Roch Cheroux, the chief executive of Welsh Water, a not-for-profit utility, asserts that simply changing ownership structure will not fix the fundamental issues plaguing the UK's water sector. He contends that regulation is more critical than ownership, pointing to Welsh Water's own performance as no better than its for-profit counterparts in addressing sewage pollution and infrastructure upgrades, despite reinvesting all profits into the business since 2001.
Welsh Water, which serves three million people, has been operating under a not-for-profit model through its parent company, Glas Cymru, since 2001, meaning it has no shareholders and pays no dividends. However, the company has faced significant penalties, including a $44.7 million fine in June for severe breaches in wastewater operations and a $40 million order from Ofwat in March 2024 for misleading customers and regulators on leakage and per-capita consumption. This follows a previous criminal fine of $1.35 million in May of last year for environmental permit breaches, later reduced to $120,000.
Cheroux, who previously led Sydney Water Corporation, highlights that conditions in Wales are similar to England, and Welsh Water's operational performance and asset condition remain below acceptable levels. The company is financed entirely by debt, with over one-fifth of customer income allocated to financing costs. Despite strong public support for water renationalisation (over 80% according to YouGov polling), the government is exploring alternatives like regional boards and mutualized ownership rather than full public ownership. Critics, like David Hall of Greenwich University, suggest full public ownership could save billions in financing costs annually.
