Richmond Council calls for Thames Water change of ownership

Image above: Richmond Council offices

Concerns raised about Thames Water’s “embattled financial state” 

Thames Water, the utility giant responsible for water supply and wastewater treatment in London, has been criticised by Richmond Council for its dire financial state and poor track record on leaks and sewage discharges. The Council expressed concerns about the potential impact of the company’s financial situation on residents during a meeting held on 11 July.

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Although Thames Water recently secured £750 million in funding from shareholders, the company cautioned that it will require an additional £2.5 billion by 2030 due to its mounting debts, which currently stand at approximately £14 billion. The Council raised worries about how these financial challenges might affect the quality of service provided to residents.

In response to these concerns, Richmond councillors passed a motion to write letters to Thames Water, regulatory body Ofwat, and the Government, highlighting the residents’ worries.

The motion, put forth by Liberal Democrat councillor Alexander Ehmann, emphasised the need for continuity of service and greater investment in repairs and infrastructure. Councillor Ehmann expressed concerns about Thames Water potentially prioritising cost-effective or profitable projects due to its “embattled financial state.”

He specifically mentioned proposals for the Teddington area. Teddington is set to undergo a scheme that involves replacing water sourced from the River Thames above Teddington Weir with treated effluent from Mogden Sewage Works.

This treated water will be transferred through an underground tunnel to the Lee Valley reservoirs. Thames Water presented this proposal in its draft water resources management plan 2024, which aims to address future water shortages and boost drinking water supply.

Images above: Thames Water proposals, impression of the transfer point along the Thames near Teddington

Council reject proposal to call for nationalisation

Despite calls during the meeting to demand the nationalisation of Thames Water, the Council rejected the proposal put forth by Green councillor Chas Warlow. Instead, an amended motion was passed, calling for a change in the company’s ownership model to better serve the needs of residents rather than shareholders. Liberal Democrat council leader Gareth Roberts clarified that the amendment does not rule out the possibility of nationalisation.

Thames Water’s interim co-CEOs, Cathryn Ross and Alastair Cochran, released a statement asserting that the company is in a “robust” financial position. They highlighted the £4.4 billion liquidity as of March 31, 2023, and expressed gratitude for the shareholders’ support. The co-CEOs stated that the company is transitioning to a more focused turnaround plan, with increased investment in networks and assets.

Regarding the issue of leaks, a Thames Water spokesperson acknowledged that the current situation is unacceptable and emphasised the company’s efforts to address it. The spokesperson mentioned the challenges posed by weather conditions in the past year but assured that Thames Water is committed to finding and fixing leaks promptly.

They mentioned that 66,896 leaks were fixed in 2022/23, compared to 61,671 in the previous year, and yet the number of leaks is at a five year high according to information obtained by the Guardian under freedom of information laws. Leaks are estimated at 630m litres a day. The company has repair teams working “tirelessly”, it says, with activity taking place seven days a week.

In response to concerns about the Teddington scheme, the spokesperson said the company is in the early stages of consultation and design. They sought to assure the public that the scheme is designed to safeguard the river’s water quality and explained that the proposed system involves treating highly purified recycled water from Mogden Sewage Treatment Works.

The spokesperson emphasised the need to secure water supplies for the future and highlighted the company’s draft water resources management plan as a comprehensive strategy to address the challenges posed by climate change and population growth.