Thursday 28 March 2024

A New Type of Money Laundering?

Thames Water is the UK's biggest privatised (thank you, Mrs Thatcher!) water company, with around 15 million customers. All such water companies have effective monopolies- a 'licence to print money'. For many years, Thames Water and sister organisations, have routinely under-invested in necessary upgrades to their systems, designed to deliver freshwater and dispose of human waste. That urgency is now even greater, given the impacts of climate change. Water company incomes have, however, largely gone to shareholder dividends and CEOs. The companies have been able to further boost income, by flooding rivers and the sea with untreated sewage. In 2023, Thames Water, itself, increased its hours of raw sewage discharge by more than 160%. Under political pressures, the water companies have now been forced to commit to spending more money on upgrades (not before time). Thames Water was supposed, over a decade, to find around £500m from its shareholders for this purpose. The shareholders (including my pension fund) have refused to deliver. They want the customer watchdog, Ofwat, to first agree a 40% increase in user charges, lower fines for illegal sewage dumping and continued dividends for shareholders (https://www.theguardian.com/business/2024/mar/28/fresh-crisis-for-thames-water-as-investors-pull-plug-on-500m-of-funding). Thames Water shareholders seem to be holding a (water)pistol to Ofwat's head. The ultimate 'threat' is temporary renationalisation?

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