MPs urge government to reveal bailout plan for struggling Thames Water
A group of MPs has urged the government to publish its contingency plans for bailing out Thames Water amid fears that taxpayers could be on the hook for billions of pounds.
The Telegraph reported that the group, led by Liberal Democrat MP Sarah Olney, demanded ministers to reveal details on “Project Timber”, the name of the government’s plan for rescuing the UK’s largest water company in the case that it fails.
Olney is pushing for a motion to debate the issue in the House of Commons.
“The public has a right to know what ministers plan to do if this disastrous situation occurs,” she told The Telegraph.
“This Conservative government’s refusal to make their contingency plan in the event of Thames Water’s collapse public is nothing short of a cover-up.”
The news comes as Thames Water is due to repay a £190m loan in April – one chunk of around £1.4bn maturing in the coming months – which its bosses have previously claimed they do not have enough money to cover.
It is struggling under an £18bn debt pile. Meanwhile, bond markets have been spooked by a potential heavy fine from regulator Ofwat, which is investigating whether a £37.5m dividend from Thames Water’s parent company, Kemble, to service “external debt obligations” breached licencing rules.
Tim Whittaker, associate director at research institute EDHEC Infra & Private Assets, told The Telegraph that if the loan could not be refinanced or investors did not inject more money, there was “a very real risk Thames Water’s parent Kemble could be put into administration”.
An Ofwat spokesperson told City PM: “Ofwat does not comment on speculation. Thames Water needs to continue to deliver on its turnaround plan to improve its operational and environmental performance.
“It is for the company to secure shareholder backing to improve its financial resilience. We will continue to closely monitor the company’s progress as they do so to protect customers’ interests.”
A government spokesperson said: “Water companies are commercial entities and we do not comment on the financial situation of specific companies as it would not be appropriate. We prepare for a range of scenarios across our regulated industries – including water – as any responsible government would.”
Thames Water declined to comment.