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Thames Water’s CEO, Chris Weston, may have his £195k bonus nullified by regulator Ofwat as part of an update into executive pay and financial resilience across the sector. If the bonus is confirmed, Ofwat will insist that it is not paid by customers but by the operating company owners instead. Other companies, such as Southern Water, have said shareholders, rather than customers, will pay bonuses. However, Thames Water has effectively no shareholders after they refused to pay the company earlier this year. In turn, lenders offered a £3bn loan at high interest rates to cover the period until expected bill rises of as much as 50% encouraged new investors to pump in over £3bn to stabilise the company’s debts.
Thames Water owners refused to increase the proposed bill surges of 44% above inflation for the next five years, and Ofwat agreed to bill increases of “only” 21%. Currently, most Thames Water lenders are finalising a restructuring of the company involving taking a discount on the money they are owed, sourcing new operational expertise and exploring the possibility of a break-up or public listing.
Despite Thames Water’s ongoing troubles, yesterday environment secretary Steve Reed ruled out nationalising the firm. He recently commissioned Sir John Cunliffe to conduct an independent review of the sector, citing “regulation and governance” as the industry’s troubles
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