Guardian UK columnist Will Hutton writes, “The Victorian network of sewers (in London, UK) is overwhelmed, and untreated or semi-treated sewage is leaking into the Thames, leaving the tide to do the rest… For more than a decade Thames Water has known that it needs to build a huge 20-mile tunnel 70 metres under the river to conduct the sewage out to sea, a £4bn investment that would last more than a century.”
“British taxpayers will essentially guarantee the £4bn of Thames Water borrowing, so that whatever happens investors will get their money back. …However, those with long memories will recall that one of the principal arguments for privatisation was that no such guarantees would ever be needed again. When Thames Water was privatised back in 1989, raising a paltry £922m for the government, we were promised a utopia of private sector efficiency in which the water industry’s new private sector owners would create a first-class water system at much lower prices than the government ever could.”
“Since 2006, (Thames Water has been owned by) a group of private equity funds domiciled in Luxembourg, marshalled by the Australian bank Macquarie. …By maxing out on debt, all the astonishingly high interest payments can be offset against tax, so that in 2012 it paid no tax whatsoever even while paying £279.5m of dividends – subject, of course, to minimal Luxembourg taxation.”
Huttton’s column can be read at http://www.guardian.co.uk/commentisfree/2012/nov/11/will-hutton-thames-water-private-equity-plaything?CMP=twt_gu. For the Blue Planet Project/ Council of Canadians campaign blogs ‘NEWS: Private water companies in England enjoy huge profits, pay little or no corporate taxes’ (November 2012) and ‘NEWS: Canadian pension funds and privatized water in England’ (February 2012), please see http://canadians.org/blog/?p=17884 and http://canadians.org/blog/?p=13343.
