The torrent of sewage that poured into Tommy Stadlen’s west London home left his wife waist-deep pregnant in a sea of gray-brown liquid, dead rats rushed into the apartment of his neighbor – and a strong conviction that the water bills he had paid for 15 years had not quite delivered the quality of service expected.
The immediate cause of the floods, which closed roads, metro stations and shops in the British capital in July, was a heavy downpour that caused a month of rain in 90 minutes.
But while extreme weather conditions, increasing population density and unconstrained construction contributed to toxic flooding, they were also the result of decades of underinvestment in the country’s water infrastructure.
“It’s the wealthiest borough, in one of the richest countries in the world and yet it lacks a functioning sewage system,” Stadlen, a tech entrepreneur, told a crowded Kensington town hall in attended by Thames Water and many other frustrated local residents in September.
While public anger at the water companies has boiled for years, it has flared in recent months, as unknown amounts of raw sewage and stormwater have been repeatedly dumped into rivers and British seas, increasing pressure on government and regulators to act.
The industry is now facing its biggest wave of protests since being privatized more than 30 years ago, as activists, from Windrush Against Sewage in Oxfordshire to Ilkley Clean River in Yorkshire, attempt to force the companies and policy makers to act.
Their efforts have garnered the support and publicity of celebrities, including Feargal Sharkey, whose Twitter campaign secured a vote in parliament for action against sewage pollution, and Bob geldof, who urged residents of his home in a town on the Kent coast to stop paying their water bills.
The main focus of activists has been storm overflows – the 15,000 pipes that dump sewage into rivers and seas when it rains.
Despite the unpleasant consequences for swimmers and wildlife, a certain amount of this spill is permitted under Environment Agency rules. But until recently, most pipelines were unmonitored, and water companies were responsible for reporting their own violations. The environmental watchdog has launched an investigation to find out whether companies have exceeded legal limits.
The new environmental law requires water and sewer companies to reduce overflows, but there is no set timetable or quantifiable targets. The government is required to publish a new overfill reduction plan by September 2022.
But if the pressure for change is there, the money is not. This month, the sector regulator, Ofwat, warned that at least two providers – Southern Water and Yorkshire Water – were in such poor financial health in March that there were concerns about their ability to make improvements. environmental. Yorkshire Water said its “financial structures are strong and resilient”. Southern has since been acquired by Australian infrastructure manager Macquarie.
Investment fell as dividends poured in
The privatization of regional water providers in England and Wales 30 years ago came with a pledge that investors would make much-needed improvements to the country’s sagging water system.
Although there was an initial increase in spending, as some companies sought to comply with EU water quality guidelines, a Financial Times study found that the total capital spending of the 10 largest monopolies of water and wastewater had fallen by 15% since the 1990s, from £ 5.7 billion to £ 4.8 billion per year.
One exception is Thames Water, which has increased spending, but not enough to stop leaks and broken pipes.
During the same period, the businesses – which were sold debt-free and received £ 1.5bn – borrowed £ 53bn, the equivalent of around £ 2,000 per household. Much of that was not used for new investment, but to pay out £ 72bn in dividends.
“The goal of the private water companies has indeed been to maximize profits,” said Dieter Helm, a utility expert at the University of Oxford.
Aging pipelines absorb the investment
The problem now is that with high debts for the service and aging infrastructure to maintain, water companies have little financial room to upgrade their Victorian-era pipelines, even though customer bills have risen by nearly. by a third since 1991.
A water industry executive said companies were spending more to “maintain deteriorating assets than to replace them.” He cited as an example the use of water jets to deal with blockages. “They are a poor substitute for improving the sewage system and will accelerate the deterioration of the pipes,” he said.
Olivia Jensen, senior scientist at the National University of Singapore, said that in Singapore, the responsible government department has an active management plan that includes leak detection systems. “It’s very different from England, where the focus has been on leveraging more of the existing system rather than building a system that will work well in the future,” she said.
Ofwat, which sets limits on how much water companies can take from bills to invest, said overall spending, including maintenance, rose 42% from £ 3.9bn to 5 , £ 6 billion a year since the 1990s. He said some expenses, such as sustainable drainage systems, would not have been included in the overall capital expenditure figures.
There has also been some improvement in transparency around sewage spills, with new electronic monitoring devices attached to the pipes. Water companies will be required to publish thunderstorm overflows within an hour, which does not reduce pollution but at least helps protect public health by providing warnings.
But that still doesn’t solve the problem of how to pay for infrastructure upgrades to reduce sewage outflows.
A recent government commissioned report estimated the cost of clearing storm surges to be between £ 350 billion and £ 600 billion, an unrealistic sum for businesses to pay that could add up to nearly £ 1,000 on annual customer bills.
Even smaller improvements – such as reducing discharges into ‘sensitive basins’ by three-quarters – would likely cost at least £ 18bn, according to the report.
However, many companies believe they can make substantial improvements at a lower cost.
Southern Water, which received an emergency £ 1bn injection from Macquarie in August, a month after the company was fined a record £ 90m for dumping billions liters of raw wastewater in rivers and seas, pledged to halve pollution incidents by 2024. compared to 2019, while ensuring that bills do not increase by more than inflation.
It estimates the cost of replacing its total sewage system at £ 50bn, but will complete major upgrades to its existing infrastructure, half of which was built before the 1970s, at a cost of £ 2bn. pound sterling.
The industry body, Water UK, said it was “pushing the government to encourage Ofwat to allow programs that meet. . . environmental goals, including ending all ecological damage caused by overflows, securing a resilient water supply and achieving our ambitious goal of net zero by 2030. ”
But Ofwat said companies “should focus on improving their performance before asking customers for more money.” “The water companies have a lot of money to invest, with a £ 50 billion deal. . . for the next five years ”.
Helm argued that it was “implausible” that the regulator could allow companies to raise their prices enough to pay for the extent of upgrades required during the next regulatory period, especially when customers are struggling. with inflation and interest rate increases. He said broader reform of the regulatory system was needed. Others, like We Own It, a campaign group, are calling for renationalization.
Back in Kensington, Stadlen pledged to continue fighting on behalf of the flooded residents. “We will not allow incompetent bureaucrats and cost-cutting private companies to default on them,” he said at the September meeting.