[another-dave]

I mean, all the more reason it shouldn't be privatised. If it only makes sense to have one of something (road network, water system) it's a natural monopoly, _and_ it's going to require large public investment to be maintained, why wouldn't you in-house the expertise needed to do that and avoid the shareholder dividends overhead?

[qcnguy]

The overhead of having shareholders in this case is minimal. The profits they make are small, but having a goal of making profits does create discipline in resource usage.

The water system is like the electricity system. It's perfectly possible to have inflows and outflows be fully private, as long as the government keeps its hands off the pricing. The network itself can also be run privately, as both supplier and buyers want supplies to flow. The trick is to ensure there are numerous different companies with the expertise to maintain pipework and then allow local communities to quickly change to different contractors.

[KoolKat23]

This is why the state owned company structure exists. The board and management are correctly incentivized and the profit can be reinvested if necessary. No parasites.

You need a counterbalance to efficient resource use, usually competition ensures they don't skimp, that doesn't work with natural monopolies.

[juuular]

Kind of shows how toxic things have become in our culture when people need to be bribed with profits to provide the basics necessary for a society to function, instead of just being incentivized by wanting a functioning society.

[lazide]

Cynically, if you’re someone trying to make a lot of money, why wouldn’t you take a well run system, convince people they can save a bunch of money by ‘cutting waste’, then pocket as much money as you can by cutting long term maintenance and pocketing the difference - and when it blows up, sell them the solution at inflated prices too?

It seems like the voters actively encouraged this kind of behavior.

Eventually people figure it out (maybe) and go all fire and pitchforks - but that sounds like a problem for ‘future me’ eh?

And if you’re good at structuring everything, maybe they’ll never even have anyone concrete to blame but themselves! (Classic referendum/politician behavior there)

[mtrovo]

I can't understand the perspective of those who defend privatizing natural monopolies. I'm not against privatization in any way, but good governance is impossible without consequences for failure.

Focusing on Thames Water's particular example, if we assume malice as the cause, what would be the potential consequences? While the government could impose fines, the possibility of non-payment exists and what would happen in that case? Instead of debt collectors taking action, like ripping pipes from the ground or causing pension fund collapse, the government would act as a last resort investor, potentially providing further funding for a few additional years before the situation likely repeats.

[lazide]

Notably, public utilities are often seen as ‘above consequences’ too when part of the gov’t, since usually governments make it impossible to sue them or give them real consequences either.

In theory, with privatization the gov’t can arrest people or the like. The gov’t very rarely does that to itself.

Politicians can be swapped out of course, but most smart ones setup scape goats and a lot of levels of abstraction so they can claim successes and point the finger elsewhere if it goes wrong.

[krona]

My point is the differences you're postulating are a rounding error in the scale of the problem in front of you.

[another-dave]

> Taken together, the fall in shareholders' investment and retained earnings - or profit - and rising dividend payments mean that, according to the University of Greenwich, owners have withdrawn £85.2bn. > > — BBC (https://www.bbc.co.uk/news/articles/cw4478wnjdpo)

It might be a rounding error vs the scale of investment needed for water, but that investment is needed regardless of public or private ownership.

It's not a rounding error in terms of gov investment elsewhere — imagine an extra £85bn invested in, say, social housing? Even as a single one-off