Government hires advisers to plan for potential Thames Water collapse

Ministers have reportedly appointed advisers to prepare for the potential collapse of Thames Water.

Environment Secretary Steve Reed has lined up FTI Consulting to advise on contingency plans which would involve Thames Water being placed into a special administration regime, according to Sky News.

The embattled water company has been at threat of both nationalisation and collapse as its investors and creditors scramble to keep the group afloat.

It has been in talks with its largest group of creditors and the water regulator Ofwat over a rescue plan that would see lenders inject £5billion of new capital.

However, its creditors warned it has a ‘very short and closing window’ to ensure its survival as a private business.

Embattled: Last month, Thames Water reported a £1.65 billion pre-tax loss in 2024

If the utility giant were to be placed into a special administration regime, customers would continue to receive water and sewage services, but it would be paid for by taxpayers.

It can only be used once a company becomes insolvent, can no longer fulfil its statutory duties, or breaches an enforcement order, according to Sky News.

Last month, Thames Water reported a £1.65 billion pre-tax loss in 2024, which has driven up net debts to around £16.8billion, up from just over £15.2billion last year.

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