Thames Water has been fined £122.7 million after two investigations into wastewater and dividend payments, in the largest penalty Ofwat has ever issued, the regulator said.
The water giant will pay £104.5 million for breaches of rules relating to its wastewater operations, after Ofwat said it “failed to protect the environment”.
Ofwat chief executive David Black said: “Our investigation has uncovered a series of failures by the company to build, maintain and operate adequate infrastructure to meet its obligations.
“The company also failed to come up with an acceptable redress package that would have benefited the environment, so we have imposed a significant financial penalty.”
Thames Water will pay an extra £18.2 million for breaking rules related to dividend payments, the first ever dividend-related fine in the industry, Ofwat said.
The regulator said the money will be paid by the utility giant and its investors, not by customers.
Water companies have faced public outrage over the extent of pollution, and at a lack of investment in water infrastructure, rising bills, high dividends and executive pay and bonuses at privatised water firms.
The embattled London water provider is also in about £19 billion of debt and earlier this year narrowly escaped running out of cash by agreeing a further £3 billion loan.
The company also hiked consumer water bills for its 16 million customers by an average of 31% in April.
Environment Secretary Steve Reed said: “The era of profiting from failure is over. The Government is cleaning up our rivers, lakes and seas for good.”
The wastewater fine was first proposed last year and confirmed on Wednesday.
A Thames Water spokesperson said: “We take our responsibility towards the environment very seriously and note that Ofwat acknowledges we have already made progress to address issues raised in the investigation relating to storm overflows.
“The dividends were declared following a consideration of the company’s legal and regulatory obligations.
“Our lenders continue to support our liquidity position and our equity raise process continues.”
