Thames Water boss won’t rule out bill increases of up to 40 per cent to save company’s future
Thames Water boss won’t rule out bill increases of up to 40 per cent
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Thames Water customers could face bill increases of up to 40 per cent as the chief executive has refused to rule out bill increases.
Shareholders have backed out of plans to push the first £500million of funding into the company, sparking concerns that bills could rise for customers.
Chris Weston, the water company’s CEO told Sky News' he did not think the firm had been "at all secretive" about the possibility of prices rises.
The lack of funding caused shareholders to blame Ofwat for not offering “regulatory support” to help save the company’s future.
Mr Weston said: “I don't think we have been at all secretive about that.
"But the plans that we have put forward - which are very much in accordance with what customers are asking us to do - require an investment of around £20billion in that 2025-2030 period, and that would result in a bill (increase) of around 40 per cent."
Water bills are going up from Monday, April 1, with the average price rise will see £28 a year added to a water bill
PA
The nine shareholders said they had been in talks with Thames Water and the regulator to try and find a way through to help the company's turnaround plan.
But in a statement, they said: "After more than a year of negotiations, Ofwat has not been prepared to provide the necessary regulatory support for a business plan which ultimately addresses the issues that Thames Water faces.
"As a result, shareholders are not in a position to provide further funding to Thames Water."
Despite the financial pressures the company is under, Thames Water stressed that it had £2.4 billion of cash currently available to it so the company will not need to be nationalised immediately.
They are still generating enough money to keep it going day-to-day for up to 18 months.
Mr Weston added: "It is very clear listening to our customers that what they value most is high quality clean drinking water and that we do do all that we can to protect the environment.
"Those two things are primarily what is driving the investment that we are having to make in our network in that five-year period."
Ofwat wants the company to clean up its act when it comes to the environment, and improve customer service.
Ofwat said: "Today's update from Thames Water means the company must now pursue all options to seek further equity for the business to turn around the performance of the company for customers."
Chancellor Jeremy Hunt said the shareholder move "should not have an impact on the services received by customers" and that the company was still solvent.
"There are parts of the country where the service has not been up to scratch, including in my own constituency," he added.
If the rise in bill were to be granted, many households would be put under further financial strain as the cost of living crisis means household bills are much higher than a few years ago.
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Mr Weston said he recognised any increase in bills "could be very, very difficult for people", adding that the company was looking at what could be done to help the most vulnerable.
Households could see their water costs go up on Monday as prices are are hiked by around six per cent.
In England and Wales, bills are set to rise by around 6.2 per cent a year, driving an increase of £28 a year on average, according to Water UK.
Meanwhile, Scotland is set to see a higher rise of 8.8 per cent, or an additional £35.95 a year, according to Scottish Water.