Whitehall officials are in a dilemma over Thames Water's future due to its dire financial situation, needing a substantial cash injection. With US private equity firm KKR leading the potential buyout, pressure mounts to avoid state intervention, which could cost the Department for the Environment, Food and Rural Affairs (Defra) up to 4 billion pounds over 18 months. This situation places Defra's already-restricted budget of 4.6 billion at risk, prompting concerns over whether customers will face higher bills or whether resources will lead to severe budget cuts. The upcoming chancellor's spending review may further complicate the issue.
Whitehall officials are facing pressure to find a private buyer for Thames Water, as temporary nationalisation could impose crippling costs on the environment department's budget.
If bids for Thames Water fail, the cost of temporary nationalisation could reach 4 billion, putting significant strain on Defra's already stretched budget of 4.6 billion.
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