Ofwat launches enforcement case over Thames Water's failure to deliver promised environmental schemes on time. The investigation will determine if the struggling water company breached its legal obligations. Customers face significant bill increases to fund further infrastructure improvements, but Thames Water's financial future remains uncertain.
Thames Water is facing an investigation by the industry regulator, Ofwat , over its delayed delivery of environmental improvement schemes. The enforcement case aims to determine if the company, currently struggling with a £19 billion debt, breached its legal obligations. Thames Water itself alerted Ofwat and the Environment Agency that it is unlikely to complete more than 100 out of 812 promised improvements by the March 31 deadline.
These schemes fall under the Water Industry National Environmental Programme (WINEP) for the 2020-2025 pricing period. The schemes are crucial for protecting the environment and ensuring clean water supplies. Customers have already paid for these improvements through their water bills, and Ofwat is taking the matter seriously. Lynn Parker, Ofwat's senior director for enforcement, stated, '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.'This investigation adds to the mounting pressure Thames Water is facing. The company has warned it could run out of money next month, potentially leading to a special administration regime unless new financing and equity are secured. A High Court battle between bondholders is currently jeopardizing its preferred rescue plan. Furthermore, Thames Water is yet to decide whether it will appeal Ofwat's final ruling on its allowed bill increases for 2025-30. These increases are already significant, with the average water and wastewater bill across England and Wales projected to rise from £480 to £603 during 2025/26 alone, and Thames Water's 16 million customers facing a 31% hike to £639. A Thames Water spokesperson commented on the investigation, saying, 'We note Ofwat's decision to open an enforcement case into the delayed delivery of WINEP7 and will cooperate fully. Customers will not pay twice for investment that has already been funded through customer bills. We've been very open about the challenges of delivering all the elements of our WINEP 7 programme, which has been impacted by cost increases that are higher than the inflation index applied to our allowances. We informed Ofwat of this in August 2023. We remain committed to delivering all our WINEP commitments.
THAMES WATER OFWAT ENVIRONMENTAL SCHEMES WINEP BILL INCREASES FINANCES WATER REGULATION
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