Privatised water firms

Date: 2020-07-02 06:33 pm (UTC)
dewline: Text - "On the DEWLine" (Default)
From: [personal profile] dewline
The whole idea ought to be tossed in the toxic trash bin.

Re: Privatised water firms

Date: 2020-07-02 07:38 pm (UTC)
haggis: (Default)
From: [personal profile] haggis
Sorry if you already know this but the water industry in the UK is very regulated, whether the companies are privatised or not.

The companies have to meet high legal standards for quality (and provide unrestricted access for testing) and can be fined/prosecuted if they fail to meet them. The overall standards are set by EU directives and individual sites have quality targets set by the Drinking Water Inspectorate or the Environment Agency. Their ability to extract water from rivers/aquifers is regulated by the EA and the prices they charge households is regulated by the DWI.

Every 5 years, each company has to present its plans to the DWI to upgrade their sites to comply with water quality standards and to meet environmental goals set by the EA. If the DWI doesn't think their proposals are value for money, they don't get the funding (from water bills) but they are still required to meet the standards.

As I understand it, privatisation means that the utility companies are completely separate from the regulators, which has improved transparency and the companies can borrow money to support innovation and investment, beyond the requirements of the DWI/EA. There are some daft things (they are v keen on selling off land and buildings and then finding that they need that land for new treatment stages or to get access for construction) and the process is grindingly slow but I am not aware of a distinction between the public and privatised companies in this regard.

They do fuck up sometimes and not everything works perfectly. However, the impression that I have got from working in the industry (as a designer for construction contractors, who in turn work for all the different UK water companies) is that company staff are genuinely motivated to provide clean, safe water, not to cut corners.

Despite how this post sounds, I am not particularly pro-privatisation or capitalism in general. However from what I have seen, the regulators and laws have kept the water companies from exploitation of resources, price-gouging and pollution that you might expect from a 'purely' capitalist enterprise, or the behaviour of companies like Nestle.

Re: Privatised water firms

Date: 2020-07-02 07:49 pm (UTC)
haggis: (Default)
From: [personal profile] haggis
I am really not intending to evangelise for privatisation or cheerlead for the privatised water companies. I am happy to hear criticism, different viewpoints or suggestions of alternatives. I just think this is an example of privatisation+regulation working well.

Re: Privatised water firms

Date: 2020-07-03 11:58 am (UTC)
haggis: (Default)
From: [personal profile] haggis
Can you explain what you mean by comparison with Scotland? I've done a bit of work for Scottish Water and didn't find them significantly different from the privatised companies I've work with.

Re: Privatised water firms

Date: 2020-07-03 11:22 pm (UTC)
mountainkiss: (Default)
From: [personal profile] mountainkiss
I know bugger all about this and tend to agree with you conceptually, but will offer a counterargument for the sake of exploration: if investors have supplied the funding that has enabled the utilities to do things they would not have been able to do whilst publicly owned, there is a case that dividends are fair and prosocial. (I have no idea if this is true and also cannot comment on scale.)

Re: Privatised water firms

Date: 2020-07-04 12:58 pm (UTC)
haggis: (Default)
From: [personal profile] haggis
That's basically my view. I wanted to clarify the difference between eg Nestle extracting water in an irresponsible way or Walkerton where the untrained owners created and then attempted to cover up a major E-Coli outbreak, and the situation in the UK where both publically owned and private companies are highly regulated on quality, environmental impact and cost to their customers.

Either of the current UK models are also better than the previous systems where water treatment was run by local councils. That limited investment and innovation and the result was a much more polluted environment. There has been a massive improvement in river and beach water quality in England and Wales since 1991.

Re: Privatised water firms

Date: 2020-07-04 01:39 pm (UTC)
haggis: (Default)
From: [personal profile] haggis
Possibly although there were EU directives before that.

The big problems (as I understand it) were
- economies of scale meant that lots of small council owned systems did not have the resources to look into innovative treatment methods or to run trials and evaluate them or run the complex geospatial modelling and modelling required to predict storms.

- you can get around this by combining them into bigger organisations. That works well for Scotland (pop 5.45 mil) but it's harder in England. UU supplies 7 million between Cheshire and Cumbria, which includes 23 local authorities. Cumbria's population and council has different needs and priorities to Manchester.

- council priorities are frequently going to place funding eg social care over funding expensive environmental improvements. And that's before you factor in different political parties running each council.

- local government funding is set by central government and is a perpetual easy target for cuts.

- If the council is fined for failing to meet water standards, will this lead to a change in leadership from the council, who are elected by an electorate who are largely apathetic about this area? And if they do an outstanding job (or turn a failing system into a successful one) - would the effort even be noticed? UU's investors may only care about money but the costs of prosecution means that poor operation puts their investment at risk.

- And slightly more contraversially, the change to non-council ownership resulted in outsourcing the design and construction parts of the process (which is where my company comes in). That costs a bit more per hour spent on design/construction BUT when the design/construction work is not required, the water company doesn't have to keep paying those engineers. And down the scale, my company has a mix of permanent and contract staff for the same reason. The contract staff get paid a higher hourly rate but have a weeks notice (and routinely mock the permanent staff as slackers and lightweights).

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