Dear Mr Efford

From: Beelci Rhamnus
Date: 2013/3/12
Subject:
To: clive@cliveefford.org.uk, effordc@parliament.uk

Dear Mr Efford,

I am writing, as your constituent, to express great concern about Thames Water’s proposed Thames Tideway Tunnel, aka London’s “super-sewer”. This £4.2bn project has already seen its projected capital cost balloon nearly 3-fold since being first proposed in 2006 and no one seems to know its likely final cost, to include financing, or continued operation and maintenance costs.

Despite TW’s shareholders having awarded themselves substantial dividends over the years, they won’t pay a penny for the tunnel. Instead the current plan is for it to be paid through a significant hike on TW’s customers’ bills, starting next year, with a large hike likely coming in spring 2015, just in time for the elections. The net effect will be a permanent water bills hike of 25% for 14m people, 6m of whom don’t even live in London.

I request that you show your concern about the impact of this issue on your constituency by supporting Simon Hughes’ Early Day Motion no 1078. Even if you’re not in a position to do so, please read on…

I am are very concerned that the 2012 Water Industry (Financial Assistance) Act has been put in place to the effect of “pre bailing-out” this private project. The explanatory note to the Act even states that “This support [of the TTT’s exceptional project risks] cannot be monetised”… We recently heard Mr Osborne pledge “no more 'too big to fail', no more taxpayer bail out of corporations’ errors”. Yes, he was referring to banks but TW is precisely owned by overseas private equity (Australian investment bank Macquarie) and sovereign wealth funds (China and Abu Dhabi), and here’s a blank cheque from UK taxpayer, acknowledging that the scheme is too risky to insure in traditional ways. Privatization was supposed to bring healthy investment to the sector, instead the current approach appears to privatize the upside with taxpayers shouldering the downside. Sir Ian Byatt, Ofwat’s first director general, who oversaw privatization, has joined Simon Hughes to blow the whistle on this highly suspicious arrangement.

Simon’s research has revealed how the overseas financiers who control Thames Water have paid themselves very generous dividends over the years, oftentimes borrowing – at our expense – to boost them beyond TW’s already tidy profits. It also demonstrated that TW could have paid for at least half of the tunnel had its owners pocketed only half of those dividends since 2000, which would still have left them with very decent double-digit return on investment. Further, TW paid negative UK tax since March 2010, despite paying themselves dividends of c. £650m. This is even more infuriating than similar behaviour by high-street and online multinationals due to the monopoly nature of our water industry: there is no way of voting with feet to express our disapproval.

Once the tunnel is built, we, your constituents, will be locked in for the long term, at the mercy of yet more of this predatory behaviour from overseas banks.

I acknowledge that London's issue of excess rainwater causing sewer overflows must be addressed. However, the super-sewer is an antiquated solution, addressing the symptom of the problem (sewer overflows) rather than its cause (rainwater entering combined sewers, and most of all, the use of an out of date toilet design that allows our excreta into the sewers instead of being separatedly collected and recycled or reused). Water experts, academics and professionals from abroad are unanimous: “grey engineering” solutions are last century thinking. There is also a growing number of internationally recognised personalities (i.e. Bill Gates, see this link: http://www.impatientoptimists.org/Posts/2012/08/Inventing-a-Toilet-for-the-21st-Century) that is supporting research for a change in the humble and specific issue of toilets!. Now, a growing number of enlightened cities are embracing Green Infrastructure as a vastly superior solution, which, besides tackling overflows, also addresses the critical rainwater-related issues of flooding and drought, both ignored by the tunnel solution. Green Infrastructure also enhances everyone’s living environment, improves air quality and mitigates climate change, whereas the rainwater-sewer solution exacerbates it. Considering that climate change is the likely cause of the degenerate weather patterns we experienced all too well last year, a heavyweight engineering solution, coming with power-hungry pumps and a carbon footprint to match is an own goal. Besides, Green Infrastructure (including the recycling of our own human waste) would also foster a green, local industry, in contrast to tunnelling jobs which would be short lived and mostly filled by foreign contractors.

In the US, the Environment Protection Agency has now recommended “going from Grey to Green” on the back of  very successful Green Infrastructure projects to tackle the same issue in places like Philadelphia, with New York following suit.  Why must the UK always lag behind?  What’s more, Green Infrastructure can be implemented in a piecemeal fashion, controlled by local authority rather than offshore financiers exploiting a monopoly, and avoid the rocket-sciency financial engineering surrounding the mega-sewer.

Once again, I ask that you kindly show your concern about the impact of this issue on your constituency by supporting the Early Day Motion no 1078.

Here are a number of related press articles, should you require more information on this developing scandal:

• Exclusive: Now water companies are caught avoiding tax, The Independent, 14 Feb 2013
• Axe supersewer and adopt my greener plan, says US expert, Evening Standard, 17 Dec 2012
• Thames Water – a private equity plaything that takes us for fools, the Observer, 11 Nov 2012
• This water tax trickery in the corporate sector is unacceptable the Observer, 10 Nov 2012
• Water companies pay billions to shareholders but little tax. Why? the Observer, 10 Nov 2012

Yours sincerely,

 

http://notosupersewer.blogspot.co.uk/