Ministers weigh contingency plan for collapse of Thames Water
The government has begun drawing up contingency plans for the collapse of Thames Water amid growing doubts in Whitehall about the ability of Britain’s biggest water company to service its £14bn debt-pile.
Sky News has learnt that ministers and Ofwat, the industry regulator, have started to hold discussions about the possibility of placing Thames Water into a special administration regime (SAR) that would effectively take the company into temporary public ownership.
Such an insolvency process was used by the government when the energy supplier Bulb collapsed in 2021, sparking concerns that it could cost taxpayers billions of pounds.
Ultimately, the Bulb administration is likely to have cost the public purse a far smaller sum, but water industry ownership restrictions which prevent consolidation mean this figure could be dwarfed if Thames Water was to fail.
The talks within Whitehall, which involve the Department for Environment, Food and Rural Affairs (DEFRA), Ofwat and the Treasury, remain at a preliminary stage and relate at the moment only to contingency plans which may not need to be activated.
Thames Water serves 15m customers across London and the south-east of England, and has come under intense pressure in recent years because of its poor record on leaks, sewage contamination, executive pay and shareholder dividends.
On Tuesday, Sarah Bentley, its chief executive for the last three years, resigned with immediate effect, saying: “The foundations of the turnaround that we have laid position the company for future success to improve service for customers and environmental performance.”
Sarah Bentley resigned as chief executive on Tuesday. Pic: John Alex Maguire/Shutterstock
In March, however, Sky News revealed that Thames Water was facing crunch talks over its finances and had hired Rothschild, the investment bank, and the law firm Slaughter & May, to explore financing options for the company.
The Daily Telegraph reported on Tuesday night that Thames Water was still trying to raise £1bn from shareholders and that AlixPartners had been drafted in to advise on the company’s operational turnaround plans.
One industry source said that regulators had also sought advice from restructuring experts in recent weeks, although their identity was unclear.
Taking Thames Water into temporary public ownership would inevitably fuel calls from critics of the privatised water industry to renationalise all of the country’s major water companies.
Thames Water is owned by a consortium of pension funds and sovereign wealth funds, many of which are understood to be sceptical about delivering additional funding.
Its largest shareholder is Ontario Municipal Employees Retirement System (Omers), a vast Canadian pension fund, which holds a stake of nearly 32%, according to Thames Water’s website.
Others include China Investment Corporation, the country’s sovereign wealth fund; the Universities Superannuation Scheme, the UK’s biggest private pension fund; and Infinity Investments, a subsidiary of the Abu Dhabi Investment Authority.
Hermes, which manages the BT Group pension scheme, is also a shareholder.
Thames Water employs about 7,000 people, and serves nearly a quarter of Britain’s population.
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Ms Bentley’s exit, which came soon after a row about her declaration that she had surrendered a controversial annual bonus, also reflects deeper divisions about how to address the mounting crisis at the company.
Earlier this year, she said she was “heartbroken” about the company’s historical failings, blaming “decades of underinvestment”.
Alastair Cochran and Cathryn Ross have been named joint interim chief executives as a search for Ms Bentley’s replacement is conducted.
Thames Water has been fined numerous times, and is facing a deluge of regulatory probes.
In 2021, it was hit with a £4m penalty for allowing untreated sewage to escape into a river and park, while in August 2021, it was ordered to pay £11m for overcharging thousands of customers.
The range of financing options available to Thames Water’s board – whose chairman, the former SSE chief Ian Marchant, is also due to step down imminently – appears to be limited.
Nearly £1.4bn of the company’s bonds mature by the end of next year, with Ofwat price controls meaning water companies have little scope to generate additional income.
In an investor update published last September, Ms Bentley said that “the difficult external environment has increased the challenge of our turnaround”.
A year ago, the company said it had agreed with shareholders the injection of £500m of new equity funding, with a further £1bn expected to be delivered by the end of next year.
The additional shareholder funding formed part of a £2bn expenditure increase, taking its total spending during the current five-year regulatory period to £11.6bn.
In its September announcement, Thames Water said shareholders had “further evidenced their support for [Thames Water] and its business plan through an Equity Support Letter where the shareholders have committed to hold investment committee meetings (for their respective institutions) as a path to obtaining approval (in the discretion of the investment committee) for funding their pro rata share of conditional commitments in respect of the further £1bn of additional equity which is assumed in TWUL’s business plan”.
“Whilst this is not a legal commitment to fund…the [Thames Water] board believes it is reasonable to incorporate this additional £1bn of equity funding in its assessment.”
The company has not paid a dividend to its owners for the last six years.
Thames Water is not the only major water company to face questions about its financial resilience and operational track record.
Ofwat has also been in talks with others, including Southern Water and Yorkshire Water, in recent years about strengthening balance sheets amid performance issues.
The financial collapse of Britain’s biggest water company, and its implications for the model of water ownership, would inevitably become a major political debating point in the run-up to the next general election.
Some critics of privatisation have demanded that the government consider mutual ownership structures, which would prohibit returns to shareholders and guarantee that profits would be reinvested in improving the sector’s dire performance, while upgrading water infrastructure assets.
In total, tens of billions of pounds have been handed to shareholders in water utilities across Britain since privatisation, stoking public and political anger given the industry’s frequent mishaps.
DEFRA, Ofwat and Thames Water were all contacted for comment on Tuesday evening.
Dozens of diplomats have walked out of the UN’s assembly hall as Israel’s prime minister took to the podium to speak.
As the session’s chairman called for order, there were boos and cheers while delegates streamed out, leaving masses of empty seats.
Benjamin Netanyahu used his speech to speak directly to the hostages held in Gaza and their captors.
UN latest: Dozens of delegates walk out on Netanyahu’s UN address in protest
Mr Netanyahu held a map and crossed out threats he said had been eliminated. Pic: Reuters
He said loudspeakers had been put up around the territory and said Israeli spies had hacked mobile phones in Gaza so they carried his voice.
To the hostages he said: “We have not forgotten you… we will not falter, we will not rest until we have brought all of you home.”
To Hamas’s leadership, he said: “Lay down your arms… free the hostages now. If you do you will live, if you don’t Israel will hunt you down.”
He hit out at “false charge of genocide” and said: “If Hamas agrees to demands, war could end.”
Mr Netanyahu held a map of the region and crossed out the various threats he said had been eliminated, such as Hezbollah and Iran’s nuclear capabilities.
“Israel rebounded from its darkest day to deliver one of the most stunning military comebacks in history,” he said.
Meanwhile, Donald Trump said he believes the US has reached a deal on easing fighting in Gaza, saying it “will get the hostages back” and “end the war”.
“I think we maybe have a deal on Gaza, very close to a deal on Gaza,” the US president told reporters on the White House lawn as he was leaving to attend the Ryder Cup.
Mr Trump has repeatedly claimed an agreement to end the war was imminent, only for nothing to materialise. Weeks ago he said: “I think we’re going to have a deal on Gaza very soon.”
There were protests outside the UN building. Pic: Reuters
It comes soon after the UK, France, Canada and Australia formally recognised a Palestinian state in an effort to keep alive the prospect of a two-state solution.
The war in Gaza has been going on for nearly two years, with UN agencies and its chief repeatedly warning over the dire humanitarian situation.
Israel’s recently launched ground assault on Gaza City has only heightened concerns and seen thousands flee south in fear for their lives.
Israel says it’s designed to destroy what remains of Hamas after its October 2023 terror attack killed more than 1,200 people and kidnapped 251.
The Israeli leader insisted Israel had to “finish the job” to ensure the atrocity is not repeated.
“They beheaded men. They raped women. They burned babies alive. They burned babies alive in front of their parents,” he told the UN.
Walk outs show Netanyahu is a leader now isolated
Even before Benjamin Netanyahu started to speak, dozens of diplomats walked out. His Israeli team attempted to distract from their actions by cheering and giving their Prime Minister a standing ovation.
Almost immediately, Netanyahu did what he often does during these speeches – presenting props and a map of the region, ticking off one by one the threats that have long been posed against his country.
However, while he attempted to remind the few still seated to listen to his speech at the UN General Assembly of the horrors of 7 October, it was clear that this was a leader now isolated.
His journey to New York was complicated as he snaked around European countries to avoid an ICC arrest warrant.
Netanyahu’s speech was broadcast live into Gaza via Israeli military vehicles carrying loudspeakers – where he sent a message to the hostages and issued a threat to Hamas: “Lay down your arms, free the hostages.”
Some of his country’s staunchest allies – Britain, France, Australia, and Canada – recognised a Palestinian state just this week. It now also appears that his strongest ally, Donald Trump, has had enough and wants this war to end.
The US president, in a meeting with Muslim and Arab leaders, has attempted to reassure them that he will bring an end to the Israeli onslaught in Gaza and ban Benjamin Netanyahu from annexing the West Bank.
In an exclusive interview with Sky News, Saudi Arabia’s Foreign Minister told me Trump is “very, very committed” to a pathway to peace to end the suffering of the Palestinian people.
Netanyahu is due to meet Donald Trump early next week. The question is, will he finally put the kind of pressure on the Israeli prime minister that the international community is demanding?
Mr Netanyahu previously condemned the recognition of a Palestinian state by Western powers, saying it only rewarded Hamas and made it harder to win the release of the remaining hostages.
There are fears he could retaliate by annexing the West Bank and recognising Israeli control over illegal settlements.
However, Mr Trump – the only world leader believed to hold any sway over Israel – told reporters yesterday he would “not allow it”.
The Israeli leader is subject to an arrest warrant from the International Criminal Court, which has accused him of crimes against humanity, which he denies.
More than 65,000 Palestinians in Gaza have been killed in the war, according to the country’s Hamas-run health ministry.
Ninety per cent of its population has also been displaced by attacks that have flattened most of the territory and left many people desperately short of food.
‘Weak-kneed’ Western leaders
The Israeli prime minister told the UN “the war could end right now” if Gaza agreed to its demands.
“Israel would retain overriding security control, and a peaceful civilian authority would be established by Gazans and others committed to peace with Israel.”
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Israeli PM accuses countries of ‘buckling’ under pressure
He also hit out at “weak-kneed” Western leaders who he accused of giving in to biased media and antisemitic mobs.
“For much of the past two years, Israel has had to fight a seven-front war against barbarism, with many of your nations opposing us,” said Mr Netanyahu.
He denied his military was deliberately targeting civilians and referenced an assessment that it was taking more “measures to minimise civilian casualties than any military in history”.
Denying genocide claims, the prime minister said the “truth had been turned on its head” and cited his forces dropping millions of leaflets and sending text messages telling people to flee prior to attacks.
World
UAE is ‘main backer behind RSF militia in Sudan’, intelligence officer claims in secret interview
The tribal militia turned paramilitary Rapid Support Forces (RSF) in Sudan are known to document their own war crimes.
Videos of their fighters lynching women, lashing emergency responders and cheering over dead bodies have circulated online since the start of the RSF’s war with Sudan‘s army in April 2023.
One piece of evidence never revealed in any of their violent videos is who is backing them and why?
In an exclusive interview with Sky News at a location we cannot disclose, an RSF intelligence officer confirms widespread allegations that the United Arab Emirates (UAE) is the RSF’s main backer in a war that has created the world’s largest humanitarian crisis and forced 13 million people to flee their homes.
“In the beginning, it was the Russians – Wagner and the state. Now, they tell me it is the UAE supporting the RSF,” says Ahmed*, using an alias to protect his identity.
An RSF intelligence officer speaks anonymously to Sky’s Yousra Elbagir
Originally from North Darfur, Ahmed lives a double life as a refugee in one of Sudan’s neighbouring countries while staying connected to forces on the ground.
“Many of the planes landing at Nyala [in South Darfur] are said to bring weapons from the UAE and partially through the Amdjarras airport in Chad.
“It’s a financial relationship, no more,” he said. “The RSF controls areas with large gold mines – Darfur alone has more than four or five gold mines – the UAE is a gold trading hub.”
The RSF is accused of genocide in Darfur and mass looting, sexual violence and armed raids across the country.
Its troops are currently strangling the last state-held capital of North Darfur in a violent siege to complete its control of western Sudan. Close to a million people in Al Fashir locality are being starved by an RSF blockade and bombarded by daily drone strikes and shelling.
The RSF has physically reinforced its siege of Al Fashir with a berm – a raised earth mound. This map shows its encirclement. Pic: Yale School of Public Health
On the outskirts of North Darfur’s Karnoi town, we meet Joint Task Forces intelligence commander Idris Ali.
The Joint Task Forces are made up of former rebels from across Darfur that the military armed the RSF to crush, through mass ethnic violence in the early 2000s. Now, they are armed by the state to fight the RSF.
“Our patriotism does not allow us to surrender. Our right to the land means we have to fight until our last breath,” says Commander Ali.
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The RSF is currently using sophisticated weapons and drones to pummel his forces and civilians in Al Fashir, and carry out strikes across Sudan.
The RSF is well armed
“According to our sources, the weapons come from the UAE. Chad is just a corridor for these arms to reach Sudan,” he added.
According to his intelligence, supplies travel from Chad’s second city Abeche through the Adre crossing and into West Darfur to Al Geneina – the state capital the RSF massacred before its violent takeover in November 2023.
One video he shared with us shows a truck crossing after dark with khaki material covering its cargo.
The commander says it was filmed by sources on the Chad-Sudan border during an arms transfer from Adre town into West Darfur. There is no identifiable branding of humanitarian aid or visible signs of weapons in the footage.
In another video, a convoy of land cruisers races through terrain similar to that of eastern Chad. He says his sources also documented this at the Adre crossing and alleges that the land cruisers are painted in RSF colours and turned into lethal ‘technicals’ [weaponised civilian vehicles] once in West Darfur.
Sudanese state forces in front of burning armed vehicles that appear to have come from the UAE
He describes a second route that runs south of the border town Tine into North Darfur. Further north, he says RSF arms and supplies land in Amdjarras airport in Chad and head to the main RSF base and supply hub in Zurug town.
At least 86 flights travelling from the UAE to Amdjarras airport were independently documented by December 2024.
In a letter to the United Nations Security Council on 4 September, the Sudanese authorities alleged no fewer than 248 flights between November 2024 and February 2025 were operated by UAE-chartered aircraft to smuggle mercenaries, weapons and military equipment into Sudanese territory.
More recently, online flight tracker @AfriMEOSINT noted flights from the UAE arriving in N’djamena airport in Chad’s capital. On 20 September, a cargo flight left Al Reef airbase in Abu Dhabi and landed in the military section of N’Djamena airport.
In April, the Guardian reported on a leaked United Nations report that documented a consistent pattern of Ilyushin 1L-76TD cargo flights originating from the UAE into Chad, with multiple flights making deliberate attempts to avoid detection and identified at least three overland routes from Chad potentially used for transporting weapons into Sudan.
According to the Guardian, the experts added they could not identify what the planes were carrying or locate any evidence the planes were transporting weapons. These findings were not included in the final 39-page report.
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Smugglers risking their lives to fight famine
UAE ‘categorically rejects’ claims
We presented the allegations in our report to the UAE’s foreign ministry. It sent us this response:
“Since the onset of the civil war, the UAE has consistently supported regional and international efforts to achieve an immediate ceasefire, protect civilians, and ensure accountability for violations committed by all warring parties.
“The UAE remains committed to a civilian-led process that places the needs of the Sudanese people above the interests of any faction.
“In this spirit, the UAE notes a marked increase in unfounded accusations and deliberate propaganda from the so-called Port Sudan Authority, one of the warring parties to the civil war, which actively undermines efforts to end the conflict and restore stability.
“These escalating fabrications form part of a calculated pattern of deflection – shifting blame to others to evade responsibility for its own actions – intended to prolong the war and obstruct a genuine peace process.
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
“We categorically reject any claims of providing any form of support to either warring party since the onset of the civil war, and condemn atrocities committed by both Port Sudan Authority and RSF.
“The latest UN Panel of Experts report makes clear that there is no substantiated evidence that the UAE has provided any support to RSF, or has any involvement in the conflict.
“The UAE reaffirms its unwavering commitment to working closely with partners to foster dialogue, mobilise international support, and contribute to initiatives that address the humanitarian crisis and lay the groundwork for sustainable peace.
“These efforts will assist in building a secure and stable future for Sudan that meets the aspirations of the brotherly Sudanese people for peace and development.”
The Chadian government did not respond to our request for comment.
Saudi Arabia’s foreign minister has told Sky News he believes Donald Trump is “very, very committed” to ending the war in Gaza.
Prince Faisal bin Farhan al Saud said a recent meeting between the US president and Arab leaders went “very well” and that he was hopeful that a peace deal could soon be agreed.
He told The World with Yalda Hakim: “The war has gone on for far too long, too many people have died. Too much suffering has occurred [and] we have a famine going on in Gaza right now.
“And I got the sense from the meeting that President Trump is very, very committed to finding a path to ending the war, bringing the hostages out, bringing the relief to the people of Gaza.
“So I’m actually hopeful that we’ve started the dialogue that’s going to get us towards achieving this ceasefire.”
Saudi Arabia foreign minister Faisal bin Farhan al Saud speaks to Sky News
His comments come amid heightened international pressure on Israel after a commission established by the United Nations recently found its military was committing genocide in Gaza.
Israel, which launched its offensive in Gaza in response to Hamas’s deadly 7 October attacks in 2023, said it “categorically rejects this distorted and false report”.
Alongside the UN Commission report, multiple Western countries, including the UK, have also decided to formally recognise Palestine as a state.
That has prompted some Israeli ministers to call for the annexation of the West Bank to push back against efforts towards a two-state solution to the conflict.
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UN chief responds to Gaza aid sabotaging allegations
But speaking to Sky News, Saudi Arabia’s foreign minister said he felt “reassured that the [US] president understands how dangerous the idea of annexation in the West Bank is, how strongly the Arab and Muslim countries feel about the need to find an end to the war.”
After the Sky News interview was recorded, Mr Trump appeared to confirm such a stance later on Thursday, telling reporters at the White House: “I will not allow Israel to annex the West Bank… It’s not gonna’ happen… There’s been enough.”
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Meanwhile, the Saudi foreign minister told Sky News that formal recognition of Palestine by so many nations demonstrated that “real hope partially exists in the renewed commitment by the international community to the two-state solution to a Palestinian state”.
He said: “Because that’s a strong signal to everyone, but most particularly to the Palestinian people, that there is actually a hope for them to live in peace and harmony side by side with Israel.”
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