Embattled Thames Water was hit by a fresh blow today after it was told by its regulator it faces the threat of multi-million pound fines after it had failed to complete more than 100 environmental protection projects. Ofwat said it is opening an investigation into whether London’s water supplier is in breach of its legal obligations through the “delayed delivery of environmental improvement schemes” that customers have already paid for through their bills.
The investigation marks the start of an enforcement action that could lead to a fine up to 10% of the turnover of the relevant subsidiary of the Thames Water group, which serves 16 million people in the capital and parts of southern England. It comes as the utility waits to hear from a judge whether Thames Water can press ahead with a proposed £3 billion financial restructuring that will save it from a temporary renationalisation. Thames has more than £16 billion of debt.
Thames Water committed to deliver 812 environmental schemes as part of the Water Industry National Environmental Programme (WINEP) from 2020 to 2025. These were to improve the quality of water in the Thames and other rivers and water courses in its catchment area and to prevent sewage flooding. Ofwat said: “Completing these environmental schemes on time is essential for companies to ensure that they are compliant with statutory requirements.
However the regulator said that “Thames Water alerted Ofwat and the Environment Agency that it will be unlikely to deliver more than 100 of these environmental improvement schemes on time, by 31 March 2025.”. Lynn Parker, senior director for enforcement at Ofwat, said: "Customers have paid for Thames Water to carry out these essential environmental schemes. We take any indication that water companies are not meeting their legal obligations very seriously.
“Therefore, we have launched an investigation to understand whether the delayed delivery of environmental schemes means that Thames Water has breached its obligations. If we find reason to act, we will use our full range of powers to hold Thames to account for any failures and will require them to put things right.". Thames Water is also locked in a dispute with Ofwat about how much it can put up bills over the next five year period. The regulator has said they can only rise by 35%, in today’s money, while the company has asked for a 53% increase.
