Feargal Sharkey has called on the government to “seize control” of Thames Water as the prospect of the firm being nationalised moves a step closer.
On Tuesday, the government objected to Thames Water’s proposed £10bn rescue deal put forward by the firm’s lenders. Environment Secretary Emma Reynolds told regulator Ofwat this week that the creditor-led plan could place an “undue burden” on customers, weaken performance standards and delay investment in infrastructure.
Reynolds said she did not want a scenario where Thames Water customers had to “pick up the bill for the company’s failures”.
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The deal would have handed control of Thames Water to its creditors, who offered to write off around half of the company’s near £20bn in debt. In return though, they wanted exemption from fines for pollution over the next four years.
Because of Thames Water’s enormous debt and limited alternatives after previous rescue efforts collapsed, rejection of this plan means it looks set to run out of money within months. If this were to happen it would enter the government’s Special Administration Regime.
Under that process, the state would temporarily take control to ensure water services continue while the company is restructured – effectively a form of temporary nationalisation.
Proponents of this solution say that it would give Thames a clean slate, allowing it to write off some of its losses and be sold without such a large debt pile.
Following the news of the government’s objection to the rescue deal, environmental campaigner and former Undertones frontman Feargal Sharkey has called on Reynolds to go further.
He told the Mirror the environment secretary must “seize control of Thames Water.”
Sharkey continued: “If the Secretary of State wanted to she has the power to do so today with the stroke of a pen. It is time to act. Thames Water customers have been paying for their own exploitation.”
Earlier this month, Sharkey was joined by Dirty Business campaigners Ash Smith and Peter Hammond at a protest outside the environment department to call for water companies to be brought under public ownership.
Sophie Conquest – Lead Campaigner at We Own It – said: “The privatisation of water is an ideological experiment which has failed abysmally.”
“The public knows that because we can feel it in our pockets, which are being emptied by water companies as they push up bills to hand over more money to faraway shareholders.”
“We know that because we cannot swim in our local rivers and seas, which are choked with sewage because water companies are choosing not to invest in essential infrastructure.”
“We know that because our supply of water is so relentlessly disrupted and disruptive – burst pipes, flooding, road closures and water outages have all become new norms.”
“And yet this government is trying to tell us otherwise.”
“Enough is enough. We pay for the water sector. We deserve to know the truth about where that money is going, and exactly how we are being failed.”
“The undeniable conclusion – when you look at the facts- is that we can’t afford to continue with privatisation. Water must come into public ownership, starting with special administration of the collapsing Thames Water.”
In his letter to Environment Secretary Emma Reynolds, Ash Smith – Windrush Against Sewage Pollution campaigner – said: “It is deeply concerning to see inaction justified by arguments that do not withstand even the most rudimentary fact checks”
“Decisive action has been taken in the past in other sectors, and what can be more important than water, public health and national infrastructure?”
“The government has shown it is not working from the evidence or applying the law designed to protect national interest and security; it is protecting the position of water company owners and creditors”