Interesting project for sure, I was not aware of this undertaking, but I had heard of the overflowing issue. The video linked by Geiko gives a much better insight in the project itself. I realize...
Interesting project for sure, I was not aware of this undertaking, but I had heard of the overflowing issue. The video linked by Geiko gives a much better insight in the project itself.
Struggling Thames Water will take over once the tunnel is fully operational and its customers can give themselves a pat on the back: they’re paying for it through their bills.
I realize this is likely a snide remark towards the utility company failing to invest into infrastructure after privatization. At the same time, if it was not a private company funding would still need to come from somewhere, which likely would be something like local taxes.
At the very least, that sentence lacks the proper context for it to be included like that. It reminds me of stereotypical UK tabloid reporting to me, where I feel like this website is actually trying to be better than that?
The Thames Water situation is a major political story that's bubbling ominously in the background, so readers are expected to be on top of it. England's water companies are regulated by Ofwat, a...
The Thames Water situation is a major political story that's bubbling ominously in the background, so readers are expected to be on top of it.
England's water companies are regulated by Ofwat, a government agency. Ofwat regulates water companies' finances as well as their services. To get around this, Thames Water (which is regulated) is wholly owned by another company, Kemble Holdings (which is unregulated). Kemble (the name comes from a village near the source of the Thames) is owned by a few foreign sovereign wealth funds (Abu Dhabi, amongst others) and pension funds (only one of which is British).
Thames Water has run up about half a billion pounds of debt, with the approval of the regulator. Kemble has about £16 billion of debt. Thames has enough money to run until next May, Kemble can't pay its debts. Kemble's owners have stated that they now consider the company to have a market value of zero.
His Majesty's Government can't buy Kemble, even for a nominal value of £1, because that would mean taking on the £16 billion pounds of debt, which it can't afford to do, because the previous government has left it an annual budget shortfall of £22 billion. It can't buy just Thames Water because that would leave Kemble with billions of debt and no way to make any income, so Kemble won't sell Thames.
So far, there have been no announcements from the government about what it will do.
I don't understand how these fit together, it's owned by wealth funds that have no wealth? How does that make sense - what's stopping them running up billions of debt for their own gain and just...
Kemble is owned by a few foreign sovereign wealth funds and pension funds
Kemble can't pay its debts
I don't understand how these fit together, it's owned by wealth funds that have no wealth? How does that make sense - what's stopping them running up billions of debt for their own gain and just walking away?
I guess that's what you get when you put public infrastructure in the hands of a private corporation...
Kemble's shareholders bought it from Macquarie Bank, which is a cartoonishly evil investment bank based in Australia. Macquarie has the most creative accountants in the Southern hemisphere -...
Kemble's shareholders bought it from Macquarie Bank, which is a cartoonishly evil investment bank based in Australia. Macquarie has the most creative accountants in the Southern hemisphere - they'll follow you into a revolving door and come out first.
So they bought the water company and then discovered it was in a right state, so they put some money in to try to improve things. Of course, they only reason they did this - and bought it in the first place - was to generate a return on their investment. Unfortunately for them, the infrastructure was in such a state that they don't have enough money to fix enough problems to make it actually profitable, so their investments are mostly going towards limiting how quickly things get worse.
The B1M did a video on this a while back. Really impressive stuff:
https://youtu.be/LW-Jhg0cZsk?si=EQTJpD0jermEDKBk
Interesting project for sure, I was not aware of this undertaking, but I had heard of the overflowing issue. The video linked by Geiko gives a much better insight in the project itself.
I realize this is likely a snide remark towards the utility company failing to invest into infrastructure after privatization. At the same time, if it was not a private company funding would still need to come from somewhere, which likely would be something like local taxes.
At the very least, that sentence lacks the proper context for it to be included like that. It reminds me of stereotypical UK tabloid reporting to me, where I feel like this website is actually trying to be better than that?
The Thames Water situation is a major political story that's bubbling ominously in the background, so readers are expected to be on top of it.
England's water companies are regulated by Ofwat, a government agency. Ofwat regulates water companies' finances as well as their services. To get around this, Thames Water (which is regulated) is wholly owned by another company, Kemble Holdings (which is unregulated). Kemble (the name comes from a village near the source of the Thames) is owned by a few foreign sovereign wealth funds (Abu Dhabi, amongst others) and pension funds (only one of which is British).
Thames Water has run up about half a billion pounds of debt, with the approval of the regulator. Kemble has about £16 billion of debt. Thames has enough money to run until next May, Kemble can't pay its debts. Kemble's owners have stated that they now consider the company to have a market value of zero.
His Majesty's Government can't buy Kemble, even for a nominal value of £1, because that would mean taking on the £16 billion pounds of debt, which it can't afford to do, because the previous government has left it an annual budget shortfall of £22 billion. It can't buy just Thames Water because that would leave Kemble with billions of debt and no way to make any income, so Kemble won't sell Thames.
So far, there have been no announcements from the government about what it will do.
I don't understand how these fit together, it's owned by wealth funds that have no wealth? How does that make sense - what's stopping them running up billions of debt for their own gain and just walking away?
I guess that's what you get when you put public infrastructure in the hands of a private corporation...
Kemble's shareholders bought it from Macquarie Bank, which is a cartoonishly evil investment bank based in Australia. Macquarie has the most creative accountants in the Southern hemisphere - they'll follow you into a revolving door and come out first.
So they bought the water company and then discovered it was in a right state, so they put some money in to try to improve things. Of course, they only reason they did this - and bought it in the first place - was to generate a return on their investment. Unfortunately for them, the infrastructure was in such a state that they don't have enough money to fix enough problems to make it actually profitable, so their investments are mostly going towards limiting how quickly things get worse.
Wow. A cautionary tale if ever I heard one.