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by gramie 139 days ago
The BBC said (https://www.bbc.com/news/articles/cw4478wnjdpo) that in 30 years, private water and sewerage companies in England and Wales have extracted over 86 billion pounds (~USD $115 billion), while investing very little.

Meanwhile, consumer water rates in those areas increased by as much as 50% in the past year alone.
2 comments
rayiner 139 days ago
What is the number? It is a huge red flag if you see an article that cites a profits number without citing a number for capital invested. You literally cannot reach a conclusion either way without comparing the two numbers.

EDIT: The UK water regulator has the capital investment data here: https://www.ofwat.gov.uk/publication/long-term-data-series-o.... What does it say?

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PaulDavisThe1st 139 days ago
> You literally cannot reach a conclusion either way without comparing the two numbers.

You certainly can reach a conclusion, and the GP did.

What you can't do is to compute the rate on return on their investment. But as a user of a water system, why do I care about that?

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rayiner 139 days ago
You cannot reach a conclusion. A conclusion is a rational thing based on comparing realistic alternatives.

As the user of the water system you do have to care about the return on investment. Because the alternative is to have the government take out bonds to pay for that work, and you’d have to pay the interest on those bonds with your tax dollars.

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PaulDavisThe1st 139 days ago
The conclusion in this case is very simple: 86 billion has been taken in profits, with very limited capital investment.

Now .. what to do about that? That's a bit more complicated, but we could at least start from the premise that had the water systems been public, that 86 billion could have been spent on capital investment without a single bond being issued.

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rayiner 139 days ago
> The conclusion in this case is very simple: 86 billion has been taken in profits, with very limited capital investment.

What is the number for the capital investment? You’re comparing a number to words. That’s a type error.

> That's a bit more complicated, but we could at least start from the premise that had the water systems been public, that 86 billion could have been spent on capital investment without a single bond being issued

Not without knowing how much capital has actually been invested to date. Because you’d be have paid out interest and principal on that over 30 years out of that 86 billion.

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PaulDavisThe1st 139 days ago
I'm the board of my local (rather small) water system. Most of our capital investment is done by spending what we raise from our members/customers, and we try hard not to require loans unless absolutely necessary.

A larger water system has bigger capital projects, but also a larger customer base (and they also likely charge more per liter of water than we do). So it is absolutely not a given that capital investment in water infrastructure requires bonds or loans (though I acknowledge that these likely cannot be avoided).

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spwa4 139 days ago
The UK has an economic and corruption problem, not a water problem. In fact, it's probably got too much of all 3.
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