From The Guardian this morning, as if it is good news:
Thames Water might last a year.
The need of the people in the area it serves for water will last in perpetuity.
How is Andy Burnham going to solve that?
The need to do so might be existential.
What is he going to do about neoliberalism running out of road, or maybe water?
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Thames water is “easy” – they are failing on any measure…. including the current, neo-liberal one.
Take into public ownership. Equity holders get nothing (as they already expect); debt holders get government guaranteed “water bonds” that are 30 years maturity at (say) 3% coupon. The massive reduction in interest rate costs (PE proposal has new debt paying 9% ish) that can be spent on infrastructure. Of course, the market value of 3% 30 year bonds will not be “par” – more like 65-70% face value… but that is a loss that bond holders take for investing unwisely.
Now, there are details that are tricky – debt holders have all sorts of different terms/conditions but to quote Donald Trump – “they have no cards”. If bond holders think having their debt secured against TW assets offers protection then let them swap debt for equity…. and be forced to run the water company against the standards we require. They would go bust pretty quickly.
Finally, this tough treatment might scare other infrastructure investors but that isn’t necessarily a bad thing – it might precipitate more companies to accept public ownership before their investments become worthless.
A new Thames Water could then offer a tiered pricing structure that rewards water conservation and build new resevoirs, mend pipes etc..
I would say that we should not expect this quickly of cheaply. Climate change means that who ever runs things water prices must rise.
Much to agree with
Sounds like an excellent plan to me. It might remind people that trading shares on the stock market is no less a form of gambling than betting on horse racing, it’s just taxed and regulated less. Buying Water bonds, or NHS bonds however is a much safer bet and a far more responsible use of your savings.
Thames Water is bust and must be renationalised.
This is never going to happen but, the law needs to be changed so that any for utility company it will be illegal to load the business with debt to pay any dividends, bonuses etc.
Bring Back the Metropolitan Water Board – and the Metropolitan Board of Works – just go and visit Crossness Pumping Station to see the Prince Consort in operation and you realise that they knew how to do things.
See
https://crossness.org.uk/
Prince Consort is one of 4 rotative beam engines built to pump the sewage collected by Bazalgettes Interceptor sewers along the banks of the Thames and its surroundings are magnificent!
The company was looted over circa 36 years. There is thus a case for confiscation & no compensation for shareholders of bondholders.
Of course it won’t happen, but it would be fun if it did – a wake-up call for those that think they can still loot the UK and its serfs.
(Court case? oh please, UK gov leans on the judiciary etc – many of whom live in the… Thames catchment area – ditto the lawyers – tell me sir – how much fecal matter do you like in your tea etc).
This evening, at 6 30 pm, I have had a text message from Dwr Cymru ( aka Welsh Water) to let me know that -due to increased demand, because of the hot weather- our water pressure will be affected…. And you thought it rained all the time in Wales!
🙂
A bright young lady from Cranfield University was on radio 4 today saying that Thames Water, which had made a profit this year having put up customers ‘ bills by 40%, had this growing debt.
So it may need to be temporarily renationalised in order to get its finances in order to be handed over to another company!!!
So we will pay through the nose, as well as our hiked bills, to pay off its debt for it to be passed to another profit seeking clutch of villains.
Why do we put up with this??
Unfortunately she wasn’t bright enough to understand, and tell Radio 4 listeners, that the UK Government doesn’t need to tax nor borrow to finance (or fund) the new and upgraded infrastructure which is required.
We really need to get the various specialists in our Universities, and other professions, to know about and understand MMT, and how our Government is self-funding.
I am told b the interview was dire.
She got across the message that BBC Radio 4 wanted to get across.