Thames Water to invest £8bn for water upgrades

Thames Water has announced approximately £8bn of upgrades to essential infrastructure between 2014 and 2020, equivalent to £1,385 for each of the 5.7 million households it serves.

The company plans to invest £5.1bn from 2014 for improvements to the UK’s oldest treatment works, pipes and sewers.

The average annual bill will increase by £2 above inflation in 2014, but the company noted that the upgrades would be achieved with bills no higher at the end of the period, in today’s prices, than they are now.

Thames Water will also investment £2.8bn in the Thames Tideway Tunnel, which will require increases of £8 above inflation for each of the five years from 2015. The project will provide additional capacity to London’s outdated Victorian sewer network. It is six times larger than anything previously delivered by the UK’s privatised water industry.

The company has revealed measures to help customers who struggle to pay their bills, including adding a one-off tax refund of £10m to the Customer Assistance Fund and introducing a social tariff in 2014, a year earlier than planned.

The combined plans indicate that Thames Water’s average household bill would increase from £358 a year in 2013 to £398, plus inflation, in 2020. The company’s bills are currently £50 a year below the average for England and Wales.

Thames Water chief executive Martin Baggs said that the company’s plans have the backing of the public.

"It is encouraging that more than seven out of ten find it acceptable. It is clear that bill increases are only acceptable if they are absolutely essential, but customers have told us to avoid storing up problems for the future," he said.