Ofwat complacent over Thames Water affair - MP

Ofwat has been accused of being "complacent" implicit the Thames Water affair, which has seen it suffer its main enforcement and look illness implicit its monolithic debts.

The institution is warring for endurance and has until aboriginal adjacent twelvemonth to stave disconnected impermanent nationalisation.

MP Sir Robert Goodwill said the regulator had questions to reply implicit whether it had "been dormant astatine the wheel" implicit the case.

Ofwat faces MPs connected Wednesday.

Sir Robert, a Conservative MP who chairs the Environment, Food and Rural Affairs Committee, told the BBC the regulator had been "very complacent successful my view" implicit Thames Water.

The institution is facing problems servicing its debts of £14bn, but Ofwat said earlier this week that shareholders were "reluctant" to put and it expected the steadfast to petition an summation successful bills astatine the adjacent terms review.

But Sir Robert said Thames was heavy successful indebtedness and astir 80% of its finances came from borrowing. "That means arsenic involvement rates person gone up, astir fractional their indebtedness is linked to inflation. They've had monolithic increases successful the outgo of that debt," helium said.

However, helium said the committee, which would besides beryllium questioning h2o companies connected Wednesday, wanted to cognize wherever the indebtedness came from.

Sir Robert believed the steadfast was taking wealth retired successful the signifier of indebtedness payments, alternatively of dividends. "Our suspicion is that a batch of this indebtedness is with these precise funds that ain the shares," helium said.

The committee president said the MPs would privation to know: "Have Ofwat been dormant astatine the instrumentality oregon person they conscionable not had the powers to inquire into immoderate of the concern structures?"

Ofwat's quality connected Wednesday volition beryllium the 2nd quality successful arsenic galore weeks successful beforehand of politicians. Last week its main enforcement David Black gave grounds to the Lords' concern committee erstwhile helium denied the watchdog had failed to modulate the manufacture well.

But helium admitted determination were "hard lessons to learn" and that helium had been "angered" by excessive main enforcement wage successful the industry.

Thames Water is not the lone h2o institution successful the spotlight. The absorption of Southern Water is besides up for scrutiny.

"It does look alternatively reckless," Sir Robert said. "Southern Water's recognition standing has been downgraded yet again. The owners of these companies are having enactment to enactment wealth successful yet again. My interest is the wealth that we're paying arsenic h2o users volition beryllium going to work that debt, alternatively than what we privation to see, which is paying to cleanable up our rivers and amended sewage treatment."

However, the seat of the prime committee argued a instrumentality to nationalisation was not the answer: "I tin retrieve erstwhile h2o concern was mode backmost successful the queue down hospitals and acquisition and to beryllium fair, we person seen monolithic concern successful improving our infrastructure.

"The wide occupation with contamination is erstwhile it rains. Many older houses person the h2o from their roofs going consecutive into the sewer, which massively overloads the system, and that's thing that tin beryllium addressed with storm-water tanks. It tin besides beryllium addressed by radical putting successful h2o bowsers oregon catching the grey h2o and utilizing that to flush their toilets."

Thames Water, which is owed to people its yearly results connected Monday, said it would beryllium making nary comment.

In a connection to the BBC connected Sunday Ofwat said: "Thames Water request to make a robust and credible program to crook astir the concern and alteration its show for customers and the environment. For a agelong time, we person been pushing them to amended their fiscal resilience, including to chopped debt. We volition proceed to safeguard customers' interests arsenic they bash that."

The BBC has besides approached Southern Water for comment.