Thames Water CEO quits as Government reportedly draws up …
Thames Water has confirmed its CEO has stepped down amid reports of the company’s future. The Government is reportedly drawing up contingency plans for emergency nationalisation as its debt has grown to £14bn.
Ministers are said to be in talks about the possibility of temporarily bringing the utility company back into public hands under a so-called special administration regime (SAR). The discussions are understood to be taking place between water regulator Ofwat, the Department for Environment, Food and Rural Affairs (Defra) and the Treasury, but the plans are at a very early stage and may not need to be put in place.
Sarah Bentley resigned with immediate effect on Tuesday (June 28) amid mounting worries. Thames Water[1] is the UK’s biggest water supplier and provides water services for 15 million people in London and the South East.
The firm is now reportedly racing to raise £1 billion from investors to shore up its finances, with AlixPartners said to be advising the firm on turnaround plans. A Government spokesman said: “This is a matter for the company and its shareholders.
“We prepare for a range of scenarios across our regulated industries – including water – as any responsible government would. The sector as a whole is financially resilient. Ofwat continues to monitor the financial position of all the key water and wastewater companies.”
Thames Water – owned by a consortium of pension funds and sovereign wealth funds – has come under pressure in recent years over its poor performance in tackling leaks and sewage contamination, while facing criticism for handing out big rewards to top bosses and shareholders. Ms Bentley, who was appointed in 2020, said in May that she would give up her bonus after the company’s environmental and customer performance suffered.
But even after giving up the bonus, the chief executive managed to double her pay, raking in £1.5 million. On announcing her departure, she said: “The foundations of the turnaround that we have laid position the company for future success to improve service for customers and environmental performance.”
Thames Water’s owners last year invested £500 million in the firm – the first injection of equity into the group since privatisation. They pledged a further £1 billion, subject to conditions, and warned that “further shareholder support may be required”.
The group’s shareholders include Chinese sovereign wealth fund China Investment Corporation, UK private pension fund the Universities Superannuation Scheme, and Abu Dhabi Investment Authority subsidiary Infinity Investments. Ofwat warned last December over the financial resilience of Thames Water, as well as Yorkshire Water, SES Water and Portsmouth Water.
Work and Pensions Secretary Mel Stride said he is confident that, whatever happens with Thames Water, the “water will continue to flow”.
Appearing on LBC, he said he could not speculate on the specific company, but added: “Ofwat has as part of its remit a requirement to look at the resilience of the entire sector and will have been looking at and continue to look very closely at Thames Water.” He said the Government “has contingency arrangements in place to cover any scenario which may play out and what I’m supremely confident of is, whatever the situation is at Thames Water, the water will continue to flow”.
References
- ^ Thames Water (www.getreading.co.uk)
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