Thames Water could face government inquiry amid bankruptcy warning
A potential Parliamentary inquiry is to be added to the seemingly ever-growing list of financial and operational problems at Thames Water.
The Financial Times reported this weekend that the bedraggled utilities provider may be called in front of MPs once more to verify aspects of its accounts that came to light last week.
In July, the company’s finance director told MPs that a £500m loan had been secured from shareholders. Instead, the money came from its parent company, Kemble Water Holdings.
In light of the news, Sir Robert Goodwill, chair of the environment, food and rural affairs committee said the panel was considering a new investigation into the company.
The company, which supplies roughly one quarter of England’s homes and businesses, is two weeks removed from a £73m customer refund order handed down by industry regulator Ofwat.
More widely, the company is sitting on a £14.7bn debt pile, as well as soaring energy and labour costs which have led to pre-Christmas lay-offs.
PwC, the group’s auditors, said this weekend that there is “material uncertainty” about its future as there is no roadmap to refinancing a £190m loan held by one of the company’s subsidiary businesses.
Thames Water’s proposed for the next five years includes £18.7bn total expenditure and a record £4.7bn investment in its network and assets to improve water security. The plan intends to deliver more for customers and the environment whilst addressing wider challenges, including tackling leaks and storm overflows.
In July, Ofwat’s chief executive David Black told MPs that the regulator is “ready to employ” a special administration regime for Thames Water if it fails to secure the investment it needs.
Thames Water has been contacted for comment.