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Signage is seen for British utility company Thames Water at a repair site in London, Britain on June 28.TOBY MELVILLE/Reuters

Executives of embattled British utility Thames Water, which is partly owned by two of Canada’s biggest pension funds, have insisted that calls for its nationalization are premature and have been highly exaggerated.

In an appearance before a committee of British parliamentarians Wednesday, company co-CEO Cathryn Ross said the utility wasn’t close to meeting the conditions required for the government to take over the business under a process known as special administration.

“Special administration is very much a nuclear option,” Ms. Ross told MPs on the Environment, Food and Rural Affairs Committee. “One of those triggers would be insolvency, and the other one would be, perhaps, persistent and severe breach of our licences. … We are a long way off that insolvency trigger, and I think a long way off the conditions of special administration being met.”

When asked what discussions she’d had with the government about nationalizing the business, Ms. Ross replied, “None.”

Thames Water has been struggling under £14-billion of debt, aging infrastructure and widespread criticism about sewage spills and leaking pipes. The utility is among the largest in Britain and serves some 15 million customers in southeastern England.

Critics call for nationalization of Thames Water as balance sheet sinks under massive debt

This week Thames announced it had secured £750-million in emergency funding over the next two years from its shareholders, which include the Ontario Municipal Employees Retirement System and British Columbia Investment Management Corporation. OMERS is the utility’s largest shareholder, with a 32-per-cent stake, while BCI owns 9 per cent.

That funding comes on the heels of a £500-million cash injection in March. The company also said this week that shareholders had agreed to kick in a further £2.5-billion between 2025 and 2030 as part of a long-term turnaround plan.

There had been reports that if Thames had not received the extra funding the government was prepared to take it over through special administration. Under that scenario, shareholders would have lost their multibillion-dollar investment.

Ms. Ross told the committee that some reports about the company’s financial woes, and potential nationalization, had been “rather more outlandish than perhaps we would have liked.”

Regulators had indicated that Thames needed an immediate injection of £1-billion, but the utility’s other co-CEO, Alastair Cochran, said £750-million was a more realistic amount for the next two years.

“Practically we cannot spend efficiently any more than £750-million in this period,” he told the parliamentary committee. “We face a number of very practical problems around deliverability, so the phasing reflects what we can deliver efficiently.”

Mr. Cochran also said shareholders remain onside with what the company is doing. “We have very patient shareholders, and they have been incredibly supportive of this business,” he said. “We are very focused on turning this business around, making sure it is financially resilient and delivers a better service for customers, and improves both its operational and environmental performance.”

Rosie Duffield, a Labour MP, said the public had lost faith in Thames, noting that more than 278,000 people had signed a petition calling for the company to be nationalized. “Do you understand why the public would like to see nationalization?” she asked the executives. “It’s a vital utility. We don’t know who all these investors are from foreign companies that own our utilities.”

The company’s new chair, Adrian Montague, told Ms. Duffield that he doubted government ownership would solve the problems facing all water utilities and that customers will have to be patient. “I can understand the frustration of customers who want to see improvements. We would love to be able to deliver all of those improvements overnight. But it will take time,” he told the committee.

Thames has also come in for criticism after a court recently found that company officials deliberately misled Environment Agency investigators during their probe of a sewage leak in 2017 that killed almost 1,400 fish in two rivers near Gatwick Airport. The court fined the company £3.33-million.

Ms. Ross told the committee that, while she accepted the court’s findings, she disagreed with the conclusion that Thames officials had misled investigators.

She and the other executives also said the utility had little choice but to increase consumers’ bills because it is facing a massive tab to upgrade pipes and other infrastructure, most of which are more than 100 years old.

“That will need to be funded, and it is an unfortunate truth that the only source of ultimate funding for that in the current model is the customer,” she said.

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