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Thames Water is saddled with billions in debt and shareholders will not provide any more cash for the deeply challenged company.
Upgrading water pipes, stopping leaks, and preventing sewage spills will cost billions, and the company has no obvious way of getting the money. The last hope was a massive hike in customer bills, but the regulator has said no to that.
In the face of these enormous financial challenges, the company is suggesting a novel solution to its liquidity problems.
Instead of hiking customer bills, the company is proposing to stop all spending on providing clean drinking water. Under the plan, the water provided to customers would still be suitable for laundry, washing the car, flushing the loo, and watering the garden, but it wouldn’t be safe to drink.
The company says that consumers will be able to buy water very cheaply from supermarkets, to use for drinking and cooking. The extra cost for the average consumer will be much lower than paying Thames Water to clean the water properly. The company can then use the money saved to pay for all those extra pipes, paying interest on its debts, and paying dividends to shareholders again.
A spokesman said, ‘I know you might expect a water company to deliver clean drinking water to its customers, and this is something we aspire to do again in future. In the short term, we will prioritise dealing with sewage spills, and all the other tedious stuff that the regulator is banging on about.
‘We need the regulator to endorse our exciting and innovative plan in full, and not to water it down.’
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