Thursday, June 29, 2023

Why Water is a Commodity continued

Britain’s model of privatised utilities is facing its biggest crisis since Margaret Thatcher was selling off the the family silver in the 1980s.

Thames Water, the UK’s latest water company, is in emergency talks with the water regulator Ofwat, ministers and government departments, amid concerns it needs a multibillion cash injection to keep operating.

The water company, which serves 15 million customers, could be put into temporary national ownership by ministers to secure a refinancing package.’

The government has “no true grasp on the costs” involved in preventing a collapse of Thame Water, with estimates presented to ministers and regulators suggesting the company could be facing a hole of £10bn in its finances, the Guardian can reveal.

The water company, which serves 15 million customers, is in emergency talks with the water regulator Ofwat, ministers and government departments after the departure of its chief executive and concerns over its ability to continue operating without a multibillion cash injection.

 Measures under discussion include placing Thames into temporary national ownership, in order to secure a refinancing package. That could mean public funds and higher bills for customers may be needed.’

For decades, water firms, which were handed a monopoly with no debts at privatisation in 1989, have been loading up debt to pay dividends while failing to adequately invest in the infrastructure to fulfil their legal duty: to provide clean water to customers and treat their sewage.

Signs of the precarious financial situation that many privatised water companies have put themselves in have been clear for many years, as they loaded up debt to pay dividends.

The Sun reports, ‘Government plans to temporarily nationalise debt-ridden Thames Water should it collapse ‘

One option that emerged from contingency talks is to place it (Thames Water) in special administration, in effect nationalising it briefly…’

The call for nationalisation of Thames Water in particular and utilities in general will no doubt reach a crescendo. State ownership isn’t the solution.

The replacement of capitalism by Socialism is.

Let us not forget that clean, sufficient water available on demand is an issue for many millions across the globe.

Privatisation of water utilities isn’t the main problem. The problem is that water fulfils the necessary functions of a commodity and ‘Commodity production is a hall-mark of capitalism.’ The shareholders of Thames Water, and others, are aware that its primary function is to make profits and increase their dividends.

This Blog has posted separately a piece from the Socialist Standard, November 1989 which explains in depth why water is a commodity.

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