The tide is turning on Thames Water: special administration looks best
It is still not totally clear what the government wants but the political mood seems to be shifting towards a decision
TL;DR
- The government is leaning towards special administration for Thames Water.
- Environment Secretary Emma Reynolds has raised concerns about the creditors' proposed rescue deal, citing unfair costs to customers, delays to infrastructure investments, and environmental improvements.
- Special administration is seen as more likely due to political factors, including opposition from Labour backbenchers and Andy Burnham's stance on public ownership.
- Special administration involves an administrator safeguarding customers and services while seeking buyers, with a secondary duty to creditors.
- The government would provide temporary funding during special administration, expecting full repayment.
- Potential outcomes under special administration include selling Thames Water as one piece or breaking it up.
- Permanent state ownership (nationalization) is a distinct option from special administration and carries greater political risk and quantifiable costs for the Treasury.
- A decision is urgent as Thames Water is expected to run out of money in October.