Britain’s struggling Thames Water is proposing to spend more money on environmental improvements

Britain’s Thames Water has proposed spending a further 1.1 billion pounds ($1.36 billion) on environmental projects over the next five years, in an updated business plan aimed at gaining regulatory support.

The company is at risk of nationalization as it struggles with its debt burden of more than £16 billion. It needs to agree on a plan that will help address ongoing sewage leaks and provide some kind of return for investors, without requiring an unacceptable increase in customers. accounts.

Thames Water, which supplies water to around a quarter of the UK population, was plunged into crisis last month when an existing business plan was branded ‘uninvestable’ by its owners.

In the new proposal published on Monday, Thames Water said the increase in spending would go towards cleaning projects and that this would happen without increasing customer bills by more than the 40% jump it had already proposed for the 2025 period -2030.

While that could help win over regulator Ofwat, the company also needs the support of its shareholders, who in March declined to invest a lifeline of £500 million in shares.

Britain’s privatized water industry has come under scrutiny after sewage leaks soared in recent years, following a period when some owners paid out large dividends and saddled companies with debt.

Public outrage over the pollution and the prospect of higher bills to fix the problem have put pressure on the regulator to ensure consumers get value for money, but investors say they still need to make returns, which has led to a standoff over Thames Water.

“We will continue to discuss this with our regulators and stakeholders,” said CEO Chris Weston.

The company said it could also fund an additional £1.9 billion of investment in the business, but that would require an additional £19 in household bills.

Thames Water has until June 12 to get approval for its plan by the deadline set by Ofwat.

The 40% increase proposed by Thames Water is comparable to the 31% increase proposed on average by the other water companies in Great Britain over the five-year period.

Thames Water’s nine shareholders include the Ontario Municipal Employees Retirement System, the UK’s Universities Superannuation Scheme, part of the Abu Dhabi Investment Authority and the China Investment Corporation.

($1 = 0.8077 pounds)

(Reuters)