The UK’s largest water supplier has told MPs that their customers “will not pay higher bills” to cover higher interest payments of their debts.
The watchdog Ofwat insisted that Thames Water’s customers must not “pay a penny more” due to “their poor performance” and their mountain of debt totalling around £14 billion.
The higher inflation rates has meant that Thames Water are paying higher interest on the £14 billion of debt and last week shareholders injected £750 million of funding.
On Wednesday Thames Water chiefs and Ofwat were under scrutiny from MPs at the Environment, Food and Rural Affairs Committee.
Cathryn Ross, the interim joint chief executive of Thames Water, was asked if the higher payments will end up with their customers paying more.
Ross told MPs, “No. There is no mechanism within the current price controls to enable us to put up bills to reflect higher interest payments.”
David Black, the chief executive of industry regulator Ofwat told MPs, “Thames Water shareholders are up for the additional costs associated with their poor performance.
“That is evidenced by the fact they’ve had to inject additional funding into the company and have had very little in the way of dividends payments over the last seven years.”
Black added, “Thames’ customers don’t pay a penny more of Thames’ 80% gearing versus other companies’ 60% gearing.”
Speaking on Wednesday, Thames Water joint chief executive Alastair Cochran said they are “very focused on turning this business around.”
“This business matters – it serves 15 million customers. Our job collectively is to turn this business around,” he said.
“We know performance both operationally and financially hasn’t been where it needs to be. We’ve been very transparent about that.”
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