Is Thames Water about to collapse?
- Thread starter Bingoman
- Start date
brogdale
Coming to terms with late onset Anarchism
Ideology and corruption.
cupid_stunt
Merry fecking Christmas.
It's certainly looking like it.
And, Thames is not the only water company with crippling debts, they are just the worst.
AnnO'Neemus
Is so vanilla
They mentioned it on R4 Today news. Apparently, the regulator has said that the company must focus on its customers or something like that. Which strikes me as clueless on the part of Ofwat. Because the way companies are set up is that they are usually legally required (pursuant to their documents) to put their shareholders first.
Smokeandsteam
Working Class First
‘Going bust’ merely means their workers will lose their jobs.
As for renationalising it, the issue, of course, is that the taxpayer will then be directly on the hook for the repair, investment and improvement programme that is desperately needed but which hasn’t happened as profit has been siphoned off by shareholders and the board.
As usual the now inevitable state intervention will be 15 years too late, costly to the taxpayer (either through higher prices or taxpayer funded payment for infrastructure: most likely both) and will leave those responsible free to do the same to other industries and services.
AnnO'Neemus
Is so vanilla
It's like ripping off a band-aid though. It has to be done at some point, so just grit your teeth and do it.
cupid_stunt
Merry fecking Christmas.
The workers wouldn't lose their jobs, businesses often go bust, and then immediately get taken over, and continue business as usual.
MickiQ
In My Defence I was left Unsupervised
That would involve the water supply in the capital being shut off which I imagine even this govt might realise is not something that will go down well with the voters
Probably because if the owners of Thames water’s debts decide that the reservoir at the top of Brixton hill world be much more valuable as flats then a lot of people in south London would have no water
brogdale
Coming to terms with late onset Anarchism
It is ‘bust’ already, in that it can’t now fund its own investment to allow it to operate safely. That’s the inevitable outcome of corporate finance/asset management ownership of natural monopolies solely as vehicles for extracting ratios of dividends and interest. Of course, in the case of a natural monopoly of our most basic physiological need, the moral hazard is so pronounced that workers will not lose their jobs.
Smokeandsteam
Working Class First
Yes, they often do, but they often don’t too. Or they do but then there are job cuts. Or they do but it’s dismissal and re-engagement on inferior terms.
cupid_stunt
Merry fecking Christmas.
No it wouldn't, a bankrupt business can be rescued and continue trading without interruption, under new owners.
An example is a company I used to work for, Johnson Press went bust, and taken over in a 'pre-package' arrangement by JPI Media, as in Johnson Press Int. Media, and continued without any interruption to the business.
cupid_stunt
Merry fecking Christmas.
That's why it needs the government to take it over, to avoid such a situation, using emergency legislation if required.
Smokeandsteam
Working Class First
Who do you imagine would want to take it over? Given the £14Bn debt and the infrastructure/repair programme of work needed?
andysays
Love and solidarity
I would hope that the rules governing the collapse of a crucial utility like Thames Water, even one in private hands, would be different to those in play if most other kinds of business went bust.
If it were to happen, I'd suggest that the government would need to take action to ensure that water continued to be supplied, they couldn't simply turn off all the taps, sack everyone and call it a day.
If it were to happen, I'd suggest that the government would need to take action to ensure that water continued to be supplied, they couldn't simply turn off all the taps, sack everyone and call it a day.
MickiQ
In My Defence I was left Unsupervised
That's a deal struck by the administrators though isn't it. The administrators are duty bound to get the best deal for the creditors. The best deal for Thames Waters creditors isn't going to be the Govt getting it for a song.
brogdale
Coming to terms with late onset Anarchism
After the state bails it out there will be a long queue of asset management corporations anxious to take it for another ride.
likesfish
You can't park here sir
The problem with State ownership is the treasuary is the worse sort of rentier any profit or surplus goes into the maw of the government never to be seen again but an investment or a loan for improvement is immeditatly kiboshed as public borrowing/debt which is a bad thing.
That was one of the arguments for privitisation that their was serious under investment for decades while publicly owned and government wouldn't invest the neccessery cash.
It needs to be in some sort of arms length trust or something so government can't use it as a piggy bank and it can raise funds like a normal buisness but not raise funds to pay shareholders.
That was one of the arguments for privitisation that their was serious under investment for decades while publicly owned and government wouldn't invest the neccessery cash.It needs to be in some sort of arms length trust or something so government can't use it as a piggy bank and it can raise funds like a normal buisness but not raise funds to pay shareholders.
moochedit
I'm not feeding seagulls
Yeah surely if they are on the verge of bankruptcy then their shares are worthless anyway.
moochedit
I'm not feeding seagulls
Yeah simalar thing happened to my employer when they went bust about 8 years ago. They sold the assets to a new company in a "pre package" deal and restarted as a new company with a simalar name but with new owners. I was one of the lucky ones that got my job back although some people did lose their jobs
MickiQ
In My Defence I was left Unsupervised
This is going to be the big problem with them being nationalised. The Govt will simply transfer any debt from the company to the national debt which will be good in the short term since it will enable the company to spend any profits on investment but a future Tory govt will be able to flog it off again as debt free sometime in the 2030's if they want.
Well no they're not owning the shares means that whoever buys them will own lots of things especially land in the SE which will raise quite a bit if sold off as land.
Personally I'm narked as everyone else and can fully understand the appeal of just seizing the assets and mounting the heads of the board on spikes outside the company HQ as a warning to others but in the real world, the state stumping up a shitload of cash to just buy it is probably the least unacceptable option.
brogdale
Coming to terms with late onset Anarchism
It all makes complete sense when you accept that the modern, neoliberal consolidator state exists solely to effect the regressive transfer of wealth from taxes on labour to unearned private income. Moral hazard and corporate welfare, innit?
brogdale
Coming to terms with late onset Anarchism
Gove's pathetic 'crocodile tears'; the asset managers have managed the company exactly how the vermin's privatisation and legislation has permitted.
Was going to go with a pob calling cartel black quip, but then thought it a bit contrived and this isn't really funny at all.
Was going to go with a pob calling cartel black quip, but then thought it a bit contrived and this isn't really funny at all.
bluescreen
tofu eating wokerati
Of course they should be reprivatised, but one of the many problems is that the investors include pension funds (Universities Superannuation scheme owns 19.7% and a Canadian pension scheme 31%) and if the govt sacks them off there's a whole new can of worms.
The deserving or undeserving investors?
bluescreen
tofu eating wokerati
I dunno, tbh, but it's bloody tough for retired people relying on their pension fund having made a sensible investment. And those retired people aren't all rich gits.
True
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