The nationalization of the struggling Temes is “not a response”, Environment Secretary Steve Reid has warned after a private equity veteran to exit the £ 4BN rescue deal, after throwing the company’s future on suspicion.
He said that a borrowing of debt -filled utility would take away from NHS and other public services.
Temes water is in about 19 billion pounds of debt and MPs were told last month that this year there was a cash of about five weeks before being bid at one point.
Britain’s largest water supplier, who has 16 million customers, chose KKR at the end of March, which is its favorite bidder as part of a new equity investment plan of about 4 billion pounds. But the firm said on Tuesday that KKR was no longer “in a position to move forward” and that its position as a favorite bidder had lapse.
In the dispatch box, the conservative shadow environment secretary Victoria Atkins accused the ministers of “out of the rescue plan”.
Mr. Reid told the MPs: “The government is ready for any incident and will take action as required. We are not looking at nationalization as it will cost more than £ 100 billion public funds, which will have to be taken away from other public services such as National Health Service was to be given to owners of water companies.
“It will take years to unplug the current model of ownership, pollution will deteriorate during that time and we know that nationalization is not the answer – you only have to look at the situation in Scotland.”
Mr. Reid said that he would “apologize” to deal with the behavior of water companies under the previous government. “I mean, we also had stories that have been confirmed by water companies of previous orthodox secretaries of the state who shout and shout at the owners of the water company, but in fact do not change the law to do anything about the bonus that they were able to pay themselves.”
Tim Faran, spokesman of the Liberal Democrat environment, said that Tems Water should go into special administration and “emerge as a public interest company.”
Richard Tice, deputy leader of Reform UK, “proposed a plan to buy it for a pound – this is a good deal for the taxpayer – then he will not have to pay huge, egoistic rates of interest, and taxpayers and customers will be beneficiaries.”
The step taken by KKR comes as an interim report by the Independent Water Commission that was found in the water sector in England and Wales requires “fundamental reset” and was called for “strong and reinforcement” of OFwat’s regulatory role.
It is understood that Tems Water is now working on alternative schemes with senior creditors. These creditors are Bondholders, who are effectively owned by the water of the Tems after the High Court earlier this year, who approved a financial reorganization through loans up to £ 3 billion to ensure that till the summer of 2026.
Sir Adrian Monteg, president of Tems Water, said: “We believe that a permanent reconciliation of the company is in the best interest of all stakeholders and continues to work with our creditors and stakeholders to achieve that goal.”
KKR refused to comment.
A spokesperson of Owat said: “We are contacting with the company on our next steps in light of our recent announcement with the company, to ensure that its equity enhancing process continues to secure better financial flexibility and operating performance.”
Last week the firm was placed under further pressure when the rules were broken on sewage treatment and found to pay dividends, followed by a record of £ 122.7 million by Owat.
Water companies have faced public and political outrage over pollution, rising bills, high dividends and executive salary and bonus limits.
Temes in April increased the consumer water bills for customers at an average of 31% and further anger over the plan to pay a large bonus to senior owners associated with the water company that acquired an emergency loan of £ 3 billion, which was later dropped.