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A damning report should spell the end of England’s privatised water industry

The chief executive of the public regulator of private water companies in England and Wales (Ofwat) says the companies “have ‘created the perfect conditions for renationalization” as a result of their own actions. Writing in The Canary, James Aitchison says a damning report should spell the end of England's privatized water industry. “The report, by the University of Greenwich Public Services International Research Unit, compared the privatised English water industry with the public Scottish industry. It provides compelling proof that the privatized water industry in England is inefficient, unnecessarily overpriced, and benefits shareholders at the expense of consumers.” [The Privatised Water Industry in the UK: An ATM for Investors, by Karol Yearwood, September 2018]

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The Privatised Water Industry in the UK. An ATM for investors

This paper aims to critically evaluate the privatised water & sewage industry in England. We find that the public-owned sector in Scotland delivers the service just as efficiently, albeit at a lower cost to consumers. Our econometric analysis suggests that the 40% increase in real household bills since privatisation was mainly driven by continuously growing interest payments on debt, contrary to the regulator attributing them to growing costs and investments. Finally, we show that the accelerating debt levels are primarily the result of disproportionate dividend pay-outs, which exceeded the privatised companies’ cash balances in all but one year since 1989. We conclude that the way the industry operates may no longer be sustainable and seems to disadvantage consumers greatly without their knowledge, as there is a fog of misleading statements by the companies and the regulator.

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The sale of Palyja and Aetra: The two companies that supply drinking water in Jakarta

Since 1997, the supply of drinking water in Jakarta has been entrusted to two private operators — PT PAM Lyonnaise Jaya (Palyja) and PT Aetra Air Jakarta (Aetra). Palyja, whose majority of shares are owned by the French company Suez Environment, manages the water distribution in the West and South of Central Jakarta, while Aetra, owned to 95% by Singapore-based Acuatico, handles the Eastern and Northern parts of Central Jakarta.