Thames Water is cutting jobs to make itself more attractive to potential buyers.
The United Kingdom-based utility, owned by German water giant RWE, won’t speculate on how many jobs will be lost, but it is feared hundreds of workers could be laid off.
The revelation has outraged British customers coping with a garden hose ban while Thames is losing the equivalent of 350 Olympic-sized swimming pools of water a day due to leaky pipes. Thames imposed the ban across Southern England in March 2006, citing drought conditions.
Thames stopped recruitment in April. In July, the chief executive imposed a total hiring freeze. Thames is hoping to eliminate jobs via voluntary redundancies as part of a company-wide review.
“The main concern about job cuts is going to be that the service is maintained and is of good quality,” said Andrew Marsh of Britain’s Consumer Council of Water.
The company said the review is part of an effort to focus on “front-line” activity. Thames has the worst leakage rate of any British water company and has consistently missed leakage reduction targets. The Office of Water Services for England and Wales has ordered the firm to invest an extra £150 million (CAN$318 million) by 2010 to replace nearly 230 miles of London pipes.
First-round bids have started on Thames, which is expected to fetch around £7 billion (around CAN$15 billion) and there are two major Canadian players. The Public Sector Pension Investment Board (PSP Investments), one of Canada’s largest pension funds, has teamed up with Guy Hands’ investment firm Terra Firma to launch a bid. PSP manages the pensions of the Royal Canadian Mounted Police and the Canadian Forces, among others. Canada’s Borealis is also bidding. Other contenders include Australia’s insatiable Macquarie and the utility group Alinta.
- With files from the Daily Telegraph and the London Standard.