Today, Ofwat has offered provisional backing to £600million of investment, half of which will be funded directly by shareholders, to provide much needed improvements in the resilience of water supplies for Thames Water customers. The money will be spent to accelerate work to reduce leaks and bursts and upgrade hundreds of kilometres of water mains.
In our most recent price review, PR19, Ofwat agreed that Thames Water could invest additional money to tackle these major issues, over and above £10bn of investment to improve services which it had already given the green light, if the company’s shareholder also made a major financial contribution and the company developed robust plans to deliver the improvements for customers.
To secure customers’ interests, those plans are scrutinised over multiple stages, the first of which has now been passed. The plans will then be subject to a further three stages of scrutiny by Ofwat with customer protections also in place to ensure the funds are spent efficiently and the commitments are delivered.
Thames Water shareholders will be investing £300million to match the contribution from customers and Ofwat can confirm that the second stage of additional scrutiny will be taking place later in the year.
David Black, Interim Chief Executive at Ofwat, said
“Leakages and bursts have a real impact on communities and improvements for customers are long overdue. Almost two years ago we told Thames Water we would support additional investment to improve services if they submitted robust plans and their shareholders co-funded the investment package .
We are pleased to be making progress towards this extra investment and will continue to make sure that customers’ interests are protected and promoted.”
ENDS
Notes to Editors
- Our Thames Water PR19 final determination can be seen here on page 37.
- A gated process ensures that companies complete activities expected in the correct order so as to receive additional funding to proceed. The process provides assurance that the company is on-track for delivery and meets the objectives required at each stage. Following the approval of gate one, Thames Water will now proceed to gate two where further detail on the plans and next steps will be worked up and submitted to Ofwat.