Thames Water before nationalization
British water company faces bankruptcy
6/28/2023, 6:17 p.m
The pipes are leaking but the bills are rising: Britain’s largest water company is teetering on the brink of bankruptcy. The government is working frantically on a rescue plan. According to London sources, the company, which was privatized in the 1980s, will be nationalized if necessary.
If necessary, the British government wants to save the Thames Water utility, which has slipped into a crisis, by temporarily returning it to public ownership. The company, which is groaning under billions in debt and supplies around 27 percent of the British population with water, must remain active under all circumstances, said the responsible Minister Rebecca Pow.
The water suppliers in England and Wales have recently come under public pressure after more waste water was discharged into the sea and rivers. Leaks also cause criticism. Thames Water loses more water than any other UK company. The BBC estimates that the equivalent of up to 250 Olympic-size swimming pools are lost every day. In addition, consumer bills are increasing.
The industry was privatized in the late 1980s, like many other sectors of public services in Great Britain. It is now being considered to place Thames Water under special administration, which could mean transferring the company to state control, the Sky broadcaster reported.
Lean investments, big bonuses
Environmental groups had accused the privatized water suppliers of investing little in their infrastructure. In addition, dividend payments and high bonuses for managers had caused public anger in the past. The opposition Labor Party has warned that the price for the failed privatization policy must not be accepted by the public. Thames Water, which owns pension funds, has accumulated a debt of around £14 billion (€16 billion). The water regulator Ofwat called for a credible restructuring plan.
Thames Water boss Sarah Bentley resigned with immediate effect on Tuesday. Before that, she had tried to turn things around for more than two years. She had previously been asked to forego her bonuses because of poor sewage management. The BBC wrote that she based the failure on decisions made by the company before her time.
Allianz is also likely to be interested in the situation at Thames Water. In a consortium with five other infrastructure investors, the Munich insurance giant is a partner of Thames Water in the construction of the “Thames Tideway Tunnel”, a 25-kilometer-long sewer with a diameter of 7.2 meters under the British capital. The £3.8 billion project is due to be completed next year.