Gee, You Think

It appears that the radical Marxists at the Financial Times have finally noticed that privatizing municipal water service are basically a license to steal, with a soupcon of incompetence thrown in:

How hard can it be to be the chief executive of a privatised British water company? Your customers are determined by geography, your prices set by a regulator and designed to offer ample scope to fund both capital expenditure and to pay returns to your investors. Pretty much all you have to do is to make sure your sewage plants work and to keep the public waterways clear of human waste.

Yet even this bare minimum seems to have eluded Martin Baggs, the former boss of Thames Water. He, you might recall, was the man at the corporate stopcock when the utility’s malfunctioning plants spilled so much excrement into the Thames that locals in the Berkshire town of Little Marlow took to referring to the scum-covered surface as “crappucino”. The company was this year fined a record £20m for venting 4.2bn litres of raw sewage into the rivers Thames and Thame between 2012 and 2013.

Not that this escapade unduly crimped Mr Baggs’ career prospects. Despite evidence of negligence in its operations that later led a judge to brand the company’s actions “borderline deliberate”, he not only prospered after its disclosure, but received a rise of 60 per cent in 2015, taking his pay to a princely £2m. He stood down last year, showered with encomiums for his “huge contribution”.

To be fair to Mr Baggs, he is not alone. The boring job of plumbing seems almost an afterthought in determining the rewards of water supremos. Not only is pay uniformly high: Steve Mogford, chief executive of United Utilities, collected £2.8m last year, for instance. But if things go wrong, well, why should a bit of sewage stop those cheques rolling? In 2016, Yorkshire Water was fined £1.7m for polluting a lake near Wakefield and a section of the River Ouse. But that didn’t prevent it handing its boss Richard Flint £1.2m.

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The regulator needs to look again at the generosity of its regime, and its cock-eyed governance. As things stand, water privatisation looks little more than an organised rip-off. Quite why this natural monopoly should not operate through not-for-profit, public interest companies is ever less clear.

This observation is not a surprise, though the source is a bit of a shocker.

This is what happens when you privatize water: higher prices and (literal) random sh%$ty events.

The above article being about the UK, we aren't seeing riots as happened in Bolivia, but it's still an ugly picture.

Unfortunately, our current international trade regime makes deprivatization extremely difficult, which is another reason to oppose those deal.