The water regulator has blamed Moody’s, the credit rating agency, for stoking the industry’s financial crisis by not calling out operators such as Thames Water when they took on unsustainable debt.
Ofwat has reproached Moody’s for certifying Thames Water’s debt as investment grade until recently, despite evidence of a fall in shareholder support and the group’s poor performance over a long period.
David Black, the chief executive of Ofwat, outlined his concern when he spoke to guests at Moody’s conference in October.
The actual basic fact here. OfWat will not announce prices etc for the next 5 years until Dec 19th. There can be no resolution of anything until what people can charge is known. Therefore the delay in sorting this out is down to OfWat.
Which is why OfWat is blaming someone else, oviously.
WTF would Ofwat know about credit rating?
Imagine the howls of outrage from OfWat if the credit rating agencies had screwed up their cosy little system by down-grading the water companies years ago.
Suddenly the lack of investment would all have been the rating agencies’ fault for restricting the water companies’ borrowing.
Oddly enough, my water bill is a tiny fraction of my gas and electricity bills, and is about the same magnitude as a couple of mobile phones and an internet connection done on the cheap. The water bill also pales into insignificance compared to the cost of running a car (fuel, car tax, insurance, service etc) or paying the local councils (parish, district and county where I live) to do what seems like fuck all. It’s also a lot less than the amount the Government steals from me directly in the form of Income Tax.
We and many others invested in water co debt (at OpCo level, we’re not stupid) due to the regulated nature of the industry and the idea the regulator wanted a stable business. Turns out Ofwat were just there to take a pay cheque.
The reason that the debt isn’t sustainable is because of bleeding OfWat.
No-one blinks an eye if the price of a pint in Thames Water area is 40% above the average for the rest of the country, but allow water to priced at the same relative price level would be evils. Despite the regionally high cost of labour and land and denied planning permissions being key inputs.
David Black = crock of cack.