Customers demand water firms are held to account - but talks over record fines reveal tension at heart of industry

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Ofwat insists Thames Water, Yorkshire Water and Northumbrian Water cannot recover the £168m combined fine from customers, but bills will increase as part of an industry-wide settlement that will be agreed by the end of the year.

The £168m fines levied on three water companies by Ofwat are part of a slow - many argue far too slow - reckoning for the industry for the routine release of sewage via storm overflows. For Thames Water, predictably hit with the largest fine of £104m, close to the maximum penalty available to the regulator, it is also another blow to its credibility and bottom line in an increasingly desperate search for investors to secure its future. The sewage problem first.

Drowning in debt after a decade of mismanagement, Thames was already struggling to secure the fresh investment it needs to shore up the business and deliver infrastructure improvements. Earlier this year, chief executive Chris Weston described the company as 'uninvestable' after existing shareholders pulled a £3.25bn equity injection, and last month said it only has enough cash to survive until next May without fresh funding.

 

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