£2bn £211m

. . . that’s what foreign private equity sharks pocketed from Thames Water over 10 years . . . increase in Thames pensions black hole over the same period

BRITAIN’S largest water company has run up a £250m black hole in its pension pot while its foreign owners have pocketed almost £2bn in dividends.

When it was sold to a consortium of investors, led by Australia’s Macquarie, in 2005 Thames Water Utilities had a £38m pension deficit. But in the last decade this has ballooned by more than 655pc to £249m – an increase of £211m.

At the same time, in echoes of the BHS scandal, the consortium is thought to have extracted at least £1.6bn in dividends and interest.

Now MPs have vowed to look at the scheme as part of a wider shake-up of the pensions industry. It could see bosses of the utility company forced to account for their actions in Parliament.

Outrage is spreading at predatory shareholders who bleed their companies dry, after the owners of shopping giant BHS earned £423m from the company between 2001 and 2004. The firm has a £571m gap in its pension scheme.

The Work and Pensions Select Committee is investigating – and its inquiry will expand beyond the failing retail chain in coming months. Its chairman Frank Field said: ‘We will certainly be looking at Thames Water.’

He said the committee’s investigations would look at how much money was being taken out of companies by their owners. Thames Water passed into private hands in 2001 after being bought by German utility company RWE.

It was sold five years later to a consortium of investors led by Macquarie – known as the Vampire Kangaroo due to its assetstripping reputation.

The size of the black hole has been investigated by Martin Blaiklock, a former utilities director at the European Bank for Reconstruction and Development.

He believes it raises serious questions about the sustainability of the company.

‘This deficit is being propped up by you and me because we’re paying for it in our water bills.

‘When they negotiate with the regulator about water prices, they can say they need to pay the deficit down and have to be allowed to charge more. The regulation for water companies isn’t very strong.’

Macquarie has also aggressively focused on cutting its tax bill. It loaded Thames Water with loans, increasing the amount of debt on its balance sheet from £1.6bn ten years ago to around £10bn today.

The company has only paid £100,000 in corporation tax since 2006, partly due to high debt levels and partly because of taxdeductible investments to replace pipes. Bosses sparked outrage in 2013 after saying it might be a decade before Thames Water next paid tax. And they have also been criticised for financing some operations through the Cayman Islands – a noted tax haven.

Despite these concerns, Thames Water chief executive Martin Baggs picked up a £2.1m pay packet last year, up from £1.3m a year earlier.

Macquarie is looking to sell its remaining 26pc stake in the company and is believed to be seeking more than £3bn from buyers.

Some of the proceeds will be used to pay down Thames Water’s debts but the Australians will pocket the rest.

Thames Water said its pension deficit had been run up due to a fall in the value of gilts – British Government bonds heavily backed by most pension schemes.

A spokesman said: ‘A recovery plan has been agreed with our pension trustees, under an independent chair, and annual deficit contributions of £20.3m are being paid.

‘The company, with shareholders’ funds in excess of £1.4bn, remains committed to meeting all of its pension obligations and has reiterated to our joint trade unions that the deficits are solely the responsibility of the company.’

The Pensions Regulator would not comment on the scheme.