Sewage spills soar as debts swell
Troubled Thames Water saw a 40% increase in pollution incidents in the first half of the year as its debt continued to balloon.
Britain’s largest water company reported 359 incidents of so-called category 1 to 3 pollution in the six months to September 30, which it said was caused by a wet spring and summer.
Its boss Chris Weston said the company was making “solid progress” in its attempts to turn the situation around, but record rainfall meant there was an “unfortunate increase” in pollution and leaks.
The ailing business was saddled with debt of nearly £16bn in the six months, a 7% increase on the same period last year.
The company said bills needed to rise or the business would not recover from the financial crisis. However, if the company fails, the water supply will not be affected.
All water companies have faced backlash over sewage discharges and leaking pipes in recent years, but Thames Water has been in the spotlight because of its debt load and the fact that a quarter of the UK population relies on it.
Critics argue that the water industry has historically neglected investment in favor of paying executive bonuses and shareholder dividends.
Water bills could rise by an average of £19 a year (21%) between 2025 and 2030, but a final decision on the proposed rise will be made on December 19.
Thames Water has previously said it would need to increase water bills by 53% to shore up its finances.
The company could run out of money within the first three months of 2025, here’s why its creditors Provided another £3 billion in cash loans It will be issued in two tranches, with the first £1.5bn tranche likely to be released in February.
The company is awaiting a court approval date next week to approve the cash infusion, which could be crucial as it means it has enough cash to last until next October.
An insider told the BBC that Thames’ financial position would be at a reasonable level if the company were not saddled with huge debts.
In its latest results, the company reported pre-tax profits of £249.6m, up 20% on the previous year.
However, Thames also needs to raise about 4 billion pounds of new equity, which does not need to be repaid.
While several interested parties are likely to put the money in, investment will depend on how much pain lenders are willing to endure and whether water industry regulator Ofwat gives the go-ahead for the company to push for a significant rise in bills.
Mr Weston said on Tuesday there had been “considerable interest” in the company from potential equity investors.
