On 10 July, Thames Water announced a massive financial injection from its shareholders. This will, for now, keep the privatised water supplier from its rumoured return to public hands.
The company, reported to have been close to renationalisation ahead of the latest news, said shareholders agreed to provide further funding worth £750m.
Sarah Bentley resigned as chief executive last month. The company has yet to appoint a permanent replacement. However, chairman Ian Marchant stated:
The additional investment announced today is the largest equity support package ever seen in the UK water sector and underscores our shareholders’ commitment to delivering Thames’ turnaround.
Too little, too late
Of course, this record package still falls short of the £1bn Thames Water was looking for. That’s on top of £500m it secured from shareholders in March. The company also noted that it would need a further £2.5bn of support between 2025 and 2030.
Canadian pension fund Ontario Municipal is its biggest shareholder. It owns almost a third of the group. Other major investors include the UK’s Universities Superannuation Scheme, and China Investment Corp.
The company claims that it hasn’t paid these external shareholders dividends for five years. However, that hasn’t stopped them from drawing £45m in debt payments.
Thames Water supplies 15m homes and businesses in London and elsewhere in southern England. What’s more, it has a complete monopoly over the region.
In spite of the fact that it supplies a captive market with a substance they literally can’t survive without, Thames Water has managed to rack up debts of almost £14bn.
Environmental disaster
On top of all this, a court last week fined Thames Water £3.3m for polluting rivers. It had pleaded guilty to pumping millions of litres of undiluted sewage into rivers near London’s Gatwick Airport in 2017, killing wildlife.
The utility isn’t alone in its environmental crimes, either. Britain’s privatised water companies recently pledged to make massive investments to stop raw sewage from being pumped into waterways.
To make matters worse – for the consumer, that is – reports said water bills could surge 40% by 2030. This is because the public is expected to fund infrastructure works amid mounting concerns over water quality and laxer environmental protections. So, those ‘massive investments’ are being boosted from the public pocket.
Thames Water: a study in extraction
So, let’s recap. The water supply was sold into private hands during the Thatcher years, completely debt free. Its customers have no choice but to buy from it. Still, Thames Water announced a pre-tax loss of £82.6m for the last year. And, all the while, overseas shareholders have been drawing millions in debt payments.
Meanwhile, it has completely failed in the job it’s actually meant to perform – cleaning wastewater before it re-enters the environment. In so doing, it’s caused untold harm to the UK’s waters and wildlife. Compounding that fact, the public will be expected to pay to clean up the private company’s mess.
Thames Water is proof of one thing, and one thing only. Private companies cannot be trusted to safeguard the public, or the environment – they can only be trusted to enrich their shareholders.
Water is a necessity of life. The fact that its supply was privatised in the first place is a ludicrous demonstration of greed. And, over and over again, Thames Water has demonstrated that folly in action.
Featured image via Wikimedia Commons/Simon Burchell, resized to 1910/1000, licensed under the Creative Commons Attribution-Share Alike 4.0 International license.
