Vital action to fix Thames Water is already drying up

ANOTHER day, another scandal for Thames Water, and once again, it seems the regulator, Ofwat, is letting the company and its rapacious private equity investors off the hook.

- James Wallace

The utility has been allowed to defer 80% of its £122million fine for up to five years. Ordinary people cannot negotiate away a court penalty, yet Thames Water has secured a deal that may give its current investors, who pocketed £170million in dividends in October 2023 and March 2024, an easy ride — all while the company fails to maintain crumbling infrastructure and continues to breach environmental regulations.

The Government has said ‘Thames Water has a “regulatory capital value” of £19billion, despite having a debt load of £20billion. To put that in perspective, imagine buying a million-pound house, leaving it to decay and then trying to flog it with the roof caved in, the floorboards rotten and sewage flooding the basement.

Would that house still be worth a million pounds? Of course not. Yet this is exactly the situation Thames Water finds itself in, a utility whose value has been extracted by investors while its essential infrastructure has been allowed to decay.

So, saying Thames Water is worth about £20billion can’t be right - and market estimates of its value now are much lower, reflecting the damage done.