Regarding the disastrous state of the finances of Thames Water and other water companies in the UK, how does taking on debt against assets to meet the demand of investors for a financial return differ from a Ponzi scheme, where new investors pay for the rewards to old investors without any meaningful investment by the broker in real assets (Thames Water in crisis talks over potential £10bn black hole, 28 June)?
When the music stops, as has happened with Thames Water, there are no liquid assets – especially funds in a bank account – to pay off the largest debtors, in this case the banks. I honestly think even Bernie Madoff couldn’t have pulled off a better deception.
Louis Berk
London
Glad to read in your report that a spokesperson for Thames Water said the company maintained “a strong liquidity position”.
Alan Gray
Brighton
Your article compares the profit extraction of water companies “in England and Wales” with the public ownership model retained in Scotland (The wretched state of Thames Water is one of the best arguments for public ownership we have, 28 June).
No mention is made of the situation in Wales, where Dŵr Cymru, a not-for-profit company since 2001, has no shareholders. The company is required to reinvest any surpluses in the business, or to provide customer services, or to reduce customers’ bills. It has also reduced its reliance on debt by a substantial amount in that period.
John Powell
Llanbedr Pont Steffan, Ceredigion
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