Is Thames Water fit for purpose?

Former Ofwat boss Ian Byatt says company must change – or be broken up.

I was delighted to see Jonson Cox’s article in last week’s Utility Week, showing that Ofwat is acting firmly to protect customers and the environment.

The failings of Thames Water go back a long way. When I was running Ofwat, Thames had a level of leaks from its supply system way out of line with other companies. My successor had to push the company hard to spend the money needed to do what it should have done to reduce them.

The level of infiltration from groundwater, some 50 per cent of dry weather flow, into the London sewerage system is much too high.

Pollution incidents have been excessive, with the company recently incurring a record fine of £20 million for pollution described by the judge as “borderline deliberate”.

Customers are now paying higher bills to finance an extravagant £4 billion tunnel under the Thames.

Where Thames Water has performed well, however, is for its global shareholders, and for its senior management, paying massive dividends and huge salaries. Inferior service has been handsomely rewarded.

There is now a new owner and new senior management. Will they be able to turn round this unhappy performance? Cox sets out five next steps for the company, all of which I consider essential.

I hope all these will be properly implemented in the spirit of reform. If not, the public interest points to breaking the company up into more effective units, perhaps separately listed and reparably licensed companies covering the different issues found in London and Oxfordshire.

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