Thames Water, the UK’s biggest water provider, has been hit by a record fine by regulator Ofwat.
The company has been fined £122.7m following Ofwat’s “biggest and most complex” investigation.
It follows two investigations related to its wastewater operations and dividend payouts.
Of the total fine, £104.5m – 9% of Thames Water’s turnover – has been levied for breaches of wastewater rules. It’s just below the maximum 10% of turnover Ofwat could have applied.
Another £18.2m penalty will be paid for breaches of dividend payment rules.
The fine will be paid by the company and its shareholders, Ofwat said, rather than customers.
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It’s bad news for Thames Water, which serves 16 million customers across London and the South East, and has just about fended off effective nationalisation, having secured an emergency £3bn loan. Its debts now top £19bn.
These fines were not factored into Thames Water’s financial planning for the next five years. The company’s chief executive, Chris Weston, told a recent sitting of the Environment, Food and Rural Affairs select committee that Thames Water’s future was dependent on Ofwat being lenient with fines.
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