The promise was more efficiency when water suppliers in England and Wales were privatized in the 1980s. Now the largest company Thames Water is facing bankruptcy.
What the British Environment Minister Steve Reed had to announce last Friday is a real turnaround: no bonuses for the top managers and managers of several water suppliers. In recent years, the Boni CEO of over 120 million euros had paid off, Reed said.
This is despite the fact that so much unclear sewage has been led in lakes, rivers and the sea. And he announced: “The era, in the pollution, was the basis for profits.” A change of course – but it’s not that easy.
Wastewater initiated unclearly
A total of six water suppliers in England are affected. Among other things, the companies have not followed environmental standards. It is new that the supervisory authority of OFWAT can delete these bonus payments. In February, the British Parliament passed a corresponding law to enable this.
The step comes after there have already been penalty payments for suppliers because they did not comply with environmental and consumer standards. In Great Britain there were repeated reports that the suppliers of wastewater lead unclearly into rivers, lakes and the sea. Free water swimmers regularly complain about gastrointestinal infections, surf schools have to cancel courses.
Initiative of a former Top athlete
The top athlete Steve Redgrave collected signatures for a clean environment. The rower won gold for Great Britain five times. Today the 63-year-old is retired. He is committed to the environment, for clean lakes and rivers. In his opinion, the condition of the waters in the United Kingdom has become significantly worse in recent years. In the 1970s, they jumped into the Thames after a training session. This is no longer possible today.
Even if the premiums for the years 2024 and 2025 are not allowed to be paid, much more would have to happen: Most suppliers have invested far too little in the line network and in sewage treatment plants for decades. And that also has to do with privatization and a toothless regulatory authority.
From privatization into bankruptcy?
For this, many people in the United Kingdom have no understanding in the face of the dividends that companies paid out. Since the privatization of the University of Greenwich, this has been 100 billion euros since privatization at the end of the 1980s in England and Wales. Recipients were the owners of the supply companies, including investors such as pension funds from Canada, for example.
And the government is also dependent on them. The largest provider Thames Water is massively indebted, with a mountain of debt of almost 25 billion euros shortly before the bankruptcy. Actually, the provider urgently needs an investor. But a donor has just jumped off. The KKR group withdrew from the negotiations.
Supervisory authority as Investment risk?
Possibly because the new bite of the supervisory authority became an investment risk. In any case, this suspicion suggests a statement by Thames Water leader Chris Weston. The manager spoke in front of a committee of the lower house in May and stated that you would have to insure donors to earn money with their investment. This is the only way to get the necessary amounts together in order to avert bankruptcy and to be able to make urgently needed investments.
Pensions, no premiums: all of this unsettled investors who want to maximize their return. It would be consistent, according to some opposition politicians, to nationalize the providers again. But the Labor government simply cannot afford that.
