UK water supplier Thames Water hit with record £123m fine for sewage pollution
Thames Water received the largest fine in UK water industry history on Wednesday, after the regulator Ofwat found serious failures in the company’s management of wastewater and sewage systems.
The £104m environmental penalty is part of a broader £123m sanction that also includes an £18.2m fine for breaching dividend distribution rules.
The regulator stated the fines would be paid by the company and its investors, not by customers.
“This decision provides certainty for the company for both its past failures and what we expect from the company to comply with its obligations in future,” said Ofwat chief executive David Black.
Ofwat has concluded two investigations into Thames Water, issuing £122.7m in penalties for breaches related to wastewater operations and dividend payments.
An enforcement order sets out the required remedial actions.
Customers will not bear the cost.https://t.co/2rPpljkOOL pic.twitter.com/a33lYqsvgAThames Water’s handling of sewage discharges was deemed a significant breach of its legal responsibilities, with Ofwat citing unacceptable impacts on both the environment and the public.
The utility also failed to propose a suitable redress package to benefit the environment, prompting Ofwat to escalate its enforcement action.
Black added: “We are clear that dividends must be linked to performance for customers and the environment. We will not stand by when companies pay undeserved dividends to their shareholders.”
The company, currently seeking new investors amid mounting financial pressures, is operating under a cash lock-up following a downgrade in its credit rating.
That means it cannot distribute funds to shareholders without formal approval until financial conditions improve.
Environment Secretary Steve Reed described the move as “the toughest crackdown on water companies in history”.
He noted that 81 criminal investigations had been launched into water companies, stating, “The era of profiting from failure is over.”
James Wallace, chief executive of River Action, called for Thames Water to be placed into special administration.
He accused the firm of polluting rivers for nearly 300,000 hours last year while accruing over £22bn in debt and failing to invest in solutions. “At last, we are seeing a government using the law and punishing a major polluter,” Wallace said.
Liberal Democrat MP Tim Farron criticised both Thames Water and Ofwat. “This should be the final nail in the coffin for Thames Water. It needs to be turned into a public benefit company, and Ofwat needs to be replaced with a real regulator with teeth.”
Green MP Ellie Chowns welcomed the fines, saying they represented long-overdue accountability.
“This milestone is only the start. We cannot allow private shareholders to reap vast payouts while communities suffer from raw sewage spills,” she said.