plan for collapse of Thames Water

[200sols]

Thames Water boss admits nationalisation possible

The firm is in a race for cash after investors said they would not give it extra money unless bills rise.

www.bbc.co.uk

Bills have to rise to pay returns to foreign investors, Thames Water says.

I don’t see any way out of this apart from re-nationalisation.

The thing when you privatise stuff, investors expect a return. Its only natural, would you pump in your own cash with no return likely? Very much doubt it.

The privatisation of water has clearly failed, time to just accept it was a mistake and start fixing it.

 

[Uther]

Just lol really.

Thames Water boss refuses to rule out bill increases of up to 40% to secure company's future

The chief executive of Thames Water has refused to rule out bill increases of up to 40% for customers as the troubled company tries to secure its future.

news.sky.com

 

[200sols]

Threats of tax payers having to cover it.

As long as, by that, they mean Council Tax payers that are served by Thames Water.... I'll be a little irked if I end up paying for it when it has nothing to do with me... I await the explanations advising how it DOES have something to do with me and how areas outwith TW service areas bear some responsibility.

They're adding it to your standing charge.

 

[darkgen]

They're adding it to your standing charge.

Please do not give the regulator ideas!

*Now awaits the introduction of a standing charge in water utilities to serve the debt of all privatised wate companies*

 

[Oh Ed not again.]

Thames Water boss admits nationalisation possible

The firm is in a race for cash after investors said they would not give it extra money unless bills rise.

www.bbc.co.uk

Bills have to rise to pay returns to foreign investors, Thames Water says.

I don’t see any way out of this apart from re-nationalisation.

The brass neck of that statement is galling.

Private company delivers terrible service.
Locally to us allowed 200 tankers of human waste to fester in the hot sun without adequate safety measures
Also locally to us, allowed rain to wash excess human waste out of treatment facility into populated areas.
Given carte blanche to pollute waterways.
Allows E-coli to flourish in a nation's capital's river.
Puts shareholders first.

Wrings hands and warns about rising prices.

In what dystopian version of reality is this considered acceptable?

edit

Thames Water is heavily indebted, with a large proportion of its £14.7bn debt pile having been run up when it was owned by Macquarie, an Australian infrastructure bank.
Interest payments on its debt have also sharply increased.
Macquarie has said that it invested billions of pounds in upgrading Thames's water and sewage infrastructure while it owned the company.
But critics argue that it took billions of pounds out of the company in loans and dividends - which is a share of a business's profits that is paid to shareholders.

However, during the 11 years of Macquarie's ownership, which ended in 2017, there were substantial dividend payouts to shareholders. In this period debts more than tripled from £3.2bn to £10.5bn (unadjusted for inflation) as Macquarie borrowed against the company's assets to increase dividend payments. During these 11 years £2.8bn was paid to shareholders, 40% of the total £7bn in dividends paid in the 32 years from 1990 to 2022.

As of July 2023, the company listed its shareholders as: OMERS (32%), the Universities Superannuation Scheme (USS - 20%), Infinity Investments (a subsidiary of the Abu Dhabi Investment Authority) (10%), British Columbia Investment Management Corporation (9%), Hermes Investment Management (manager of the BT Pension Scheme) (9%), the China Investment Corporation (9%), Queensland Investment Corporation (5%), Aquila GP Inc. (5%), and Stichting Pensioenfonds Zorg en Welzijn (2%).[15] Shareholders have not taken a dividend since 2017, though the company has paid internal dividends from the operational business to holding companies to be able to service its debt obligations

So Macquarie plundered their share, ditched the dog in 2017 and stuffed a bunch of Investment Vehicles with the burden. Since then the investment companies have seen little to no return, and are understandably getting upset.

Meanwhile, millions of people suffer as a result of Macquarie's actions and they'll never be held accountable.

 

[danlightbulb]

The thing when you privatise stuff, investors expect a return. Its only natural, would you pump in your own cash with no return likely? Very much doubt it.

The privatisation of water has clearly failed, time to just accept it was a mistake and start fixing it.

The regulator is in a bind I think.

To secure more investment there needs to be returns as you say. Otherwise why would anyone invest. Returns ultimately come from profit and from customer bills.

And investment pressure is up because of the things that need to be fixed. These aren't sudden things, but a slow evolution of issues over many decades resulting from growth and changes in standards and customer/environmental expectations. This would need to be done whether funded privately or via Government ownership.

At the moment, the regulator will be trying to ensure that the shareholder returns are the lowest possible whilst still keeping the company investable. Until/unless the regime changes, that's all they can do.

 

[doodah]

In my naive view - what's stopping us from letting it go bust, not bail it out and renationalise.

I thought we should let the markets play out themselves? They amassed this debt through poor management whilst reaping dividends.

Edit - and is not a violation of their terms?

https://twitter.com/i/web/status/1773257567726088368

Why are we one of the few major economies in the world that privatise water?

 

[ttaskmaster]

In my naive view - what's stopping us from letting it go bust, not bail it out and renationalise.

Who's going to pay for the renationalisation?
Who's going to pay for all the subsequent fixing of all that is wrong?
What makes you think things will be any better once renationalised, given the dire performance that led to privatisation in the first place?

 

[danlightbulb]

Why are we one of the few major economies in the world that privatise water?

Clearly will be met with skeptisism as this is from the UK water industry trade body, but still worth a look:

https://www.water.org.uk/wp-content/uploads/2018/12/GWI-International-sector-performance-comparisons.pdf

The water sector in England & Wales has outperformed those in France, Ireland, Italy and Spain since 1990 in terms of the most important service indicators.

In five out of the six measures, the water sector is either the top performer or the most improved.

In the sixth measure – the quality of sewage treatment – England & Wales is the second best performer.

The water sector in Germany delivers a broadly similar quality service to that of England and Wales. It does so, however, at greater expense. On a like for like basis, prices in Germany are about 12 per cent higher than in England & Wales.

There is a strong case for stating that the England & Wales regulated system delivers the best value for money of all the utility sectors in this study. The model has driven up standards and increased efficiency.

 

[Richie]

Clearly will be met with skeptisism as this is from the UK water industry trade body, but still worth a look:

https://www.water.org.uk/wp-content/uploads/2018/12/GWI-International-sector-performance-comparisons.pdf

I wonder why they left out Scotland on their comparison but included all other parts of the UK/Ireland

 

[danlightbulb]

I wonder why they left out Scotland on their comparison but included all other parts of the UK/Ireland

Dont know, maybe data availability of the metrics they were comparing?

Scotland isn't a gleaming example of successful nationalised running either

Sewage dumped in Scotland's rivers and lochs more than 600 hours a day in 2023

Scottish Water said the increased number of overflows is because of higher rainfall.

news.stv.tv

Also: https://www.ofwat.gov.uk/leakage-in-the-water-industry/

Leakage measured in litres per person per day is significantly lower in England and Wales than in Scotland and Northern Ireland (Figure 2). In 2020-21 England and Wales leaked 51 litres of water per person per day while in Scotland and Northern Ireland this figure was above 80 litres of water.

 

[Oh Ed not again.]

Well this story is progressing at a rate of knots as the day goes on.

Thames Water boss admits nationalisation possible

The firm is in a race for cash after investors said they would not give it extra money unless bills rise.

www.bbc.co.uk

We've gone from:

"Shareholders won't release money until bills go up" -> "Boss admits bills need to rise by 40%" -> "Nationalisation Possible"

Give it a few hours and Thames Water will be nationalised at this rate. Win.

 

[Diddums]

I want those debts wiped out. Clean slate. Let those greedy ***** hold the bag for once.

 

[ttaskmaster]

Give it a few hours and Thames Water will be nationalised at this rate. Win.

Given that the NHS and other public services are under greater strain than ever with pre-existing underinvestment and backlogs exacerbated by the pandemic, how would this be a win?

 

[Tom_ed1987]

I want those debts wiped out. Clean slate. Let those greedy ***** hold the bag for once.

Yup, I don't really understand why this can't happen.
Being renationalised now, with the current private owners getting a nice fat payout from the UK taxpayer whilst that same taxpayer is saddled with a huge investment bill just seems crazy.
It's privately owned, those private owners made a lot of money while the going was good. Well now it's not good, so time for them to lose. I don't understand why there isn't a greater call for this to play out like that?

 

[Diddums]

I don't understand why there isn't a greater call for this to play out like that?

 

[jeffk]

Who's going to pay for the renationalisation?
Who's going to pay for all the subsequent fixing of all that is wrong?
What makes you think things will be any better once renationalised, given the dire performance that led to privatisation in the first place?

1. Why pay? Let Thames Water collapse and take back control via primary legislation. If that scares investors off future privatisation projects then good.

2. Thames Water is already demanding huge subsidies on top of a 40% hike in prices, so it’s a choice between that money being used the fix the problems or it going overseas to investors.

2. It wasn’t dire performance that led to privatisation, it was ideology.

 

[Oh Ed not again.]

Given that the NHS and other public services are under greater strain than ever with pre-existing underinvestment and backlogs exacerbated by the pandemic, how would this be a win?

Most obviously would stopping shareholders dictating how a private company provides a public service of critical infrastructure. Given that our current government and it's regulators seems utterly unable or unwilling to step in and resolve this matter (so far) at least with nationalisation we'd be able to shorten the chain of responsibility.


Above all services on which people depend to live should not be run for profit.

 

[jpaul]

he put the solution eloquently

 

[adidan]

That old money making methodology, privatise profits and nationalise debt.

It would be interesting, considering all the recent talk of China, to know how many things in the UK the Chinese State has money 'invested' in.