Ofwat has initiated an investigation into Thames Water after the company acknowledged that it will not be able to complete over 100 environmental projects financed by its customers.
The regulator will assess whether the delays in these initiatives constitute a violation of the firm’s operating licence, given that Thames Water is the largest water provider in England.
These delayed projects encompass enhancements to sewage treatment facilities and efforts to minimize wastewater leaks.
Thames Water expressed its commitment to fully cooperate with the inquiry but conceded that it has encountered “challenges in executing all components” of the initiative due to rising costs.
The firm had committed to a total of 812 projects as part of a broader national program aimed at complying with regulatory requirements in the period from 2020 to 2025.
However, Ofwat reported that Thames Water indicated it is unlikely to finish more than 100 of these by the set deadline at the end of March.
Lynn Parker, Ofwat’s senior enforcement director, remarked, “Customers have invested in Thames Water’s crucial environmental initiatives.”
“We take any signs that water companies are failing to meet their legal responsibilities extremely seriously. Should we find grounds to take action, we will utilize our full authority to hold Thames accountable for any shortcomings and will demand corrective measures.”
A spokesperson for Thames Water stated that the company is collaborating with Ofwat and emphasized, “Customers will not incur additional costs for investments that have already been covered in their bills.”
The spokesperson also noted that the company has been adversely affected by “cost increases exceeding the inflation rate associated with our financial allowances.”
Meanwhile, the parent company of the beleaguered utility is projected to run out of funds by late March and may be forced into special administration without court approval for a restructuring plan.
It is currently facing approximately £16 billion in debt and requires £3.3 billion over the next five years to remain operational.
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