Thames Water fine payment plan branded 'sweetheart deal'

TROUBLED Thames Water has agreed to pay £24.5 million of its record £122.7m in fines by the end of September under a payment plan agreed with regulator Ofwat.

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The industry watchdog, which handed Thames Water the penalties in May for failures over sewage treatment and paying out dividends, said a fifth of the fines would be due in the initial instalment.

Thames Water said the fines would not be paid out of customer bills. But the remaining 80% is dependent on the financial security and future of the debt-laden water supplier as it teeters on the brink of a possible temporary nationalisation, meaning the majority of the fines may not be paid for up to five years.

Ofwat said the remainder will be paid either 30 calendar days after it secures a rescue financing deal and there is enough cash liquidity in the business or, if it is placed into a special administration regime by the Government, 30 calendar days after it exits the insolvency process.

Ofwat said it had set a final “backstop date” of March 31, 2030 for the remaining penalties.