Ofwat agrees penalty payment plan for Thames

Ofwat has agreed a payment plan with Thames Water for the penalties it issued in May: £104.5m from the wastewater investigation, and £18.2m in relation to dividend payments that contravened new rules.

Thames must pay 20% (£24.5m) by 30 September but has been given dispensation to pay the remainder on the earliest of three possible events: 30 calendar days after the implementation of the company’s restructuring plan; 30 calendar days after exiting the Special Administration Regime; or 31 March 2030. Customers will not fund the payments under any scenario.

Thames said it is continuing to work on a market-led recapitalisation as its preference.

The leeway has drawn criticism from campaigners. River Action chief executive James Wallace said: "Ordinary people cannot negotiate away a court penalty, yet Thames Water has secured a deal that may let its current investors, who pocketed £170m in dividends in October 2023 and March 2024, off the hook.”

Public ownership lobby group We Own It said: “Ofwat is rolling over and extending the deadline for collecting those fines. At the same time Thames Water executives continue to pocket huge bonuses for presiding over this chaos. Regulation has failed time and time again.”