The pathetic system for water regulation provides massive incentives for companies like Thames Water to cheat. The way this works is brilliantly exposed in a recent blog by WASP (Windrush Against Sewage Pollution).
In short, its all about RCV (Regulatory Capital Value). By massively inflating the true value of its assets Thames Water is able to borrow more, charge more, and extract more profit for its shareholders.
The technicalities about how this works are set out clearly in the piece. The real life impact on our pockets, on nature, and the crumbling infrastructure are all too obvious.
35 years of so-called regulation of this grotesque private monopoly have failed. It must be brought back into public ownership, and democratic control.
