Thames Water Update & March for Clean Water - 21 October 2024
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Dear member
Thames Water
GMB reps and officers have had meeting with Thames management, Ofwat, and Defra in recent weeks to talk about the company's finances, the final PR24 determinations and ownership.
In this bulletin we would like to update you on what we know and have learned from these discussions.
What the future holds for Thames Water remains unclear. The shareholders in Thames have said that the company is un-investible. Thames says it needs at least £3.5 billion in equity and is looking for new investors. In discussions with Thames attracting new investors hinges on getting a good final determination from Ofwat for PR24.
Ofwat criticised TW for its PR24 submission. In its draft determination Ofwat gave Thames £16bn of the £18.7bn that Thames had asked for. Ofwat put Thames in special measures and the company has submitted a revised business plan in which it is seeking £24bn, more money than in its original submission.
Thames has also seen its credit rating downgraded to Junk by the ratings agencies, so in effect in breach of its operating licence. Ofwat has put an independent expert on Thames’ Board and is giving Thames time to find new equity and investors.
Thames has said to us that they have enough money to go into second quarter of 2025, having agreed funding with its creditors. Before the money runs out Thames should know if they have got enough money in the Ofwat PR24 final determinations.
Because of the election putting back draft determinations, Ofwat consulted on whether the announcement of the final determinations should be put back from December 2024 to January 2025. Ofwat said to us that they were confident final determinations should be out on 19th December.
In our meeting with Defra, officials said that water sector was a top priority for Government as outlined in the Special Measures Bill with the prospect of further reform to come. Defra said they were ready for all eventualities and that water is an essential service. There will still be a company, with the workforce and terms and conditions. We are seeking a meeting with the Secretary of State, Steve Reed.
Ofwat said that it had met with Thames and its creditors and stressed that need for a solid turnaround plan. We talked about what might happen if Thames does not get new investors and the equity it needs. Ofwat officials explained there were two routes into special administration financial or performance (the latter being a very high bar) and that special administration might not be benign.
In discussions GMB has stressed the importance of the workforce and that investment is required to repair aging assets, stops leaks and pollution. Central delivering investment is having an operational plan and workforce plan. The workforce must have a say in this plan and Thames like other water companies must be accountable to stakeholders, which includes its employees.
Whether Thames Water survives through a financial restructuring or ends up in special administration is still uncertain. Thames provides an essential public service which will still need to be delivered. GMB members are the backbone of this service, and we will fight for workers jobs, pay, pensions and terms and conditions.
MARCH FOR CLEAN WATER – 3RD NOVEMBER 2024
GMB is joining the March for Clean Water in London on Sunday 3rd November. We want you to come along. Water workers provide an essential public service and care about the work they do, and the environment. The Water sector and water companies must change.
The March assembles at 11.00 on Albert Embankment SE1 7SP. Look out for the GMB Flags.
Please see the link for further details marchforcleanwater.org/march
In Solidarity
GARY CARTER
NATIONAL OFFICER