Thames Water chairman apologises to customers but defends bonuses for bosses

Thames Water’s chairman has apologised to customers while insisting it is “not a failing company” and saying that hundreds of thousands of pounds worth of recent bonuses for bosses were justified.

Sir Adrian Montague told MPs on Tuesday that he wanted to apologise for “letting customers down” in recent years and at times causing people “real hardship”.

When asked about attempts to turn the struggling water company around, he said: “We realise there is a vast amount to be done to bring performance up to scratch. We know we are letting customers down.

“We know that pollutions, we know that spills, we know that supply interruptions cause inconvenience and sometimes real hardship.

“So I think the right thing to do is to start a discussion of the turnaround plan by acknowledging that we haven’t always served our customers as well as we should, and through the committee apologising to them.”

Sir Adrian was appearing in front of the Environment, Food and Rural Affairs (Efra) select committee of MPs on Tuesday.

Thames Water is England’s biggest water firm and supplies about 16 million households across London and the South East.

The company has been at the centre of growing public outrage over the extent of pollution, rising bills, high dividends, and executive pay and bonuses at the UK’s privatised water firms.

It also has about £19 billion of debt, and was recently allowed to take another high-cost loan which could reach £3 billion to stave off imminent collapse.

In sometimes heated exchanges with MPs, Sir Adrian revealed how close the company had come to running out of money in the last year.

He said: “There were times in the last year that we had five weeks’ liquidity – and running a £20 billion corporation on five weeks’ liquidity, honestly, it’s hair-raising.”

He also defended taking on the extra £3 billion of debt on financial terms described as “eye-watering” even by the High Court judge who approved it.

Sir Adrian said: “We were in a beggars-can’t-be-choosers situation, we were running along the edge of the precipice. We had to secure the financial future of the company.”

Despite this, he defended handing out hundreds of thousands of pounds in bonus payments to top bosses in recent years.

He said: “We live in a competitive marketplace and we have to provide the right sort of packages to these people otherwise the head hunters come knocking.”

When asked by Labour MP Helena Dollimore why head hunters would recruit from “a failing company” he disputed her characterisation.

Sir Adrian said: “It’s not a failing company. It’s a company in recovery. We are making progress.”