This from the Guardian is amazing, an overview of the ownership of the English water industry. The findings?
Foreign investment firms, private equity, pension funds and businesses lodged in tax havens own more than 70% of the water industry in England, according to research by the Guardian.
The complex web of ownership is revealed as the public and some politicians increasingly call for the industry to be held to account for sewage dumping, leaks and water shortages. Six water companies are under investigation for potentially illegal activities as pressure grows on the industry to put more money into replacing and restoring crumbling infrastructure to protect both the environment and public health.
And:
More than three decades after the sector was sold off with a promise to the public they would become individual small shareholders or "H2Owners", control of the water industry has become dominated by overseas investment vehicles, the super-rich, companies in tax havens and pension fund investors. The ownership structure is such that transparency and accountability are limited, according to Dr Kate Bayliss, a research associate with the department of economics at Soas University of London.
The idea of individual small ownership was always implausible. That it has turned out the way it has is telling. And to what purpose? As Bayliss notes:
Bayliss has carried out academic research of the industry ownership structures and said: "This is a quite different model to how one might expect a private company to operate. It's not simply a case of the owner aiming to raise revenue and lower costs and keep the profits. Private equity earnings are more likely to be achieved by restructuring company finances, or financial engineering than productivity improvements…"
"There is a much stronger focus on extracting revenue, rather than the long-term health of a company … It creates risky financial structures. We've seen some retail companies collapse with this private equity structure," she added.
In this context the much-vaunted improvements over social ownership have vanished like the mist. Indeed the following offers a succinct appraisal of the realities of private ownership:
Ash Smith, a co-founder of the campaign group Windrush Against Sewage Pollution who has investigated water companies for several years, said: "The smell of privatisation and weak regulation reached far across the globe and attracted the most powerful and clever shareholders' funds.
"The deal was unbelievable – buy a refundable stake in a water monopoly and feast on the guaranteed annual bills from captive customers in exchange for nothing."
As the article notes although the owners are being pushed by government to improve service and pay for capital investment it is customers who have to foot the bills. Another pointless privatisation to add to the pile.
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