Thames Water’s £18billion debt pile to come 'at huge cost to the taxpayer' – can you cut your bills?
Thames Water is struggling to find extra cash after its investors said they would not give them a £500million cash injection
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Thames Water is buried under £18billion of debt, which will inevitably deter investment in UK infrastructure, a key bondholder has warned.
If Thames Water become unable to deliver its services effectively, the company will be forced into nationalisation which could “risk contagion” to investment in other projects, an expert has warned.
Shalin Shah, senior fund manager at Royal London Asset Management said forcing Thames Waters’ creditors to take losses risked angering investors at a time when Britain’s ageing infrastructure urgently needs private investment.
The move to nationalisation “would ultimately increase costs for consumers,” he said.
Mr Shah told Bloomberg: “Political risks remain heightened around the balance between maintaining affordability on customer bills and allowing higher returns that unlock much-needed investment in the sector.”
The firm is struggling to find extra cash after its investors said they would not give them a £500million cash injection.
Thames Water has more than 15 million customers
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The regulator, Ofwat, whose approval is needed for any price rises, has so far pushed back on substantial bill increases.
The Government is still facing pressure to intervene and support Thames Water after the owner, Kemble, failed to make an interest payment on a £400million loan last week.
They have also warned that it will miss its deadline to repay £190million to lenders by the end of the month after shareholders refused to put more money into the business.
Thames Water has more than 15 million customers and the current cash crunch could force the Government to intervene and place Thames Water into special administration – a form of nationalisation – “at huge cost to the taxpayer” the asset manager said.
They have told customers to weed their gardens to cut usage, despite leaking 585 million litres of water a day.
The company listed “spring tips” for Britons to reduce consumption ahead of any substantial price rises.
It wrote: “We encourage customers to save water throughout the year. This is particularly important in spring and summer.
“Regularly weed your garden and mulch flower beds and hanging baskets. This will help water retention.”
Another tip urged customers to “take shorter showers” and “turn off your taps when brushing teeth”.
Customers can check if they’re eligible for financial assistance such as social tariffs or WaterSure.
Discounted water bills are offered by water companies throughout the UK to help low-income households afford their water. Schemes differ in terms of who is eligible for help and what assistance is provided.
However, they’re generally available to those that have a household income of less than £17,005 excluding benefits, or £21,749 if the person lives in a London Borough.
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How to cut your water bills:
- Shorten your showers
- Choose showers over baths
- Turn off the tap whilst brushing your teeth
- Collect rainwater
- Contact your supplier
Charles Watson, chair and founder of River Action said: “It is a bit rich Thames Water asking bill payers to follow water saving tips when their broken business model has led to decades of chronic under-investment in their creaky infrastructure that leaks millions of litres of clean drinking water annually and leads to raw sewage discharges, for thousands of hours, in the rivers where they operate. How about fixing your leaky pipes first?”
A Thames Water spokesperson said: “We’re committed to helping customers use water wisely.”