How UK’s biggest water supplier sank into crisis

Thames Water, the UK’s largest water supplier, has been ravaged since privatisation by soaring debts and chronic underinvestment, sinking into a deep financial crisis which has sparked bailout speculation.Britain’s publicly-owned water and sewage industry was privatised in 1989 under the Conservative government of then-Prime Minister Margaret Thatcher. At that point, the sector had no debt.Critics accuse successive major shareholders of using debt to pay themselves generous dividends.When faced with accusations of past under-investment, Macquarie insisted last year that it had “supported the company to invest more than £11 billion in its network”, adding that increasing debt had also been offset by a doubling in the value of Thames Water’s assets.Thames Water’s woes accelerated in early April when Kemble defaulted on a key interest payment on a debt of £400 million, sparking media speculation that it was on the brink of collapse and renationalisation.Thames Water on Monday wrote to industry regulator Ofwat to request a 44-percent jump in water bills, in return for greater investment in infrastructure and environmental practices over the next five years.

Source:

World News | International News Headlines | Guardian Nigeria