Thames Water. Pass the parcel.
Thames Water is £20 billion in debt and about to ask for help again. It's been private for nearly 40 years, and every owner has borrowed, extracted and passed it on.
THE GIST ON THAMES WATER: "Pass the Parcel"
Where is Thames Water now?
Thames Water is £20 billion in debt, bills went up 20% last year, and it's about to ask the government for help again. You can't go bankrupt when 16 million people need your product to live.
It has been in private hands for nearly 40 years, with a monopoly on something nobody can opt out of.
What did the owners do?
Since privatisation, every owner has done the same thing: borrow against it, extract as much cash as possible, and pass it on to the next owner. Round and round the carousel it went.
Now it's £20 billion in debt, pumped 14.3 million tonnes of sewage into rivers last year and will run out of money by October. Who's going to save it? Surprise, surprise, a group of American hedge funds.
Why does this keep happening?
Because the government can't let the water stop. Everyone knows it. It's a get out of jail free card. It doesn't matter how much you borrow, extract or fail to invest, you can't go bust.
This wasn't a matter of if, it was a matter of when. No competitor and no consequence, and this is what you get: complacent greed.
What about the regulator?
The regulator was supposed to stop this but had no power to enact sanctions. When the fines are cheaper than fixing the pipes and no one can stop you, can we really be surprised?
The theory was that private ownership would bring efficiency and investment. Without competition, discipline never came and investment didn't follow. Every owner did the rational thing in the absence of consequences: extract and pass it on. That works, just not for customers.
Do you know where your water bill goes?
Your take. One tap, then see how everyone else voted.
Quick answers
How much debt does Thames Water have?
£20 billion, according to Huw.
Why can't Thames Water go bust?
The government can't let the water stop, so there's no real consequence for borrowing, extracting cash or not investing.
What was the promise of privatisation?
Efficiency and investment. Huw says that without competition, discipline never came.
See you on the next one.
What should the next one be? Suggest a topic for Huw to explain
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