A Chinese infrastructure company could take over Thames Water amid mounting financial pressures, reports suggest.
Ministers are preparing to take Britain’s biggest water supplier, which has been marred by sewage discharge and major debt issues, into public ownership.
The move would effectively nationalise Thames Water and wipe out much of its £16 billion debt, as ministers desperately search for private investment.
It would ensure that Thames Water’s 16 million customers continued to receive water and sewerage services should the utilities giant collapse.
However, taxpayers could be liable for billions of pounds in bailout costs at a time when public finances are already severely constrained.
In June, private equity firm KKR pulled out of plans to inject £4 billion of cash into Thames Water in a bid to keep it afloat.
Environment Secretary Steve Reed has reportedly appointed insolvency practitioners FTI Consulting to step up planning for Thames Water in case it fails to secure a buyer.
CK Infrastructure Holdings, which already owns Northumbrian Water and UK Power Networks, is among the leading contenders to be named Thames Water’s new owner.
The Hong Kong-based logistics giant is prepared to operate within the new regime of tougher fines for environmental infringements.
However, concern about Chinese control of British businesses is widespread due to espionage fears, citing links to the leadership of President Xi Jinping.
And this year, CKI’s parent company CK Hutchison Holdings sold its interest in the Panama Ports Company following pressure from US President Donald Trump.
Government sources said a state bailout was the most likely option.
One told The Times: “The political benefits of a special administration regime are apparent to us and it is now something we are looking very seriously at and preparing for it to happen.”
Another added: “It would look like the government is siding with one institution with close links to the Chinese state at the expense of blue-chip UK financial institutions.”
A spokesman for Thames Water said: “Our focus remains on a holistic and fundamental recapitalisation, delivering a market-led solution which includes targeting investment grade credit ratings and returning the company to a stable financial foundation.
“Constructive discussions with our many stakeholders continue.”
The Department for Environment, Food & Rural Affairs said in a statement: “The Government will always act in the national interest on these issues.
“The company remains financially stable, but we have stepped up our preparations and stand ready for all eventualities, including applying for a special administration regime if that were to become necessary.”
