“The water industry is in crisis. Can it be fixed?”, asks the BBC’s Business Editor Simon Jack:
Our loos flush and water comes out of our taps. In that sense, the water industry in England and Wales works. In just about every other way, it’s a mess. The most visible sign of that mess comes after those loos have flushed. Last year England’s privatised water firms released raw sewage for a total of 3.6m hours, more than double the amount recorded the year before.
When her government privatised the water companies in the late 1980s, they were debt free. Today they have a combined £60bn in debt. In five years out of the 10 that Macquarie was a major shareholder in Thames Water, investors took out more money in dividends than the company made in profit and made up the shortfall by borrowing heavily while letting debt levels soar.
Thames Water’s debt today stands at over £16bn and the cost of that debt is rising for the UK’s biggest water company, which one in four people in the UK rely on for their supply. It is the most extreme example but other companies including Southern Water are in a similar debt-laden boat. Since 2021, Southern’s largest shareholder has happened to be Macquarie.
