Campaigners fear Thames Water may postpone Banbury Sewage Treatment upgrade again

Windrush Against Sewage Pollution (WASP) is not convinced the privatised water company will get Banbury Sewage Treatment Works (STW) upgraded by the new date of 2029. It was originally due for completion in early 2026.

Now WASP says sources in TW and the Environment Agency (EA) suggest there could be further delay to its upgrade programme – though it is not known if Banbury would be on that list.

Meanwhile untreated sewage is poured into the River Cherwell for hundreds of hours per year following heavy rain. And angry householders are paying hiked bills to help TW manage its decimated finances.

WASP is furious about dividends being paid to shareholders out of customer payments while work is delayed and rivers polluted.

Vaughan Lewis said: “Thames Water is continuing to push back deadlines for agreed upgrades to sewage treatment works, now blaming lack of contractors. Not of course the fact that with a near £20 billion debt pile, they don’t have the funds to carry out the work.

“Government still refuses to see the obvious: Thames Water is broken. It needs to be put into Special Administration, its debts wiped by the courts and a new, not-for-profit, public entity started – one that prioritises clean water and the customer over shareholders greed.

“Government is content to nationalise the railways but cannot bring itself to do the same for water. Why?

"Disgracefully, the Banbury expansion work was shelved, along with over 100 other projects, apparently due to 'lack of funds'. The company has since demanded - and received - an additional eye-watering sum of £1.18 billion to deliver these 100 previously funded schemes.

“In recognition of the company's failure to deliver the agreed projects on time, Ofwat launched an enforcement case against them in February this year; we are still waiting for the outcome of this investigation.”

The Environment Agency (EA) has meanwhile issued a tougher permit to Thames Water for the operation of Banbury STW, meaning that it is presently periodically operating illegally, Mr Lewis said.

The EA has called Thames Water the worst supplier in the country. On the brink of collapse, TW is trying to achieve a deal to secure its future, which it has warned would be a ten-year project. It has been criticised for paying dividends and bonuses without investing in outdated infrastructure.

Mr Lewis said Ofwat found that between October 2023 – March 2024, immediately prior to announcing the true state of its financial difficulties, the company had paid more than £195.8 million to its holding companies.

For these breaches, which were contrary to dividend payment rules, the company was fined the smaller sum of £18.2 million.

Mr Lewis said: "At the same time as pleading lack of funds as the key reason for breaking its commitments to carry out these necessary upgrades, the company cynically and illegally moved funds up the labyrinthine corporate food chain to feed the greed of shareholders.

“This is a company that always places profit before bill-payers and the environment. The regulators are gradually coming to terms with just how weak they have been since privatisation in 1989.

"Despite this, it is clear that they have little real sanction on Thames Water; the grubby deal negotiated with Ofwat for the £104.5 million fine is a clear example of this inability. (TW was allowed to defer paying the fines)

“Thames Water bill-payers must now recognise that they are not receiving the level of service and environmental protection that they have paid for. Perhaps we all need to reflect on that.”

A Thames Water spokesperson said: “We have been open about the challenges of delivering all the elements of the programme, of which upgrades at Banbury were impacted. This was impacted by cost increases that were higher than the inflation index applied to our allowances.

“The upgrade at the site will include an increase in treatment capacity, from 266 to 490 litres per second. This will reduce the need for untreated discharges in wet weather. Note that these untreated discharges do pass through our inlet screens to remove large solids and the system is designed this way to prevent flooding to customer’s properties. This work is forecast to complete in spring 2029."

He said special administration would not fix TW’s problems.

"It will delay the delivery of improvement for our customers and the environment. It will be disruptive, add risk and uncertainty, increase costs, hinder our operational turnaround and does not fix the balance sheet.

"We are focussed on working with London and Valley Water consortium and all stakeholders to finalise a holistic market-led solution that is deliverable, will return Thames Water to an investment grade credit rating and benefit customers and the environment.”

He said dividends paid were internal dividends, not to external companies. And ‘bonuses’ were management retention plan payments.

Mr Lewis said: “TW can't get ' investment' – or a bail out - from anyone unless the Government agrees to not mount prosecutions and/or levy fines for pollution and poor performance.

"In effect the equity investors and hedge funders are holding the government to ransom - ‘agree to let us behave as we wish or we walk’. At present Ofwat is ‘considering' the demands. If they (Government) cave in then all water companies will want the same deal - cue anarchy.”

We have asked TW for comment about the possibility of investment programmes being further delayed.