| Topic: | Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Re:Another Thames Water blunder or just plain arrogance? | |
| Posted by: | Mike Hardacre | |
| Date/Time: | 08/06/06 09:38:00 |
| All this criticism of Thames seems to forget that it is a public company with shareholders and the primary responsibility of the directors is to meet their needs. Thames may be losing a lot of water through leaks but the action to repair this will depend on what is considered in the best interests of the people who own the company. That a substantial amount of new building has taken place in their area does not oblige them to meet that need if the investment to do so would be uncommercial. It is not possible or indeed fair to weigh Thames Water with new obligations which weren't in the prospectus when the company was originally listed. If the level of leakage in the system was felt to be important then covenants should have been included that obliged the company to meet certain standards. This would have lowered the price that investors were willing to pay bringing in less money for the Treasury so it wasn't done. Thames actually invested more in the last financial year (£600 million+) than their profits (£385 million) and over the next 5 years they will be investing over £3bn. The water rates in London are much lower than other parts of the country despite the unique challenges that the area provides. The rights of faceless corporations may seem to be less important that the rights of individuals but if any Government embarks on the road of overriding them in response to a populist clamour they will soon be looking for the next target. These companies will be part of your pension scheme so ultimately you end up paying the price. |