Drought

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Sciolus
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Drought

Post by Sciolus » Mon Aug 15, 2022 7:43 pm

The story so far:
- People have been saying for decades that England's water management is environmentally destructive and unsustainable.
- Government policy all that time has been to increase water demand where there is least supply.
- Two fifths of f.ck all has been done to improve the management of water.
- A very dry winter, followed by a very dry spring and a very dry summer, has been managed by doing nothing and hoping for the best.
- The water companies' response to damagingly low river levels is, er, to extract even more.
- The other response, once things are so critical they can't be ignored any longer, is to make a token gesture to reduce demand in the form of hosepipe bans.

And now we have this:
Water companies ‘off the hook’ as penalties for missed household water use targets delayed

Fines issued to water companies that miss targets for cutting household water usage will be delayed until 2024-2025, despite all water companies missing their 2020-21 targets.
(Paywalled, I can't find any open reports.)

This is all very familiar and utterly depressing.

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Re: Drought

Post by plodder » Mon Aug 15, 2022 9:12 pm

IABMCTT

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Re: Drought

Post by Martin_B » Tue Aug 16, 2022 4:40 am

From what I'm hearing from the UK, leakages from pipes is still a massive problem, too.
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Re: Drought

Post by Grumble » Tue Aug 16, 2022 5:36 am

Martin_B wrote:
Tue Aug 16, 2022 4:40 am
From what I'm hearing from the UK, leakages from pipes is still a massive problem, too.
No new reservoirs, slow replacement of old leaky pipes, criminal lack of maintenance and investment in wastewater treatment leading to routine dumping of sewage, massive bonuses for the bosses. The whole setup is rotten.
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Re: Drought

Post by JQH » Tue Aug 16, 2022 8:17 am

Martin_B wrote:
Tue Aug 16, 2022 4:40 am
From what I'm hearing from the UK, leakages from pipes is still a massive problem, too.
It is. Even when water is fountaining out of the road and gushing away like a small river it takes Thames Water over a week to get round to fixing it. Meanwhile a main blows and we had no water in a f.cking heat wave.
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Re: Drought

Post by Bird on a Fire » Tue Aug 16, 2022 8:40 am

There was a decent piece on the Graun yesterday. An extract:
English and Welsh water companies have handed their shareholders billions of pounds since privatisation, including more than £57bn in dividends from English firms alone in the past 30 years. By contrast, Scottish Water – which is publicly owned – has invested nearly 35% more per household in infrastructure, and Welsh Water became a not-for-profit company in 2001. Research by the Liberal Democrats suggests water company executives in England were awarded £27m in bonuses over the past two years, despite pumping out raw sewage into waterways 1,000 times a day. Southern Water, which has brought in a hosepipe ban, paid its bosses £3.4m in bonuses last year.

Water for households costs more in England and Wales than in most regularly drought-ravaged countries in Europe. Despite having some of the heaviest and most reliable rainfall of any industrialised country, British water companies charge more than those in Spain, Germany, Italy and Greece. In this regard, we truly are out in front.

The population of Britain has grown by around 10 million since water privatisation, but no major reservoir has been built in England in that time, and only about 4% of UK water is regularly transferred between traditionally wet areas in the north and west and dry areas in the south and east. Levelling up has yet to happen.
https://www.theguardian.com/commentisfr ... hould-know

My first field job in 2009-10 was in rivers in Southern Water country. The EA and Wildlife Trusts were trying to get them to abstract less from the rivers. Guess what?

High pollution, high cost to the consumer, low sustainability and low resilience: not a great advertisement for the English model.

Maybe the water cycle isn't the kind of thing a corporation can run effectively at all. But economic philosophy aside it's clear that the regulation has been pretty worthless for decades.
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Re: Drought

Post by Bird on a Fire » Tue Aug 16, 2022 9:30 am

There was a good piece by Tony Juniper (chair of NE) the other day on the importance of wetlands for both alleviating drought and reducing flood risk https://www.theguardian.com/commentisfr ... ate-change

What strikes me is that most examples of restoration come from public funding or NGOs. The companies we're paying to "manage" water are really just extracting and selling it (and polluting it).
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Re: Drought

Post by IvanV » Tue Aug 16, 2022 9:31 am

Grumble wrote:
Tue Aug 16, 2022 5:36 am
No new reservoirs...
Because we don't need any. Indeed some reservoirs (eg Barnes) have been closed. Recent applications to build have been turned down, because other approaches would be cheaper. Because reducing leakage, and other aspects of better resource management, are cheaper ways of dealing with the growth in demand in the places like the SE. A few years ago a desalination plant opened in E London - cleverly using only slightly salty brackish water rather than seawater as a source - because it was a much cheaper solution than a reservoir - it only needs turning on occasionally.

Certain other areas of the country have more water than they know what to do with, because industrial demand has crashed. Indeed this has resulted in a rising water table in areas like the West Midlands, which is a problem in itself. In the NE, very little of Kielder's capacity is used.

And before anyone says we should have more long distance transfer schemes from places with a large surplus of water, those are far too expensive too. Early medium distance schemes, such as Elan to Birmingham, Vyrnwy to Liverpool, and Lake District to Manchester, are not that far and downhill enough to require no pumping, and were built when construction costs were a lot lower - they might well not be built today. Taking water to the SE is much further and doesn't have the gradient to avoid huge amounts of energy in pumping.

The water companies have, quite properly, been made to have leakage control plans and resource plans with explicit risk management, etc. And quite a few of them take it seriously and deliver their plans. The regulatory failing has been failing to make them enough of them comply with it. The notorious under-performers are Southern and Thames. They both seem to have worked out that compliance is more expensive than suffering the punishment for failing to comply, and have directors who can apparently sleep at night doing that - I know someone who once turned down a senior job with one of them on such grounds.

And we should understand that a system that never results in tight supply conditions (ie not enough for everyone to have all they want in bad droughts - I don't mean people having nothing) is probably inefficiently over-specified. From time to time, not very often but sometimes, we should expect to have consumption restriction measures in place.

There seems to be potential for major culture change in our use of water. In theory water companies are supposed to be doing that, but perhaps it is a bit unrealistic to expect them to do it, maybe it's better done centrally. We have very little conception of water in this country, and use more than other countries.

For example, even though 58% of households are now metered, 78% of people think their household uses less than 60 liters per day, (and 45% said less than 20) when average household use is about 350 litres per day. Though maybe this is actually a revelation that most people don't have great numeracy skills. I know off the top of my head that our average annual water consumption (excluding the recent year when we had a problem) is 90 m3 per year, which is 250l per day. Which raises the next question. I'm not aware of being particularly careful with water. Yet our water consumption is markedly less than average, and even more so when you adjust it per capita. So, how are ordinary people using so much water? Some people water lawns, and have swimming pools, but not that many. Similar issues apply in other wealthy countries.

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Re: Drought

Post by IvanV » Tue Aug 16, 2022 10:11 am

Bird on a Fire wrote:
Tue Aug 16, 2022 8:40 am
There was a decent piece on the Graun yesterday. An extract:
English and Welsh water companies have handed their shareholders billions of pounds since privatisation, including more than £57bn in dividends from English firms alone in the past 30 years. By contrast, Scottish Water – which is publicly owned – has invested nearly 35% more per household in infrastructure, and Welsh Water became a not-for-profit company in 2001. Research by the Liberal Democrats suggests water company executives in England were awarded £27m in bonuses over the past two years, despite pumping out raw sewage into waterways 1,000 times a day. Southern Water, which has brought in a hosepipe ban, paid its bosses £3.4m in bonuses last year.

Water for households costs more in England and Wales than in most regularly drought-ravaged countries in Europe. Despite having some of the heaviest and most reliable rainfall of any industrialised country, British water companies charge more than those in Spain, Germany, Italy and Greece. In this regard, we truly are out in front.

The population of Britain has grown by around 10 million since water privatisation, but no major reservoir has been built in England in that time, and only about 4% of UK water is regularly transferred between traditionally wet areas in the north and west and dry areas in the south and east. Levelling up has yet to happen.
https://www.theguardian.com/commentisfr ... hould-know
I'd call it the usual crap. Public sector has to pay for capital and risk too, it just does it in a different way, and when something goes wrong it tends to be horribly expensive. And public sector senior employees are also good at putting their snouts in the trough - just look at HS2, universities, local councils, etc.

Imagine if our water companies were run like HS2. Dwr Cymru - which was taken out of private ownership - is hardly a shining light of good practice in the E&W water sector. Maybe that 35% extra per capita investment in Scotland is actually inefficiency? I don't know, but it is something that needs investigating before we say it is an unambiguous "good thing". They do sometimes have water supply shortages in Scotland too, for all it being so wet - at least in the W. Indeed the issue tends to be magnified because dispersed population there are many small local water supplies in Scotland, without interlinking. And water in Scotland has not been without its scandals. Crytosporidiosis in Loch Katrine - one of Glasgow's largest water resources - has been an issue of the last 20 years or so, resulting in LK being taken out of supply from time to time with consequent water shortages in Glasgow. I think they have sorted it now, eventually, after a long time. I'm not saying it's worse, but simply it needs more careful analysis to show its better.

But something has been different over the last 15-20 years from the time when the E&W companies were privatised. In the public sector, leading up to privatisation, the water companies were starved of capital, the infra was falling apart, pollution by water companies was appalling. The government couldn't borrow easily to fund it, because the markets were worried government borrowing was borrow and spend. Also water charges were political, so it was difficult for govt to put the charges up to pay for the investment. By compartmentalising utility company borrowing against utility customer income, the market would lend for that, because it knew it would be repaid, when it wouldn't lend more to government as it didn't know for sure how it would be spent. Also water charges could be increased to something sensible. (Maybe that's part of why water charges are low in other countries - they don't cover the cost?) Remember when Chancellors went on and on about the PSBR (public sector borrowing requirement)? Not recently they haven't done. So in the recent period, governments have had greater freedom and lower cost in borrowing, and could have financed utility expenditure rather more cheaply and extensively than the utility companies. But that might be about to flip back again with a return to economic conditions looking more like the 70s/80s.

And usual silly stuff about Britain being high rainfall. What actually matters is incident rainfall per capita, and relating it to sensible basin-related regions. Because very little water is transferred between basins. So that's the real measure of water scarcity. And SE Britain has one of the lowest incident rainfall per capita in all Europe. Because most of the rest of Europe is less densely populated, when you measure it at basin level. And supposedly dry places are actually rather wet when you look over the basin. People mostly live in dry coasts and valleys, not up in wet hills. It barely rains in the city of Alicante, for example. But that is a narrow coastal strip that gets its water from extensive depopulated mountains that catch a lot of rain - a lot higher annual rainfall than London, and over an extensive area. So if you measure it at a basin level, Alicante and that broader highly populated strip along the E coast of Spain is much better served for water than London. That's just one example, but it's the normality across most of Europe.

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Re: Drought

Post by lpm » Tue Aug 16, 2022 11:30 am

That's a confusion of different issues, Ivan.

What matters isn't hosepipe bans, they're inevitable every few years. What matters is that the privatised British water companies fail to do the basics.

- not processing sewage before discharge to rivers and sea
- failing to deliver water to household and business taps
- high leakage levels
- illegal over-extraction and permitted over-extraction from rivers

As an example, this weekend my water went out and came back at low pressure after 24 hours. Some nearby villages were without for three days. Some homes are still out. Pubs and small businesses, already struggling to survive, have to close when they don't have water. The provision of bottled water was at a location 20 minutes drive away. Deliveries of bottles to homes of the elderly were promised but didn't turn up.

And this is the second outage so far this year. And it's the sixth or seventh outage in the past 5 years. This is nothing to do with temporary drought conditions. It's part of the fundamental way the water companies have chosen to operate.

The major culture change isn't in our use of water. It's in how we as a country choose to run things. We have gone down the route of very low regulation, very high extraction of cash by senior directors and zero long term thinking about what sort of water network we'll want in 2070.
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Re: Drought

Post by IvanV » Tue Aug 16, 2022 12:40 pm

lpm wrote:
Tue Aug 16, 2022 11:30 am
That's a confusion of different issues, Ivan.

What matters isn't hosepipe bans, they're inevitable every few years. What matters is that the privatised British water companies fail to do the basics.

- not processing sewage before discharge to rivers and sea
- failing to deliver water to household and business taps
- high leakage levels
- illegal over-extraction and permitted over-extraction from rivers

As an example, this weekend my water went out and came back at low pressure after 24 hours. Some nearby villages were without for three days. Some homes are still out. Pubs and small businesses, already struggling to survive, have to close when they don't have water. The provision of bottled water was at a location 20 minutes drive away. Deliveries of bottles to homes of the elderly were promised but didn't turn up.

And this is the second outage so far this year. And it's the sixth or seventh outage in the past 5 years. This is nothing to do with temporary drought conditions. It's part of the fundamental way the water companies have chosen to operate.

The major culture change isn't in our use of water. It's in how we as a country choose to run things. We have gone down the route of very low regulation, very high extraction of cash by senior directors and zero long term thinking about what sort of water network we'll want in 2070.
I did try to cover these issues. Let me clarify.

There is a notorious situation in a particular small village in the Thames Water area in the high part of the Chilterns, that suffers what you describe, so I guess that may be where you live. It is small and fairly remote by SE English standards, and one of the highest settlements in the Thames region. So when water pressure falls it is inevitably first to lose its water. Whether it is your village or not, it can stand for your problem.

I agree, and explicitly said, that Southern and Thames have most conspicuously been failing to do the basics. I mentioned their Directors should really have difficulty sleeping at night given what they do, in terms of deliberate omissions. And I said the main problem has been Ofwat failing to enforce on them the delivery of plans they have written - which are compliant plans - with sufficient vigour and pain, so they get away with not delivering their plans. I'm not saying the other companies are angels, but Thames and Southern are conspicuously the worst for this.

In the case of the small village in the Chilterns, I guess Thames Water thinks it can get away with failing to spend the money required to deal with a particularly expensive problem given the small population and (locally) high altitude involved. And so far they have got away with it because the regulator is both lily-livered at enforcement, and also unwilling to supply the full money involved, given the consequences for customers' bills.

Before privatisation, there was much more unprocessed sewage discharge to rivers and coasts, very high leakage levels, and illegal and permitted over-extraction. And indeed widespread poor drinking water quality as well. These issues all got an awful lot better in the early years after privatisation, with a huge amount of investment. Recently, some of them have been getting worse again in some areas, due to certain water companies not wishing to incur the cost of dealing with it properly, and getting away with not doing the spending, even though it has been costed into their regulated plans. And then sometimes Ofwat does a deal that only permits a basic scheme, which doesn't really solve it, because Ofwat doesn't want to agree to the high cost of the proper plan, because then it would have to increase the price to customers to pay for it.

The deteriorating discharge issues - which is a major issue on the Chess Valley where Chesham sewage works regularly overflows near where I live - is a consequence of increasing sewage volumes and a failure to increase the capacity of sewage works to handle it. It has to go somewhere, so it overflows into watercourses. Because it is very expensive to expand sewage works, and also often socially difficult to achieve. As I said, sometimes Ofwat conspires with the water company to do a cheap fix, because otherwise it would be expensive for customers. I tend to think that is what happened here, because they did do an upgrade of Chesham sewage works, but it wasn't enough, because that is all that Ofwat funded. Abuse of watersources is a similar issue, which a bit more leakage control and interlinking would go a long way towards handling.

These issues don't go away by nationalising things. Rather nationalised things can often continue misbehaving with impunity because you can fine them and it has no effect. They don't even always spend all the money they have been given, although the reasons are different. For example, National Highways formerly Highways England formerly Highways Agency has been unable to get its arse into gear to spend the money it has planned to spend. At least shareholders feel the pain of fines. But the problem is that the enforcement hasn't been strong enough to make them feel enough pain such that they think delivering is better than not delivering.

Let us not forget the reason that the water industry was privatised in the first place is that government felt powerless to solve these things in the public sector. And initially it got a lot better because of the privatisation. That's not as true now as it was then, because now government can borrow more easily - at least recently but it will be getting a lot harder with the interest rate likely to follow inflation upwards, and a recession reducing tax income. And let us remember it isn't always a panacea, nationalising things. A lot of crap and impunity goes on there too.

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Re: Drought

Post by El Pollo Diablo » Tue Aug 16, 2022 12:43 pm

IvanV wrote:
Tue Aug 16, 2022 10:11 am
And public sector senior employees are also good at putting their snouts in the trough - just look at HS2, universities, local councils, etc.
Ah, that would be the organisations that are currently struggling to recruit because private sector organisations have given their staff considerably heftier pay rises than public sector orgs, and the public sector can't compete. And whilst HS2 is well-paid within the transport public sector, staff leaving to join private sector companies would earn more. That's not a good thing. I'd also add that whilst the usual Times-reading moron who comments BTL about how public sector means more union involvement, strikes, etc (b.llsh.t, but let's go with it), and obviously that's bad because herp-de-derp, the union in HS2 just advised to accept a 3.5% pay rise. Management-grade staff at Network Rail just accepted the same, along with a 75% discount on leisure rail travel for them and their families. Both well below inflation, both well below private sector businesses.
Imagine if our water companies were run like HS2.
What, programme-management businesses set up from scratch as an arms-length branch of government (with significant interference from said government) to deliver mass capital investment in infrastructure that doesn't currently exist, rather than business-as-usual asset management organisations for decades-old infrastructure which needs careful planning and strategy?

You're right, that'd never work. Because it's a f.cking stupid comparison.
Maybe that 35% extra per capita investment in Scotland is actually inefficiency? I don't know, but it is something that needs investigating before we say it is an unambiguous "good thing"
You'd be hard-pressed to make that claim without evidence, I'd suggest. Yes, it's too simplistic to say that spending more money is better, but similarly it is too simplistic to say that spending less money is more efficient. Often, the short-term focus on efficiency merely lands on "scope efficiency", which is doing less.
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Re: Drought

Post by plodder » Tue Aug 16, 2022 1:02 pm

Ivan's broadly correct here. Water supply (and waste water treatment) is a hugely complex subject and moaning that water companies don't spend anything on infrastructure is incredibly ignorant. The problems around extraction of water vs demand vs new development vs declining industry vs changing weather patterns vs public / industry attitudes towards water use vs land use vs cost vs asset management are not simple and are rarely covered in newspaper articles. Having said that, the industry still has a "the problem to pollution is dilution" mentality which frankly speaking needs to grow the f.ck up.

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Re: Drought

Post by IvanV » Tue Aug 16, 2022 2:03 pm

El Pollo Diablo wrote:
Tue Aug 16, 2022 12:43 pm
IvanV wrote:
Tue Aug 16, 2022 10:11 am
And public sector senior employees are also good at putting their snouts in the trough - just look at HS2, universities, local councils, etc.
Ah, that would be the organisations that are currently struggling to recruit because private sector organisations have given their staff considerably heftier pay rises than public sector orgs, and the public sector can't compete.
And I was talking about the people at the very top, because the original comment I was responding too talked about director bonuses, not the salaries of the 99%, or 99.9%.

HS2 project director Mark Thurston is Britain's highest paid civil servant at £625k according to a recent report. The same report suggests 46 employees of HS2 earned more than £150k.

The same report mentioned that 74 employees of Network Rail earned more than £150k. Given the relative size of what the two organisations do, at first glance it seems to me that HS2 is being more generous with its senior employees than NR. But perhaps you have some additional evidence that can shed further light on that.

Is this top end included in the description of HS2 struggling to recruit? Maybe these £150k+ earners can earn a lot more at Balfour Beatty, Arriva, etc? We all know about multi-million salaries and bonuses in the private sector. But is that what these kind of people are eschewing by choosing to work for HS2? Is it hard to get a proper top project director on a mere £625k?

I don't know. You tell me.

Similarly both academic staff salaries and (some) university VC salaries are outrageous, but in the opposite direction from each other. There is a similar issue with top salaries at some local authorities too.

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Re: Drought

Post by plodder » Tue Aug 16, 2022 2:57 pm

HS2 is a beast of a scheme and I'd absolutely expect the top tier of management to be on that kind of money.

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Re: Drought

Post by dyqik » Tue Aug 16, 2022 3:05 pm

plodder wrote:
Tue Aug 16, 2022 2:57 pm
HS2 is a beast of a scheme and I'd absolutely expect the top tier of management to be on that kind of money.
£150k isn't that much more than we pay senior IT support staff, software developers, project managers and system engineers. Plus Federal benefits.

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Re: Drought

Post by Bird on a Fire » Tue Aug 16, 2022 3:17 pm

Agree that the public/private thing isn't the immediate crisis. But to me it seems clear that the combination of a 10 million increase in population (especially in the driest parts of the country) and (long-forecast) rising temperatures and decline in rain (plus increases in runoff, finite aquifers, etc) makes it pretty obvious that some new infrastructure will be required somewhere at some point. And new infrastructure requires investment.

The huge shareholder payouts and director compensation etc. simply show what's being done with the available money. This article from 2 years ago gives figures of £123bn capital expenditure vs. £57bn shareholder payouts - and note that all the capital expenditure was paid by customers' bills, with the £48bn of accumulated debt all being funneled straight down the piggies' gullets.

But, as I said in my original post, the most important failure is one of regulation: it doesn't necessarily matter who's in charge of pipes, storage and treatment if somebody sensible is telling them what to do, and enforcing it. For various parts of water companies' roles that may be EA, NE or Ofwat - certainly the first two of the three have been deliberately put out of action by the Tories, precisely in order to allow companies and toffs to extract more profit from natural resources.

England's experiment with low regulation and privatized natural monopolies of rainwater and rivers could be a very good idea that just needs a few tweaks to cope with the new normal. Or, maybe, there's a reason why nobody else, even within the UK let alone the rest of the world, does it like that. I'm not qualified to say. It would certainly be an interesting experiment to suddenly give the regulators exceedingly good budgets, fine the f.ck out of every miscreant for every misdeed since 2010, and see how things improve. But I won't hold my breath.
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Re: Drought

Post by Bird on a Fire » Tue Aug 16, 2022 3:22 pm

dyqik wrote:
Tue Aug 16, 2022 3:05 pm
plodder wrote:
Tue Aug 16, 2022 2:57 pm
HS2 is a beast of a scheme and I'd absolutely expect the top tier of management to be on that kind of money.
£150k isn't that much more than we pay senior IT support staff, software developers, project managers and system engineers. Plus Federal benefits.
University Vice Chancellors in the UK get an average of £270k. And vice at universities generally chancels itself pretty well.

Paying people to do important stuff still seems a better use of money than giving it to shareholders, who are just paid for having money. Sure they're "accepting risk" or whatever, but at least from my outsider perspective having money looks a lot less risky than not having it. Where are my dividends? ;)
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Re: Drought

Post by lpm » Tue Aug 16, 2022 3:51 pm

As always, we have a tendency to look at the UK and compare to other possible UK set-ups.

But we should simply just compare the UK to the civilised first world countries. What do they do? How can we rejoin the ranks of the first world?
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Re: Drought

Post by IvanV » Tue Aug 16, 2022 3:56 pm

Bird on a Fire wrote:
Tue Aug 16, 2022 3:17 pm
Agree that the public/private thing isn't the immediate crisis. But to me it seems clear that the combination of a 10 million increase in population (especially in the driest parts of the country) and (long-forecast) rising temperatures and decline in rain (plus increases in runoff, finite aquifers, etc) makes it pretty obvious that some new infrastructure will be required somewhere at some point. And new infrastructure requires investment.

The huge shareholder payouts and director compensation etc. simply show what's being done with the available money. This article from 2 years ago gives figures of £123bn capital expenditure vs. £57bn shareholder payouts - and note that all the capital expenditure was paid by customers' bills, with the £48bn of accumulated debt all being funneled straight down the piggies' gullets.

But, as I said in my original post, the most important failure is one of regulation: it doesn't necessarily matter who's in charge of pipes, storage and treatment if somebody sensible is telling them what to do, and enforcing it. For various parts of water companies' roles that may be EA, NE or Ofwat - certainly the first two of the three have been deliberately put out of action by the Tories, precisely in order to allow companies and toffs to extract more profit from natural resources.

England's experiment with low regulation and privatized natural monopolies of rainwater and rivers could be a very good idea that just needs a few tweaks to cope with the new normal. Or, maybe, there's a reason why nobody else, even within the UK let alone the rest of the world, does it like that. I'm not qualified to say. It would certainly be an interesting experiment to suddenly give the regulators exceedingly good budgets, fine the f.ck out of every miscreant for every misdeed since 2010, and see how things improve. But I won't hold my breath.
With so many water companies now in private hands, it's a bit tricky knowing what's really going on. (And United Utilities is complicated because it includes an electricity distribution company.) But to take one that is still quoted on the stock exchange, Severn Trent's dividend yield is recently 3.4% which is fairly normal and not conspicuously generous to shareholders. Obviously they have to pay a bit more than gilts, the gilts yield curve has moved up of late and its only a notch better.

The analysis quoted in the Guardian (and elsewhere) saying that "they have borrowed to pay dividends" seems to be a misunderstanding how private companies finance works. You could say that of just about any private company borrowing to invest while paying dividends. And who are these people who wrote this paper? Prof David Hall is an ecologist, and I can't discover who Karol Yearwood is.

I find Sir Dieter Helm, an eminent economist and rent-a-quote, is quoted in that article saying that the regulators haven't done their job. It's nice to know I agree with Sir Dieter on this point, it happens occasionally. (Not to be confused with the description of Patrick Minford who is an "economist", as Private Eye accurately describe him. Sir Dieter, I am happy to clarify, is an economist and understood as such by the profession.)

Though the big and difficult present issue, which Sir Dieter doesn't mention, is that the water sector has been entirely privately financed for the last 32 years, and private finance has in recent times been a lot more expensive than public finance. That makes a sufficient difference to the final price to customers in a capital intensive industry that you could tolerate quite a lot of extra inefficiency and still charge customers less. This was the whole fallacy exposed by the PFI hospitals and schools mess, where just about the only service being provided was capital, and it was more expensive, without anything else to spread efficiencies over and make the whole thing cheaper. Things were different 32 years ago when it was privatised.

We should now be re-examining how we finance the water sector, as well as how we get water companies to do what we have paid them to do, given the premium that customers are paying for that private finance. Maybe government can take over some of their debt and charge them public sector interest rates on it. But getting them to actually deliver to their plan is the same problem whether they are public or private, as the issue of National Highways failing to do what they have been funded to do makes clear.

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Re: Drought

Post by causan_dux » Tue Aug 16, 2022 4:21 pm

lpm wrote:
Tue Aug 16, 2022 3:51 pm
As always, we have a tendency to look at the UK and compare to other possible UK set-ups.

But we should simply just compare the UK to the civilised first world countries. What do they do? How can we rejoin the ranks of the first world?
Although this is to ignore the unique geographical and hydrological situation of the UK, a country in which it rarely rains from one year to the next, which has just a couple of rivers (as far as I recall, there's the Thames and then isn't there one called the Ouse or something?), and where most of the land is thousands of miles from the sea. Not for nothing is this parched desert on Europe's western periphery called the Namibia of Europe.

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Gfamily
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Re: Drought

Post by Gfamily » Tue Aug 16, 2022 4:23 pm

Just by the by, I was looking at the Wikipedia article about Lake Mead, the largest reservoir in the United States.

It's not been at full capacity for almost 40 years, and at the end of May 2022, it was less than 27% full.
My avatar was a scientific result that was later found to be 'mistaken' - I rarely claim to be 100% correct
ETA 5/8/20: I've been advised that the result was correct, it was the initial interpretation that needed to be withdrawn
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Re: Drought

Post by IvanV » Tue Aug 16, 2022 4:25 pm

lpm wrote:
Tue Aug 16, 2022 3:51 pm
As always, we have a tendency to look at the UK and compare to other possible UK set-ups.

But we should simply just compare the UK to the civilised first world countries. What do they do? How can we rejoin the ranks of the first world?
These are exceedingly good points.

The origin of the British approach to water lies, perhaps surprisingly, in how the French do it. Though since we are the British we pretend we invented it. And since we were in a hurry we did it at the wrong scale and tried to solve it all in one go and so made a lot of mistakes in the process and created a distinctive system that lacks some of the advantages of the original ways of doing it.

In France, and indeed Germany, and probably much of the continent, water and sewerage is the responsibility of municipalities. Many of the municipalities do it themselves, but contracting it out has a long tradition in France, and more recently in Germany. "Build-Own-Operate-Transfer" (BOOT) is common system of delivering new water infrastructure in Germany as in many countries. Companies active in supplying water management services to municipalities in France include the Compagnie Générale des Eaux now called Vivendi, Lyonnaise des Eaux now called SUEZ, Saur and Bouygues. You may notice that these companies are in some cases much more active in other sectors than their watery origins.

One key difference, perhaps, is that the companies answer directly to the municipalities, and so there is much closer visibility at a local level of whether they are delivering. Another is that the notion of a private company providing a public service under contract has such a long history in France that how to do it is written into general law, and so they don't need long and complicated contracts because so many of the aspects are established law and administrative practice. This is true in many continental countries with the "code system" of law. The French do have regional water basin management bodies also, in the public sector, to try and put together the efficiency of basin-level water management.

Yet another difference is that the continentals are also much more practiced at "public-private partnership finance" than the British, where both private and public capital are used jointly to deliver a capital intensive scheme. Again this is a common structure, it's in law, and they are practised at it. Which is not to say it never goes wrong and terrible overruns happen. Whereas we in Britain seem addicted to entirely private capital whenever we venture into PPP and PFI space, and that is more expensive. The reason for bringing in private capital can be that public capital is in finite supply, but also it is useful if your private delivery partner has some skin in the game. And with a long tradition of trust between the parties, so they don't screw each other to pieces as could potentially happen.

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Re: Drought

Post by dyqik » Tue Aug 16, 2022 4:37 pm

Gfamily wrote:
Tue Aug 16, 2022 4:23 pm
Just by the by, I was looking at the Wikipedia article about Lake Mead, the largest reservoir in the United States.

It's not been at full capacity for almost 40 years, and at the end of May 2022, it was less than 27% full.
Of course, that reservoir is right next to Valley of Fire State Park and Desert National Wildlife Refuge. Which might provide some hints...

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Re: Drought

Post by monkey » Tue Aug 16, 2022 5:04 pm

dyqik wrote:
Tue Aug 16, 2022 4:37 pm
Gfamily wrote:
Tue Aug 16, 2022 4:23 pm
Just by the by, I was looking at the Wikipedia article about Lake Mead, the largest reservoir in the United States.

It's not been at full capacity for almost 40 years, and at the end of May 2022, it was less than 27% full.
Of course, that reservoir is right next to Valley of Fire State Park and Desert National Wildlife Refuge. Which might provide some hints...
I'd say things like having lawns and golf courses in the deserts is the problem, rather than the deserts themselves.

Here's John Oliver talking about it, if you like things light and with jokes - youtube clicky

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