Thames Water's Crisis: £15bn Debt, Privatisation, and Controversial Bill Hikes
Thames Water, the UK's largest water supplier serving 15 million people in London and surrounding areas, is in a financial crisis due to high debts and underinvestment since privatization.
The company's proposed massive increase in water bills has sparked controversy and speculation of a bailout, worsening the cost-of-living crisis and potentially being unpopular before a general election.
In 1989, the Conservative government under Margaret Thatcher privatized Britain's publicly-owned water and sewage industry, which had no debt at the time.
Thames Water was first listed on the London stock exchange and later acquired by RWE in 2001, and then by Kemble Water, a holding company led by Macquarie, in 2006.
Currently, Thames Water, which includes various holding companies like Kemble, has amassed nearly £15 billion ($18.7 billion) in debts, leading to concerns about potential renationalization.
Macquarie no longer holds a stake in Kemble.
Macquarie's debt levels significantly increased during its management, and the utility now operates under a "debt-driven" model, according to Katie Meehan of King's Water Centre.
Critics argue that previous major shareholders, including Macquarie, used debt to pay themselves large dividends.
Macquarie sold its stake in Thames Water's parent company, Kemble Water, in 2017.
Currently, the utility's largest shareholders are Britain's Universities Superannuation Scheme and Canada's Ontario Municipal Employees Retirement System.