Council calls for change in water company management
By Charlotte Lillywhite - Local Democracy Reporter
13th Jul 2023 | Local News
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Richmond Council has called for a change in Thames Water's model of ownership after raising concerns about its 'embattled financial state'.
The local authority slammed the utility giant's 'poor record on leaks and sewage discharges' at a meeting on July 11.
It comes after Thames Water secured a further £750million in funding from shareholders, but warned another £2.5billion will be needed by 2030 as it faces debts totalling around £14bn.
Richmond councillors raised concerns about the potential impact of the company's finances on residents at the meeting. They voted to write to the company, regulator Ofwat and the Government with residents' concerns and demand "continuity of service, and greater emphasis on repair and investment, are central to any restructuring of Thames Water."
The motion, put forward by Lib Dem councillor Alexander Ehmann, raised concerns about "the extremely distressed state of Thames Water finances, and the additional uncertainty caused to residents already affected by Thames Water's poor record on leaks and sewage discharges."
Councillor Ehmann said the company's "embattled financial state may well intensify their work on projects that are purely the cheapest or the most profitable", including proposals for Teddington.
Lib Dem councillor James Chard added the company "is in a precarious financial position and this puts investment to ensure water quality, support the environment and reduce leakage in jeopardy."
Under the Teddington scheme, treated effluent from Mogden Sewage Works would replace water taken from the River Thames above Teddington Weir and transferred via an underground tunnel to the Lee Valley reservoirs.
Thames Water put forward the proposals in its draft water resources management plan 2024 to tackle future shortages and boost drinking water supply.
The council turned down calls to demand the nationalisation of Thames Water later in the meeting. The motion, proposed by Green councillor Chas Warlow, asked the authority to write to the Secretary of State for Environment, Food and Rural Affairs "urging the Government to take Thames Water back into public hands."
Councillor Warlow said: "What our motion seeks to do is reflect the anger, the outrage of residents when they hear about Thames Water's pollution and their financial shenanigans."
The authority instead passed an amended motion calling for a change to the company's "model of ownership which meets the needs of residents, not shareholders." Lib Dem council leader Gareth Roberts said the amendment "does not rule out a move towards nationalisation."
In an earlier statement, Cathryn Ross and Alastair Cochran, interim co-CEOs of Thames Water, said the company is in a "robust" financial position.
They said: "We had £4.4bn liquidity as at 31 March, 2023, and are extremely fortunate to have such supportive shareholders. Their commitment to delivering Thames' turnaround and life's essential service is reflected in the largest equity support package ever seen in the UK water sector, whilst taking no dividends out."
They said the company is "transitioning to a more focused turnaround plan" that "focuses expenditure on a smaller number of initiatives that will deliver substantial and sustainable improvements in key performance metrics over the next three years".
They added the company had increased investment in its networks and assets to "record levels".
Regarding leaks, a Thames Water spokesperson said: "We know it's not acceptable to be losing so much precious water and we're doing something about it. Over the last year we've faced challenging weather conditions meaning we're not where we'd like to be on leakage."
They said: "We have now recovered from drought and freeze-thaw and are getting back on track. Finding and fixing leaks remains a top priority. In 2022/23, we fixed 66,896 leaks (compared with 61,671 in 2021/22). This equates to one leak being fixed almost every 7 mins 45 seconds.
"We have 200 repair teams working tirelessly to fix leaks with activity taking place seven days a week and over 280 people working round the clock and mainly overnight to detect leaks not yet appearing at ground level."
The spokesperson added the company is in the "very early stages of consultation and design" for the Teddington scheme and will share more information in the autumn.
They said: "It's critical that we act now to secure our water supplies for the future, which is why we launched our draft water resources management plan 24 which sets out the actions and investment needed for the next 50 years.
"Last summer the extreme heat and lack of water was a clear indication of climate emergency first-hand. There are no simple quick solutions and we need to plan ahead to manage a growing population, a changing climate and an increasing drought risk as well as making sure we can protect our environment now and in the future.
"We're proposing to invest in several new strategic schemes that will provide water to the South East including the Teddington abstraction scheme. We want to reassure local people that the proposed scheme isn't any different to the normal water supply system and is designed to safeguard the river's water quality.
"The scheme will work by putting highly treated recycled water from Mogden Sewage Treatment Works, through an additional stage of treatment. This would ensure we protect the river's water quality and would also compensate for the additional water abstracted during a drought.
"The Environment Agency will set the discharge standards to protect the quality of the river water and we will need to comply with these. We've worked closely with the Environment Agency, Natural England, the Drinking Water Inspectorate and the Port of London Authority on the studies completed to date and we will continue to work with them and the local community to protect and improve the local habitat."
A Government spokesperson said: "We prepare for a range of scenarios across our regulated industries – including water – as any responsible government would. The sector as a whole is financially resilient. Ofwat continues to monitor the financial position of all the key water and wastewater companies."
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