Britain’s water regulator said Southern Water is too heavily geared, and must pay a fine if it doesn’t improve its “inadequate” business plan.
| Britain’s water regulator has delivered a stinging rebuke to Macquarie-owned Southern Water, slapping the English utility with a potential £54 million fine for having an “inadequate” five-year business plan.
Thames Water, which is grappling with a punitive debt burden, has been put into a special oversight scheme that could lead to its break up, or a re-listing on the stock exchange. Australian superannuation fund QIC is a 5.4 per cent shareholder, and was contacted for comment.Britain’s water sector has come under huge political and economic pressure. Greater reporting of England’s chronic problem of spills and sewage overflows has turned water into a terminally toxic political issue.
“Gearing is forecast to reach 72.9 per cent over the 2025-30 period, which is above the level we consider reasonable for a water company to maintain adequate levels of financial resilience in the long term,” the Ofwat report said. The regulator rejected Southern’s request to delay some of its required capital spending into the 2030s, and told the company to meet its commitments and obligations with 12 per cent less money than requested.“If Southern Water gives us the assurance and confidence we expect, we may move the company out of the ‘inadequate’ category and reduce or remove its financial penalty. This will be reviewed ahead of our final decision in December 2024,” the regulator said.
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