Speeches by Gardiner.

“Will you have to write to us on that one also?”

“Why was there a Civil Immunity Clause in the original loan agreement? Do you have to write to us on that one also?”

“Indeed. What was the purpose of the Civil Immunity Clause in the original loan agreement?”

“It rather suggests that he believed that so much money, so much money, could have been being spent in, let us call it more productive ways, directly addressing the concerns.”

“No, I do not think he did because as you say, Sir Adrian, he had perused all the data by this stage and then he came to a conclusion that actually he would not have gone down that road had he realised that at the beginning. That is what he said.”

“Why do you think the judge said that he might have refused to sanction the plan from the outset if he had known those costs were so high?”

“In fact, under the new Water (Special Measures) Bill they have the right to recover that and to make sure it is not the public that are paying the bill. The High Court judge said that he might have refused to sanction the plan from the outset if the, “Eye-watering level of the adviser’s fees had been clear up front.” W…”

“Are they? Are the others still there? Are they still keen and showing interest?”

“If not, will it be too late to go back to the other potential investors that you have excluded from the process, or would it result in a special administration regime?”

“If Ofwat refuses to reduce those penalties, is the equity investment still on the table from KKR?”

“If you can write to us on that, thank you. The revised regulatory business plan that you are developing requires a reduction in penalties from Ofwat, does it not?”

“How much is that assessment of the additional penalties from the EA?”

“That is what I was asking.”

“The additional cost that you are factoring in will come from the fines the Environment Agency levies against you for those additional inspections that they have promised to fulfil.”

“Have you made an internal assessment?”

“Absolutely. The Environment Agency has also said that it will significantly increase its inspection and enforcement regime on Thames Water. What amount has Thames internally estimated that this might cost? Maybe this is one for Mr Buck. You have made an internal assessment of that, so what is it?”

“But your problem is that because you are behind in both AMP7 and AMP8, you are incurring additional penalties. You just said £500 million hangover from last year in AMP7. That means that it is going to become even more expensive to get the capital in and persuade investors to come in because they see that the further y…”

“Given AMP8 is at least two times the capital work of AMP7 and you have made no attempt to source the additional contractors that you will need, this means you have only re-engaged the existing contractors. This means your ability to press on with AMP8 is constrained, and in this first year of AMP8, you will probably on…”

“So it is going to be more costly because of the delays. The failure to achieve your ODIs—your Outcome Delivery Incentives—on sewage and leakage, and your MeXes—the measures of experience—the more penalties you incur, and the more difficult it will be to sucker in new investors. Sorry, let us put that another way, the h…”

“You said that it is behind in time. What about in financial terms?”