plan for collapse of Thames Water

[danlightbulb]

Every year the water companies come along and say we need to invest X to maintain the infrastructure and Y to make improvements to meet the standard. OFWAT says they can have Z but Z is usually considerably below X plus Y.

That's true but it's because Ofwat has a duty to keep bills down and customers have been very adverse to bill increases for last decade. They were getting a steer from government to minimize bill increase.

This time around Ofwat has pretty much waived through all environmentally linked investment.

It's not only a UK problem I don't think. Did you see news recently about Sidney beaches sewage pollution?

 

[Shoza]

That's true but it's because Ofwat has a duty to keep bills down and customers have been very adverse to bill increases for last decade. They were getting a steer from government to minimize bill increase.

This time around Ofwat has pretty much waived through all environmentally linked investment.

It's not only a UK problem I don't think. Did you see news recently about Sidney beaches sewage pollution?

You say that, but my cost of water has gone up loads above inflation:

2016: £47.80 a month
2024: £87.50 a month

Accounting purely for inflation my bill should be about £63 a month so where has it been going - to private investors. The system is designed to ensure the minimum possible service, limited investment and maximum return to investors.

Ofwat have totally failed as a regulator.

 

[200sols]

You say that, but my cost of water has gone up loads above inflation:

2016: £47.80 a month
2024: £87.50 a month

Accounting purely for inflation my bill should be about £63 a month so where has it been going - to private investors. The system is designed to ensure the minimum possible service, limited investment and maximum return to investors.

Ofwat have totally failed as a regulator.

The headline inflation figure is just that, a figure of a basket of goods. Some things have risen well above this figure. Its simply not true that all the excess cash is going to private investors but I guess thats an easy scapegoat.

 

[danlightbulb]

You say that, but my cost of water has gone up loads above inflation:

2016: £47.80 a month
2024: £87.50 a month

Accounting purely for inflation my bill should be about £63 a month so where has it been going - to private investors. The system is designed to ensure the minimum possible service, limited investment and maximum return to investors.

Ofwat have totally failed as a regulator.

Thats a rather large bill number. You have a very big house or on a meter with high consumption?

 

[Shoza]

Thats a rather large bill number. You have a very big house or on a meter with high consumption?

4 bed terrace in Manchester. 2 of us live here so would be hugely cheaper on a meter but United Utilities can’t install one due to shared supply the row of terraces have.

 

[danlightbulb]

4 bed terrace in Manchester. 2 of us live here so would be hugely cheaper on a meter but United Utilities can’t install one due to shared supply the row of terraces have.

You can request assessed charge or an internal meter.

 

[Shoza]

You can request assessed charge or an internal meter.

Tried the assessment side and it was refused.

 

[danlightbulb]

Tried the assessment side and it was refused.

Complain in writing then escalate to CCW.

 

[danlightbulb]

Wessex and Northumbrian also appealing.

Makes 6 companies total. 2 more than last time.

 

[ttaskmaster]

Gravy train if it happens. At least it will be for workers not shareholders. Union membership would rise quickly.

Workers will be retained, as no-one else knows how to actually operate the systems... except previous employees who left to work for contractors or consultants.
I doubt there'll be any salary increases, especially once they become civil employees. But the government will revert back to the 1970s, where nothing gets done, no investment happens and stuff fails.

 

[darkgen]

Workers will be retained, as no-one else knows how to actually operate the systems... except previous employees who left to work for contractors or consultants.
I doubt there'll be any salary increases, especially once they become civil employees. But the government will revert back to the 1970s, where nothing gets done, no investment happens and stuff fails.

So not much different than what we already have today minus money being sucked out of the company for ghouls? I jest of course.

I just wished a more coherent governance could be applied with a quasi model where legitimate profit is earned, just not at the expense of the customer or development and improvement to the service. Returns and bonuses should be measured in decades and not some faux arbitrary yearly key indicator which suggests leaks / spillages are down (due to monitoring being ignored / turned off / re-measured).

Bring back some honesty.

 

[ttaskmaster]

So not much different than what we already have today minus money being sucked out of the company for ghouls? I jest of course.

I don't....
Right now there's no work to do because there's no money. All we do is plan and prioritise.
Under the government we'd be doing nothing because they won't get their thumbs out of their backsides and make plans, issue orders, or simply make a decision on what they want us to do... and anything we sent up on our own initiative would get buried in red tape, bureaucracy and focus meetings.

Any money would still get sucked out of the industry though, either being diverted to some other project or sequestered away in some MP's offshore accounts.

 

[413x]

Consider Welsh water.
Not for profit.
Our bills are going up by 44 percent by 2029 and will be the most expensive in the country and on the pollution side it still performs poorly.
Worse still, the vast chunk of that is front loaded in the first year


Thames water bills would be considerably lower if they don't get an increase.

I don't think Thames is sustainable even with the increase they've asked for. Their refinancing is a huge extra load of debt.

 

[Blackjack Davy]

I don't think Thames is sustainable even with the increase they've asked for. Their refinancing is a huge extra load of debt.

Over £200m of it will be going in "professional fees" - and no-one at the top will be losing their job. If this were a story about russia and overwhelming levels of corruption mismanagement and oligarchs feeding from the cash trough you'd be appalled but not surprised. This isn't russia though this is britain in 2025.

 

[ttaskmaster]

FT.com ran a Lex column which highlighted ‘toxic levels of complexity’ facing the water industry: “So far, one part of the strategic trilemma has trumped the others: keeping bills low. Ofwat recently rubber-stamped an average 36 per cent rise in customer bills over five years from April, yet that is the first time in 15 years it has allowed bill prices to rise in real terms. This has allowed financial rust to set in, and not only at Thames Water. In its last review of financial resilience, Ofwat said 10 out of 16 companies either required action or were of “elevated concern”. Water company executives blame the regulator for prioritising low bills over greater infrastructure investment. This is not entirely wrong.”

I don't think Thames is sustainable even with the increase they've asked for. Their refinancing is a huge extra load of debt.

“The judge who approved the debt deal found it was very likely that Thames Water’s creditors would have to pay for the costs of the restructuring – and he would have considered blocking the deal if they did not. However, he wrote that the High Court should closely scrutinise whether creditors do in fact take steep losses when deciding on the next stage. The judge said that well over half of the first £1.5 billion of equity would go on expensive interest and ‘eye-watering’ costs, including millions of pounds in fees for legal advisers. The company and the creditors have said the whole way through that those costs would be borne by existing investors when they take a ‘haircut’ (a loss) on their investments.”

 

[Freefaller]

I know PFAS is not a new issue, but it certainly seems to becoming more source of focus at the DWI - having worked in the infrastructure industry and recently met up with some ex colleagues that used to work in many of the water companies and regulators, it seems it's a little more serious than they're letting on to believe. Or at they sensationalising it or being a bit conspiracy theorists over it?

Of course there's a cost for fixing the issue, but I wonder how much of it will be done to just "pass the test" rather than putting in place proper measures?

 

[ttaskmaster]

Of course there's a cost for fixing the issue, but I wonder how much of it will be done to just "pass the test" rather than putting in place proper measures?

Firstly, a lot of it is just headlines, which are so much easier and profitable now that the industry is under serious fire.
Secondly, I hate to use the word, but Brexit has had a notable impact on the availability and cost of stuff that the industry makes considerable use of, so things are being shaken up as alternatives are sought anyway.
Thirdly, new regulations mean everything is suddenly *non-compliant* and is in dire need of fixing... OMG, headlinez, TikTok rantz and all the other cRaZiNeSseS.

It's an age-old tale, mostly - Drinking water is full of diseases, make it safe with this. This is now hazardous, use that instead. That is now bad, do this other thing. We now know other thing contains nasty plastics, use BPA. BPA is dangerous, use TPU. TPU is now considered dangerous.... etc.
New guidance will be issued, guidelines will be met, things will carry on until the next one.

 

[Freefaller]

Firstly, a lot of it is just headlines, which are so much easier and profitable now that the industry is under serious fire.
Secondly, I hate to use the word, but Brexit has had a notable impact on the availability and cost of stuff that the industry makes considerable use of, so things are being shaken up as alternatives are sought anyway.
Thirdly, new regulations mean everything is suddenly *non-compliant* and is in dire need of fixing... OMG, headlinez, TikTok rantz and all the other cRaZiNeSseS.

It's an age-old tale, mostly - Drinking water is full of diseases, make it safe with this. This is now hazardous, use that instead. That is now bad, do this other thing. We now know other thing contains nasty plastics, use BPA. BPA is dangerous, use TPU. TPU is now considered dangerous.... etc.
New guidance will be issued, guidelines will be met, things will carry on until the next one.

Yeah it seems that way - it's a good way of breeding distrust though and I suppose it creates more distractions from other issues.

 

[ttaskmaster]

Yeah it seems that way - it's a good way of breeding distrust though and I suppose it creates more distractions from other issues.

On the upside, it seems several companies are seeking to invest, beyond those that put up the emergency £3bn over which the court case was held.
Some American company is offering a starting bid of £7bn, while others are offering similarly impressive sums, too... so much for being uninvestable.

Perhaps your water will be saved after all?

 

[darkgen]

On the upside, it seems several companies are seeking to invest, beyond those that put up the emergency £3bn over which the court case was held.
Some American company is offering a starting bid of £7bn, while others are offering similarly impressive sums, too... so much for being uninvestable.

Perhaps your water will be saved after all?

On the proviso legacy investors take a significant hit, which I think has been the general consensus all along. I hope it works.