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Bosses at struggling Thames Water have been called back to appear before MPs as it emerged that £2.5 million of bonuses handed out to executives cannot be recovered by regulators. In a letter to the cross-party Environment, Food & Rural Affairs, EFRA Committee, Ofwat confirmed that a payment already made in April under a controversial ‘retention’ scheme does not come within the scope of new rules that can ban water firms from paying out bonuses. Thames Water Britain’s biggest water supplier paused plans in May to pay 21 senior bosses £18.5 million in bonuses linked to the water company securing a £3 billion emergency loan following outcry from the EFRA Committee. But it was also revealed that the first of three payments under the scheme totalling £2.5 million had already been handed out on April 30 to senior executives, although this did not include Thames Water Chair Adrian Montague, Chief Executive Chris Weston or Chief Financial Officer Steve Buck. Ofwat Chief Executive David Black confirmed in a letter to the EFRA Committee published for the first time that, as none of those handed the bonuses were on the water firm’s board, ‘the payments made on April 30 2025 are not within the scope of the rule’. The committee has recalled Thames Water bosses for further questioning on July 15 over the so-called ‘management retention plan’. The MPs will also demand answers over the reasons for private equity firm KKR’s decision to walk away from a £4 billion rescue deal. The committee had made a request to Montague for minutes of board meetings relating to KKR, but this was refused by Thames Water, as he said it could jeopardise current talks over an alternative rescue plan. In a letter to committee Chair Alistair Carmichael, Montague said: ‘Providing copies of minutes of discussions in relation to the KKR proposal could undermine the successful conclusion of a live transaction which remains subject to negotiation.’ He instead offered a private meeting with Carmichael. Carmichael wrote in response: ‘A private briefing is not appropriate in these circumstances, nor does it meet the standards of transparency we seek to uphold on this committee.’ The committee has also written to KKR with questions over its withdrawal from a takeover of Thames Water. KKR dropped plans to inject much-needed cash into the troubled supplier last month, but has not confirmed its reasons for the move. Heavily indebted Thames Water, which supplies 16 million customers, said at the time it was instead taking forward talks with ‘certain senior creditors’ on an alternative plan to recapitalise the business. But the withdrawal of KKR has raised the spectre of a temporary government nationalisation of Thames Water once more, should it fail to secure a rescue deal. By Holly Williams, PA Business Editor Press Association: Finance source: PA Copyright 2025 Alliance News Ltd. All Rights Reserved.
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