2023-06-29 10:00:06
In London, June 28, 2023. TOBY MELVILLE / REUTERS
Verdant England and the London region lack neither the rivers nor the rains to feed them. This does not prevent the first British water company from sinking, to the point that today its very existence is at stake. On Wednesday June 28, the general manager of Thames Water, Sarah Bentley, announced her immediate departure from the company. ‘business. In question, a debt of 14 billion pounds sterling (16.22 billion euros), the reimbursement of which is becoming critical in the face of rising interest rates and the weak enthusiasm of shareholders to bail out the company.
Thames Water is a British institution. It supplies water to more than 10 million Londoners, but its reputation is marred by leaks, pollution and other scandals. However, the firm has swallowed up considerable sums to renovate the network of thousands of kilometers of pipes, much of which dates from the Victorian era.
Privatized in 1989 by the Thatcher government
It was also the first water company to be privatized in Great Britain by the Thatcher government, in 1989. The idea was of course to relieve the finances of the municipalities and to inject rigor and capitalist efficiency in the system. Indeed, a good part of the world’s major financiers have marched to its capital, from the Ontario teachers’ fund to the Australian investors of Macquarie, without forgetting the sovereign wealth funds of Abu Dhabi or Kuwait. It even once belonged to the German service giant RWE.
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An unmanageable debt, fickle and greedy shareholders, a weak regulator have led to what looks like a pretty scandal, since the British government is concocting a rescue plan that might involve nationalizing the company. A case that particularly resonates with the ears of the French, who pride themselves on owning the two world leaders in the sector with Veolia and Suez.
Throughout the world, for more than a century, they have preached regarding the superiority of the private model over that of municipal management, the most common in the world. The proof still remains to be provided.
Read also: Article reserved for our subscribers The Chinese sovereign wealth fund CIC invests in the British Thames Water
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