Barclays: Thames creditors’ plan could cost customers 20% more than the FD

(by Verity Mitchell)

Thames Water customer bills could be nearly 20% higher in five years' time if the rescue plan proposed by lenders is approved. That is according to reports of a research note from Barclays.

Both CKI and Castle Water have reportedly complained that their alternative proposals have been sidelined in favour of the rescue plan being negotiated with Ofwat by London and Valley Water, Thames’ A creditor consortium. According to reports, Barclays’ research calculated that the favoured proposal requires customers to bear some of the future operational and financial risks to the company, adding £116 to bills when they are revised in 2030, and requires additional leniency from the regulator on fines for sewage spills.

The creditor consortium responded that: "We have always said that customer bills will remain in line with those contemplated in the final determination.”

Even if CKI was offered a fresh chance to bid, the sale of critical infrastructure to a China-linked owner could raise questions of national security. According to press reports, the creditor consortium is hopeful that discussions with Ofwat and the Treasury will result in an outline agreement in December.