STORY
Ofwat, the regulator for England and Wales’s water industry, has imposed its largest-ever penalty on Thames Water, fining the company a total of £122.7 million after finding systemic failures in its wastewater management and improper payments to shareholders. The fine is split into two parts, firstly, £104.5 million for breaching wastewater rules, Ofwat’s investigation uncovered that Thames Water allowed raw sewage to flow into rivers and streams on hundreds of occasions in 2024, with storm overflows spilling “routinely and not in exceptional circumstances” causing extensive environmental damage. Secondly, £18.2 million for paying dividends to investors despite record pollution and poor customer service performance, marking the first time Ofwat has penalised a water company for dividend rule breaches.
David Black, Chief Executive of Ofwat, said the penalties reflected a “clear-cut case where Thames Water has let down its customers and failed to protect the environment” adding that the regulator would not hesitate to act again if similar failings recur. Thames Water serves around 16 million customers in London and the Thames Valley but has been grappling with nearly £20 billion of debt. Earlier this year, it secured a £3 billion emergency loan to stave off collapse and is in advanced talks with private equity firm KKR over a potential takeover and restructuring plan.
Environment Secretary Steve Reed welcomed the fines as evidence that “the era of profiting from failure is over” while environmental groups and opposition politicians renewed calls for the company to be placed into a special administration regime or brought back into public ownership to safeguard Britain’s waterways. Ofwat confirmed that customers would not bear the cost of the fines; instead, the penalties will be met by the company and its investors.