Thames Water CEO Chris Weston says nationalisation is not the answer to the company’s woes – and that environmental targets are not realistic.

Chris Weston was commenting in a wide-ranging exclusive interview running for over 40 minutes as part of the BBC's Big Boss interview series. The interview with the BBC’s Business Editor Simon Jack was featured on the BBC’s Radio 4 Today programme this morning -where Jack described Thames Water as drowning in debt, running out of cash, on the brink of financial collapse and the object of public fury and a chorus of voices calling for the water company to be temporarily or permanently nationalised.

Questioned on the prospect of special administration, Chris Weston said:

“If you are going to put a company like Thames into special administration, you need to be clear as to how you’re going to get it out. An obvious way is to market it and put it back onto the market but there is an alternative in nationalisation. Then you’re bringing Thames onto the national balance sheet and you are financing that massive infrastructure investment programme that is so necessary amongst all of the other things that the Government is trying to do.

He also argued that existing targets on leakage, spills and pollution were unattainable and that the company needed “breathing space” to fix its many problems, which would take up to ten years. He told Simon Jack:

“I would say, that at the end of the day, the targets that the company is expected to make are not realistic. And if we don’t hit those targets, we get penalised for it. An example would be something like leakage. We have to hit a certain level of leakage, but it is so far in excess of what we are capable of doing – or I think what anyone would be capable of doing – however much money you invested, that it is not going to be achievable. It’s just not realistic. I think we have to recognise that as we turn around the company. And if you don’t do that you don’t address a fundamental flaw in the way that regulation works….”

"Chances of getting zero pollutions are very slim"

He went on to explain why the chance of getting to zero pollutions is “very, very slim”, saying:

“We can invest a lot, we work very hard to try and stop pollutions happening, but people do abuse our network. There are people that misconnect into our network – some deliberate, some not deliberate. And those kind of factors are outside our control, the weather is outside our control. It’s not an excuse, it’s a reason.”

He also described the world of floods in winter and droughts in summer and as “the new normal”, which made “huge infrastructure investment even more urgent.”

Questioned by Simon Jack about Prime Minister Andy Burnham’s views about wanting greater public control over life’s essentials, Chris Weston said:

“ I completely agree with the Prime Minister . I think the only way out of the narrative that surrounds Thames at the moment is if there is greater public control and an ability to hold us to account more than has been the case in the past.

“We have a proposal on the table from our creditors and I think it is a pretty robust proposal. They have written recently to the secretary of state about how they are going to enhance it."

Simon Jack responded:

"Lets say you do go into special administration usually that’s a temporary affair till you can find someone else to sell the business to. I’m wondering whether you find it hard to conjure, as I do, a Burnham government having a beauty parade for another – probably foreign – bunch of investors?”

"If you are going to put a company like thames into special administration you need to be clear as to how you’re going to get it out," Weston replied. 

Asked about whether he was in regular discussion with the new administration and whether he had met the new Environment Secretary Angela Eagle or the Prime Minister , Weston replied “Not at the moment, no.”

Simon Jack also quizzed Weston about his recent 14% increase in basic pay and a £99,000 retention fee, “which people say is a bonus by any other name, driving a coach and horses through the bonus ban.”

“Why did you need to do that when the company is in such desperate straits and it looks so bad?”, Jack asked.

Weston explained his own pay was decided by the remuneration committee and the Board via a process of benchmarking, commenting:

“The thing I am more concerned about is how I attract people and retain them within Thames. We need capable people to help turn this company round. And if we’re not prepared to pay market rates then they won’t come to us and they won’t stay with us.”

"We completely understand customers' frustration"

Asked by Jack if he could "leave us with one message for customers out there who are frustrated what would it be?" Weston replied :

"Firstly, we completely understand that frustration and secondly, we are working very hard to address the root cause of much of that frustration. We are undertaking the biggest investment programme in our history and as we do that, we are improving the operations of the company.”

Pressed further by Simon Jack who suggested to the Thames CEO, “Bear with us, is what you’re saying?” Chris Weston responded:

“I’m afraid so. I can’t do it overnight. If I could wave a magic wand and make it happen tomorrow, I would.”

Feargal Sharkey - "experiment in privatisation of water industry has been an unmitigated catastrophic disaster"

Commenting separately on the interview, campaigner Feargal Sharkey said:

"I think it’s just an act of desperation at this point, as I think Chris needs to acknowledge. Not only was Thames Water – albeit they're the poster boy – this experiment in privatisation of the water industry has been an unmitigated catastrophic disaster for bill payers, customers and the environment.”

He contunued

“This scaremongering that’s going on about adding this huge investment - let me be very clear, Any suggestion that the shareholders are proving the money, we pay them back is a complete fabrication….Over the next five years, the water companies will actually spend £91 billion pounds and £90 billion of that – 99% of that funding – is being provided through the recent bill increases that’s coming from our back pockets, our bank accounts.”

He went on to say that Ofwat is now estimating that our bills are now going to have to increase to £2000 a year by 2050.

He told his interviewer:

"The last YouGov survey back in May made very clear that 82% of people in this country now want to see the whole industry nationalised.”

Click here to listen to the BBC’s Big Boss interview with Thames Water CEO Chris Weston in full