UK Strategic Planning

[bickster]

21 minutes ago, MakemineVanilla said:

It sounds like Wales is getting special treatment, as they are also repairing the Pontcysyllte Aqueduct 

Why would repairing and maintaining a world heritage site be getting special treatment? 

[MakemineVanilla]

5 minutes ago, bickster said:

Why would repairing and maintaining a world heritage site be getting special treatment? 

Litotes, old chap, litotes!

[bickster]

1 minute ago, MakemineVanilla said:

Litotes, old chap, litotes!

I shan't be sorry when that makes any sense.

[tinker]

59 minutes ago, MakemineVanilla said:

It sounds like Wales is getting special treatment, as they are also repairing the Pontcysyllte Aqueduct.

The engineer claimed that the joints are sealed with "welsh flannel", which I can quite believe.

Isn't it the canal river trust that maintains the canal and river networks in the UK, the ones who budget is being slashed from next year? 

[Mandy Lifeboats]

12 hours ago, T-Dog said:

 

So, again, entirely niave - is there any reason why our Government would want us to pump shit into the rivers other than profit? Again, apologies if a dumb question. 

The alternative is a huge investment in infrastructure.  The water companies can only raise the cash by massively raising prices. That would raise prices of most goods, fuel inflation and cripple government fiscal policy.  

Shit in the rivers is better than the UK public realising that our country has been mismanaged for decades. 

 

[Genie]

1 hour ago, Mandy Lifeboats said:

The alternative is a huge investment in infrastructure.  The water companies can only raise the cash by massively raising prices. That would raise prices of most goods, fuel inflation and cripple government fiscal policy.  

Shit in the rivers is better than the UK public realising that our country has been mismanaged for decades. 

 

Not entirely true, they could stop sending out millions to shareholders and instead spend the money on the infrastructure (it would need more than that).

[Mandy Lifeboats]

Just now, Genie said:

Not entirely true, they could stop sending out millions to shareholders and instead spend the money on the infrastructure (it would need more than that).

They could.  But their share price would crash.  

The shareholders would undoubtedly vote the chief executive out of office and ruin the plan. 

Welcome to the world of capitalism. 

[blandy]

4 minutes ago, Mandy Lifeboats said:

They could.  But their share price would crash.  

Another alternative is (the threat of) a windfall tax - "if you invest in infrastucture, that's fine and good, if you pay out dividends above a threshold, then we'll tax the **** out of you". That's a simplification, but it's entirely possible to incentivise investment and de-incentivise profiteering and excessive dividends and executive pay etc.

The share price of oil and energy companies seems to have survived windfall taxes.

[bannedfromHandV]

It’s almost as if water management and supply should be nationalised and ran as not for profit……if you can get your head around that crazy notion.

[blandy]

Just now, bannedfromHandV said:

It’s almost as if water management and supply should be nationalised and ran as not for profit……if you can get your head around that crazy notion.

It's not a solution. It's an idea, and it has some merits, of course. But also some drawbacks. It would have been better never to have privatised it, absolutely, but now it is, it's not a simple reverse situation, unfortunately. 

[Mandy Lifeboats]

1 minute ago, blandy said:

Another alternative is (the threat of) a windfall tax - "if you invest in infrastucture, that's fine and good, if you pay out dividends above a threshold, then we'll tax the **** out of you". That's a simplification, but it's entirely possible to incentivise investment and de-incentivise profiteering and excessive dividends and executive pay etc.

The share price of oil and energy companies seems to have survived windfall taxes.

Absolutely. 

If its law and applies to all water companies then it would work. 

It's worth remembering that the law prevents the water companies getting together and agreeing common financial approaches. 

The government is at fault and the government needs to sort it. 

[Mandy Lifeboats]

In the 1990s I worked for OFFER (the Electricity Regulator). 

It was a relatively short time after the companies had been denationalised and they had financial incentives to invest is assets crucial to the running of the grid rather than frivolous corporate spending.

One company (I shall not name them) purchased a helicopter for their Chief Executive and listed the expenditure as vital to the running of the grid. 

OFFER challenged it.  We dropped the challenge when the company sent us a business case where it was to be used for essential and urgent visual checking of pylon lines during major outages. 

Where there's a rule there is a clever accountant and solicitor paid to bend it. 

Edited March 28 by Mandy Lifeboats
Spelling mishsteaks

[Xann]

Rinsed and rinsed and rinsed again, in water filled with shit.

From the word go privatised water has failed the consumer.

F**k the shareholders off. Get water paying for itself. Eventually it'll return profits to the state.

Quote

 

In water industry circles, the Whitehall codename for the contingency plan for Thames Water’s failure has taken on a new meaning. Project Timber was so-called because of fears that the collapse of Britain’s biggest water company could have far-reaching consequences. But water wags have been humming Monty Python’s Lumberjack song, noting the risk Thames’s predicament poses to the company’s biggest shareholder, the Canadian pensions behemoth Omers.

The fate of Thames, which serves 16 million customers, hangs in the balance. Rishi Sunak has even parachuted in his business aide, the former Morgan Stanley banker Franck Petitgas, to oversee talks between Thames, the regulator, Ofwat, and the environment department, the Financial Times reported.

The immediate threat is a £190m loan owed by the water company’s ultimate parent, Kemble, which has caused its auditors to warn it could run out of money by the end of April, when it is due to be repaid.

Sources close to Thames believe that the loan will probably be reworked to “amend and extend”, giving Kemble a payment holiday in return for higher interest rates long-term. However, investors are pushing Ofwat to allow Thames to pay dividends up to Kemble to service its debts. Meanwhile, Ofwat may decide a £37.5m dividend paid in October was a breach of Thames’s licence and fine it.

 

Grauniad

[bannedfromHandV]

1 hour ago, blandy said:

It's not a solution. It's an idea, and it has some merits, of course. But also some drawbacks. It would have been better never to have privatised it, absolutely, but now it is, it's not a simple reverse situation, unfortunately. 

Do you mean in terms of shareholders being pension providers etc? Agreed that makes any and all industrial nationalisation difficult now but far from impossible.

I’m sick of seeing things like what the Thames Water CEO has come out and said, that in order to carry out the improvement works needed to maintain a decent level of service, bills will need to be increased. Nope, bills will need to be increased in order to carry out the works AND keep the shareholders happy/profiting.

[blandy]

43 minutes ago, bannedfromHandV said:

Do you mean in terms of shareholders being pension providers etc? Agreed that makes any and all industrial nationalisation difficult now but far from impossible.

I’m sick of seeing things like what the Thames Water CEO has come out and said, that in order to carry out the improvement works needed to maintain a decent level of service, bills will need to be increased. Nope, bills will need to be increased in order to carry out the works AND keep the shareholders happy/profiting.

Of course, nationalisation isn't impossible, I agree. What I'm getting at is there isn't a simple solution (not that you claim there is, I'm just speaking generally).

It's kind of on these lines. If the ownership is changed tomorrow, or after an election, there's some things. Like you say, the Gov't in nationalising water either pays the current share price for each company, or they hit pension funds, Councils who have ownership of shares, individuals who do in the pocket. Some might just be venture capitalists and hedge funds and elicit little sympathy, but others will be Decent and necessary share owners.

Then there's the actual issues - pollution and discharges and leaks and insufficient reservoirs. As the new owner, suddenly the Gov't (or the taxpayer, realistically) has to pay to fix those things. So bills go up.

Then there's the actual people working for the water industry - clerks generating bills and answering phones, maintenance people and contractors - they're all going to be exactly the same folks. And maybe you bin off the senior management and directors and execs...and replace them with, who? There would be a leadership vacuum for a while and that would lead to chaos for a period. Is Grant Shapps or Suella or Angela Eagles or Angela Rayner or whoever going to run it any better? and then they get reshuffled and the next politician comes in and has to learn the ropes from scratch. And there's the huge amount of time it would take Parliament to pass a bill to nationalise all the water companies. There's other stuff more urgent.

I guess I'm saying there's no magic bullet fix.

Now if a water company (privately owned) goes bust, then it's a little different, like with the train companies. At that point the government pretty much has to intervene to keep people's water flowing. And then you'd have one or two nationalised, in all but name, and the others still private. Neither one thing or the other.

So, to me it seems like legally binding requirements for infrastructure fettlement, limits on pollution, with severe penalties, enforced, strict monitoring, via properly staffed and resourced environment agency, and OFWAT and so on is a more pragmatic solution.

[chrisp65]

They’ll stay private until private decides it’s a pain in the arse and not worth the effort, at which point all talk of pension funds and resources and logistics goes out the window because MrPrivateWater Plc just handed the keys back.

It just needs an environment where extracting profit is just not worth the effort for companies that aren’t actually in it for everyone’s long term benefit.

Like with trains.

[blandy]

1 hour ago, chrisp65 said:

at which point all talk of pension funds and resources and logistics goes out the window because MrPrivateWater Plc just handed the keys back.

Except it doesn't all go out of the window. If the keys are handed back the shareholders and pension funds and logistics get **** over. 

If "the keys are handed back" then that's because the shareholders (and therefore the actual owners) either own shares which have already plummeted in value, because the Company is bust, or they have authorised the board to hand the keys back, via an EGM and vote and they voluntarily take the loss of their shares. If the company is bust, and unable to get the shareholders to stump up money to rescue it, or to allow a new share issue (thus devaluing existing shares), then the Gov't would have to intervene to ensure the taps keep flowing with water, but that's a case different from "nationalising all water companies".

It's simplistic in the extreme if anyone were to think that "nationalising it" fixes everything. Yes, it shouldn't ever have been privatised, but no, a government deciding to reverse that model with water would have huge adverse consequences, as well as creating some opportunities to run it all differently. But stuff would still need fixing, people would still see bills rise, pollution would still need stopping and reservoirs building.

[bickster]

At some point you have to say but the shareholders keep taking profits when the profits should have been used to stop flushing jobbies down the river

I get the investors / shareholders / pensions thing, I really do but quite frankly they are taking the piss (quite literally)

As for the investors in Thames Water saying that they'll only put the money in if the charges go up (massively) then its shit or bust and they clearly chose bust

[Genie]

Are there any actual profits though? I thought the water companies were losing money but still paying out.

[tinker]

Think they borrowed money to pay shareholders a big dividend when interest rates were low but the recent interest rate raise has made the repayments unaffordable. Capital investment was never mentioned but I do note that £5b was spent on a sewerage pipe for London so where that money has come from is a mystery. 

Tbh it seems like a load of fraudulent owners have rinsed it, left an empty shell that's now unable to meet its obligations,processing our waste water. It has managed to provide us with drinking water so far but I do wonder who's monitoring the quality of that, our water leaves a distinct stale smell in the waste pipes as of late, I threw a dishwasher out thinking it was faulty only for the new one to emit the same ordor........