Oh dear!! :wave:
Here's a quote from The Guardian on the 9th January this year:
"Thames Water, under private equity ownership, has been the most egregious example, building up sky-high debts as it distributed excessive dividends to its private-equity owners via a holding company in Luxembourg, a move designed to minimise UK tax obligations. As the Cuttill report highlighted, at current rates of investment it will take Thames 357 years to renew the London’s water mains: it takes 10 years in Japan."
Thames Water "investment"?
"Since 2007, it has made capital investments at least £1 billion a year in its infrastructure – the largest such annual investment within the UK water industry. In 2015–2016, this figure was £1.2 billion. This level of investment has allowed the company to defer, but not avoid, substantial portions of its corporation tax liability in line with UK tax law."
So, the taxpayer has paid for quite a lot of it! :wave:
How about the lack of condoms mentioned earlier and the lovely clean water that the Privatised Water Companies have provided us with?
"In the period 2005–13 Thames Water was the most heavily fined water company in the UK for pollution incidents, paying £842,500 for 87 events.
In 2016, it paid the largest fine for a single pollution incident of £1 million.
In March 2017, Thames Water was fined a record £20.3 million after it pumped nearly 1.5 billion litres of untreated sewage into the River Thames."
Hmmm! I think I would prefer condoms to untreated sewage! :wave:
So, who owns the biggest of the UK's Water Companies?
If you look at the Thames Water web site it will give you a nice warm glow but a quick trawl through other opinions results in a Financial Times article from the 4th May last year that stated:
"Floated on the stock exchange in 1989, the group was acquired by German utility RWE in 2001.
Since December 2006 Thames Water has been owned by a consortium of institutional investors, including funds from China and Abu Dhabi. It was managed by Macquarie Capital Funds, dubbed by Australian newspapers the “vampire kangaroo” for its allegedly ruthless focus on profits and tax minimisation.
It sold its final stake in March to Kuwaiti and Canadian investors, whose 26 per cent stake in the company is the largest single holding. These investors are represented by a holding company called Kemble Water Holdings.
Kemble has another unit called Thames Water Utilities Cayman Finance.
There are about seven other intermediary companies between the holding company Kemble and Thames Water’s customers, with roles that are hard to determine. Thames Water says this is an “entirely appropriate structure for a business like ours and not uncommon among utilities”.
A 2015 National Audit Office report attacked several water companies for retaining profits rather than passing savings to customers. But Sir Ian is concerned that Thames Water’s removal from the stock market in 2006 means that issues such as executive pay, which has ballooned in recent years, pass unchallenged."
That's just
ONE of the Water Companies! Not to worry, at least nowadays we have got rid of the "uneconomical and inefficient state monopoly" haven't we? The answer is "Yes!" and "No!"
"No!" because none of the privatised companies was uneconomical and "Yes!" they were undoubtedly being managed inefficiently. :wave:
But lets's take a look at another Financial Times article from 6th June 2017 which states:
"Consumers in England are paying £2.3bn more a year for their water and sewerage bills under the current privatised system than if the utility companies had remained in state ownership, according to research by the University of Greenwich.
The nine English regional water and sewerage companies — three of which are listed on the stock market and six of which are owned privately (*) — have invested no significant new shareholder equity but extracted nearly all of their post-tax profit as dividends, according to the Greenwich university report, which calculated the cost of privatisation to each household as over £100 a year.
At the same time, the companies have built up a growing pile of debt to finance investments over the 28 years since the industry was privatised."
So we are paying a huge price for the "efficiency" and almost none of it stays in the UK! :wave:
(*) I've highlighted this bit because I'm old enough to remember the time when the government privatised the public utility companies. It was the biggest scam of the 20th Century. The UK Government "sold" to the general public something that they already owned!
The companies were sold in a fever of high excitement because an easy profit could be made by the general public who bought the shares; the reason being that they were
ALL undervalued. The general public did make an immediate profit by selling the shares that were allocated to them.
Unfortunately, after the sale of British Gas (the most profitable of the Utility Companies) the percentage offered to the general public fell and fell until very few people were actually allowed to buy the shares. This coincided with an increase in the percentage of shares being offloaded to companies in the City of London; who in turn took massive profits in either the form of dividends (because they
ALL made a profit) or by selling the shares to foreign investors.
Apart from the raft of lies that were being told about the nationalised companies prior to privatisation, it was
never revealed that some of these companies would (or even
could) become privately owned and thereby hide away such things as their Management Salaries and Bonuses, Investment Strategies, Dividends, Profits, Taxes etc!
Things have to change! :thumb:
References:
https://www.theguardian.com/commentisfree/2018/jan/09/nationalise-rail-gas-water-privately-owned
https://en.wikipedia.org/wiki/Thames_Water
https://corporate.thameswater.co.uk.../Our-corporate-governance/Ownership-structure
https://www.ft.com/content/5413ebf8-24f1-11e7-8691-d5f7e0cd0a16
https://www.ft.com/content/91a2779a-4077-11e7-9d56-25f963e998b2
