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By EDWARD HEATHCOAT AMORY, Daily Mail 08:45am 22nd June 2006
Thames water is a bad advertisement for privatisation.
Yesterday, the monopoly supplier of water to Britain's capital city saw profits rise by 23 per cent. Meanwhile, it failed dismally to meet its performance targets and has imposed a hosepipe ban on customers who, last year, were hit with a 20 per cent price rise.
Every warning issued by the critics of water privatisation is apparently coming true. But it's not privatisation that is to blame. Instead, it is years of weak and inept regulation.
In theory, consumers are protected by the water regulator Ofwat. But this toothless quango, led by a former civil servant and Anglican lay preacher called Philip Fletcher, has conspicuously failed in its duty.
Thames Water was bought six years ago by RWE, a German utilities giant. Since then, the company has removed almost £1billion in dividends, with the money returning to Germany (£256million this year alone).
At the same time, this monopoly supplier has raised prices and kept investment to a bare minimum. Later this year, the bosses hope to sell the company for £8billion. Perhaps they sense that they are not going to be allowed to get away with daylight robbery for much longer.
Water companies in the South East of England face two main problems. Rising demand, as John Prescott allows millions of new homes to be built without giving the slightest thought to how they will be supplied with water, and leaks.
The staggering truth is that in London, one third of all the water that Thames pumps into its pipes seeps away before it gets to homes and businesses.
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