Thames Water boss issues stark warning on restrictions after dry spring

The boss of under fire - which supplies 16 million customers - has warned it may have to impose restrictions this summer after the dry spring.

Chris Weston revealed the UK’s biggest supplier has already upped its preparation plans, which meant reminding customers about the importance of conserving water. “I am confident that we won’t run out of water,” he told a committee of MPs. “I am not confident that we won’t have to restrict usage because that will depend on what the does and what rainfall happens between now and the summer.”

It comes as the UK has experienced unseasonably parched conditions for much of the year, with England and Wales having their driest March conditions since at least 1961. Given it is only May, there are concerns about reservoir levels and whether, if we have another very dry summer, hose pipe bans will be imposed in some areas.

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Mr Weston, giving evidence to the Environment, Food and Rural Affairs Committee, insisted that its reservoirs were 94% full. “We are prepared as best we can be for a drought event”, he said. He said the company has four levels of drought preparedness, and had recently moved from zero to one.

While Mr Weston stressed it was working hard to avoid restrictions, it was pointed out that Thames was losing 56 mega-tonnes of water a day through leaks. Meanwhile, work on a new reservoir - in Oxfordshire - is not due to start until 2028, and would not be ready until well into the next decade.

Meanwhile, Britain’s only water desalination plant will spend another summer out of action. The Thames Water-owned plant in Beckton, east London, is supposed to turn salty seawater into fresh drinking water for hundreds of thousands of households during a supply crisis. Mr Weston criticised the previous decision to invest in the facility.

Across the country, reservoirs are only 84% full. The lowest are reportedly Thirlmere and Haweswater in the Lake District, which are only 58% full and dropping by as much as 2% a week. United Utilities, which manages water resources across the northwest, is already urging customers to use less water.

It came as Mr Weston used the appearance before MPs to blast Thames' former bosses and owners. "It is a big ship to turn around,” he told MPs, adding: “This has been decades in the making, the crisis that we face at Thames, and I think all actors have a role to play in this. The company and management got it wrong. Five chief executives in five years is not a recipe for success.”

Mr Weston also slammed previous owner Australian bank Macquarie, which loaded Thames with huge debts. “That will have exacerbated the situation,” he said. “That will have contributed to the problem. It stresses the organisation.”

However, he was also quizzed by the chair of the committee, Lib Dem MP Alistair Carmicheal, about why he took a £195,000 bonus when he started, part of a £2.3million a year package. “My remuneration was agreed with the board,” he said, while admitting “It was not the reason but it was a reason for me joining Thames.”

Thames Chairman Sir Adrian Montague said: “We realise there is a vast amount to be done to bring the performance up to scratch and that we are letting customers down. We are starting to see real progress. We are seeing green shoots.”

Mr Weston said investment was going into taking pollution incidents, including raw sewage released into rivers. There were 469 such incidents last year - up from 350 the previous year - including 33 that were classed as serious. "No-one at Thames comes to work to cause leakage and everyone wants to try and minimise that as much as possible," he said.

It came as Sir Adrian said the company was five weeks away from running out of money at points in 2024, describing the situation as “hair-raising”. When asked by MPs about Thames’ finances, he said: “The fact of the matter is, as we’ve noted on several occasions, Thames in the last year has come very close to running out of money entirely. There were times in the last year that we had five weeks’ liquidity - and running a £20 billion corporation on five weeks’ liquidity, honestly, it’s hair-raising.”

Thames has seen chosen the infrastructure arm of KKR, a US private equity behemoth, as its prepared suitor as it looks for a rescue bid to avoid renationalisation. The board is in exclusive talks with KKR, which is promising to put £4billion into the company in equity and take control.

Mr Weston told MPs it was still a “very fluid situation”, with the possibility the company could still fall into public ownership. He acknowledged that hundreds of millions of pounds in penalties Thames Water faces for missing performance targets made it more difficult for a new investor to come in. Asked whether, if the current process with KKR fails, it would be too late for Thames Water to go back to other potential investors, or if it would result in a special administration regime, Mr Weston said: “It’s a very fluid situation but those both are possibilities.”

MPs heard that top bosses at Thames were set to pocket bumper bonuses if a turnaround of Thames is completed. The rewards could come in three waves, with the first worth 50% of executives’ salaries, so potentially more than £1million. Sir Adrian admitted the payouts could be “very substantial”.