Ofwat allowed the water companies to take on massive debts, the big question is WHY?

As Katie59 says if TW goes into liquidation the shareholders will probably lose the lot hence TW can press shareholders for a cash injection to keep going which seems to be happening.

Did you not read what I posted earlier, Grantanow?

TW were required to raise £1.5billion this year. So far they have managed £0.5billion. Shareholders don't seem very willing to be 'soaked' , nor do people appear to want to lend anything to them.

Unlike a government, companies can't extract money out of thin air.

I don't think there is a 'long run' involved here.

Katie59

There is too much waste of water and too much pollution but get this straight it’s not going to be improve without a great deal more investment that has got to come either from higher bills or taxation.

Furthermore, inland freshwater is never going to be “safe” because natural bacteria, fungus, algae, viruses thrive, particularly in warm weather, which is why water we drink and swim in is chlorinated. You would probably be safe in a cold mountain stream but not in lowland rivers in summer.

The River Wye is polluted so why havn’t the Environment Agency stopped chicken manure spreading?. Chicken litter is a dry product easy to transport and use as fertiliser where it won’t pollute.
Why?.

My daughter was taken to hospital in Bristol last night suffering from acute sickness and diarrhoea. Food poisoning was ruled out. She had taken her two boys canoeing in the river Wye on Friday afternoon. She spent all night Friday together with her younger son vomiting etc. Fortunately her son got over it quite quickly. She, on the other hand ended up with a fluid drip, taking up a side ward with the nurses and consultant time. Apparently there is blue algae in the Wye. The canoe company did not mention it.

Apologies for not putting this out here earlier. I’ve been very worried about her all night. She is now at home and still recovering.

I 100% support renationalising public services. We have little or no control over private companies and our so called regulators sit on their hands! Where is the Environment Agency? Surely they should also be taking action.

I am a Thames Water customer and went two days without water supply. They are supposed to give compensation but they denied any cut off of water supply despite all the neighbours complaining. The local leisure centre helped with bottled water but according to Thames Water, there was never any problem.

That's shocking ayse. I hope that your daughter's recovery continues but I am appalled at the news about the Wye. I'm sure that most people are unaware of this.

Thames water 'kindly' repaired the supply pipe in my garden, disturbed by the massive roots of a tree next door (and very close). I was warned that next time I would have to pay. Luckily, I persuaded the owner/landlord to remove the tree.

Next, we had new smart meters installed in the pavement - a huge predicted bill - but there was only one meter for both houses - then more drilling and digging to remedy that.

I'm really not impressed, I'm not thrilled about paying their shareholders. I don't think they should be a private company. We all need water, so can't just choose to opt out - or find a better deal. They have the monopoly - aren't there rules about that?

Someone upthread suggested Scottish water,publicly owned,was just as bad.
I can deny that.Scottish water is top of the league of the 4 nations for
1 Quality of water
2 Service
3 price,its cheaper by far than England and Wales
4 They spend much more on infrasctucture,around
£72 per head of population.
There are still problems of course with a mainly Victorian system ,but it is being upgraded and when there are burst pipes they tend to be fixed quite quickly .
Our water is chlorinated as it comes from lochs and will have bacteria in it ,but it certainly doesn't have sewage or commercial waste

paddyann54

Someone upthread suggested Scottish water,publicly owned,was just as bad.
I can deny that.Scottish water is top of the league of the 4 nations for
1 Quality of water
2 Service
3 price,its cheaper by far than England and Wales
4 They spend much more on infrasctucture,around
£72 per head of population.
There are still problems of course with a mainly Victorian system ,but it is being upgraded and when there are burst pipes they tend to be fixed quite quickly .
Our water is chlorinated as it comes from lochs and will have bacteria in it ,but it certainly doesn't have sewage or commercial waste

It’s your final paragraph that’s most important paddyann54. None of the water companies, including Scottish Water is actually doing well - because there is a massive water infrastructure investment required to bring the system up to standard. Scottish Government are reliant on funding from Westminster to carry out such works, which hasn’t been any kind of priority for 40 years. Increased charges to users ultimately will be the only way we can get services up to speed again, and it will take many years - I read somewhere that if they started the work today it would take over 25 years.

There are still problems of course with a mainly Victorian system

I wonder what the Victorians would think of us, that we are still reliant on systems they put in a century and a half ago because they made the connection between cholera and water?

Cholera
This terrible killer first entered Britain in 1831 through the port of Sunderland, and it wasn’t long before it spread to London, killing 6536 people. It is caused by the Vibrio Cholerae bacteria and is passed between humans by water. It can only get into the human body if somebody drinks water with the bacteria in it. The bacteria only get into the water via faeces. Cholera causes terrible diarrhoea and agonising stomach cramps. The body passes fluid, nutrients and salts out of it so quickly, it rapidly dehydrates, causing death from organ failure. All within a few hours.

Typhoid can be passed on through contaminated water too.

Callistemon21

^There are still problems of course with a mainly Victorian system^

I wonder what the Victorians would think of us, that we are still reliant on systems they put in a century and a half ago because they made the connection between cholera and water?

Cholera
This terrible killer first entered Britain in 1831 through the port of Sunderland, and it wasn’t long before it spread to London, killing 6536 people. It is caused by the Vibrio Cholerae bacteria and is passed between humans by water. It can only get into the human body if somebody drinks water with the bacteria in it. The bacteria only get into the water via faeces. Cholera causes terrible diarrhoea and agonising stomach cramps. The body passes fluid, nutrients and salts out of it so quickly, it rapidly dehydrates, causing death from organ failure. All within a few hours.

Typhoid can be passed on through contaminated water too.

I think they would think we’ve lost the plot - and they would be right.

I still remember the outbreak of typhoid in Aberdeen which was traced to imported corned beef from Argentina. The large tins were cooled in the river there. One tin must have been punctured and contaminated water got in, the tin ended up in a butcher's in Scotland.

growstuff

Correct me if I'm wrong, but my understanding is that OFWAT is a regulatory body. It doesn't actually control water companies or how much they invest.

I suspect this is true, they only get involved if the companies fail to fulfil their comittments. Which very many of them have. I doubt that they can control borrowing, even if it is to overpay their board members and top management.

cc

growstuff

Correct me if I'm wrong, but my understanding is that OFWAT is a regulatory body. It doesn't actually control water companies or how much they invest.

I suspect this is true, they only get involved if the companies fail to fulfil their comittments. Which very many of them have. I doubt that they can control borrowing, even if it is to overpay their board members and top management.

Some posters have asserted that OFWAT controls water companies' investment, but if you go on their site they say that they monitor investment plans to ensure that they are value for money...

I've also seen some commentators in articles saying that OFWAT has restricted companies' investment. I haven't managed to get to the bottom of this...

Whatever the rights and wrongs of this it seems to me that the water companies' financial management has been out of control and that the obligation they seem to feel that they should pay high management salaries and dividends doesn't sit well with providing first and foremost an effective public service.

MaizieD

cc

growstuff

Correct me if I'm wrong, but my understanding is that OFWAT is a regulatory body. It doesn't actually control water companies or how much they invest.

I suspect this is true, they only get involved if the companies fail to fulfil their comittments. Which very many of them have. I doubt that they can control borrowing, even if it is to overpay their board members and top management.

Some posters have asserted that OFWAT controls water companies' investment, but if you go on their site they say that they monitor investment plans to ensure that they are value for money...

I've also seen some commentators in articles saying that OFWAT has restricted companies' investment. I haven't managed to get to the bottom of this...

Whatever the rights and wrongs of this it seems to me that the water companies' financial management has been out of control and that the obligation they seem to feel that they should pay high management salaries and dividends doesn't sit well with providing first and foremost an effective public service.

I agree. I don't think that OFWAT have done anything to control the companies' financial management.
But it's actually where our payments to water companies are going that is most concerning. At the moment they are going to massive interest payments for their borrowing, to management salaries and bonuses, and to shareholder dividends, rather than investment in the infrastructure which is undoubtedly required.

You don't have to identify with left wing politics to believe that public monopolies like utilities - water, sewage, power, railways, state schools, libraries, museums, and hospitals and other community facilities, should be publicly owned and controlled for the benefit of the users, not for the benefit of highly paid managers and investors who are only interested in making a quick profit.

“Some posters have asserted that OFWAT controls water companies' investment, but if you go on their site they say that they monitor investment plans to ensure that they are value for money... “

So it is OFWAT that decides what is “value for money” and stops water companies spending extra to improve water quality.

That’s assuming the water companies have investment plans, Katie59.

Katie59

“Some posters have asserted that OFWAT controls water companies' investment, but if you go on their site they say that they monitor investment plans to ensure that they are value for money... “

So it is OFWAT that decides what is “value for money” and stops water companies spending extra to improve water quality.

That's not at all how I would interpret that. l would say that OFWAT's objective would be to stop spending on measures which would do nothing to improve water quality..

MaizieD

Katie59

“Some posters have asserted that OFWAT controls water companies' investment, but if you go on their site they say that they monitor investment plans to ensure that they are value for money... “

So it is OFWAT that decides what is “value for money” and stops water companies spending extra to improve water quality.

That's not at all how I would interpret that. l would say that OFWAT's objective would be to stop spending on measures which would do nothing to improve water quality..

The regulators are OFWAT they say who does what, how is that difficult for you to accept