Thames Water fined £123m over sewage spills and dividend breaches

Thames Water has been hit with a record £104m fine over environmental breaches involving sewage spills, after failing to operate and manage its treatment works and wastewater networks effectively.

- Kalyeena Makortoff Helena Horton

The water regulator for England and Wales, Ofwat, confirmed yesterday that it was issuing the debt-laden utility with £123m of penalties that would be "paid by the company and its investors, and not by customers".

That total included an £18.2m fine for breaking dividend rules, the first of its kind in the industry. Ofwat said the company had paid out cash to investors despite having fallen short in its services to customers and its environmental record.

The UK's largest water company is in a desperate race to raise funds and find new buyers to stave off the risk of being renationalised, and has urged the regulator to let it off paying hundreds of millions of pounds of fines to make it more attractive to investors.

Ofwat said its investigation had uncovered failings around Thames's handling of sewage and wastewater, which amounted to a "significant breach" of its legal obligations. The regulator added that Thames had caused an unacceptable impact on the environment and customers.