Oct 26 Combined JW - Flipbook - Page 35
Hayling Herald Opinion
Save Our Island: Water Transfer
and Water Recycling Project
By Dave Parham from the Save Our
Island campaign group
IN order to understand how
Southern Water were able to come
forward with this unsound plan
– which has no customer or local
government support and may well
prove to be unsustainable – we
should look at why this situation
was allowed to arise.
Before 1979, the water industry
was suffering from a dire lack of
investment, so the government of
the day privatised the industry with
the laudable intention of turning
the situation around to create a new
and vibrant industry to take the
country forward. The government
established a very light touch monitoring and governance structure to
encourage entrepreneurship, and
granted financial returns on capital
investment.
The intention was to create water
companies with clear constitutions to service the nation’s needs
with well planned, safe, and future-proofed strategic utilities.
This was designed to attract
responsible UK-based investors
(like pension funds and banks) who
would be comfortable with a longterm guaranteed-but-lower return
on investment.
None of this happened. Within a
few years, all of the English water
companies had been swallowed up
by the praying mantises who reside
in the secret world of private equity
corporations. These corporations
saw an opportunity to take over
an asset-rich industry with little or
no controls, no competition, and a
forever-guaranteed revenue stream.
They saw a gold mine, and history
has proved it to be so.
During the intervening years,
assets were stripped, huge amounts
of cash were extracted, and massive
debts were accumulated. As these
corporations were not incentivised
to do the right things – they chose
to focus on their own objectives.
The consequences include:
n The light touch governance
meant very few people at Ofwat
or the Environment Agency were
engaged in the direct governance of
the water companies (some would
say not many more than the England Cricket Test Team Squad!)
Process and control audits were
minimal, and in some key areas –
including reporting pollution – the
water companies were authorised to
self-determine critical safety performance themselves.
n The water companies have not
come forward with a national
strategy to collect rainwater, store
it, and distribute it. Remember that
currently only 1% of our rainfall
is stored. They did not prioritise
water leakage reduction or sewage
pollution, which continue to increase, and not all of the pollution
events are even recorded. Belatedly,
Ofwat have started fining the water
companies for uncontrolled pollution, but this means little as it is
the bill-payers who end up paying
these fines, resulting in just another
hidden tax. Only now has the issue
become frontline as a result of a
groundswell of concern from the
population driving attention from
the government.
n The capital investment incentive
turned out to be an own goal. The
guaranteed return does not cover
storage (reservoirs etc), pollution control and distribution, and
prompts water companies to undertake questionable engineering/
mechanical solutions which are
not part of the service-critical path
to a sustainable future. A classic
example is the multi-million-pound
desalination plant at Beckton in
the Thames Estuary (completed
in 2010 at a cost of £270m) which
has been maintained at huge cost
in full working order for over four
years, and was only turned on for
four days. And it has still not been
turned on during 2026. Despite
conditions meeting the criteria for
emergency activation during the
drought, the facility has remained
offline due to technical issues,
including damaged filtration membranes and equipment degradation.
n Ofwat recently changed the rules
so that the return on investment is
now made to the investor, not the
water company. Again, this has little
meaning as the investors – the private equity corporations – already
own the water companies.
It was always folly – and has now
been proven beyond doubt – to expect a disparate group of profit-motivated foreign-owned private equity
corporations to somehow be able to
work together to plan and manage
the future of our nation’s critical
life-preserving water industry.
The organisations assigned to
oversee the governance of the water
companies (primarily Ofwat and the
Environment Agency) have failed
in this task, and as a consequence,
both are being completely reorganised. However, it is not clear that
this reorganisation will solve the
problems.
Defra must now own the strategy,
including:
n Water storage
n Water distribution
n Pollution prevention
n Environmental constraints (including climate change)
n Rules of governance
The water companies should
be told what their role is to be in
achieving the government’s objec-
tives and the governance which will
oversee their progress and performance.
This environment resulted in no
reservoirs being built, uncontrolled
water leakage, increased and uncontrolled pollution of our rivers and
shorelines, questionable focus on
capital projects, and above all, no
national strategy.
Southern Water’s Hampshire
Water Transfer and Water Recycling Project is the highest cost,
shortest lifespan, most vulnerable
solution compared to all the viable
alternatives. Yet it remains the only
solution presented to the Environment Agency by Southern Water to
expand their supply.
The existing approval process also
avoided any involvement of the
customer base or elected local governments on the change of use for
Havant Thicket and Budds Farm.
A detailed explanation can be
found at havantmatters.org/water
In addition, in September 2026,
Ofwat heavily criticised Southern
Water’s Draft Drought Plan 2027
Consultation as it is clearly inadequate in most areas, and Ofwat are
still missing the big issue of a National Strategy which includes the
ramifications of climate change.
It is very difficult to understand
why the Environment Agency and
Ofwat continue to process existing
questionable water company projects and initiatives as if nothing has
changed since the decision was
made to disband and reorganise the
governance structure.
Surely the decisions made by these
two organisations – which have now
been declared not fit for purpose in
their current form – should be reevaluated as a matter of urgency to
prevent financial wastage and wrong
choices being made.
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