I often go on about the failure of the media to explain to the great British public that there is no free lunch. That if you want doctors, nurses and teachers, they have to be paid. And that if you prefer your hospitals and school to be run as public bodies rather than by US corporations and their friends for profit, that means paying taxes, rather than paying them rather more, possibly a lot more. And that means the man in the street paying taxes. And that you are not going to balance the books by bashing the rich, attractive though that might at first appear.
In which connection I had thought that the present mess that Thames Water has got itself into might provide a useful lesson. Something along the lines that if you sell a cash-cow for ready cash, you have to accept that the buyer is going to want to carry on milking the cow. And striking a reasonable balance between the owners of the cow, that is to say Thames Water, and its consumers is going to be tricky. But at least, if the owners threaten to walk away because they can no longer make a decent return, the consumers are going to have to think a bit harder about what is fair. And furthermore, if you strip away all the financial jiggery-pokery, in the end, one way or another, the consumers have to pay for the huge amount of investment that is needed.
Leaving aside what might be described as Macquarie's asset stripping operation. Which is probably not explained at reference 1.
However, having spent a modest amount of time on the matter this evening, I give up. It is just all too complicated. Beyond confirming that privatisation was a bad mistake - one not made by most other countries - I am not much further ahead. But I offer a few tit-bits for those with more energy than I.
Item 1, snapped above, from JP Morgan, is an expanded version of the diagram offered at reference 2. From which I at least manage to learn that about 30% of all this is in aid of pensions for civil servants in Ontario. Which one might have thought was a worthy enough cause.
Item 2, reference 3 is a reminder that the bills we consumers get from Thames Water are as difficult to understand as the financial shenanigans which, until recently anyway, did keep them afloat.
Item 3, I tried asking Google's Gemini what Macquarie, cast by some as Mr. Bad in this story, paid for Thames Water in the first place, back in 2006. The idea being to make some stab at what would be a fair return on their investment. Gemini was fairly guarded, but suggested that the purchase price might have been around £8bn, with Macquarie stumping up around 10% of that. He also offered a few tips about how I might go about finding out more for myself. In the meantime, £8bn seems an oddly small number compared with the £18bn debt the group is said to have at reference 4. A lot of which I understand to have wound up with Macquarie in the form of divis.
Item 3, for those with a strong stomach, I offer the ten year old reference 5. Where a very quick skim suggests that the financial wizards on the case for Kemble are running rings around their oppos at the regulator. And I don't suppose that things have changed that much in the intervening ten years.
PS: Gemini is not as helpful as Microsoft's Copilot can be when it comes to giving sources for the information that he offers.
References
Reference 1: https://www.macquarie.com/uk/en.html.
Reference 2: https://psmv5.blogspot.com/2024/03/trolley-656.html.
Reference 3: https://psmv5.blogspot.com/2023/07/watery-muddle.html.
Reference 4: Thames Water owners to begin urgent restructuring talks: Political headache intensifies for Sunak as utility’s parent company Kemble dices with insolvency - Gill Plimmer, Jim Pickard, Financial Times - 2024.
No comments:
Post a Comment