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Water companies called out on dividends and pollution

England’s privatised water companies have been called out for paying £57 billion in dividends since 1991 - equating to an average of £2 billion per year – and dumping raw sewage into rivers for 1.5 million hours in 2019, according to the Guardian newspaper.

The paper found that since 1991, water companies have spent £123 billion on capital expenditure and run up debts of £48 billion – with interest accrued in the region of £1.3 billion last year. Critics are claiming water companies have got into debt to pay dividends - something many refute - and are critical of poor spending levels on infrastructure. With director’s pay soaring, the Guardian newspaper is quick to point out that the earnings of nine of the water companies’ highest-paid directors rose by 8.8% last year.

With the Environment Agency slamming the underperformance of water companies and campaign group We Own It calling on the Government to bring them back into public ownership, many are wondering what the future will hold. 

This comes on top of the revelations (also by the Guardian) that water companies discharged raw untreated sewage from storm drains into rivers on more than 200,000 occasions in 2019. Industry insiders have called these releases ‘frequent’ when the European court of Justice only allows the discharge of untreated human waste in ‘exceptional’ circumstances.

Untreated sewage from combined sewer overflows (CSOs) contains excrement, toilet paper and other items that should never be flushed such as wet wipes, cotton buds, contact lenses and even condoms. It’s easy to see how discharges into rivers cause environmental damage. There’s a health hazard too, with illnesses such as E coli directly linked to sewage. With fears over the possible transmission of Covid-19, high levels of water contamination will not bode well should interest fall further on sewage discharge rates.

The Guardian further points out that by March 2020, water companies should have installed monitoring on the majority of their combined sewer overflows, but only 6,600 of a total 10,000 had monitoring fitted. 

While it’s easy to place the blame, there are always two sides to the story. England’s water companies are battling an aging infrastructure, (inherited from the public sector), built well before the demands of modern day life. The issue of combined drainage systems and overflows is complex and not something that can possibly be solved overnight, (or is cheap to fix) even if the water companies were brought into public ownership. 

As the Guardian’s own report shows, water companies are investing billions each year into infrastructure (making them the bane of road users sick of road works to upgrade pipes). With innovative projects such as the Thames Tideway Tunnel in construction and set to drastically clean up the Thames, it’s unfair to say that all water companies are putting profits above the environment and public health. 

However, it’s clear that some fundamental problems need to be addressed. For water companies, the exploration of new technologies and solutions to long-standing issues with water and drainage systems needs to be a top priority in the years to come.

You can find the Guardian articles here:

https://www.theguardian.com/environment/2020/jul/01/water-firms-raw-sewage-england-rivers

https://www.theguardian.com/environment/2020/jul/01/england-privatised-water-firms-dividends-shareholders

https://www.theguardian.com/environment/2020/jul/01/england-sewerage-water-companies-practices-policies