Thames Water has paid its chief financial officer, Steve Buck, a £1m signing fee despite intense scrutiny of Britain’s biggest water company’s finances as it tries to avoid being taken into public control.
The utility revealed that it made the payment last month, in a letter sent last week by Sir Adrian Montague, its chair, to MPs on the environment, food and rural affairs select committee, Sky News first reported.
Thames is one of at least eight water companies banned from paying performance-related bonuses because of continued environmental failings from its creaking infrastructure. The company, which provides water and sewage services to 16 million customers in London and the Thames valley, has been on the verge of collapse for more than two years.
Andy Burnham has previously indicated that the government should take control of Thames in order to write off debts worth billions of pounds. However, the creditors who effectively control Thames have spent months negotiating to take formal ownership, if regulators will give leniency on future fines. The creditors have offered the government a “golden share” in the business in a last-ditch bid to avoid having their debts written down.
Yet the continued payments of millions of pounds to executives will probably strengthen calls for the government to step in and take formal control via a special administration regime.
The payment to Buck was made at the end of last month, after Thames took legal advice over its obligations.
The payment was drawn from a £3bn emergency debt package agreed last year with creditors. That money is designed to keep Thames running while it tries to negotiate a longer-term takeover by its creditors, more than two years after its shareholders effectively walked away from the business.
Cat Hobbs, director of We Own It, a campaign group calling for nationalisation of the water industry, said:
double quotation markThe Thames Water saga is beyond a joke a this point – they are completely taking the mickey. Andy Burnham must step in immediately and take back the company … the shareholders have walked away, and the debt can be drastically cut and refinanced more cheaply in public hands. It’s criminal to let this rip off continue with 16m households paying the price.