Water companies caught using their own sewage crisis to overcharge US to fix it

Water companies in England and Wales are spending around six times more on fixing the sewage system than comparable countries like Denmark, where water is publicly owned and locally operated. The regulator Ofwat passes on costs for privately-owned infrastructure investments onto the public through bill increases.

Water companies have “unbelievably high costs”… apparently..

Campaign group Windrush Against Sewage Pollution (WASP) found that private water companies upgrading a sewage plant covering Oxford would cost £435m, much higher than the £40m initially quoted. The sewage works would serve up to 267,000 people.

In comparison, building a whole new sewage works in Assens, Denmark cost £29m. This is a country where the cost of living is higher and the cost of sewage equipment is one of the most expensive in the continent. The Assens system serves 100,000 people.

WASP said:

It wasn’t just the epidemic of ridiculous and unbelievably high costs that inspired WASP to investigate water company pricing, it was also the casual approach the entire industry has to adding eye-watering increases that, in the Oxford case, started at an already alarming £40m in 2021 and rocketed through £130m, £337m and now to £435m, without a credible explanation.

Even in the US building sewage plants costs much less at £248m for a new plant serving one million people. This raises the question of whether water companies have a profit-extraction scheme underway through overpricing sewage infrastructure and passing the cost to bill payers.

“Game the system”

Ofwat has said it’s not formally investigating the claims that water companies are ripping off the public through such overcharging. Indeed, Ofwat itself is facing legal action for allowing water companies to pass the costs of their own investment failures onto the public.

And WASP further argued:

The regulator’s hands-off approach to auditing and detail has allowed companies to game the system

Overall, Ofwat has approved £104bn in infrastructure investment from water companies for the next five years. That gives ample space for further rip offs from the water firms, using their own sewage spill mess to profiteer beyond the usual scam of dividends they leech from the water supply.

Indeed, the upgrade of Cambridge sewage treatment works is costing £400m and will serve around 260,000 people. WASP has branded it a “national issue”.

For 2025/26, bills are set to rise by £123.

Featured image via the Canary