Why are bidders fighting to buy leaky Thames Water?

The battle for UK's biggest water firm is a 'vulture auction', writes James Moore. Either way, it will be us footing the bill

- James Moore

It's not Thames Water anymore and it hasn't been that for quite some time; it's Thames Wat-er-mess.

The tragedy of this now-zombie company - which has warned that it will run out of cash sometime next year - is that things like leaks, customer service and the untreated sewage that keeps getting pumped into the environment aren’t anywhere near the front of the queue when it comes to the ongoing discussions about its future. It’s the financiers’ interests that come first.

However, despite enough debt to fill several reservoirs, it might surprise you to learn that there is plenty of interest in taking on this sinking ship, which is now firmly in the class of what they like to call a “distressed asset”.

The dismal state of the business has led to what the GMB union described (aptly in my view) as a “vulture auction”, alongside some strongly worded criticism of the reported plans of one of the bidders. Infrastructure investor Covalis Capital would draft in Suez, a French company that runs water assets there and employs 5,000 people in this country managing water and waste for local authorities and businesses, as an operating partner to run the thing.