You realize that when a business is privatized they don’t give it to the civil service right?
Of course.
Though what’s happening here is that Thames Water can no longer issue dividends to investors without permission from the regulator Ofwat given things are in such a mess. The government doesn’t want the service to collapse because it doesn’t want the cost of nationalising it. So some balance has to be stuck, allowing Thames Water to issue some return to private investors, (they’d previously not received dividend on their investment for 7 years) so that they don’t withdraw their investment altogether. Additional private investment that was in the pipeline was withdrawn when it was seen that Thames Water wasn’t able to offer a return from its profits, which has what’s made its cash situation worse.
But this is the nature of private investment. It has to be courted, motivated. The government is trying at all costs to avoid the huge cost of nationalising TW. And to do that it has to be allowed to issue plans where it’s both delivering its service obligations but also distributing profit.
It is being heavily scrutinized and the regulator has already put in controls over what it can do financially. My point (although I was being flippant) is that you need genuine good business experience and leadership to sail a group as large as TW away from being this close to collapse. A lot of it involves showing a credible plan for making it work within budget and delivering some return to investors so that vitally needed investment can be secured. This is really difficult to do but from reading their interim report, they’re just about managing it.
I think calls from various MPs for them to revise their compensation / dividend schemes are a type of virtue signalling. There is a huge amount of attention on this. They’re paying compensation packages comesurate with what it costs to buy leadership skill from the business world to be able to handle the complexity of the operation. MPs all know that, they just also want to make suitable noises so that when voters look at the numbers and go “how much?!” that they’ve looked like theyre right along side them tutting and shaking their head.
But in reality anyone in parliament knows they need to buy in leadership from the business world. It’s just political view much they publicly acknowledge that fact.
The government doesn’t want the service to collapse because it doesn’t want the cost of nationalising it.
They might not really want to nationalize it but they’re also aware of public sentiment. They may ultimately decide that it’s worth nationalizing it just to send a message. So you don’t know they won’t nationalize it so the rest of the argument is somewhat irrelevant until that decision is made.
Your point is that you think that nationalization would end up in a worse situation than it currently is in and honestly I can’t see how that could possibly be the case.
That’s because you seem to be assuming nationalization has neither an actual nor political cost. It has both.
Chancellor’s budget had been under a microscope with people wondering how on earth they’ll balance the books without raising taxes on people (as they promised). Chucking in the nationalization of the country’s biggest water supplier like its spare change is nuts.
Private investment is fine, even preferable, so long as it’s regulated properly. That’s Ofwat’s job. If you don’t think Ofwat can do that job properly then I’m not sure why you’d think similar people would do better running the entirety of TW…
Of course.
Though what’s happening here is that Thames Water can no longer issue dividends to investors without permission from the regulator Ofwat given things are in such a mess. The government doesn’t want the service to collapse because it doesn’t want the cost of nationalising it. So some balance has to be stuck, allowing Thames Water to issue some return to private investors, (they’d previously not received dividend on their investment for 7 years) so that they don’t withdraw their investment altogether. Additional private investment that was in the pipeline was withdrawn when it was seen that Thames Water wasn’t able to offer a return from its profits, which has what’s made its cash situation worse.
See here; https://www.cityam.com/clock-ticking-for-thames-water-as-it-searches-for-investment/
But this is the nature of private investment. It has to be courted, motivated. The government is trying at all costs to avoid the huge cost of nationalising TW. And to do that it has to be allowed to issue plans where it’s both delivering its service obligations but also distributing profit.
It is being heavily scrutinized and the regulator has already put in controls over what it can do financially. My point (although I was being flippant) is that you need genuine good business experience and leadership to sail a group as large as TW away from being this close to collapse. A lot of it involves showing a credible plan for making it work within budget and delivering some return to investors so that vitally needed investment can be secured. This is really difficult to do but from reading their interim report, they’re just about managing it.
I think calls from various MPs for them to revise their compensation / dividend schemes are a type of virtue signalling. There is a huge amount of attention on this. They’re paying compensation packages comesurate with what it costs to buy leadership skill from the business world to be able to handle the complexity of the operation. MPs all know that, they just also want to make suitable noises so that when voters look at the numbers and go “how much?!” that they’ve looked like theyre right along side them tutting and shaking their head.
But in reality anyone in parliament knows they need to buy in leadership from the business world. It’s just political view much they publicly acknowledge that fact.
They might not really want to nationalize it but they’re also aware of public sentiment. They may ultimately decide that it’s worth nationalizing it just to send a message. So you don’t know they won’t nationalize it so the rest of the argument is somewhat irrelevant until that decision is made.
Your point is that you think that nationalization would end up in a worse situation than it currently is in and honestly I can’t see how that could possibly be the case.
That’s because you seem to be assuming nationalization has neither an actual nor political cost. It has both.
Chancellor’s budget had been under a microscope with people wondering how on earth they’ll balance the books without raising taxes on people (as they promised). Chucking in the nationalization of the country’s biggest water supplier like its spare change is nuts.
Private investment is fine, even preferable, so long as it’s regulated properly. That’s Ofwat’s job. If you don’t think Ofwat can do that job properly then I’m not sure why you’d think similar people would do better running the entirety of TW…