Ofwat should approve the bonuses and dividends of water companies, say the deputies | Water
The bonuses and dividends for the bosses and shareholders of the water company must be approved by the regulator before being paid, as Billpayer funds are used in an irresponsible manner, deputies said.
They also recommended that the government plan to put an end to the model of for -lucrative water company and make English companies for non -profit, similar to the way the system works in Wales, in the Restricted Environment Committee report, Rural Affairs (EFRA).
The report notes: “The Welsh Water gear levels are lower and its financial resilience is better than many main water companies.
The Committee has discovered in recent weeks that Thames Water leaders had received bonuses worth millions of pounds from a controversial loan of 3 billion pounds sterling, whose aim was to stabilize the finances of the company and save it from the collapse.
The ministers recently set up an independent water commission to produce a report on the future of the water industry in difficulty in terms of England, which is unique in that it is entirely privatized and managed for profit. Companies have presided over wastewater spills and financial mismanagement leading to environmental destruction, a waste of money from customers, large bonuses for executives and the risk that businesses collapse and require a bailout of taxpayers.
The EFRA Committee report aims to guide the committee after months of collecting evidence of experts in the sector.
The report recommendations include the regulator’s authorization, OFWAT, to prevent inappropriate owners from buying water and veto companies to hire frames.
The government has recently adopted new laws which allow it to ban premiums for management and reports, but the report notes that the weak standards currently underlie this means that the water bosses that had recently supervised wastewater spills were authorized to be paid. The new law only prohibits performance bonuses, so that water companies can get around this by labeling them as something else, for example as retention payments, adds the report.
The chairman of the EFRA committee, the deputy for Lib Dem Alistair Carmichael, said: “In the midst of an increasing public indignation at the poor performance of water companies, some companies have paid dividends to the shareholders and excessive bonuses to their senior executives.
“The complex and sometimes impenetrable financial structures of water companies, with their countless subsidiaries, portfolio companies and parents, seem to suggest that their objective is less to provide good service to their customers and more to allow them to juggle their finances and their increasingly unbearable debt levels.
“It must stop now. Confidence and responsibility in the water sector are very low. It is not acceptable that it fell to laudable citizen scientists to denounce the problems linked to local water resources. The protection of the environment and the delivery of reliable and safe water must be the first priorities of water companies and regulators. ”
