London & Valley Water Statement on Thames Water

In response to press speculation surrounding Thames Water’s restructuring efforts, the London & Valley Water consortium (“L&VW”) confirms that it continues to be in active discussions with regulators about a comprehensive recapitalisation and transformation of the Company. Experienced investors are ready to provide the £10 billion of new capital that Thames Water needs urgently to deliver the turnaround, with all profits being reinvested in the infrastructure until the business is turned around and returned to the public markets. Following preliminary feedback from the previous Secretary of State last month, the consortium has been working on material improvements to the proposal. The consortium is confident it can address all the issues raised by Defra and Ofwat. Investors will fund all additional improvements, without any requirement for taxpayer funding or increases in customer bills. No environmental leniency has been requested. The consortium is eager to engage with new ministers to discuss their priorities and present a revised proposal, which will deliver environmental compliance, cleaner rivers faster, and safeguard resilient supply and clean drinking water. Thames Water provides the most essential service for households and local communities and will be one of the largest infrastructure investment projects in the country over the next decade, creating jobs and supporting regional growth. The Company needs strong, committed stewardship to continue to improve delivery and resilience of critical national infrastructure; L&VW is deeply aware of this important obligation and is committed to turning around Thames Water and rebuilding trust with customers, local communities, employees, and all stakeholders. The consortium recognises that the new Government, led by Prime Minister Andy Burnham, would like to see water companies create greater local public control and involvement to strengthen accountability for protecting investment and delivering improvements. L&VW agrees that there is an opportunity to enhance the way local government, regulators, and Thames Water work together, granting greater public controls on critical business issues to improve delivery of complex, essential infrastructure projects, and demonstrate shared accountability. To achieve this outcome, L&VW has evaluated potential new local public control supervisory structures which can be beneficial to customers through the Company’s operations, designed in the public interest, which we intend to share with the new Secretary of State. In addition to a new public interest supervisory structure with enhanced local representation for local authorities and regional leaders, the consortium is willing to make significant new commitments to grant greater controls and oversight to ministers, implemented through a ‘Golden Share’. A spokesman for London & Valley Water: “Thames Water is a company of national importance, and we look forward to working with the new Government to secure a long-term solution which delivers greater public control and the best outcome for customers. “We continue to believe that the L&VW plan is by far the fastest and most reliable route to solving Thames Water’s complex problems and improving outcomes for customers and the environment, and achieves this without any Government funding or cost to taxpayers. “Under our plan, customers will have strong protections, regulators and Government will have enhanced oversight, and there will be greater controls to ensure Thames Water delivers the record investment needed to improve environmental and operational performance.” Specifically, the L&VW plan provides the following benefits: Greater transparency for regulators and protection for customers thro...