Thames Water bonuses might be blocked by regulator Ofwat | EUROtoday

Thames Water and different water corporations might be prevented by the trade regulator from paying any bonuses, underneath guidelines as a consequence of come into impact subsequent month.

Environment Secretary Steve Reed stated new measures would cease water corporations dumping a “tidal wave of sewage into our rivers while pocketing millions of pounds of bonuses”.

Regulator Ofwat has been in a position to cease companies utilizing buyer cash to fund bonuses, however the brand new guidelines imply they may not use funds from shareholders or lenders both.

Thames’ chairman has advised MPs that bosses may get hundreds of thousands in bonuses as a part of a current £3bn mortgage with the agency saying it’s “critical” it retains the employees “best placed” to enhance its efficiency.

Thames Water is the UK’s greatest water firm, serving a couple of quarter of the UK’s inhabitants, however has come underneath hearth lately.

It has large money owed and is struggling to repair leaks, sewage spills and modernise outdated infrastructure.

Earlier this 12 months, it secured £3bn in emergency funding, which it stated would give it the house wanted to finish a restructuring of its money owed and appeal to a money purchaser.

Subsequently it picked US personal fairness big KKR as its “preferred partner” to purchase the agency.

Under its new powers contained within the the Water (Special Measures) Act, Ofwat will be capable of ban “undeserved bonuses when high standards on the environment and financial management of water companies are not met”.

It may imply that Thames Water’s bonuses might be blocked as quickly as subsequent month.

The ban would even be retrospective, which means bonuses paid within the final monetary 12 months might be clawed again.

“The government will ban the payment of unfair bonuses for polluting water bosses,” Reed stated. “The days of profiting from failure are over.”

Earlier this week, Thames chairman Sir Adrian Montague advised MPs that lots of of hundreds of kilos price of current bonuses for bosses had been justified.

“We live in a competitive marketplace and we have to provide the right sort of packages to these people otherwise the head hunters come knocking,” he stated.

Sir Adrian stated high executives may get hundreds of thousands of kilos in bonuses as a part of the emergency mortgage settlement.