Ministers must hold the line on Thames Water. It got itself into a mess | Nils Pratley
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It seems Thames is trying to scare the government into thinking the world will end if it falls into ‘special administration’. Make-your-mind-up time approaches for the board of Thames Water. The directors may not like Ofwat’s so-called “final determination” last month – even though it allowed bill increases of 35% over the next five years – but, if they wish to dispute it, they are free to appeal to the Competition and Markets Authority (CMA). The deadline to do so is 18 February.
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On the way, however, it seems Thames is engaging in another round of lobbying by trying to terrify the government into thinking the world will end if the company falls into the “special administration regime”, or SAR – the temporary nationalisation setup for failing or bankrupt water companies.
That, at least, is the way to read the report in the Times this week that Thames has warned ministers (again) that it is in danger of disappearing down the SAR plughole unless Ofwat coughs up more concessions. The corporate pitch should be familiar by now: think about the bondholders who would be burned if Thames collapses; they are also the folk you need to fund nuclear power stations, windfarms and more.
Anything is worth a try, of course, when you’re in a hole as deep as Thames’s. And, since the government is squatting on every regulator in the land to find ideas for economic growth (to the point of ousting the chair of CMA this week), raising visions of a riot in the debt markets is an obvious line to take.
