A lot of laughter with no refunds

For-profit companies formed out of the Thatcher administration’s privatization of English and Welsh water supplies overcharged customers by more than £1 billion with help from the regulator Ofwat, according to a new report from the House of Commons’ Public Accounts Committee (PAC).

Owned by global names such as Citibank and HSBC as well as Asia’s richest man, 18 private companies manage the water and sewage resources.

Ofwat estimates the costs involved and sets five-year price limits for charges by the firms.

The report highlighted massive failures by Ofwat that allowed water companies to make windfall gains by“consistently overestimating financial costs”, while customers were denied a “fair deal”.

The Public Services International Research Unit found in a 2001 study that tariffs increased by 46 percent during the first nine years of privatization while operating profits have more than doubled (+142 percent) in eight years.

The report also revealed that investments were reduced (It will return to public ownership when it’s in need of investment, maintenance and repair that was avoided to maximise profits – thereby socialising the costs)

In light of the windfall, Ofwat asked the water companies to voluntarily forego a bill increase. Only six of the 10 largest companies agreed to do so.

“PAC’s comments on gains relate to decisions Ofwat made six years ago,” Ofwat CEO Cathryn Ross said in a statement. “Since 2012, we’ve stressed that customers are having a really tough time and stepped in to claw back £435m from companies.”

So, they steal 1 billion and the watchdog meekly asks for 40% to be voluntarily returned? You gotta be kidding me? PLEASE?

Newsflash Cathryn – Whining to a corporation is akin to sending them Jimmy Carr – produces a lot of laughter with no refunds.