Troubled Thames Water waist-deep in trouble over sewage dumping

The heavy fine for the UK’s biggest water supplier comes shortly after the troubled utility company announced it was in talks with creditors to seek new equity, to prevent it running out of cash by May next year.

UK water regulator Ofwat has fined Thames Water £104m (€124m) for its part in illegal sewage discharges into rivers and sea.

The UK’s biggest water company was one of three water companies to be fined and, already deeply in debt, Thames Water was told to pay back a total of £56.8m (€67.75m) back to its customers.

“While our performance penalty value is among the highest in the sector, this reflects that Thames Water has three to four times more customers than other water companies, so our penalty rates are set proportionally higher,” said a spokesperson told Euronews Business, adding that the “penalty per household ranks Thames as an average performer in the industry”.

The penalty comes shortly after the troubled utility company, serving about a quarter of the UK population including most of Greater London, announced talks with its creditors to seek new equity, otherwise it would run out of cash in May 2025.

What are the targets missed?

Ofwat’s Water Company Performance Reports are a regular check-up on how water companies’ stated targets are met with a view to improving the service and protecting the environment.

“No company has made it into our ‘leading’ category for the second year running and progress against key targets, including pollution and internal sewer flooding, is unacceptably slow,” Ofwat CEO David Black wrote in his introduction.

The report found that companies are falling behind on key targets for pollution and internal sewer flooding. “Despite water companies committing to reduce pollution incidents by 30% there has only been a 2% reduction,” read the report.

Thames Water has been reprimanded for its underperformance, although it was highly rated for its water quality.

“We delivered our lowest ever annual leakage volume and recorded our best performance over the past five years for water quality (CRI), sewer flooding, and clearance of blockages,” said a spokesperson on behalf of Thames Water.

For the industry overall, the report said that companies were behind with their targets of reducing leakages (achieved 6%, against a target of 16% by 2025) as well as reducing internal sewer flooding incidents (10% completed, the target is 41% by 2025).

Customer satisfaction had deteriorated further, to its lowest point since Ofwat introduced the measure in 2020 – Thames Water fared the worst out of all 17 water companies examined in the report.

“Companies must implement actions now to improve performance,” read the report, adding: “The challenge for water companies is to match the investment with the changes in company culture and performance that are essential to deliver lasting change.”