Thames Water Utilities Finance plc announces that Thames Water has submitted its business plan for 2025-30 to Ofwat as part of Price Review 2024 (PR24) following consultations with nearly 20,000 customers, the communities in which it operates and its wider stakeholders.
Cathryn Ross and Alastair Cochran, Interim Co-CEOs of Thames Water said: ";Our ambitious plan delivers what our customers have told us are their top priorities. We plan £18.7 billion total expenditure - including a record £4.7bn investment in our network and other assets - to maintain safe high quality drinking water, to ensure security of water supplies across London and the Thames Valley now and in the future, and to deliver further environmental improvements. Our plan prioritises storm overflows, bathing water status and reducing leaks and pollutions. In parallel, we will do more than ever to support customers by introducing an improved social tariff for those who struggle to pay their bills."
Our plan will deliver a reliable, secure and affordable service for customers by:
- Preserving a reliable supply of water, with minimal disruption
- Replacing 500km of ageing water mains
- Maintaining safe, high-quality drinking water by replacing 54,000 lead pipes
- Upgrading 150km of sewers to lower the risk of sewer collapses
- Reducing the number of times sewage floods into properties by 17% as well as all other external sewer floods by 14%
- Providing over 530,000 households meaningful support with their water bills
- Resolving more billing and operational issues within 24 hours by improving digital infrastructure, allowing customers to resolve more issues online
Our plan will create more jobs and enhance biodiversity for communities by:
- Hiring more local people by increasing the number of T-levels, summer internships and apprenticeships
- Investing £12 million in improving land to boost biodiversity
Our plan will further materially improve Thames Water’s environmental footprint by:
- Reducing storm overflows by 28%
- Reducing blockages caused by sewer misuse by 15%
- Reducing the total number of pollution incidents by 30%
- Opening the Thames Tideway Tunnel, London’s “super sewer”, the third phase of improvements that will increase the health of the river by reducing combined sewer overflows by c.95
- Investing to improve the bathing water quality at Wolvercote Mill Stream
- Spending over £2.5bn to deliver a 22% reduction in leakage
- Reducing water use per person by 5.5%
- Continuing our industry leading roll out of 1 million smart meters to make it easier for customers to save money and find leaks
- Ensuring water security for this and future generations, including consulting and planning for a reservoir near Abingdon
- Replacing assets that come to the end of their life with carbon neutral alternatives
Our plan is financeable by:
- Delivering an £18.7 billion totex programme to maintain safe high quality drinking water, ensure security of water supplies and deliver further environmental improvements
- Offering sufficient returns for further shareholder funding of £3.25 billion in AMP7 and AMP8, in addition to £0.5 billion received in March 2023
- Proposing a Weighted Average Cost of Capital of 4.25% (real)
- Delivering c.30% real RCV growth over AMP8
- Targeting BBB+/Baa1 investment grade credit ratios
- Reducing average gearing to 71% and strengthening post maintenance interest cover ratio to 2.1x
- Assuming no dividends are paid to our external shareholders during AMP8
