Campaigners have gathered outside the high court in London calling for judges to block a financial bailout of struggling Thames Water.
MPs, activists and members of the public were protesting on Tuesday outside the court where the privatised water company was seeking a £3bn financial lifeline.
The company is trying to secure approval from the high court for the money – referred to as a “liquidity extension” – which some creditors have already agreed to lend. Without this extension, the company, which has debts of £15bn, says it will run out of cash by next March.
Analysis by the campaign group We Own It, who were protesting outside the courts, estimates that the bailout, if approved, will cost customers £250 a year each.
“This deal is for £3bn of cash right now that will be charged at a whopping 10% interest … that’s £250 a year from every household,” said Matthew Topham of We Own It. “We don’t think that households should have to pay to bail out Thames Water,” he said.
A letter from Windrush Against Sewage Pollution was being delivered to the judge hearing Thames’s application, by Charlie Maynard, the MP for Witney.
The letter called for the court to hear submissions from the public on the bailout. “The outcome of this process will affect every household and business in the Thames region … the nature of the proceedings … means the court process is effectively out of sight and reach of all but the named participants in a proposed loan being arranged to keep TWUL in business by forcing its billpayers to bail it out for its previous and continuing excesses and failures.
“We ask the court to consider our evidence on behalf of the unrepresented.”
Jenny Jones, a peer, said the hearing on Tuesday would be excluding the voices of consumers and campaigners who are challenging the attempt by Thames Water to raise the £3bn loan at an interest rate of almost 10%.
“The government could put Thames Water into special administration on the grounds of either its junk status share ratings, or its failure to reduce sewage dumping. Instead the government is trying to prop up a failed system of privatisation by allowing another big loan that will waste bill payers’ money on inflated interest payments,” she said.
Thames reported pollution had increased by 40% in the six months to 30 September, with 359 category one to category three pollution incidents.
Court approval is required as the terms of the loan effectively breach Thames Water’s agreements with its existing creditors by pushing their claims lower down the list of seniority. Ian Byrne, the independent MP for Liverpool West Derby, said if the bailout went ahead, the 16 million households who have no choice but to use Thames Water services would be due to pay over £250 a year in higher bills to bail the company out.
The campaigners are calling for the government to use its special administration powers and take the company into public ownership. Byrne said Tony Blair used such powers in 2002 to renationalise Railtrack. “Privatisation is a failed experiment,” he said.
If the court and its creditors approve, the proposed deal would give Thames enough funds to continue until October. Thames is also seeking to raise £3.25bn in new equity to fund investments up to 2030.
