How can Ofwat (UK Water Regulator) state it will allow UK and Welsh water companies to apply massive increases in price? http://news.bbc.co.uk/1/hi/business/4060823.stm
"Water firms say the extra cash is needed for maintenance and improvement work and environmental projects."
WTF? Most of these companies are making huge profits for their shareholders. So why can't they take some of that money and use it for maintenance and other projects - making a little less profit?
Instead the weak UK regulator is effectively allowing a stealth tax on the populace, which as usual will hit the poorest hardest. It's the same story with the other privitised utilities - weak, poor regulation.
I would like to see a cap on all Water company profits during this price rise. Any profit in excess of the cap to be returned to the TAX payer. For God's sake, we all need to drink and this rise is going to punish those already in desperate situations.
dear sir, it has com to my attention that you do not understand the way things work to finance these works well let me make this as simple as i can you want the water we provide so guess who pays, and they funny thing abuot this is you have no choice as the goverment get direterships within departments with the finances to go with the high job so any body who complains to any department is told this is another departments resonceability. so the merry dance you have to make to have any complaint is passed and passed and passed untill youy the customer gives up due to the expence in phone calls emails etc. great system you will find in most public and private sectors.
Originally posted by stokerAnd now the sensible answer.
dear sir, it has com to my attention that you do not understand the way things work to finance these works well let me make this as simple as i can you want the water we provide so guess who pays, and they funny thing abuot this is you have no choice as the go ...[text shortened]... ence in phone calls emails etc. great system you will find in most public and private sectors.
Quite often the various Regulators are bound by European drafted legislation that UK has had to adopt in some shape or form. So the Regulators are not as powerful as they first appear and have set criteria under which they must act. I haven't read the UK adoption of this particular piece of legislation as I deem that I have a life, however, it is fair to say that they are forced to weigh up the maintenance of the networks, the normal profits and the subsequent pricing.
Not much help, but it is not as simple as the Regulators not doing their jobs.
And now for the real answer.
I'm afraid its all to do with globalisation and privatisation policies led by the IMF and the World Bank. History is repeating itself over and over on this one, except pretty much up to now the public services which corporations were wrecking were in 3rd world countries, some with corrupt leaders.
How it works is like this... Corporation comes in offering to take non profit making public service from the government. Normally for nothing, or a nominal fee. Then this corporation normally makes a nice donation to the specific leaders favourite 'charity'.
This corporation then owns a previously public service, which is normally competition free; water, rail, electricity. The corporation then starts massive regimes of cost cutting, headed by massive redunancies. People dismiss this due to the fact that government services are notoriously inefficient. These redundancies, and subsequent reduction in spending and time on maintenance aren't immediately noticable. Over time however, the service will become unreliable as problems mount up and are 'fixed' as cheaply and with as little time as possible.
After some time, all these problems manifest themselves in blackouts within an electricity company (North-East America), water-shortages/cut offs in a water company (Thames area) and disasterous crashes (rail).
The corporations then announce to the public that the service needs a massive injection of cash cos of the state of the system. This is normally given in the form of a government subsidy, ie: the average tax payer pays it, OR charges are increased for provision of the service, ie: the average tax payer pays it.
Here's a good article on World Bank workings...
http://www.jubileeplus.org/analysis/articles/IMF_Four_steps_Damnation.htm
A book I'd recommend reading if you're interested is 'The Best Democracy Money can Buy' by Greg Palast. This is his take on the big electricity blackout in North East america last year...
http://www.gregpalast.com/detail.cfm?artid=258&row=1
D
move to scotland - the water supply there is still maintained by the public sector, in the form of Scottish Water, the funding of which is collected by local authorities together with the Council Tax. i doubt the population of a country where so much rain falls would accept privte companies making a profit from it...