Thames Water gets £8m f ine for leaky pipes ... as foreign owners siphon off £100m
Payout to Thames Water’s owners revealed yesterday Fines firm was hit with for pollution and leaks Corporation tax it has paid in past decade
BRITAIN’S top water firm has been fined £8.6million for leaking millions of litres a day – just after revealing it had paid £100million to its foreign owners.
The penalty, imposed for allowing 677million litres of water to leak out every day last year, is Thames Water’s second major fine this year.
It was the maximum that could be imposed by the regulator, Ofwat, and follows a record £20.3million penalty in March for polluting the Thames with 1.4billion litres of raw sewage.
The latest fine came as Thames Water, which serves 15million people in London and the Thames Valley, said £100million in dividends was paid to investors last year.
The Australian bank Macquarie earned £26million, while Abu Dhabi’s sover- eign wealth fund took £10million. It came after profits plunged 86 per cent to £71.1million in the year to the end of March.
Even though shareholders have taken millions out of Thames Water, it has not paid any corporation tax in the UK since 2006. Chief executive Steve Robertson, who earns £550,000, admitted the firm ‘faced challenges during the year’.
Ofwat chief executive Cathryn Ross said yesterday: ‘The failure by Thames Water to meet the leakage commitments it has made to its customers is unacceptable. Our performance commitment regime imposes significant penal- ties for failure to deliver the levels of performance that customers have paid for and consequently, Thames Water will now face the maximum penalty.’
The regulator punished Thames Water months after a judge slammed it for polluting the Thames.
Ordering the firm to pay £20.3million at Aylesbury Crown Court, Judge Francis Sheridan criticised it for a ‘shocking and disgraceful state of affairs’.
Slamming its ‘ history of non-compliance’, he added: ‘It should not be cheaper to offend than to take appropriate precautions.’
Thames Water went into German hands in 2001 and was then bought by Macquarie in 2006 for £8billion.
The bank has since offloaded its stake to investors from all over the world – including Kuwait, Abu Dhabi, Canada and China.
‘Shocking and disgraceful’
MILLIONS of pounds have been paid out to the foreign owners of Britain’s biggest water company even as it picked up almost £29m in fines for leaks and pollution and paid no corporation tax. Thames Water rewarded investors with £100m in dividends last year including £26m to Australian bank Macquarie and £10m to Abu Dhabi’s sovereign wealth fund, despite profits sinking 86pc to £71m.
Yesterday, it was fined £8.6m for missing leak reduction targets by 47m litres a day – and could face further enforcement action.
It follows a £20.3m fine in March for polluting the River Thames with 1.4bn litres of sewage.
The company allowed 677m litres of water to leak every day last year.
Cathryn Ross, chief executive of water regulator Ofwat, said the failings were ‘unacceptable’, adding: ‘Thames Water will now face the maximum penalty.’ Thames, which serves around 15m people in the Thames Valley and London, is banned from passing the fine on to customers. Ofwat is also considering further enforcement action.
The company was bought from its German owners RWE by Australian bank Macquarie in 2006, for around £8bn.
It has paid only around £100,000 in corporation tax – back in 2006. It says this is due to a rule allowing it to defer tax based on invest- ment, and that it has invested £12bn in the past ten years.
But in that time Thames Water has been loaded with more than £10bn of debt. Macquarie and other shareholders have taken out about £1.2bn in dividends during its ownership, not including its latest payout.
It sold stakes to foreign investors with the final 26.6pc going last month to Kuwaiti and Canadian investors.
The company is now owned by a group of mostly foreign inves- tors including Abu Dhabi, Dutch and Chinese funds.
Hermes GPE, which manages the asset on behalf of the BT pension scheme, owns 13pc.
New chief executive Steve Robertson, who took over in September on a basic salary of £550,000 and got a £54,000 bonus last year, yesterday admitted the company would probably miss its leakage target again next year.
He said it plans to spend an extra £150m to cut leaks, adding: ‘I am extremely sorry that we missed the target and we are going to pay money back.
‘We have the largest domestic urban area by a mile – over 40pc of our pipe infrastructure is more than 100 years old, therefore, logically, we would say it’s more likely to suffer from leaks.
‘London now has a larger population than ever, so for me the question is we have got to look forward and make sure we are putting the infrastructure in, and supporting that growth.’
The company’s record fine in March was for allowing sewage into waterways in 2013 and 2014, leaving people and animals ill, and killing thousands of fish.