Nationalizing English Water Firms Could Cost £105 Billion

UK Prime Minister Andy Burnham’s push for greater control of England’s troubled water industry could come with a hefty price tag of about £105 billion, according to a new industry-commissioned analysis.

The estimate covers the cost of buying England’s 14 water companies, privatized nearly 40 years ago and facing pressure to invest more in aging infrastructure.

Burnham is weighing how to overhaul the water industry. Before taking office in July he pledged to bring the sector into public ownership but has since focused on greater public control. Last month, he announced plans to scrap limits on state ownership of water utilities.

Read More: Burnham Opens Door to Public Ownership of UK Water Companies

The report by research consultancy PF Global, commissioned by trade association Water UK, estimated the cost based on recent deals in the sector and the value of their regulated assets. It argues that cheaper estimates which have been published overlook the companies’ large debts, which would not simply disappear under public ownership.

The £105 billion estimate covers only water firms in England, while the government calculated a lower £100-billion price tag last year for companies in both England and Wales. A separate analysis by consultancy Frontier Economics put the cost at about £144 billion in 2030, using the industry’s projected regulated capital value as a proxy for what the businesses are worth.