Are the water authorities an attractive proposition?

The article reports on the proposals of the British government to transfer several water authorities to private ownership. These proposals are clearly hoping that the proceeds of the sale will make a substantial contribution of the Department of Treasury. With regard to the private statutory companies, a crucial distinction exists and the water services public limited companies, the government have coined for privatized water authorities. Water services are capital intensive, their key element in the total cost structure is investment expenditure. It is emphasized that the revenue can only be raised by decreased investment, which in time must affect service standards or by price increases.