The £78bn payout is nearly half the £190bn the companies spent in the same three decades on infrastructure.
When England’s water industry was privatised in 1989, we were told it would lead to ‘shareholder democracy’. Instead, what we’ve seen is a monopoly which has resulted in consumer bills soaring, while infrastructure deteriorates and the debt of water companies soars.
Since the 1990s, investment by the 10 largest water and sewage companies has fallen by 15%. Now new research published by the Financial Times has found that 16 water monopolies have paid out a total of £78bn in dividends in the 32 years since privatisation.
The paper states: “The £78bn payout is nearly half the £190bn the companies spent in the same three decades on infrastructure. The utilities meanwhile chalked up more than £64bn net in debt over the same period, despite being sold at privatisation with no borrowings.”
The FT also finds that water companies in England and Wales paid £2.5bn in dividends and added £8.2bn to their net debt in the two financial years since 2021.
That water companies have paid out a shocking £2.5bn in dividends since 2021, while consumer bills have soared and while they’ve also been pumping sewage into our waterways and allowing infrastructure to crumble, will infuriate many.
News of the dividends payments come as Thames Water, the UK’s largest water company teeters on the brink. It has been given just six weeks to prove to regulator Ofwat that it has as a viable survival plan.
Thames, which has 16 million customers across London and the Thames valley, has been thrown into crisis after its shareholders last month pulled the plug on a plan to inject £500m into the business. Thames’s holding company, Kemble Water Finance, has admitted it will not be able to repay a £190m loan due by the end of April.
The company initially wanted to hike the price of bills by 40%, a move rejected by the regulator.
There are fears that Thames Water’s crisis may spill over into other water companies, which has also resulted in a wider debate around the future of Britain’s utilities.
Basit Mahmood is editor of Left Foot Forward
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