Thames Water unable to repay debt, admits boss

Standing at a cost of £190m, the figure forms part of the £1.4bn of external debt it has maturing over the coming years. Asked directly if it’s got enough money to meet the first repayment in front of parliament’s Environment, Food and Rural Affairs Committee, the firm’s joint interim chief executive Alastair Cochran said: “Not currently, no.” 

Instead, Cochran said lenders due the money will be asked to extend the repayment date. If that extension isn’t granted, then spending cuts would have to be made to come up with the funds. 

Meanwhile, its new chair Sir Adrian Montague blamed the company’s financial troubles on bills being kept at “very low” levels by the regulator. He said: “Some of the problems that we’re now encountering were because the bills were kept deliberately very low over the last period.  

“It seems a case of ‘we would say that wouldn’t we’ but there is truth there.”  

Also appearing in front of the select committee, bosses at industry regulator Ofwat said that – while Thames Water was an “outlier” due to its level of borrowing – the problem was not isolated to the company.  

Ofwat’s chief executive David Black added: “We also agree that the finances of the sector are not in the shape they ought to be. We think that putting the public interest first needs to come much clearer in terms of the way that the companies are acting.

“And so we think they haven’t met public expectations. That’s very clear.”