Thames Water
Thames Water Utilities Limited, trading as Thames Water, is a British private utility company responsible for the water supply and waste water treatment in most of Greater London, Luton, the Thames Valley, Surrey, Gloucestershire, north Wiltshire, far west Kent, and some other parts of England. Like other water companies, it has a monopoly in the regions it serves.
With origins dating back to the formation of the New River Company in 1609, Thames Water was established in 1989 during privatisation of the water industry in England and Wales. The name of the company reflects its role serving the drainage basin of the River Thames; water is sourced from the Thames as well as a number of other rivers and boreholes.
The UK's largest water and wastewater services company, Thames Water is responsible for an extensive water management infrastructure which includes the Thames Water Ring Main around London, one of Europe's largest wastewater treatment works and the UK's first large-scale desalination plant—both at Beckton in east London—and the £4.2 billion Thames Tideway sewer. Per day, the company supplies of drinking water and treats of wastewater. It serves a population of 15.5 million people—over a quarter of England's population—but its ageing infrastructure is prone to leakage and is a frequent cause of pollution, for which it has been repeatedly prosecuted and fined.
Current shareholders include four major pension funds and four overseas investment funds which between them hold over 90% of the company's shares. The company has been criticised for paying substantial dividends to shareholders while simultaneously taking out loans, accumulating over £16 billion in debts. From June 2023, Thames Water was repeatedly said to be close to financial collapse. In April 2024, the UK Government was reported to be considering plans to temporarily renationalise the company, and in January 2025 began talks with potential special administrators. A £3bn emergency bailout was agreed in March 2025, giving Thames more time to repair its finances, but in June 2025 the government stepped up preparations for temporary nationalisation of the company.
History
Origins
Thames Water can trace its history back to the construction of the New River, which was started in 1604 by Edmund Colthurst to carry fresh water from Hertfordshire into London. The business of the New River was taken over by the New River Company, officially founded by royal charter in 1619, under the leadership of Hugh Myddelton. Although earlier small-scale water supply operations existed, the New River Company was the first water supply company and is the earliest direct ancestor of Thames Water today.During the 1850s, John Snow and William Farr's identification of the 1854 Broad Street cholera outbreak provided a stimulus for the better treatment of sewage. The Thames Conservancy was established in 1857 with unified control over water supply, drainage and navigation. The Great Stink occurred in 1858, and focused government and public opinion on cleaning up the Thames. To resolve these issues, the Metropolitan Board of Works, under the leadership of Chief Engineer Joseph Bazalgette, constructed a large network of sewers by 1870, many of which are still in use today.
In 1904 the New River Company and eight other water companies serving London were taken into public ownership under the control of the newly-founded Metropolitan Water Board. In 1973 the responsibility for water supply and sewage in the Thames catchment was transferred to the Thames Water Authority.
Privatisation
In 1989, the responsibility for navigation, regulatory, river and channels management was transferred from the Thames Water Authority to the National Rivers Authority, which became part of the Environment Agency in 1996. The remainder of the Thames Water Authority was privatised as Thames Water Utilities Limited.Takeovers
Thames Water plc was acquired by the German utility company RWE in 2001.On 17 October 2006, following several years of criticism about failed leakage targets in the UK, RWE announced it would sell Thames Water for £8 billion to Kemble Water Holdings Ltd, a consortium led by the Australian Macquarie Group which appointed David Owens as CEO. In December 2006, the sale of Thames Water's British operation went ahead, with RWE keeping the overseas operations.
Under the new ownership, the company re-focused its efforts on improving its operational performance and in 2007 announced the largest-ever capital investment programme of any UK water company.
However, during the 11 years of Macquarie's ownership ending in 2017, there were substantial dividend payouts to shareholders. In this period debts increased from £ to £10.5 billion as Macquarie borrowed against the company's assets to increase dividend payments. During these 11 years £2.8 billion was paid to shareholders; 40% of the total £7 billion in dividends paid by Thames Water in the 32 years from 1990 to 2022.
Thames Water was a Tier Three sponsor of the 2012 Summer Olympics in London.
Sale by Macquarie
From 2017, under the government's Open Water programme, and in common with all water and sewerage companies, Thames Water was required to provide entirely separate retail and wholesale operations for its commercial customers, working through a central market operator.On 14 March 2017, Macquarie Group sold its remaining stake in Thames Water's holding company to Canadian pensions group OMERS and the Kuwait Investment Authority.
On 22 March 2017 a record fine of £20.3m was imposed on Thames Water after large leaks of untreated sewage, totalling 1.4bn litres, occurred over a number of years.
As of July 2023, the company listed its shareholders as: OMERS, the Universities Superannuation Scheme, Infinity Investments , British Columbia Investment Management Corporation, Hermes Investment Management , the China Investment Corporation, Queensland Investment Corporation, Aquila GP Inc., and Stichting Pensioenfonds Zorg en Welzijn. Shareholders have not taken a dividend since 2017, though the company has paid internal dividends from the operational business to holding companies to be able to service its debt obligations.
2023–2025 financial crisis
In its annual report for the year ending 31 March 2022, Thames Water had reported annual revenues of around £2bn, generating a profit before interest, taxes, depreciation and amortisation of around £1bn. Facing high levels of asset depreciation - around £650m - the company has to invest all profits back into the business to maintain the status quo. As of March 2022, Thames Water had, since 2007, accumulated debts of around £15 billion, mainly through the issue of various bonds, with annual interest obligations of the debt standing at around £500m, around 50% of EBITDA. So, after capital investments, the business was not generating sufficient cash to fulfil its interest obligations, and found itself in a continuously worsening financial position. With current debt amounting to 80% of the value of the business, Thames Water had become the most heavily indebted of England and Wales' water companies. This situation had been recognised by the regulator Ofwat in December 2022 - leading to increasingly urgent discussions concerning a possible collapse and potential state bail-out of Thames Water.After joining Thames Water as CEO in 2020, Sarah Bentley resigned on 27 June 2023 amid concerns over spills from Thames sewage pipes. On 28 June 2023, concerns were raised about the company's ability to service its debt of £14 billion, and the company was then reported to be in urgent talks to secure extra funding to avoid the company collapsing. In 2022, shareholders had provided an initial £500m to Thames Water and pledged a further £1bn, but the company was said to be struggling to service its substantial debt pile. On 29 June 2023, with the UK government reportedly on standby for a potential taxpayer bailout through a temporary nationalisation, with pension funds worried about their investments in the firm, and with suppliers engaged on major projects concerned about payment, Thames Water announced experienced City troubleshooter Sir Adrian Montague would lead rescue efforts, succeeding Ian Marchant as chairman on 10 July 2023. On 2 July 2023, shareholder USS announced its support for the business's turnaround plans. The head of Ofwat said Thames Water customers would not be liable for the costs of any bailout. On 10 July 2023, Thames Water shareholders agreed to provide £750m in funding, short of the £1bn sought; the company also said it would need a further £2.5bn from investors by 2030.
In September 2023, Thames Water was one of several water companies ordered by Ofwat to pay back customers for poor performance. It was ordered to apply reductions totalling £101m to customers' future bills. In October 2023, Thames Water, along with Southern Water, SES Water and South East Water, was named by Ofwat as one of the four worst performing water companies, all needing to dramatically improve their financial performance.
In December 2023, Thames Water told MPs that it did not have enough money to pay off a £190m loan due in April 2024, despite a recent £500m cash injection financed by a loan to its parent company.
Also in December 2023, the company appointed Chris Weston as its new chief executive. Weston took up the position on 8 January 2024 and was to be paid an annual salary of £850,000 and a performance-related bonus of up to 156 per cent, taking his total package to about £2.25 million.
As of March 2024, investors announced they would withhold the first payment of a £4bn turnaround plan unless Ofwat agreed to an increase in customer bills, saying that without it the plan is "uninvestible". Thames Water stated that an increase in bills of 40% would be required over the next five years. Responding to the request, Michael Gove, the UK's housing and communities secretary, stated that "Thames Water leadership has been a 'disgrace'" and customers should not be expected to pay higher bills.
Thames Water was the subject of a documentary, Thames Water: Inside the Crisis, which aired on BBC Two on 18 and 19 March 2025. While some welcomed the fact Thames Water was being "transparent" about the scales of the challenges it faced, the documentary generally faced negative reviews. Rachel Cooke at the New Statesman questioned the logic of Thames Water allowing consumers to see the full scale of the challenges at the water company at a time when public trust in the water sector was at an all-time low. The Daily Telegraph's Ben Marlow argued that the BBC had given Thames Water a "free hit" to portray themselves in a positive light with this documentary, but the company had instead used it to "punch themselves in the face".