Boss Sarah Bentley resigns without making te reason public. Could it be that the job is impossible? Thames has a £14bn debt pile it has built up over successive ownerships – largely the Aussie bank – Macquarie, it is owned by a number of pension funds and sovereign wealth funds. Besides its awful environmental record it has seen leakages increase, whilst all the time paying out high dividends and wages to its management, and the increase in interest rates will mean higher repayment costs. Will it default and be taken back into public ownership – another blot on Thatchers record? There would seem to be 2 scenarios – both disasterous for the government. Hiking water costs by 40% has been suggested by some (Thames Water charges went up by 11.6% on 1st April; this would be completely unpalatable given the mortgage hikes and cost of living crisis; or, let it go bust. The government may find this impossibkke given the sovereign wealth funds including China (8.6%), Abu Dhabi (9.9%) (and pension funds including Ontario (31%) and British Universities Staff Pension Fund (20%). Presumably the Universities fund would need to be underwritten by the government, but allowing the companny to go bust could cause all sorts of knock on impacts for foreign investment? Present profit is £1 billion, but whilst leaving the EU has halted some of the fines they would have accrued, they can expect an increasing public pressure to cut the sewage and price rises. OFWAT is tasked with moderating costs and setting targets – now is the tie to do so.
This also has implications for Starmer who seems set on wining approval from the city