Thames Water Under Fresh Investigation by UK Water Regulator

(Bloomberg) -- Thames Water is under investigation by water regulator Ofwat over whether the delayed delivery of environmental protection schemes means the company has breached its obligations.

Thames Water will only deliver about 100 of the 812 schemes it committed to as part of the Water Industry National Environmental Program during the five years to 2025, according to a statement Wednesday.

“Customers have paid for Thames Water to carry out these essential environmental schemes,” said Lynn Parker, senior director for enforcement at Ofwat. “We take any indication that water companies are not meeting their legal obligations very seriously.”

Any penalty would be a blow to heavily indebted Thames Water, which only has enough cash to last until the end of March. It’s a key moment for the company as it undergoes restructuring and an equity-raising campaign to try to stave off special administration.

As a result of an enforcement case, Ofwat can obtain legally binding undertakings and impose enforcement orders. For the most serious contraventions, it can impose financial penalties, according to the regulator’s website.

Thames Water will cooperate fully with the enforcement program, according to a spokesperson. Customers won’t pay twice for investment that has already been funded through bills, they added.

The measures taken against Thames Water don’t go far enough, according to anti-privatization campaigners We Own It. 

“The government must put an end to the crisis, stabilize the landscape for finance and households, and bring Thames Water into special administration and permanent public ownership,” Matthew Topham, lead campaigner at We Own It, said in an emailed statement.  “Ofwat must cancel its bill rise at Thames and ask ministers to bring the firm into public ownership so it works for people, not profit.”

Why Customers Will Pay the Bill for UK’s Water Crisis: QuickTake

(Adds Thames Water statement in sixth paragraph, campaign statement in seventh)

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