The BBC said (https://www.bbc.com/news/articles/cw4478wnjdpo) that in 30 years, private water and sewerage companies in England and Wales have extracted over 86 billion pounds (~USD $115 billion), while investing very little.
Meanwhile, consumer water rates in those areas increased by as much as 50% in the past year alone.
What is the number? It is a huge red flag if you see an article that cites a profits number without citing a number for capital invested. You literally cannot reach a conclusion either way without comparing the two numbers.
You cannot reach a conclusion. A conclusion is a rational thing based on comparing realistic alternatives.
As the user of the water system you do have to care about the return on investment. Because the alternative is to have the government take out bonds to pay for that work, and you’d have to pay the interest on those bonds with your tax dollars.
The conclusion in this case is very simple: 86 billion has been taken in profits, with very limited capital investment.
Now .. what to do about that? That's a bit more complicated, but we could at least start from the premise that had the water systems been public, that 86 billion could have been spent on capital investment without a single bond being issued.
> The conclusion in this case is very simple: 86 billion has been taken in profits, with very limited capital investment.
What is the number for the capital investment? You’re comparing a number to words. That’s a type error.
> That's a bit more complicated, but we could at least start from the premise that had the water systems been public, that 86 billion could have been spent on capital investment without a single bond being issued
Not without knowing how much capital has actually been invested to date. Because you’d be have paid out interest and principal on that over 30 years out of that 86 billion.
I'm the board of my local (rather small) water system. Most of our capital investment is done by spending what we raise from our members/customers, and we try hard not to require loans unless absolutely necessary.
A larger water system has bigger capital projects, but also a larger customer base (and they also likely charge more per liter of water than we do). So it is absolutely not a given that capital investment in water infrastructure requires bonds or loans (though I acknowledge that these likely cannot be avoided).
Issuing bonds is how virtually every large water system pays for capital projects. My county is very financially responsible (triple AAA bond rating), but it has hundreds of millions in debt outstanding for water/sewer: https://www.fitchratings.com/research/us-public-finance/fitc.... This is a small county with just half a million people.
Again, how much money did these UK water companies invest? What's the number? Without knowing that, you're in no position to say it's in the range of what a government utility would be able to pay out of operating surplus, without issuing bonds.
Meanwhile, consumer water rates in those areas increased by as much as 50% in the past year alone.