Amid a water crisis, residents in England look for leadership

UTILITIES

Foul conditions call for nationalization, many are saying

Laura Reineke, who started a local swimming group in Henley-on-Thames, England, says that what little vegetation she sees on the bottom of the River Thames is “covered in sewage fungus” and a danger to the area.

People go kayaking on England’s River Thames in Henley-on-Thame in August. Four decades after privatization, calls to nationalize the water industry have swept across England and Wales amid sewage spills and rising household bills. PHOTOS BY SAM BUSH — THE NEW YORK TIMES

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By Eshe Nelson

The New York Times

HENLEY-ON-THAMES, England >> On its journey to the North Sea, the River Thames runs through Henley, a picturesque middle-class town about 35 miles west of London. The river is central to the town’s identity, which is known for its annual royal regatta and for being the location of the first boat race between Oxford and Cambridge universities.

Long a source of pride, the river is now a source of alarm.

“In the last two years, it’s just got worse and worse and worse,” said Laura Reineke, 51, a Henley resident who started a local swimming group.

The water is “murkier, and if you do see vegetation on the bottom, it’s covered in sewage fungus,” she said. While swimming in the Thames, she added, the group has also seen sanitary products caught in the plants, colostomy bags and what appear to be excrement marks on swans.

Nearby, wastewater treatment plants for Thames Water, England’s largest water company, sometimes dispose sewage into the river and local streams, drawing complaints from Henley residents.

Thames Water is not alone. The 10 water utilities in England and Wales, which were privatized in 1989 during a wave of deregulation and free-market liberalization, have become a target of public ire over polluted waterways and rising household bills.

The number of people getting sick from the water is growing, according to data collected by campaign groups and hospital admissions. Surfers Against Sewage, a nonprofit group that tracks water quality around Britain, said more than 1,900 people reported getting ill after entering the water last year, nearly triple the number from previous year. But this was likely just “a glimpse into the true scale” of the problem because it included only reports submitted to the group, it said.

As anger grows, Henley has become one of the loudest cries in nationwide calls to bring the country’s water companies back into public ownership.

“Privatization has been a calamity and in particular in the water industry,” said Jo Robb, 47, a district councilor and a member of the Henley Mermaids.

Across England and Wales, insufficient investment in the sewage infrastructure and the water supply has led to a crisis that has been brewing for years. Now, more people are putting the blame on the ownership of the water utilities, which are regional monopolies, predominantly owned by multinational conglomerates and asset managers, including sovereign wealth funds and pension funds. Critics argue that shareholders in the water companies have received billions of pounds in dividends since privatization but failed to put enough money back into the water system while piling up debt.

In June, the Henley Town Council called for the nationalization of Thames Water, which serves about 16 million people, saying the company’s track record has been “beyond concerning.”

To activists, Thames Water is an ideal starting point to nationalize water utilities because the company is in the most financial distress.

Thames Water, which has debt of about 15 billion pounds ($20 billion), said it would run out of cash by May if it was unable to raise more equity. Its shareholders, who own the company through Kemble Water Holdings, include a Canadian pension fund, Abu Dhabi’s sovereign wealth fund in the United Arab Emirates and a British pension plan for university staff, and they have been reluctant to inject fresh cash amid clashes with regulators over how much to raise customers’ bills.

Thames Water faces regulatory fines that will add to its burden. Last month, the country’s Water Services Regulation Authority, known as Ofwat, said it intended to fine the company 104 million pounds, a record amount, for spilling untreated wastewater and causing environmental harm, in part because it had not upgraded sewage plants.

Thames Water has said it is planning to upgrade the Henley sewage center by the end of 2026. More broadly, a company spokesperson said, it had submitted “an ambitious business plan” to Ofwat that would “help us address an aging asset base, climate change and population growth.”

Thames Water might be the starkest example of the crisis, but anger is felt around the country, from Windermere in the Lake District to Brighton’s beaches on the south coast. Regulators are investigating all of the water and wastewater companies in England and Wales over concerns about their releasing sewage outside of exceptional circumstances, such as storms, and for not accurately reporting the pollution. The regulator has warned several of them about the state of their finances.

The average utility bill in England and Wales is 441 pounds a year, higher than some of their European neighbors, like France, but lower than others, such as Norway. Ofwat has proposed increasing consumers’ bills by more than a fifth on average over the next five years.

The water companies rebut the accusation that shareholder payouts are to blame for insufficient investment. Rather, it is because water bills are too low and have been “artificially suppressed” by Ofwat, said Stuart Colville, deputy CEO of Water UK, an industry group.

Charging customers even more would allow water companies to double their investment, to 105 billion pounds, in the next five years, the group said, enabling them to reduce pollution and protect future water supplies, such as building new reservoirs.