Thames Water is to be allowed to hike consumer bills by 35% by 2030 following a decision by the industry regulator, as it was also handed an £18.2 million fine for paying “unjustified” dividends to shareholders.The ruling falls well short of the 59% Thames Water had said it needed in the run-up to the decision, as the embattled water company tries to negotiate a bailout.
The company, which serves about 16 million people in London and the South East, is in the grip of a funding crisis and needs a £3 billion loan from creditors to keep operating beyond March. Ofwat said the £18.2 million fine was for paying £158.3 million in dividends to shareholders which it said were not justified. The regulator said it will claw back £131.3 million of the payments so it does not come out of customer bills