ICSM Utilities Insolvency News: management in panic mode at Thames Water as Andy Burnham becomes PM

By Harry Mottram: 

By Harry Mottram: There’s a sense of panic in the boardrooms of Thames Water in their Reading headquarters as news that Andy Burnham is set to take charge of Downing Street. The privately owned utility is billions in debt with no hope of staving off insolvency and a public image that the Grim Reaper would be proud of. Sewage in the rivers, burst water mains and poorly maintained infrastructure are just some of the problems but the debt mountain is its nemesis.

Thames Water’s CEO Chris Weston has called for clarity from the new Labour leader who has outlined his plans to nationalise the utility and put it out of its agony. Weston told the Press Association this week that the water company has enough funding until October and is relying on creditors for support as they battle to secure a rescue takeover. Except nobody believes him since every attempt to reschedule the debt or find a buyer has resulted in more debts and higher water bills for customers.

Andy Burnham has said he believes public ​ownership is the best option for Thames Water, ​raising the likelihood of nationalisation for the utility. Weston however believes the firm should stay private to benefit shareholders and the lenders and banks who are in hock for some £20bn. He said things were getting better with sewage ⁠pollution down and its underlying profit at £204 million, up from last year. Clean water campaigner Feargal Sharkey said that if the utility is forced to open its books and show the necessary infrastructure repairs as liabilities then it would fail to show it was solvent and its assets would revert to state ownership. Sharkey has appeared on numerous TV and radio programmes promoting the idea which has gained traction as it ‘won’t cost tax payers’ a penny.’

Thames Water was founded in 1989 in the dying days of Margaret Thatcher’s Conservative Government when the state-owned Thames Water Authority was sold.

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