A report by Common Wealth suggests that ministers could nationalize failing water companies, like Thames Water, at minimal cost using a process called special administration. Ewan McGaughey, a professor from King's College London, argues that the commonly cited £99 billion cost of nationalization is inflated, based on outdated estimates from the industry. The report contends that real market values, taking into account debt and necessary repairs, might be much lower, allowing for a potential legal argument for public ownership worth close to zero. Public support for nationalization is strong, though government officials cite regulatory capital value as the main valuation method.
The actual market value of water companies appears to be substantially lower, as demonstrated by KKR's $4 billion equity offer for Thames Water.
Government officials claim that regulatory capital value is the standard measure for determining the value of water companies, complicating the nationalization process.
#water-nationalization #public-ownership #special-administration #market-valuation #water-industry-reform
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