It reads like satire, doesn’t it? The most indebted water company in Britain, responsible for fouling our rivers and short-changing its customers, is now poised to fall into the hands of one of Wall Street’s most notorious private equity giants — KKR. If that name rings a bell, it should. It’s the same firm immortalised in Barbarians at the Gate, the real-life saga of greed and leveraged buyouts that led to the corporate cannibalism of RJR Nabisco.
Only this time, the target isn’t a tobacco company. It’s the water flowing from your tap.
Thames Water, once debt-free at the time of privatisation under Margaret Thatcher’s misguided free-market experiment in 1989, now sits on a £19 billion mountain of liabilities. And yet, the answer, we are told, is to pile on even more debt — a staggering £22 billion should the deal with KKR proceed. It’s as if we’ve learned nothing in the last three decades.
This isn’t a plucky little startup. This is a monopoly that supplies drinking water to 15 million people across London and the Thames Valley. A basic, life-sustaining service — not a commodity to be bought, flipped, and drained of value. And yet, here we are again, letting private equity firms who know the price of everything and the value of nothing circle like vultures.
To be fair, Thames Water’s collapse didn’t happen overnight. Its rot truly began in 2006 when Australian investment bank Macquarie acquired it, loading the utility with debt while extracting over a billion pounds in dividends. Like a vampire in kangaroo disguise, they sucked Thames Water dry and left behind a husk too weak to invest in the very infrastructure we pay for.
In return for our bills — which just increased by a blistering 26% — we get untreated sewage poured into our rivers, nearly 10,000 hours’ worth in London alone last year. Blackened waterways, dead fish, environmental fines, and broken promises. And worst of all, schemes meant to protect the environment — which customers have already paid for — remain incomplete.
If you think the regulator Ofwat will ride to the rescue, don’t hold your breath. Time and again, it has either looked the other way or nodded along as Thames Water was gutted for profit. Now it appears poised to oversee yet another ownership transfer that will do nothing but compound the misery.
Earlier this year, the High Court laid bare the brutal truth. In the hearing over Thames Water’s plea for a further £3 billion bailout, it was revealed that half of that sum — £800 million — would vanish straight away, eaten up by sky-high interest charges, commissions, and fees. The court was so stunned, Master of the Rolls Sir Geoffrey Vos described the costs as “eye-watering” and expressed bafflement at how the company could justify them.
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It’s a bitter irony that a service privatised to bring “choice and efficiency” now offers neither. Customers can’t opt out. And efficient? Hardly. The only thing that’s been efficient is the siphoning of cash to shareholders.
What should happen is simple. Thames Water must be placed into special administration — effectively temporary renationalisation — so its operations can be stabilised, its debts assessed, and its future secured in the public interest. But instead, we get KKR, whose record of asset-stripping and profiteering makes them the very last people who should be anywhere near our water supply.
It is a betrayal of public trust and an insult to the millions who pay their bills in good faith. Governments of both stripes have let this rot fester. And unless they act decisively now, they will be complicit in yet another act of economic vandalism.
This isn’t just about water. It’s about who we allow to profit from our most essential services. If KKR is the answer, then we’re asking the wrong question.
