Pearl River The last thing any of us need is another lesson in the absolute irresponsibility of any public officials or authority ever allowing vital community resources to be privatized as commodities and plums to be picked by private equity pirates. This time, like so many times before, it’s the foolhardy privatization of water. The place is England. This story is Thames Water, and it all goes downhill from there, especially for people living in London and throughout the southeastern part of the country who have to depend on this outfit.
The crisis is front and center right now because the company is about to go bankrupt with $20 billion in debt. Thames Water isn’t the only water privateer in the United Kingdom, but one of ten big private outfits in England and Wales. When this privatization circus began, the UK Treasury wrote of about 13 billion pounds in debts that it was owed by the Regional Water Authority. That was in 1989. Now the companies are carrying 60 billion pounds in debt. That’s not the half of it, as the Economist reports, “The companies … potentially face a vast bill for cleaning up rivers, beaches, and other bathing places: raw sewage is repeatedly dumped into them during storms.” Private equity holders are drinking champagne, while the British are sipping shit, since they have extorted almost 66 billion pounds in dividends from private water companies from 1989 to 2022.
Investors have only been willing to put up a piece of the money Thames Water needs to reorganize and get back on its feet, but of course, no surprise there, since they are just in it for the money. There is talk, which of course is opposed by the conservative Economist, of having to renationalize the water system, which they hope would be temporary at worst. The moral about all of this might be expressed as “some blokes just never learn.”
Why would any government ever allow such a vital resource to be privatized? The lessons of failure are global. And, if they did, why would they ever allow private equity to be involved, since that just means larding debt on the balance sheet to pay out dividends. It is equally disturbing to see that the big investors in this scam now are pension funds in Ontario, British Columbia, and the UK itself, as well as a number of state sovereign funds. What an irony to find sovereign funds, which are investment vehicles for public money, and pension funds, that public employees had a stake in and are counting on for their pensions, trying to exploit public drinking water and the people who depend on it.
We know this story too well. ACORN and Local 100 with the help of a number of environmental groups and the Green Corps led a campaign to prevent the privatization of the New Orleans Sewerage and Water company that began 25 years ago in 1998 and didn’t end until the last vote was cast in January 2002 by once again city councilman Oliver Thomas, when he was then a member of the S&WB governing body.
If politicians would start protecting the public, we need laws that prevent the intrusion of private equity and privatization in our vital public services. Maybe instead of dealing with make-believe issues, they could spend some time doing their real jobs and protecting and advancing public services. Now that would be a radical idea!