Taxpayers face eye-watering £2billion bailout as incoming PM Andy Burnham prepares to nationalise Thames Water

TAXPAYERS face being landed with a £2billion bill to keep Thames Water running as incoming Prime Minister Andy Burnham prepares to seize control of the crisis-hit firm. Britain’s biggest water company supplies 16million customers across London, Kent, Essex and Gloucestershire. Burnham is expected to push the struggling giant into a special administration regime, a rare emergency measure that keeps taps running while a buyer is found. It would mark the first time a water company has faced such action, and comes just days into Burnham’s premiership. Sign up for the Money newsletter Thank you! Thames Water is drowning in £17billion of debt and has warned it could run dry of cash by the end of the year. Chief executive Chris Weston told The Sunday Times: “If they put us into a SAR, the government would have to fund us for the period of time that we were in the SAR.” Finance boss Steve Buck warned the firm would need “at least another £2 billion” to survive until the end of next year if a rescue deal with creditors collapses. A source close to Burnham said: “If it is going to cost the taxpayer £2 billion to keep the company afloat then the taxpayer needs to receive something in return, that means control.” Meanwhile, Labour deputy leader Lucy Powell fuelled speculation of nationalisation, telling Sunday Morning with Trevor Phillips: “The privatisation of water hasn’t worked.” She added: “It’s not created competition. What we’ve seen is bills going up and up and up over years and years and years of investment not being made.” Most read in Money Thames Water’s army of investors, including US hedge funds Apollo, Elliott and Silver Point, are said to be lawyering up for a legal battle if ministers push ahead. Turnaround chief Mike McTighe insisted the group still wanted to strike a deal, saying: “We remain ready and willing to recapitalise Thames Water, return it to investment grade, and begin the long process of turning it around.” 1 comment1