Sewage crisis passes the high-water mark

If there was any doubt about how high the stakes are in the multibillion pound standoff between the owners of Thames Water and regulators, they became clear after 8am yesterday.

The beleaguered firm announced that shareholders had pulled the plug on £500m of emergency funding intended to keep Thames Water afloat.

In a nutshell, the industry regulator doesn’t want Thames Water to hike bills by 40 per cent; its shareholders say this makes the company “uninvestable”. And so the row rumbles on – and the future of England’s largest water company, which serves 16 million customers, remains up in the air.

For many, the saga is fast becoming an object lesson in the trials and tribulations of allowing critical national infrastructure to be placed in foreign ownership.

Campaigners have decried what they say is the folly of handing control of Thames Water to investors like the sovereign wealth funds of China and Abu Dhabi.

A lack of appetite in Beijing and the Middle East – alongside other investors – for further investment in London’s water and sewage pipes could yet leave customers with heftier bills and ministers with the headache of sorting out decades of under-investment.

But behind this lies another uncomfortable truth: the UK also needs that foreign investment, not only to fix our leaky water pipes, but also to pay for the green energy sources and grid required to combat climate change.

While the perils of granting foreign capitals a say in setting water bills in the UK might be clear, the task of encouraging investment without it bringing untoward influence is arguably more pressing.