Water Companies, why no competition?

sophie_maxwell

Really, I'm intrigued, we're supposed to be a democratic nation, with open markets etc. but when it comes to our water bills, we have to pay a single company whatever the hell they tell us to. We can't switch to a cheaper company as with gas/electricity. We can't complain because it's a private company and they have a green card to charge what they want.

It's not like it's a public body, I wouldn't be so annoyed if I knew the money was going to improve infrastructure but it's just going to German shareholders. I'm not at all happy with that.

It's not fair that we are being told to pay such huge amounts to fund foreign shareholders, if I'm paying for a resource such as water I want my money to pay for my country's infrastructure.

Why doesn't anyone try to take them on with this, Martin should. Maybe there's already a petition somewhere

fischer79

I can understand why you might not be happy that water companies are private rather than public companies but I'm not sure why the nationality of the shareholders makes a difference.

To flip it the other way round are you unhappy that the profits UK based multi-nationals make abroad through subsiduary companies are brought back here. I think UK PLC does a lot better out of the rest of the world than the other way around.

BTW water company profits are supposed to be regualted by OFWAT which calculate a margin based on investment and efficiency performance, though its debatable how well that works.

Voyager2002

They do claim to be investing in our infrastructure, although how much good they are doing is debatable.

OFWAT is supposed to provide the same kind of discipipline that competition provides in a normal market, but to the best of my knowledge has never refused to let them increase prices.

Anyway, when water first entered the private sector the shareholders were British, but they chose to sell to foreign companies.

Ultimately, that is the way things are because the great British public voted for the Conservatives in 1992: water privatisation was one of their manifesto commitments. If you failed to vote for Kinnock in that election then you have only yourself to blame.

sophie_maxwell

Haha well I was not old enough to vote in 1992 In reality though OFWAT are about as useful as OFCOM who are near useless in regulating the phone industry. For too long they've allowed the massive proliferation of 0870 and other rip-off phone numbers. I don't see how our massive bills are justified when they can pay such massive dividends to shareholders. The fact is that we are subsidising shareholders. Same with our railways.

Anyway, we voted Labour back into power in 1997, why didn't they renationalise it? Similarly why didn't they renationalise the railways... :rolleyes:

withabix

Voyager2002 wrote: »

They do claim to be investing in our infrastructure, although how much good they are doing is debatable.

No it isn't. The expenditure is controlled by OFWAT, in order to acheive new standards determined by HM Government & EU legislation, OFWAT and the EA/SEPA and is carried out in 5-year Asset Management Programme (AMP) 'units'. The level of work is extensive and is largely a consequence of under-investment in water/sewer infrastructure and treatment facilities when they were PUBLIC BODIES.

There is currently SO much investment and construction work in the water industry at present that the companies carrying out this work (like I have been working on for the last ten years) cannot recruit enough staff to carry out this work.

The PRIVATE water companies inherited a PUBLICLY OWNED infrastructure which had little or no investment over decades and decades. Why do you think that Victorian water mains are being replaced all over the UK? Why do you think it is now safe to swim in the sea without meeting your breakfast? Why do you think the rivers are now much cleaner?

You COULD have an open market in water, however that would require THE GOVERNMENT to pay for large scale interconnectors between water supply regions. These DO NOT EXIST. So, who would pay for these? Oh...that would be the consumer in the form of tax then...

You would then also have to build duplicate water treatment works all over the country at massive expense, in order for these competing water supply companies to supply their water into the network so that the consumer can decide who to pay their bill to.

Water is a unique mains product in that it has different properties all over the country, requiring different treatment, having different dissolved natural chemicals in it etc. Extra treatment would be required when mixing water sources, as would happen if there was an interconnected national water grid.

Plus, HOW exaclty would you decide who treats your poo and waste water? Do you want to keep it in a bucket in the understairs cupboard and then take it to your chosen water company to deal with???

So, just how much MORE do you want to pay for your water exactly??? That is what would happen if there was a national water grid/network and a choice of suppliers, as MASSIVE investment in the BILLIONS OF POUNDS would be required.

By the way, despite the lack of investment during public ownership, we STILL have probably the best water supply, delivery and water/sewage treatment infrastructure in the world, along with the best drinking water quality.

withabix

sophie_maxwell wrote: »

Anyway, we voted Labour back into power in 1997, why didn't they renationalise it? Similarly why didn't they renationalise the railways... :rolleyes:

Because labour are more blue than the conservatives.

IvanOpinion

sophie_maxwell wrote: »

Anyway, we voted Labour back into power in 1997, why didn't they renationalise it? Similarly why didn't they renationalise the railways... :rolleyes:

Probably because they couldn't afford to ... that is why they now have to manufacture all the jobs in the civil service whereas before they could manufacture jobs in various public industries. I don;t think it is necessarily in the best interests to renationalise certain services .. after all we saw what a mess the government made of running them.

Ivan

sophie_maxwell

withabix wrote: »

No it isn't. The expenditure is controlled by OFWAT, in order to acheive new standards determined by HM Government & EU legislation, OFWAT and the EA/SEPA and is carried out in 5-year Asset Management Programme (AMP) 'units'. The level of work is extensive and is largely a consequence of under-investment in water/sewer infrastructure and treatment facilities when they were PUBLIC BODIES.

There is currently SO much investment and construction work in the water industry at present that the companies carrying out this work (like I have been working on for the last ten years) cannot recruit enough staff to carry out this work.

The PRIVATE water companies inherited a PUBLICLY OWNED infrastructure which had little or no investment over decades and decades. Why do you think that Victorian water mains are being replaced all over the UK? Why do you think it is now safe to swim in the sea without meeting your breakfast? Why do you think the rivers are now much cleaner?

You COULD have an open market in water, however that would require THE GOVERNMENT to pay for large scale interconnectors between water supply regions. These DO NOT EXIST. So, who would pay for these? Oh...that would be the consumer in the form of tax then...

You would then also have to build duplicate water treatment works all over the country at massive expense, in order for these competing water supply companies to supply their water into the network so that the consumer can decide who to pay their bill to.

Water is a unique mains product in that it has different properties all over the country, requiring different treatment, having different dissolved natural chemicals in it etc. Extra treatment would be required when mixing water sources, as would happen if there was an interconnected national water grid.

Plus, HOW exaclty would you decide who treats your poo and waste water? Do you want to keep it in a bucket in the understairs cupboard and then take it to your chosen water company to deal with???

So, just how much MORE do you want to pay for your water exactly??? That is what would happen if there was a national water grid/network and a choice of suppliers, as MASSIVE investment in the BILLIONS OF POUNDS would be required.

By the way, despite the lack of investment during public ownership, we STILL have probably the best water supply, delivery and water/sewage treatment infrastructure in the world, along with the best drinking water quality.

Why interconnectors? What about using the energy market as a model - they have regions but I am free to choose scottish power for my home in the midlands if I so wish. I don't see why interconnectors would be needed.

My main point is why we should have to pay massive bills when they can afford to pay their shareholders such vast amounts of money. Clearly there isn't enough work going on because they are able to make such large profits.

withabix

sophie_maxwell wrote: »

Why interconnectors? What about using the energy market as a model - they have regions but I am free to choose scottish power for my home in the midlands if I so wish. I don't see why interconnectors would be needed.

My main point is why we should have to pay massive bills when they can afford to pay their shareholders such vast amounts of money. Clearly there isn't enough work going on because they are able to make such large profits.

There is a national power grid (an interconnector) and a national gas grid (an interconnector), that's why you can select your energy supplier. Your energy supplier buys capacity and sells it on. Most of them run power stations and supply electricity into the national grid.

Water in each region is supplied into the network by the regional water company. There is no way for the water to be supplied to your home other than from their treatment works, unless you want your water delivered in bottles, buckets or by tanker!

As for profits - suppose you ran a company and your customers suggested that you spent all of your profits on providing a swanky posh shop for them to buy your goods in, what would you say?

Why shouldn't utility companies make profits?

You could always apply to the EA for a licence to drill a borehole in your back garden and provide and treat your own water, if you dislike the amonut you are paying for it. But hang on, that would cost more than you pay for your water already...

withabix

sophie_maxwell wrote: »

My main point is why we should have to pay massive bills when they can afford to pay their shareholders such vast amounts of money. Clearly there isn't enough work going on because they are able to make such large profits.

Errrr... that 's the whole point of running a business. Would you prefer that they made losses and then went bankrupt? Your taps would suddenly stop providing water. That would be useful now, wouldn't it....

sophie_maxwell

withabix wrote: »

Errrr... that 's the whole point of running a business. Would you prefer that they made losses and then went bankrupt? Your taps would suddenly stop providing water. That would be useful now, wouldn't it....

When someone runs a business, customers can choose whether to patronise it or not. That's why supermarkets compete against each other and we get lower prices.

With water companies, there is no competition so they are free to treat customers as they wish without concern for the consequences. They can even bluff OfWAT in the same ways the telecoms companies bluff OfCOM.