English water companies are collapsing
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In the UK, privatized water companies have consistently failed to invest in infrastructure, leading to frequent pollution incidents with sewage and waste contaminating rivers and lakes. This negligence has resulted in significant financial losses for investors, including major stakeholders like the Abu Dhabi Investment Authority and Ontario Municipal Employees Retirement System, who have had to write off their investments in Thames Water, the UK’s largest water supplier. It’s becoming clear that English water companies are collapsing as a result of these ongoing issues.
Thames Water, struggling under a mountain of debt, has been unable to secure new financing, leading to insolvency for its parent company, Kemble. The wider water industry in the UK faces similar challenges, plagued by the regular discharge of untreated sewage into water bodies. Originally meant as an emergency measure during heavy rainfall, this practice continues unabated. Compounding the issue is the long-standing problem of leaking pipes, causing nearly a quarter of the country’s drinking water to be lost.
David Black, head of the water regulatory authority Ofwat, has called for a cultural shift within these companies, emphasizing the need for improved leadership and corporate responsibility. The UK’s approach to water privatization, initiated over 30 years ago under Prime Minister Margaret Thatcher, starkly contrasts with the public management of water services in Northern Ireland, Scotland, and most other countries around the world.
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