It's absolutely shocking how they can have paid out so much in dividends whilst at the same time racking up massive debts. And who's going to pay for it ultimately? Yep, us.
Imagine not being able to run a sustainable business when you have a monopoly on selling water.
Imagine running a business where you can’t put your prices up beyond inflation.for 5 years, you can’t keep any extra revenue generated by higher demand, but you have to absorb power costs that have doubled in two years, chemical costs that have gone up 80/90% in some instances driven by power prices and availability, millions on Covid impacts, millions of pounds on customer compensation and associated incident costs due to extreme weather events impacting a network that was underfunded for decades (including when it was nationalised) and compounded by a customer base that has dramatically changed since Covid, and debt servicing costs that are escalating…..but you’re now expected to sort it all out and run a sustainable business.
It’s not all black and white.
When you have one on the verge of collapsing and several others struggling, it points to historical underfunding and inept regulation, rather than just mismanagement.
With the greatest of respect that is the biggest load of bollocks I’ve ever read on this site. The business limitations have always been there and if you chose to invest in a business that has a total monopoly on supply you should expect some limitations on what you can charge otherwise you are effectively pointing a gun at every household and business on the country.
The fact that the need to upgrade the infrastructure was known at the time of privatisation and yet was not carried out in favour on making better profits for shareholders is entirely the fault of the companies. Extreme weather events could have been predicted and factored into the model and if they followed the wrong advise that is on them.
People who pay these bills, all who are reliant on water which was previously nationally owned also don’t have the ability to increase their wages more than inflation, so why should they pay the costs of failing businesses?
Imagine not being able to run a sustainable business when you have a monopoly on selling water.
Imagine running a business where you can’t put your prices up beyond inflation.for 5 years, you can’t keep any extra revenue generated by higher demand, but you have to absorb power costs that have doubled in two years, chemical costs that have gone up 80/90% in some instances driven by power prices and availability, millions on Covid impacts, millions of pounds on customer compensation and associated incident costs due to extreme weather events impacting a network that was underfunded for decades (including when it was nationalised) and compounded by a customer base that has dramatically changed since Covid, and debt servicing costs that are escalating…..but you’re now expected to sort it all out and run a sustainable business.
It’s not all black and white.
When you have one on the verge of collapsing and several others struggling, it points to historical underfunding and inept regulation, rather than just mismanagement.
With the greatest of respect that is the biggest load of bollocks I’ve ever read on this site. The business limitations have always been there and if you chose to invest in a business that has a total monopoly on supply you should expect some limitations on what you can charge otherwise you are effectively pointing a gun at every household and business on the country.
The fact that the need to upgrade the infrastructure was known at the time of privatisation and yet was not carried out in favour on making better profits for shareholders is entirely the fault of the companies. Extreme weather events could have been predicted and factored into the model and if they followed the wrong advise that is on them.
People who pay these bills, all who are reliant on water which was previously nationally owned also don’t have the ability to increase their wages more than inflation, so why should they pay the costs of failing businesses?
Take your point and agree on dividends etc.
However if nationally owned the 'people' will still be paying for it, whether that's via their bills or general taxation.
Those of us old enough will remember thatcher selling off the water, and in turn writing off 5bn of debt, so some history here of under funding.
Imagine not being able to run a sustainable business when you have a monopoly on selling water.
Imagine running a business where you can’t put your prices up beyond inflation.for 5 years, you can’t keep any extra revenue generated by higher demand, but you have to absorb power costs that have doubled in two years, chemical costs that have gone up 80/90% in some instances driven by power prices and availability, millions on Covid impacts, millions of pounds on customer compensation and associated incident costs due to extreme weather events impacting a network that was underfunded for decades (including when it was nationalised) and compounded by a customer base that has dramatically changed since Covid, and debt servicing costs that are escalating…..but you’re now expected to sort it all out and run a sustainable business.
It’s not all black and white.
When you have one on the verge of collapsing and several others struggling, it points to historical underfunding and inept regulation, rather than just mismanagement.
With the greatest of respect that is the biggest load of bollocks I’ve ever read on this site. The business limitations have always been there and if you chose to invest in a business that has a total monopoly on supply you should expect some limitations on what you can charge otherwise you are effectively pointing a gun at every household and business on the country.
The fact that the need to upgrade the infrastructure was known at the time of privatisation and yet was not carried out in favour on making better profits for shareholders is entirely the fault of the companies. Extreme weather events could have been predicted and factored into the model and if they followed the wrong advise that is on them.
People who pay these bills, all who are reliant on water which was previously nationally owned also don’t have the ability to increase their wages more than inflation, so why should they pay the costs of failing businesses?
Take your point and agree on dividends etc.
However if nationally owned the 'people' will still be paying for it, whether that's via their bills or general taxation.
Those of us old enough will remember thatcher selling off the water, and in turn writing off 5bn of debt, so some history here of under funding.
And since then £57bn has been paid out in dividends, of all the privatisation that happened the water was the most ridiculous, as it is not and never can be a free market
Imagine not being able to run a sustainable business when you have a monopoly on selling water.
Imagine running a business where you can’t put your prices up beyond inflation.for 5 years, you can’t keep any extra revenue generated by higher demand, but you have to absorb power costs that have doubled in two years, chemical costs that have gone up 80/90% in some instances driven by power prices and availability, millions on Covid impacts, millions of pounds on customer compensation and associated incident costs due to extreme weather events impacting a network that was underfunded for decades (including when it was nationalised) and compounded by a customer base that has dramatically changed since Covid, and debt servicing costs that are escalating…..but you’re now expected to sort it all out and run a sustainable business.
It’s not all black and white.
When you have one on the verge of collapsing and several others struggling, it points to historical underfunding and inept regulation, rather than just mismanagement.
With the greatest of respect that is the biggest load of bollocks I’ve ever read on this site. The business limitations have always been there and if you chose to invest in a business that has a total monopoly on supply you should expect some limitations on what you can charge otherwise you are effectively pointing a gun at every household and business on the country.
The fact that the need to upgrade the infrastructure was known at the time of privatisation and yet was not carried out in favour on making better profits for shareholders is entirely the fault of the companies. Extreme weather events could have been predicted and factored into the model and if they followed the wrong advise that is on them.
People who pay these bills, all who are reliant on water which was previously nationally owned also don’t have the ability to increase their wages more than inflation, so why should they pay the costs of failing businesses?
Take your point and agree on dividends etc.
However if nationally owned the 'people' will still be paying for it, whether that's via their bills or general taxation.
Those of us old enough will remember thatcher selling off the water, and in turn writing off 5bn of debt, so some history here of under funding.
And since then £57bn has been paid out in dividends, of all the privatisation that happened the water was the most ridiculous, as it is not and never can be a free market
Oh I dunno. I got so fed up with Thames Water I've decided to switch to Northumbrian instead.
They've confirmed they're happy to have me as a customer, just as soon as I've paid the £2billion fee for a new pipe to be connected up to their mains supply, which all sounds fair enough!
Imagine not being able to run a sustainable business when you have a monopoly on selling water.
Imagine running a business where you can’t put your prices up beyond inflation.for 5 years, you can’t keep any extra revenue generated by higher demand, but you have to absorb power costs that have doubled in two years, chemical costs that have gone up 80/90% in some instances driven by power prices and availability, millions on Covid impacts, millions of pounds on customer compensation and associated incident costs due to extreme weather events impacting a network that was underfunded for decades (including when it was nationalised) and compounded by a customer base that has dramatically changed since Covid, and debt servicing costs that are escalating…..but you’re now expected to sort it all out and run a sustainable business.
It’s not all black and white.
When you have one on the verge of collapsing and several others struggling, it points to historical underfunding and inept regulation, rather than just mismanagement.
With the greatest of respect that is the biggest load of bollocks I’ve ever read on this site. The business limitations have always been there and if you chose to invest in a business that has a total monopoly on supply you should expect some limitations on what you can charge otherwise you are effectively pointing a gun at every household and business on the country.
The fact that the need to upgrade the infrastructure was known at the time of privatisation and yet was not carried out in favour on making better profits for shareholders is entirely the fault of the companies. Extreme weather events could have been predicted and factored into the model and if they followed the wrong advise that is on them.
People who pay these bills, all who are reliant on water which was previously nationally owned also don’t have the ability to increase their wages more than inflation, so why should they pay the costs of failing businesses?
I’ve taken that to heart given some of the stuff I have read on here 😉
I would say the impact of Covid certainly and probably Brexit too were fairly unforeseen, impactful events.
Clinate change yes, but did anyone hand on heart really envisage this 20-30 years ago? Or envisage it enough to invest billions of pounds at the time.
Besides that you have essentially agreed with my bollocks, in that years of underfunding has caused this, but that is hardly the fault of current shareholders (some maybe…) and management, is it?
The people will pay for it either way now, through bills or general taxation. Shareholders are there to get a return on investment and directors are effectively agents of the shareholders. Some (not all) shareholders in the water industry are getting not much more than 2% dividend yield… Where is the incentive to pump billions in for that kind of return?
Imagine not being able to run a sustainable business when you have a monopoly on selling water.
Imagine running a business where you can’t put your prices up beyond inflation.for 5 years, you can’t keep any extra revenue generated by higher demand, but you have to absorb power costs that have doubled in two years, chemical costs that have gone up 80/90% in some instances driven by power prices and availability, millions on Covid impacts, millions of pounds on customer compensation and associated incident costs due to extreme weather events impacting a network that was underfunded for decades (including when it was nationalised) and compounded by a customer base that has dramatically changed since Covid, and debt servicing costs that are escalating…..but you’re now expected to sort it all out and run a sustainable business.
It’s not all black and white.
When you have one on the verge of collapsing and several others struggling, it points to historical underfunding and inept regulation, rather than just mismanagement.
With the greatest of respect that is the biggest load of bollocks I’ve ever read on this site. The business limitations have always been there and if you chose to invest in a business that has a total monopoly on supply you should expect some limitations on what you can charge otherwise you are effectively pointing a gun at every household and business on the country.
The fact that the need to upgrade the infrastructure was known at the time of privatisation and yet was not carried out in favour on making better profits for shareholders is entirely the fault of the companies. Extreme weather events could have been predicted and factored into the model and if they followed the wrong advise that is on them.
People who pay these bills, all who are reliant on water which was previously nationally owned also don’t have the ability to increase their wages more than inflation, so why should they pay the costs of failing businesses?
I’ve taken that to heart given some of the stuff I have read on here 😉
I would say the impact of Covid certainly and probably Brexit too were fairly unforeseen, impactful events.
Clinate change yes, but did anyone hand on heart really envisage this 20-30 years ago? Or envisage it enough to invest billions of pounds at the time.
Besides that you have essentially agreed with my bollocks, in that years of underfunding has caused this, but that is hardly the fault of current shareholders (some maybe…) and management, is it?
The people will pay for it either way now, through bills or general taxation. Shareholders are there to get a return on investment and directors are effectively agents of the shareholders. Some (not all) shareholders in the water industry are getting not much more than 2% dividend yield… Where is the incentive to pump billions in for that kind of return?
I apologise for the ‘biggest load of bollocks’ comment. That was obviously a massive exaggeration considering especially the post match threads.
Shareholders obviously invest with a view to getting a return on their money, but it is their choice to invest or not, in this case the customer has no choice whether to use the product. Current shareholders may not have seen the benefit of past profits but they have chosen to invest in a company that has neglected the infrastructure it depends on in favour of profit. Would anyone think it was sensible to invest in a textile company that still relied heavily on Victorian machinery? If since privatisation Thames Water had invested more in this area they would now have a company worth more and a more attractive proposition for investors.
Private companies need to make a profit. If they are publicly owned there is no need to make a profit and the money that customers pay can be used to properly run the company instead of paying out to shareholders and executives who pay themselves huge salaries.
The privatisation of the utilities has been a disaster and the chickens are now coming home to roost.
Let Thames water go bust and the taxpayer take over the companies with no debt.
Private companies need to make a profit. If they are publicly owned there is no need to make a profit and the money that customers pay can be used to properly run the company instead of paying out to shareholders and executives who pay themselves huge salaries.
The privatisation of the utilities has been a disaster and the chickens are now coming home to roost.
Let Thames water go bust and the taxpayer take over the companies with no debt.
I'm not sure that if the company goes into administration the debt simply dissapears.
I suspect it'll end like a Bulb situation and whilst the state may take it on in the interim someone else will eventually buy it.
We’re arguably further away from nationalisation than ever for the industry as a whole as the cost to the govt would be astronomical, before they even look at future funding.
Thames issue is, I believe, that there holdco debt was due for refinancing at the exact wrong time, when the cost of financing has gone sky wards and the regulator has changed licence conditions that make acquiring finance at holdco level much more difficult that previously. Begs a question over the going-concern review of their last audit…
Talking of regulators, water companies have to adhere to Ofwat, Defra. CCW, DWI, EA, Natural England. Getting things done quickly and at good value is not easy!!
Hopefully this current issue will shine some focus on that area.
ME14 the money that customers pay is not enough to fund the investment required, as the regulator has been solely focussed on low customer bills and not investment in infrastructure for many years. So it either comes from higher bills, shareholder investment (why for such low returns - if any) or the government which will come through higher taxation.
A new reservoir at Broadoak will cost north of £250m. If nationalised, who pays for that?? You and I though higher bills or taxation, there won’t suddenly become a money tree and the companies will then be battling with the NHS etc over priority.
I get the arguments, but be careful what you wish for, the investment problems started in the nationalised era….
front page of the Times today (just read the gist while shopping, didn't buy the paper) .. water bills to go up by 40% .. w t f .. this presumably is to pay for infrastructure to stop the polluting of waterways because the present (usually very old) systems can't cope .. I know that the nationalised industries pre Thatcher had their faults. BUT this is taking the piss and there is little the 'customer' can do about it .. is water resource re-nationalisation in Labour's manifesto should it win the next election ? IF not Sir Keir, make it a near priority
The reason the punters will have to pay is because they have failed to invest anywhere near pre-privatisation levels. They have skimped on routine maintenance, failed to spend where necessary and dumped sewage because cheaper to pay fines than do their job properly. Profits were up, bosses bonuses were up and shareholder dividends were up. Now they want us to pay for it again. If the government steps in, then the shareholders have to lose their investments.
We're currently in the middle of starting up a new business and in a battle with a dodgy energy firm regard electricity though. The broker managed to call me while I was waiting for EDF to return a call and I got suckered in. Once I realised it wasn't EDF I interrupted her asking what she estimated the monthly premiums to be. I agreed to the terms over the phone, expecting to get the full details through email and being able to cancel if something didn't look right. Now the email has come through, they was £403 upfront and estimating £600 per month.
Apparently theres no cooling off period with commercial energy contracts, and agreeing over the phone is all it takes to lock you into a 36 month contract.
ME14 the money that customers pay is not enough to fund the investment required, as the regulator has been solely focussed on low customer bills and not investment in infrastructure for many years. So it either comes from higher bills, shareholder investment (why for such low returns - if any) or the government which will come through higher taxation.
A new reservoir at Broadoak will cost north of £250m. If nationalised, who pays for that?? You and I though higher bills or taxation, there won’t suddenly become a money tree and the companies will then be battling with the NHS etc over priority.
I get the arguments, but be careful what you wish for, the investment problems started in the nationalised era….
Investors expect a return on their money, that money comes from the bills of ordinary people. If the bill payers don't have to pay the shareholders, the money can be invested in the infrastructure instead. Investors/shareholders expect a return on their money, they aren't doing it for philanthropic reasons, so cut out that part of the chain.
The Government plans to spend billions to fund their crazy Rwanda scheme, so why not use that money to improve the water industry instead.
We have parts of the industry unable to supply the water their customers demand and other parts filling our rivers and seas with untreated sewage. Privatisation has gone badly wrong.
I’m not close to the waste water industry, but It’s easy to forget the reputation we had for pollution of our beaches and rivers pre privatisation and the quality of drinking water. Yes there are headlines of sewerage’s dumps (guess what - they’ve always happened) but the overall water quality and environmental standards have increased hugely.
I think leakage, despite being too high, has reduced significantly in that time too.
And how controlled the investment was, I think capped at £2bn per year pre-privatisation. It’s averaged at least double that ever since, even with dividends paid.
Let us not forget either that water companies can not refuse new development connections, another misconception, but can seek contributions from developers.
I don’t disagree with some of the points but there are a lot of rose tinted glasses around!
Comments
Shocking.
The fact that the need to upgrade the infrastructure was known at the time of privatisation and yet was not carried out in favour on making better profits for shareholders is entirely the fault of the companies. Extreme weather events could have been predicted and factored into the model and if they followed the wrong advise that is on them.
People who pay these bills, all who are reliant on water which was previously nationally owned also don’t have the ability to increase their wages more than inflation, so why should they pay the costs of failing businesses?
However if nationally owned the 'people' will still be paying for it, whether that's via their bills or general taxation.
Those of us old enough will remember thatcher selling off the water, and in turn writing off 5bn of debt, so some history here of under funding.
They've confirmed they're happy to have me as a customer, just as soon as I've paid the £2billion fee for a new pipe to be connected up to their mains supply, which all sounds fair enough!
It has paid out 57 Billion pounds in dividends.
So if it had just paid out 49 Billion in dividends it would be dept free.
Or am I missing something.
I would say the impact of Covid certainly and probably Brexit too were fairly unforeseen, impactful events.
Clinate change yes, but did anyone hand on heart really envisage this 20-30 years ago? Or envisage it enough to invest billions of pounds at the time.
Besides that you have essentially agreed with my bollocks, in that years of underfunding has caused this, but that is hardly the fault of current shareholders (some maybe…) and management, is it?
;-)
The privatisation of the utilities has been a disaster and the chickens are now coming home to roost.
Let Thames water go bust and the taxpayer take over the companies with no debt.
I suspect it'll end like a Bulb situation and whilst the state may take it on in the interim someone else will eventually buy it.
That's just a matter of fact and nothing in history has proven me otherwise.
Thames issue is, I believe, that there holdco debt was due for refinancing at the exact wrong time, when the cost of financing has gone sky wards and the regulator has changed licence conditions that make acquiring finance at holdco level much more difficult that previously. Begs a question over the going-concern review of their last audit…
A new reservoir at Broadoak will cost north of £250m. If nationalised, who pays for that?? You and I though higher bills or taxation, there won’t suddenly become a money tree and the companies will then be battling with the NHS etc over priority.
We're currently in the middle of starting up a new business and in a battle with a dodgy energy firm regard electricity though. The broker managed to call me while I was waiting for EDF to return a call and I got suckered in. Once I realised it wasn't EDF I interrupted her asking what she estimated the monthly premiums to be. I agreed to the terms over the phone, expecting to get the full details through email and being able to cancel if something didn't look right. Now the email has come through, they was £403 upfront and estimating £600 per month.
Apparently theres no cooling off period with commercial energy contracts, and agreeing over the phone is all it takes to lock you into a 36 month contract.
Absolute shysters
The Government plans to spend billions to fund their crazy Rwanda scheme, so why not use that money to improve the water industry instead.
We have parts of the industry unable to supply the water their customers demand and other parts filling our rivers and seas with untreated sewage. Privatisation has gone badly wrong.
And how controlled the investment was, I think capped at £2bn per year pre-privatisation. It’s averaged at least double that ever since, even with dividends paid.
I don’t disagree with some of the points but there are a lot of rose tinted glasses around!
Water companies have been ordered to pay £114m back to customers after failing to meet key targets.
Ofwat, the industry regulator, said that firms are "falling short" on performance measures around leakages, supply and reducing pollution.
It said that following a review, millions of pounds will be returned to households by cutting bills.
https://www.bbc.co.uk/news/business-66922070