Thames Water is being investigated over late delivery of environmental improvement schemes, the industry regulator has announced.
Ofwat said the enforcement case against the company, currently fighting to secure its financial future amid a £19bn debt pile, aimed to determine whether it had breached its legal obligations.
The watchdog said that Thames itself had been in contact to alert it and the Environment Agency that it will be unlikely to deliver more than 100 of 812 improvements it had promised by a 31 March deadline.
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The schemes fall under the Water Industry National Environmental Programme (WINEP) during the current 2020-2025 pricing period.
That ends at the end of March when Thames customers then face steep, inflation-busting increases to bills over the next five years from April to pay for further infrastructure improvements which include widespread storm overflow upgrades to prevent sewage spills.
Lynn Parker, Ofwat’s senior director for enforcement, said: “Customers have paid for Thames Water to carry out these essential environmental schemes.
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“We take any indication that water companies are not meeting their legal obligations very seriously. Therefore, we have launched an investigation to understand whether the delayed delivery of environmental schemes means that Thames Water has breached its obligations.
“If we find reason to act, we will use our full range of powers to hold Thames to account for any failures and will require them to put things right.”
The regulator ultimately has the power to fine the relevant part of the business up to 10% of its annual turnover.
Previous, and recent, penalties paid by Thames include an £18m fine in December for breaking shareholder payout rules while it was also slapped with a £104m bill last summer for sewage failings.
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Thames Water is grappling pressure over improvements to its day-to-day operations while scrambling to secure its financial future.
It has previously warned it will run out of money next month, raising the prospect of the utility entering a special administration regime, unless new financing and new equity is secured.
The company’s preferred rescue plan is currently hanging in the balance due to a High Court fight between bondholders.
Thames is also yet to confirm whether it will appeal Ofwat’s final ruling on how much it is allowed to raise bills by during 2025-30.
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The average water and wastewater bill across England and Wales is set to go up from £480 to £603 during 2025/26 alone – an increase of about £10 a month.
Thames Water’s 16 million customers face a 31% hike to £639 – a rise of £151.
It had sought an increase above 50% across the pricing period.
Sky News has approached Thames for a statement on Ofwat’s investigation.
