The UK's largest water supplier is contemplating a price hike surpassing 50%.
UK's major water supplier, Thames Water, serving about 16 million customers in London and the south, is contemplating a price hike above 50% in the near future. The company, in private ownership, has expressed discontent towards the "stringent" cost-cutting measures imposed by regulatory body Ofwat, implying they are discouraging potential investors.
Thames Water has been criticized for reportedly frequently discharging wastewater into rivers and the sea, leading to significant financial obligations. The company has been under Ofwat's monitoring since July, with an external assessor assigned. A conglomerate, including a British and a Canadian pension fund, holds ownership of Thames Water. The British water infrastructure was privatized in 1989.
Thames Water's CEO, Chris Weston, disclosed on Wednesday that the increased water tariffs would contribute towards renovating its pipelines and treatment facilities, as well as enhancements for households and the environment. Customers will now shoulder the long-term emphasis on maintaining affordable prices. Weston also highlighted the intent to upgrade the social tariff, enabling additional homes to derive benefits from it.
Ofwat, however, had previously dismissed Thames Water's initial price surge proposal of 44% and demanded cost reductions.
In early August, the regulator also imposed hefty fines totaling millions, upon three water providers, including Thames Water. The organizations were accused of inappropriately handling wastewater for an extended period. A substantial portion of the UK's wastewater infrastructure still dates back to the Victorian era.
Thames Water's upcoming price hike in water supply could face criticism from customers, given their history of discharging wastewater into rivers and the sea. Despite Ofwat's rejection of a previous 44% increase proposal and imposing fines for wastewater mismanagement, Thames Water argues that the increased tariffs are necessary to improve their water supply infrastructure and facilities.
