Eliminating all incidents of pollution in the Thames Water network will be “nearly impossible” and a public debate is needed on the true cost of stopping all wastewater discharges, chief executive Chris Weston has said.
Speaking on the occasion of the revelation of the company’s interim results pollution incidents increased by 40%Mr Weston said customers’ “rising expectations” about water quality and pollution were unlikely to be fully met over the next five years.
River Thames faces a crucial 10 days in which she hopes to gain court approval for the first step towards securing a £3bn loan to keep the business afloat, and two days later she will find out how much regulator Ofwat will let it increase customers’ bills.
The move will determine how much return potential new investors can expect and how much creditors holding nearly £16 billion of the company’s debt will be willing to lose in a restructuring.
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Mr Weston is confident the first step, a High Court hearing into a £3bn bridging loan, will be taken.
As for Ofwat, he said in a media call that it was crucial that the regulator allows a rate of return for investors that reflects “the risk that investors will take on the sector as a whole and the company”.
“Without this, neither Thames Water nor the sector will attract the investment businesses need. »
Increasing returns for investors funded by bills increasing by up to 50% will not be popular. Mr Weston’s message on pollution will also be difficult to digest, but it reflects the reality of underinvestment in an aging and increasingly outdated system.
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Public anger over sewage dumping – where effluent is deliberately dumped into rivers into rivers as a safety measure to prevent it backing up into homes – has increased both political pressure and the cost loan for water companies.
Whatever Ofwat authorizes, Mr Weston said even the £23.7 billion it wants to invest will not clean up the system entirely.
“It’s important to remember that the system works as it was designed,” he said of the outflows, which were built in as a failsafe to the Victorian network.
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The Thames Tideway, a 25km tunnel under the river in London, will open next year, diverting much of the sewage that ends up in the Thames from Acton to Becton, but even that will not eliminate incidents .
“Some are very, very minor, some are serious, so there needs to be a priority on how we deal with this problem, there needs to be a debate about the costs of dealing with these pollution incidents,” he said. he declared.
“This will not eliminate all pollution, achieving this will be almost impossible. So we need to have a debate about cost.
While financial engineering will determine whether Thames Water survives in its current form, the physical engineering of the aging sewerage system is another matter.