The water regulator Ofwat has fined Thames Water £122.7 million following and investigation into wastewater and dividend payments.
Ofwat has said Thames Water has “failed to protect the environment” and they will pay £104.5 million for breaching the rules of their wastewater operations.
The water giant will also pay an extra £18.2 million for breaking the rules over dividend payments, which is the first ever fine in the industry.
In October 2023 Thames Water paid £37.5 million in dividends and in March 2024 they paid out £13.13 million.
Ofwat chief executive David Black said, “Our investigation has uncovered a series of failures by the company to build, maintain and operate adequate infrastructure to meet its obligations.
“The company also failed to come up with an acceptable redress package that would have benefited the environment, so we have imposed a significant financial penalty.”
Thames Water is in a “cash lock-up” meaning they are not allowed to pay any dividends without approval from the regulator.
Black added: “We will not stand by when companies pay undeserved dividends to their shareholders.”
Environment Secretary Steve Reed said, “The era of profiting from failure is over. The Government is cleaning up our rivers, lakes and seas for good.”
A Thames Water spokesman said, “We take our responsibility towards the environment very seriously and note that Ofwat acknowledges we have already made progress to address issues raised in the investigation relating to storm overflows.
“The dividends were declared following a consideration of the company’s legal and regulatory obligations.
“Our lenders continue to support our liquidity position and our equity raise process continues.”
Mike Keil, chief executive of the Consumer Council for Water, said: “These failures amount to a serious betrayal of customers and the environment by Thames Water and come at a time when our research shows it is already the least trusted water company in England and Wales.
“We’re pleased to see Ofwat using its new powers to block unjustified dividends, which shareholders should have to earn through the company delivering on its commitments to customers and the environment.
“Thames Water customers are paying more than ever before for their water and sewerage services and they are impatient for improvements to the company’s customer service and environmental performance.”
