By Muvija M
LONDON (Reuters) – The British government is closely monitoring struggling water supplier Thames Water and is ready to take action if needed, environment minister Steve Reed said on Wednesday, although he ruled out renationalisation of the sector as a whole.
Thames Water, which has warned that it could run out of funds in the coming months, is facing the possibility of state ownership under a special administration regime if it fails to raise money.
Britain’s water regulator, Ofwat, has already imposed a “Turnaround Oversight Regime” on Thames Water, the country’s biggest water company, and appointed an independent monitor to report on its progress in turning around the business.
“We’re closely monitoring the situation with Thames … the company remains viable, but if we have to take action, we are prepared to do that,” Reed told LBC Radio after launching an independent commission into the sector.
But he ruled out renationalisation of the industry, which is facing a major crisis since its privatisation in 1989 after years of under-investment and pollution scandals affecting rivers, lakes and seas.
“It could cost up to a 100 billion pounds to buy out the current owners, and secondly, it would take years to unpick the current ownership model, and that would choke off investment and mean the water pollution would get even worse,” he told the BBC.
Utility bosses from the water and energy industries had cautioned against state-ownership in the run-up the 2019 election when the then Labour Party leader, Jeremy Corbyn, set out proposals to nationalise certain sectors.
“I think the public … don’t want the taxpayer to foot the bill (of renationalisation),” Reed said, speaking one week before the government’s budget. It has warned that tough decisions would be needed to fill a 22 billion-pound spending hole.
(This story has been refiled to add the byline)
(Reporting by Muvija M, Editing by Paul Sandle)
