WITH the Thames Tideway Tunnel, the huge “supersewer” that Thames Water Utilities is planning to build (at a cost to each of its customers of an extra £80 a year on bills for eternity) coming ever closer, Thames Water (TW) is tightening its grip on the industry.
While campaigners continue to fret that “blue-green” alternatives have not been fully explored (see Eye 1359), the permeable membrane between government, TW, the so-called independent regulators and even the environmental groups that might be expected to query the tunnel becomes ever thinner.
TW has recently given plum jobs to some important government chaps (all chaps, of course) who originally gave permission for the tunnel (TTT). Ian Pearson, who gave the green light for it in 2007 when he was minister of state for climate change and environment, was appointed non-exec director of TW Utilities last September. Handily, Pearson is also a member of the advisory board of PwC, which audits water and sewage policies.
Open-ended financial guarantees
Simon Hughes (not the former Lib Dem MP), who was the Environment Agency deputy director and spokesperson on the tunnel until April, has now taken the golden shilling as “strategic water resource stakeholder lead” (whatever that means) at TW.
Mike Gerrard became managing director of the TTT project in May 2011, having previously been chief exec of Partnerships UK, predecessor of Infrastructure UK, the department of the Treasury which recommended and authorised the open-ended financial guarantees for the tunnel. In other words, if Gerrard’s TTT overspends [“overflows”, shurely? Ed], Gerrard has authorised his own bail-out.
As well as government members joining TW, “independent” regulators seem to be remarkably friendly too. Jonson Cox, current chairman of the water industry regulator Ofwat, received a bonus of £8.1m in 2010 when he was chief exec of Anglian Water. An earlier stint at Railtrack ended in his summary dismissal, but water is obviously far more lucrative. Mind you, the CEO of TW, Martin Baggs, has had to make do with a miserly £2.057m in 2015.
Advising the regulator and the regulated
Steve Walker, who was at TW for 19 years, most recently as major projects director (aka head of Thames Tideway Project), now acts for Ofwat as a consultant, helping to regulate his old employer (and his own earlier work).
Alan Lovell, the new chair of the Consumer Council for Water, the supposedly independent representative of all water consumers, also acts as a paid adviser to PwC.
PwC not only has Lovell and Pearson as advisers, but in a classic case of the wolf being appointed sheepdog, PwC is both auditor and delivery partner to both Ofwat and to nine of 19 of Britain’s water utilities. In other words, PwC is auditing its own business plans and helping Ofwat to decide whether the tariffs that PwC itself recommends its clients impose are fair. Advising both the regulator and the regulated is no doubt lucrative but surely cannot be acceptable.
PwC has other useful placings. For instance, Paul Rew, a former PwC partner who led its sustainability and climate change assurance business and is also a non-exec director of Northumbrian Water Group plc, was appointed non-executive director for the Department for Environment, Food and Rural Affairs in 2011. Iain Ferguson, another Defra non-exec (appointed 2010), is also a member of PwC’s advisory board.
Macquarie Group, overall owner of Thames Water, is one of the companies advised by PwC on the “Lux leaks” list of companies with “special” tax deals in Luxembourg – so at least we can be sure it has really good tax advice.
Meanwhile, the environmental groups that might be expected to query some of TW’s sustainability claims with regard to the tunnel might find it financially awkward, as TW is one of their largest donors. The main river charity is Thames21, whose major corporate sponsor is… Thames Water. Its chief exec also chairs the campaign group, Thames Tunnel Now (TTN). TTN’s main spokesperson is Carlo Laurenzi, chief exec of the London Wildlife Trust, which during 2012-13 formed “a strategic alliance” with Thames Water, running joint projects and funding others.
Other members of TTN include the RSPB (just getting a huge new reserve at Abingdon, funded by Thames Water) and the River Thames Society, whose Guide to the Natural Thames was financed by… Thames Water. Treble Thames waters all round!