Last year Thames Water was hit with a £20m fine for polluting the waterways of Oxfordshire and Buckinghamshire with a billion and a half litres of raw sewage between 2012 and 2014.

The judge cited a “failure to report incidents” and a “history of non-compliance” by the company. Equipment was unmaintained. Warnings from employees went unheeded by management. Thames’s conduct was branded “disgraceful”, justifying the largest financial penalty for pollution in UK corporate history.

While all that was going on Thames’s boss, the aptly named Martin Baggs, received a 60 per cent pay rise, taking his total annual remuneration to above £2m.

Now Thames (along with three other private water companies) has let down its customers again, leaving them high and uncomfortably dry after pipes burst in last week’s big freeze. And, once again, it’s apparently corporate incompetence at work rather than just bad luck.

“Water companies have been warned time and again that they need to be better at planning ahead to deal with these sorts of situations,” fumed Rachel Fletcher, the head of the regulator, Ofwat, today.

So presumably, if history is a guide, Thames’s current chief executive can look forward to a bumper payday.

Owning a water company isn’t a licence to print money. But the cash does flow extraordinarily freely in this sector. In the financial year ending in 2017, according to data collected by Ofwat, the private water companies raked in total revenues from households and businesses of £11.7bn.  Their profits before tax were just under £2bn.

Read more on the website of The Independant

All we can do is plead for a regulator capable of keeping these voracious private companies under control.

Of all the privatisations carried out in Margaret Thatcher’s time, the one least popular with the public was the sell-off of 10 publicly owned water authorities to private companies. Government ministers defended the sale by explaining that rain did not simply fall from the sky and find its own way to where it was needed. They rightly pointed out that it requires a huge industry to get clean water through the tap into the home or the workplace and to take away dirty water and sewage, clean it, and pump it back again. The argument put forward at the time of privatisation, in 1989, was that private companies could carry out this work more efficiently.

This was a triumph of ideology over common sense. Though it is true that companies that compete in the marketplace have to be more efficient to survive, there is no market pressure on water and sewage companies. The customer cannot choose the supplier. Who they get depends on where they live: if it is Cornwall, it is South West Water; in Wales it is Dwr Cymru; in the North-west of England it is United Utilities, and so on. 

Nor can the customer haggle over price: they pay what the companies charge, or risk having their water supply turned off. To mitigate that problem, the government created Ofwat in 1989, a quango whose job is to set maximum prices and thus protect customers from being fleeced by these monopolies.

Read more on the website of The Independent

This report by the New Policy Institute analyzes what has happened to the water industry in the UK since it was privatised by Thatcher in the late 80s. In a nutshell: very high profits fuelled by debt creation and low investments, and bad performance. The initial local then international corporations have now been mostly replaced by financial players.

The full report by the New Policy Institute (pdf, 410 Ko)

British water companies are avoiding millions of pounds in tax by loading themselves up with debt listed on an offshore stock exchange, an investigation has revealed.

The disclosure is likely to reignite the public outcry about legal tax avoidance by big firms at a time when Britain is drowning in debt and suffering painful public spending cuts. It comes only a week after industry regulator Ofwat announced that water bills would rise by an average of 3.5 per cent to £388 a year. Corporate Watch found six UK water companies took high-interest loans from their owners through the Channel Islands stock exchange. Interest payments on the loans reduce taxable profits in the UK and, thanks to a regulatory loophole, go to the owners tax free.

First significant step of the €5 billion asset divestment program before end 2013
Net debt reduction of € 1.450bn

Paris, 28 June 2012. Today, Veolia Environnement’s wholly owned subsidiary, Veolia Water UK PLC, has agreed to sell the UK regulated water activities of Veolia Environnement to Rift Acquisitions Limited(a) for a total transaction value of £1,236 million(b).

 
Following completion of this transaction, Veolia Environnement’s net debt will be reduced by around £1,165million(c)  (€1,450(d)million) as a consequence of the sale. Veolia Environnement will retain, in addition to its non regulated water business, an interest in the UK regulated water business through Veolia Water UK’s retained 10% equity interest in the divested business for a period of at least 5 years.