Thames warns of funding gap problems

Nov 30 2009 By nebusiness

The UK’s biggest water company today warned of a potential funding gap as the recession poses "significant challenges" for the business.

Thames Water said rising bad debts and the more expensive cost of financing "will make it more difficult to fund the essential investment in the network that is required".

The company, which supplies water to 8.5 million customers across London and the Thames Valley, had planned to invest £5.5bn in the 2010-2015 period - funded by a 17% rise in bills before inflation.

But regulator Ofwat’s final decision on prices published last week limited the firm to a 3% rise. Thames Water has two months to decide whether to accept the decision or appeal to the Competition Commission.