Outlook: Water bunkum
Wednesday 09 June 1999
Poor old Hyder, the owner of Welsh Water, is sinking so fast under its debts that it has pressed the nuclear button and warned that a one-off cut remotely approaching 15 per cent will put it in breach of its banking covenants. Thames is telling the Government and anyone else who will listen that if the regulator soaks the industry in the way he threatens to then the quid pro quo must be a dismantling of the barrier on water company mergers.
Now Severn Trent's Vic Cocker has jumped in by unveiling plans to double the size of its non-regulated business to pounds 1bn a year, thereby reducing its dependence on water and sewage services.
Severn Trent is better placed than many to survive the double whammy of swingeing price cuts and a rising tide of expenditure on environmental improvements. Being landlocked it does not have hundreds of miles of coastline to worry about and, although its territory includes the longest river in the country, even the fish are complaining that Trent water is too clean for comfort.
Fortunately for shareholders, the company was saved from overstretching itself by being blocked from buying Wessex Water. The result is that Severn Trent's dividend and interest cover ought to withstand the worst the regulator can throw at it.
The decision to seek salvation overseas is not so encouraging. As countless other utilities, from National Power to Thames itself can testify, diversification and overseas expansion is rarely the panacea it is cracked up to be. As an antidote to executive boredom, it no doubt has its uses, allowing a jet-setting lifestyle for top managers, big expenses and, until the shareholders catch up with you, an open cheque book for extravagant acquisition making. But that's about it.
Investors and customers alike will thank Mr Cocker more if he sticks to his knitting and concentrates on improving operational efficiency in his core monopoly business.
- 1 Husband creates spreadsheet detailing wife's 'excuses' for turning down sex
- 2 UK pirates will get four warning letters a year
- 3 Saneie Masilela, 9, marries Helen Shabangu, 53 years his senior, for the second time
- 4 Laurie Penny: Feminist author subjected to 'vile sexist and anti-Semitic abuse' over her book
- 5 Why I'm on the brink of burning my Israeli passport
Saneie Masilela, 9, marries Helen Shabangu, 53 years his senior, for the second time
Time runs out for Christian Iraq: Isis deadline passes with mass flight
Miley Cyrus death hoax: Fans distraught after a Facebook scam goes viral and she fails to tweet for three days
Laurie Penny: Feminist author subjected to 'vile sexist and anti-Semitic abuse' over her book
Malaysia Airlines MH17 crash: France and Germany accused of going soft on Putin as sanctions talks stall
Malaysia Airlines flight MH17 crash: 'Nine Britons, 23 Americans and 80 children' feared dead after Boeing passenger jet is 'shot down' near Ukraine-Russia border
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
Malaysia Airlines MH17 crash: Obama - 'We’re going to make sure that truth gets out'
- < Previous
- Next >
iJobs Money & Business
£40000 - £50000 Per Annum: Clearwater People Solutions Ltd: Business Analyst r...
£500 - £550 per day: Orgtel: BA/PM - Client Data London (Greater)
£400 - £450 per day: Orgtel: SQL Developer - Banking - London - £450pd Our cl...
£375 - £400 per day: Orgtel: SQL DBA - Banking - Gloucester - £400pd Our clie...