ‘by the company and its investors and not by customers’.
Investors say that the regulator’s unwillingness to go soft on the company over future fines could put it at risk of administration, as they scramble for a lifeline.
Now they are pleading with the Prime Minister to compel the watchdog to adopt a more compromising position to its stance on financial penalties.
Thames Water is drowning under huge debts and the threat of further fines for pollution incidents (stock photo)
Investors of Thames Water are begging Keir Starmer to intervene as Britain’s biggest supplier crumbles under crippling fines and could be facing collapse
An investor involved in rescue talks told The Daily Telegraph: ‘We have had a year of dealing with one of the most intractable regulators I’ve ever had the misfortune of coming across.
‘They have failed in their job. Absolutely, we need intervention from Downing Street.’
‘I think what it takes is the government and the regulator coming together – it needs the Environment Department, the Treasury and even Number 10 to say: “What’s the least worst outcome here?”,’ another investor said.
It comes just days after Ofwat received a proposal that would provide the water company the capital they desperately need to recover from the billions of pounds worth of fines looming over them.
Creditors have said that Thames could be looking at more than £1billion in further pollution and environmental failings, according to the Telegraph.
But the watchdog have been reluctant to grant the request.
The regulator’s probe into how the company was managing its treatment works and wider wastewater network uncovered a number of failings.
Ofwat said these amounted to a significant breach of the company’s legal obligations, which has caused an ‘unacceptable’ impact on the environment and customers.
Creditors have said that Thames could be looking at more than £1billion in further pollution and environmental failings. (file image)
Creditors are preparing a second bid in an attempt to soften Ofwat’s stance that could see the company willing to offer more cash and write off a larger sum of debt.
A FTSE 100 infrastructure fund warned Ofwat’s stubbornness could dampen Labour’s attempts to bring in foreign investors for UK assets.
They said: ‘There is a £500 billion investment that’s needed across UK infrastructure that is contingent on stable regulation.’
A source close to Thames’ creditors said: ‘Ofwat is undermining the government’s aim to attract private capital and deliver growth and reform across the water sector.’
Now with the risk of rescue talks being stalled, Hong Kong’s richest man, Li Ka-shing, has demanded to rejoin the auction for Thames after KKR abandoned its bid fore the business earlier this month.
However investors fear his links to China will trigger a long and drawn out investigation under the National Security and Investment Act.
An Ofwat spokesperson said: ‘Our focus is on ensuring that Thames takes the right steps to deliver a turnaround in its operational performance and strengthen its financial resilience to the benefit of customers.’
