Water Pollution -“ A National Disgrace”? A case for renationalisation?

Very interesting MaizieD. It would be good if that happened. Asset stripping on steroids seems to be the M.O. at present.

vegansrock

The politicians have got to step up. Privatisation has not worked. Nationalisation won’t wave a magic wand but at least it means our water is not owned by foreign investors who don’t give a stuff about water quality or customers in England. Why should these companies expect huge payouts and then be bailed out by the taxpayers when the shit literally hits the fan?

Quite.

Sarnia I saw that report. This, in a supposedly wealthy country.

The whole of the UK is in a sad state of neglect.

I don't see any reason why it shouldn't be treated as any other failed private sector company.

Totally agree MaizieD. Any private company that was incompetent, badly managed and unable to provide what customers have paid for, wouldn’t expect the government to bail them out - they would declare bankruptcy. Why are the PRIVATE water companies any different? They want to have their cake and eat it. Business doesn’t work like that - and they know it!

While I agree with most of the above comments and would like to see nationalisation of vital services, I would like to add the point to the debate that we the consumer must take some responsibility.
The systems would cope better if we did not dispose of nappies, wet wipes, sanitary towels and so much more in to overworked drains via our toilets.
We could also help by using our grey water for gardening purposes, invest in more water butts for our garden, turning off our cold taps during the teeth cleaning process and much more.

the population has become far too large for our uk infrastructure and yes the utilities should all be privatised but that will not be possible

Totally agree MaizieD. Any other company that borrowed money to pay hefty dividends to its shareholders wouldn't be bailed out by the government, Thames Water shouldn't be treated any differently. Joe Bloggs who got his company into a similar dreadful mess wouldn't get a government bail out would he? It seems these investors now want a golden safety net provided by the British taxpayer and that's not fair and shouldn't happen.

Katie59

OFWAT regulate the water industry by 5 yr reviews, prior to 2010 the aim was to improve water infrastructure, at the 2010 review that was changed to “make better use of existing infrastructure” so its hardly surprising that aging facilities have not been adequate.

You cannot expect investors to put money into our water industry without paying them a worthwhile return, they will simply say no.
Thames Water is in that situation now their liabilities nearly equal assets, the government could take over that debt but then would also have to find the cash for further investment.
Personally I think that government should take over the water industry but it wont happen, more likely a temporary bail out will be agreed.
Nationalizing the industry would mean politician's taking responsibility for pollution directly, politician's are not good at taking responsibility, they would rather pass the buck and blame others .

Thanes Water is in trouble because it borrowed heavily in order to pay shareholder dividends. Shareholders have refused to stump up any money to recapitalise.

Without a government bail out it seems to me that the company has no alternative but to declare bankruptcy. It would then be in the hands of the Receiver who will sort out which creditors get what and how to dispose of its assets. If the government bought it from the Receiver at a knockdown price it would be under no obligation to pay off any of the company's creditors, dealing with them is the Receiver's job, not the purchaser's.

I don't see any reason why it shouldn't be treated as any other failed private sector company. 'Investment' in a private sector company is always a risk. If it goes bust you lose out. That's what a market economy is about. There's no absolute safety in it. I can't see why Thames should be any different.

When people buy shares they know they can go down as well as up. Shareholders in a failed company that has to be bailed out by the taxpayer are not owed compensation.

OFWAT regulate the water industry by 5 yr reviews, prior to 2010 the aim was to improve water infrastructure, at the 2010 review that was changed to “make better use of existing infrastructure” so its hardly surprising that aging facilities have not been adequate.

You cannot expect investors to put money into our water industry without paying them a worthwhile return, they will simply say no.
Thames Water is in that situation now their liabilities nearly equal assets, the government could take over that debt but then would also have to find the cash for further investment.
Personally I think that government should take over the water industry but it wont happen, more likely a temporary bail out will be agreed.
Nationalizing the industry would mean politician's taking responsibility for pollution directly, politician's are not good at taking responsibility, they would rather pass the buck and blame others .

the government could take over and not pay compensation

I think not.

Katie59

That’s not how commercial contracts work is it, loans are made against assets, physical assets or long term contracts, and investors expect a return on those investments, successive governments have used private finance to reduce government borrowing, hoping that efficiency gains will offset interest paid.

Make no mistake the government COULD take over and not pay compensation but they WONT because every private finance contract that we have would then be under threat. The reason that Utility contracts are so popular with investors is because the UK is highly unlikely to default on a debt

We have the situation now that Thames water cannot raise money for new work because the contract terms are not good enough, Ofwat still has not approved the finance needed to do the work, they are a government agency and are being directed by polititians who want to spend money elsewhere.

The government are right not to pay more though, why should they - the investors who have hugely benefited from Thames Water should be financing the debt, not the government being seen as the default bail out. I wonder if anybody has done the equation comparing the shareholder payouts over the years to the debt level now?

We had a talk about the water system in the UK. The infrastructure is very, very old and dates back centuries and that is one of the issues. The talk focussed on the Thames at the time of Dickens but apparently there are still issues with raw sewage after heavy rain . The man who spoke to us was a prof from a uni and his job was to analyse ‘poo’ to see what diseases , including Covid, could be traced. It was fascinating. At least we no longer get cholera and typhus. Being a younger country as regards waste disposal it is not so bad here though I well remember that 50 years ago they used to collect sewage and/ or have septic tanks in the garden. Most places are now connected and we don’t seem to get the pollution in our seas and waterways these days.

If a company is failing in its statutory duties as Thames Water is, then no dividends should be paid, the bosses should be forensically examined to dig out corruption, profiteering and incompetence. The state has a duty to intervene in the interests of the public they are supposed to serve.

It's the impact on people that concerns me. I live close by the sewage works mentioned on BBC News during the week. It is a small unmanned works and floods regularly. It is on a flood plain from the River Mole which runs through our area and consequently the residents of the large housing estate, built there recently find themselves ankle deep in sewage water every time there is steady, prolonged rain. The e-coli readings are off the scale resulting in people and dogs, in particular, being ill as the ramblers and dog walkers paths are left covered in raw sewage once the water drains away. This is the 3rd time it has happened this year and we're still in March. People come and have a look and say they will sort things out but nothing ever happens. Bottom line, nobody who could help, cares.

The politicians have got to step up. Privatisation has not worked. Nationalisation won’t wave a magic wand but at least it means our water is not owned by foreign investors who don’t give a stuff about water quality or customers in England. Why should these companies expect huge payouts and then be bailed out by the taxpayers when the shit literally hits the fan?

That’s not how commercial contracts work is it, loans are made against assets, physical assets or long term contracts, and investors expect a return on those investments, successive governments have used private finance to reduce government borrowing, hoping that efficiency gains will offset interest paid.

Make no mistake the government COULD take over and not pay compensation but they WONT because every private finance contract that we have would then be under threat. The reason that Utility contracts are so popular with investors is because the UK is highly unlikely to default on a debt

We have the situation now that Thames water cannot raise money for new work because the contract terms are not good enough, Ofwat still has not approved the finance needed to do the work, they are a government agency and are being directed by polititians who want to spend money elsewhere.

Let Thames water go bankrupt and the shares will be worthless. Then nationalise.

Agreed! The company (along with others) has clearly been mismanaged for years and should be allowed to go bankrupt, rendering the shares worthless. That’s what happens to private companies that don’t perform effectively. No bail out by the taxpayer. When the shares are worthless the government can take back management of the company!

Casdon

England and Chile are apparently the only countries in the world with fully privatised water supply systems. As privatisation has been an unmitigated disaster, re nationalisation will have to happen, it’s just the when and how that’s in question.

It should never have been privatised.

How they ever expected to improve antiquated systems and satisfy shareholders who wanted a good return on their investments is a mystery.

However, Welsh Water has no shareholders and is a not-for-profit organisation yet seems little better even though water bills are high.

That’s not the problem though Katie59. The problem is that the money that householders are paying for their water supply is being creamed off and paid to shareholders rather being invested in improving the infrastructure.

The whole problem is that OFWAT is obsessed with keeping water prices down, you can argue that the private water companies are inefficient but I will guarantee a nationalized industry would be worse and at least £50 billion would have to be found for reinvestment.

The whole problem is that old storm water drains are connected with sewage drains, it doesn’t happen in newer developments storm water separated and runs onto balancing ponds to prevent surges. It probably cheaper to build larger sewage works than separate existing systems.

I don’t believe that any government will renationalize the water industry the cost will be too high, so more investment needs to be allowed, wether that cost is paid by customers or from general taxation it needs to be made.

I have only paid my water usage for the last few months. I am not paying anything for sewage…
Of course, I am getting threatening letters now, but let them threaten. I’m not going to pay for a service that’s not being provided…

Casdon

England and Chile are apparently the only countries in the world with fully privatised water supply systems. As privatisation has been an unmitigated disaster, re nationalisation will have to happen, it’s just the when and how that’s in question.

I do hope you’re right Casdon. The current situation is untenable.

Germanshepherdsmum

Do you have any idea what renationalisation would cost?

No more than it is costing us now with cleaning up the rivers and restocking only for them to be polluted again and again. And the cost of bailing them out. The company is bankrupt and in normal circumstances it would be pretty much worth nothing but

You can guarantee that the government will bail them out if they can’t raise the cash - it is outrageous. The shareholders who have lived off the fat of the land in premiums whilst they allowed our waterways to be devastated by pollution are now saying that we should pay up to the tune of 40% rise in bills.

Let Thames water go bankrupt and the shares will be worthless. Then nationalise.

England and Chile are apparently the only countries in the world with fully privatised water supply systems. As privatisation has been an unmitigated disaster, re nationalisation will have to happen, it’s just the when and how that’s in question.