Wed, 28 May 2025

Wed, 28 May 2025 Thames Water hit with biggest ever penalty over sewage and dividend breaches

Thames Water must pay a £104.5m penalty for sewage breaches and £18.2m relating to shareholder dividends.
Thames Water has been fined £122.7 million by Ofwat, the water industry regulator, for breaching rules related to sewage spills and shareholder payouts. The fine is the largest ever issued by Ofwat and comes after two investigations into Thames' operations. The company was penalized for releasing raw sewage from storm overflows in exceptional circumstances, posing a risk to human health and the environment. It has been found that three-quarters of Thames Water's storm overflows were spilling "routinely" rather than in exceptional circumstances. Thames Water also breached rules related to shareholder payouts, with two dividends worth £168.8 million being declared in 2023 and 2024 without properly reflecting the company's delivery performance. The regulator stated that the shareholder payouts were "undeserved" and would have to be clawed back by Thames Water. Ofwat confirmed that the fines would be paid by the company and its investors, not customers who saw their water bills increase last month. Thames Water has been struggling under a £20 billion debt pile and had secured a £3 billion rescue loan earlier this year to stave off collapse. The company employs 8,000 people and serves about a quarter of the UK's population across London and parts of southern England. Ofwat stated that Thames Water failed to protect the environment and its customers by not maintaining adequate infrastructure. The regulator also criticized the company for failing to come up with an acceptable redress package for the environmental damage caused by sewage spills. The penalties will ultimately go to the Treasury, but no decision has been made about how the money will be used.
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