Despite the £56bn ($71bn) paid out in dividends to shareholders in the sector since privatisation, today investors in the biggest beast, Thames Water, appear to be running for the hills.
The water industry has become a bad bet. Billions are required to fix pipes and treatment plants that have been left to rot for years, to invest in building resilience to the climate crisis, and to meet a tougher environmental regime-one arguably forced upon the regulator, Ofwat, by public outrage over sewage discharges.
Combine that with higher interest rates on the £18bn debt held by Thames and its parent company, more than half of which is index-linked, and the attractions of what was once considered a cash cow fade dramatically.
The nine owners of Thames Water appear to have had enough. There is talk among some of "not throwing good money after bad", and of having to protect their investors, as Thames struggles to repay debts and, according to insiders, faces a £4bn shortfall in revenue to the end of the decade.
Last Thursday, the investors, which include the Canadian public pension fund Omers (Ontario Municipal Employees Retirement System), the UK's University Superannuation Scheme, Abu Dhabi's sovereign wealth fund and the Beijing-controlled China Investment Corporation, pulled the plug on a commitment to provide £500m of equity - part of a total of £3.25bn in extra cash the company is seeking saying Ofwat's intransigence made Thames "uninvestable".
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