Thames Water - Inefficient, greedy or both?

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Matt King reviews the situation....

Hosepipe Ban

On Monday, 3 April 2006 , Thames Water introduced a hose-pipe ban on its 5 million household customers. The ban will affect an estimated 8 million people.

Thames Water has stated that the ban is necessary to preserve scarce water resources through what is expected to be a dry summer. If the region does not enjoy more rainfall, Thames Water may introduce further emergency measures, which may eventually culminate in all domestic water supplies being cut off, forcing people to obtain their water from standpipes in the street.

Millions of litres leaked every day

However, it is estimated that a staggering 914 million litres is leaked every day from water mains under the control of Thames Water. That is enough water to fill 11.4 million baths or, in other words, 1½ baths for every Thames Water customer. If these leaks were fixed � if even half were fixed � would London need a hosepipe ban? Would London live under the threat of supplies being cut off?

Thames Water has blamed the leaks on an ageing network of water mains and claims that it is spending £500,000 per day to fix the leaks, but it would appear that this is insufficient to prevent a third of all of its water being lost through leakage.

Hundreds of millions in dividends for shareholders

Thames Water may not direct enough money to fix leaks, but it found £141.2 million to pay in dividends to its corporate shareholders for the financial year ended 31 March 2005. In 2003/4, it was £136.1million. This is a list of Thames Water's dividends obtained from its own Annual Reports from 1997:

1997	£136.6 million
1998	£643.4 million
1999	£891 million
2000	£117.2 million
2001	£122.5 million
2002	£126.6 million
2003	£136.1 million
2004	£141.2 million

Price rises

The average water bill for Thames Wa ter for the same period from 1997 to 2005 has risen from £201 to £246, or 22.4%. In 2005, Thames Water announced that in the next 5 years, average prices would rise by a furth er 24%. If it were not enough that their prices rose in real terms by an enormous 44% from 1989 (when privatisation happened) to 1999, they now plan on pursuing their customers for a further price rise, which goes a long way beyond inflation and reason.

Millions in retained profits

The customers will be required to pay more even though Thames Water loses a third of all of its water in leaks every day and even though Thames Water announced in its most recent Annual Report that it currently has £57.3 million in retained profits.

Thames Water customers, most of them Londoners, are played for fools by a company that operates a virtual monopoly on the city. We are currently dealing with a hosepipe ban, facing inflation-busting rising prices and facing the threat of standpipes and yet Thames Water continues to pay hundreds of millions in dividends to its shareholders and continues to underfund its infrastructure, thus ensuring that nearly a billion litres of water is lost every day, more than enough to see us through the predicted drought of this summer.

Matt King

April 8, 2006