The UK government has appointed FTI Consulting to advise on contingency plans for Thames Water, in case the country’s largest water utility is placed into a Special Administration Regime (SAR), a government source confirmed.
Thames Water, burdened with nearly £20 billion of debt, is seeking £5 billion from senior bondholders to avoid nationalisation. The company has said it has sufficient funds to operate for 12 months but needs a regulatory reset for the financing deal to proceed.
Sky News reported that Environment Secretary Steve Reed approved FTI Consulting’s appointment. Sources said the firm could act as administrator if a private sector rescue fails, though a court would have to approve such an appointment.
Responding to an enquiry, a government spokesperson said: “The government will always act in the national interest on these issues. The company remains financially stable, but we have stepped up our preparations and stand ready for all eventualities, including applying for a Special Administration Regime if that were to become necessary.”
hames Water, burdened with nearly £20 billion of debt, is seeking £5 billion from senior bondholders to avoid nationalisation
Insiders emphasised that the move does not indicate imminent insolvency. A SAR would ensure continued services but could leave taxpayers covering bailout costs. Mr Reed told Parliament in June: “Thames Water must meet its statutory and regulatory obligations to its customers and to the environment—it is only right that the company is subject to the same consequences as any other water company. The company remains financially stable, but we have stepped up our preparations and stand ready for all eventualities.”
Thames Water serves about 16 million customers, representing a quarter of the UK population. Its shareholders, including the Universities Superannuation Scheme and an Abu Dhabi sovereign wealth fund, have written off their investments.
The company is working with funds such as Elliott Management and Silver Point Capital, with a late October deadline to challenge Ofwat’s spending plan. Ofwat approved £20.5bn in spending from 2026, while Thames Water is seeking about £4bn more.
FTI Consulting’s appointment comes as parts of the country face a “nationally significant” water shortfall and Ofwat chief executive David Black prepares to step down following a review recommending the regulator’s abolition.
