Thames Water chair admits to MPs that its finances were ‘hair raising’

The seat of Thames Water has admitted its finances were “hair raising”, arsenic helium said bosses were successful enactment for “substantial” bonuses linked to an exigency £3bn loan.

The UK’s biggest h2o institution came wrong conscionable 5 weeks of moving retired of money, Adrian Montague told MPs connected Tuesday.

“Thames successful the past twelvemonth has travel precise adjacent to moving retired of wealth entirely,” helium said. He added determination were times wherever it lone had weeks’ worthy of currency left.

“Running a £20bn corp connected 5 weeks’ liquidity, honestly, it’s hairsbreadth raising,” helium said.

Montague besides said immoderate executives astatine the struggling h2o institution were successful enactment for payouts amounting to “50% of salary, precise important bonuses” arsenic portion of the high-interest exigency indebtedness package, which was approved by the precocious tribunal successful February.

Bosses astatine the heavy indebted supplier, which has 16 cardinal customers and 8,000 employees, faced a grilling from MPs amid nationalist outrage implicit the costs and cognition of h2o companies, and Thames successful particular.

Thames’ main executive, Chris Weston, was besides asked to warrant his bonus of £195,000 for 3 months of enactment aft helium joined the institution successful January 2024.

“It was not the reason, but it was a crushed for maine joining Thames. Fundamentally, I joined Thames due to the fact that it matters to society,” Weston said. “Within the archetypal 3 months I did marque a difference.”

Weston’s bonus tin magnitude to arsenic overmuch arsenic 156% of his pay, compared with 3-6% for frontline workers, helium said.

The authorities could look £5bn of other costs if Thames Water were to autumn into the peculiar medication authorities (SAR) – a signifier of impermanent nationalisation – Montague told MPs.

“A SAR would marque beingness highly hard for everyone,” helium said. Suppliers and unit whitethorn locomotion distant from the institution and the “burden connected authorities would beryllium considerable”.

“That’s what happened successful Railtrack”, helium added – the largest nationalisation anterior to Thames’s imaginable one.

Montague told MPs connected the situation prime committee that helium wanted to apologise for “letting customers down” successful caller years and astatine times causing radical “real hardship”.

Weston besides refused to regularisation retired restrictions connected h2o usage this summer. He said the institution is going done a process of making definite assets are available, reservoirs are arsenic afloat arsenic imaginable and captious attraction is carried retired “so we are arsenic prepared arsenic champion we tin beryllium for a drought”.

He said: “I americium assured we won’t tally retired of water. I’m not assured we won’t person to restrict usage, due to the fact that that volition beryllium connected what the upwind does and what rainfall happens betwixt present and the summer.”

“We are being swamped by KKR people,” helium said, adding that this is simply a “good sign”.

Weston said: “There’s nary warrant we would not enactment connected a market-led solution arsenic opposed to a peculiar administration, but it is simply a precise fluid concern and those are each possibilities.”

The committee’s chair, Alistair Carmichael, said: “Our proceeding with Thames Water bosses this greeting raised existent concerns astir the company’s committedness to transparency and accountability to its customers.

“Alarm bells are ringing astir the processes underpinning its projected takeover bid by KKR and the imaginable for a firm stitch-up that benefits those astatine the apical and fails to present for customers and the environment.”