Hunt says Thames Water customers shouldn’t pick up the tab for its mistakes
Thames Water must sort out its own financial problems, chancellor Jeremy Hunt has declared, as the future of the trouble water company hangs in the balance.
Speaking in Washington last night, Hunt told reporters that the government would never insure investors against poor decisions.
During a visit to Washington for the spring meetings of the IMF and World Bank, the chancellor said:
“It would be completely wrong for Thames Water customers to pick up the tab for bad decisions by Thames Water’s owners and managers.”
Hunt’s comments come as Thames Water prepares to tap the debt markets in an attempt to fund a rescue plan and repair its finances.
Its board is expected to meet today to rubber-stamp a revised five-year spending plan, which could be released tomorrow; it would then approach lenders to fund the proposals in the coming days.
Thames Water to add to debt mountain in bid for survival
The Guardian reported last weekend that Thames Water – which has debts of £14bn – has just six weeks to convince its regulator that it has a viable survival plan for its business.
Although it could have enough cash to survive for about 15 months, insiders and investors fear that it must move quickly to strike a deal with its watchdog to stave off insolvency.
Thames Water has six weeks to agree survival plan
Its parent company, Kemble Water Finance, missed an interest payment earlier this month, after its investors abandoned plans to provide £500m of emergency funding in a row with the water regulator. Thames has been pushing Ofwat to let it raise bills by 40%.
Hunt said the government was prepared for “all possible outcomes”, but also denied that the UK’s reputation as a destination for international investment would suffer if Thames Water fell into administration.
The chancellor argues that markets need to work properly, saying:
“Of course we want to attract investment into the UK but we do that on the basis of laws and making sure we have transparent regulation and people are able to get very good returns.”
