The report, ‘Money down the Drain: getting a better deal for consumers from the water industry’, has been described by Thames Water as “misleading”.
It has has published a point-by-point rebuttal of the report on its own proposition in an attempt to “set the record straight” on a number of issues including tax avoidance, infrastructure investment and the company’s ability to finance major projects.
The water company has denied a claim in the report that Thames Water had requested loans from the government to finance the Thames Tideway Tunnel project.
Thames Water said: “The government will not, and has never been asked, to provide loans to Thames Water in order to fund the construction of the Thames Tideway Tunnel.”
Although Thames Water confirmed that the government had offered contingent financial support to the project, it said that this was “not a guarantee”, and that the support is to cover “exceptional and remote project execution risks that cannot be commercially insured on terms offering value for money to our customers, or insured at all.”
While the company admitted that it had a financing company that was incorporated in the Cayman Islands, it also said that it received no tax advantage from this arrangement and that “all funding arrangements of Thames Water are clearly understood by HMRC, which has designated the company as ‘low risk’.”
In addition, Thames Water refuted the assertion that the company’s profits were not spent on improving customer service but were transferred “straight to shareholders who have seen extraordinary returns on their investment.”
Thames Water argued that its 2013 accounts demonstrated that more than £90 million of efficiencies were instead reinvested in the business.
A spokesman for Thames Water said: “Many aspects of this report are misleading. We are seeking a meeting with Centre Forum to discuss their report. In the meantime, this point-by-point rebuttal sets the record straight.”
“Our commitment to delivering the best possible service to our customers has resulted in us achieving our leakage targets for seven consecutive years, providing, arguably, the best water quality in the world1, and securing investment of nearly £5 billion to fund much needed improvements to treatment processes and network infrastructure,” said Thames Water.
A spokesman for Centre Forum, said: “It’s understandable that Thames Water should want to respond to our report and we welcome their contribution. We look forward to talking through their concerns in more detail.”