(Bloomberg) -- UK Chancellor Jeremy Hunt said consumers shouldn’t foot the bill for mistakes made by the management and owners of struggling utility Thames Water. 

“It would be completely wrong for Thames Water customers to pick up the tab for bad decisions by Thames Water’s owners and managers,” Hunt told reporters at a briefing on the sidelines of the International Monetary Fund meetings in Washington. 

Thames’s owners last month declared the highly indebted company “uninvestible” and refused to put in more money after regulator Ofwat declined to support the company’s business plan. 

The owners have now defaulted on about £1.4 billion ($1.7 billion) of loans held within the Kemble group of parent companies. Thames Water, the ring-fenced operating company which has over a year of working capital, is facing special administration that would place the utility under Ofwat’s control and wipe out shareholders. 

Hunt said the government was prepared for “all possible outcomes” but rejected suggestions that administration would damage the UK’s reputation as a destination for international investment, a key plank of his plans to stimulate economic growth.

“Of course we want to attract investment into the UK but we do that on the basis of laws and making sure we have transparent regulation and people are able to get very good returns,” he said.

“Now what we’re never going to do for investors in the UK, is say that the state is going to insure against bad decisions made by management or shareholders. That’s what markets are about.”

Shalin Shah, a senior fund manager at Royal London Asset Management and creditor to Thames, told Bloomberg earlier this month that any outcome that undermines investor expectations “could unfortunately risk contagion to other infrastructure assets that are funded against similar regulation.” That would lead to higher bills for consumers, he said. 

Hunt argued that the UK “is one of the most attractive places on the planet in terms of infrastructure investment,” but accepted that the government had lessons to learn from the Thames Water crisis.

“Do I look at what’s happened to some of the water companies and say that we shouldn’t learn any lessons? Absolutely not,” he said. “We need to make sure that companies are regulated in a way that makes sure that what happens to their balance sheet doesn’t do damage to public services.”

(Updates with more comments from Hunt and context)

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