£8bn Thames Water Sale Highlights OFWAT's Failure - Huhne

4.17.00pm BST (GMT +0100) Tue 17th Oct 2006

Commenting on the takeover of Thames Water, Liberal Democrat Shadow Environment Secretary, Chris Huhne MP said: "Ofwat needs to look at this purchase very closely, and prepare to be far more prescriptive in its conditions for investment and customer service. The last thing Thames Water customers need is another gouging of the consumer to meet a corporate borrowing binge.

"This is a potentially worrying takeover because Macquarie has the reputation for borrowing large amounts of cash to buy its acquisitions, which it then attaches to the company. This can mean that investment is cut to the bone while the outfit is sweated for cash to meet its interest and debt repayments.

"RWE bought Thames Water for £4.8 billion in 2000 and is selling just six years later for £8 billion. That in itself is a terrible condemnation of the water regulator for being far too feeble in defending consumer interests."