Renationalising Thames Water would be a gamble – but there is another way to help clean up the industry
Retrieved on:
Monday, July 3, 2023
But since 1989, the industry has failed to invest sufficiently in replacing antiquated pipes and sewage treatment systems.
Key Points:
- But since 1989, the industry has failed to invest sufficiently in replacing antiquated pipes and sewage treatment systems.
- Meanwhile, dividend payments, funded by water companies loading up on corporate debt, have soared.
- The largest of those companies, Thames Water, has debts of almost £14 billion – roughly 80% of the value of the assets of the business.
- Rising inflation and interest rates mean this debt is increasingly expensive to service, let alone reduce.
- But existing water companies are unlikely to be considered suitable buyers on competition grounds (and many already face similar problems as Thames Water).
Not for profit
- Welsh Water has a unique corporate structure, with no shareholders and is run solely for the benefit of its customers.
- While not perfect, its performance in recent years compares favourably with that of the other privatised water companies.
- Welsh Water’s decisions are made not in the interest of profit-seeking shareholders but in the interests of broader society.
- Any profits made are either reinvested or returned to its 3 million customers in the form of cheaper services.