WEBVTT - Why Labour's Growth Plan Has a Thames Water-Sized Hole

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. Regulated assets like water,

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<v Speaker 1>airport and energy are held by investors on the basis

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<v Speaker 1>that usually returns are safe and predictable. The owners of

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<v Speaker 1>Thames Water, which serves, by the way, what a quarter

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<v Speaker 1>of the UK population, disproves that and investors are risking everything.

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<v Speaker 1>They're risking losing their investments. They've had to write off

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<v Speaker 1>billions of pounds and now creditors are contemplating or restructuring

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<v Speaker 1>that would possibly impose more losses on them. So if

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<v Speaker 1>you're the new government trying to attract a lot of

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<v Speaker 1>investment into the country, how do you fix Thames Water

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<v Speaker 1>so that creditors don't point to that and say, well,

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<v Speaker 1>the UK is uninvestable. On today's show, we discuss why

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<v Speaker 1>the tale of Thameswater has spooked born investors and what

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<v Speaker 1>the government needs to do to win them back. I'm

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<v Speaker 1>Francin Laqua. This is in the City.

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<v Speaker 2>Welcome to the City of London.

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<v Speaker 3>The City of the City of London.

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<v Speaker 2>We need mind the gap between the and the financial

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<v Speaker 2>hearts of the country, the city, the city.

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<v Speaker 4>Welcome to in the city, clear of the doors.

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<v Speaker 1>So with me today. UK Economy reporter Phil Aldrich and

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<v Speaker 1>corporate finance reporter abinav Ramarayan, thank you both for joining us.

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<v Speaker 1>I mean, this is kind of a crazy story because

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<v Speaker 1>you know, water is meant to be boring, utilities are

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<v Speaker 1>meant to be predictable, and Thames Water was anything but.

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<v Speaker 3>Well, exactly, the old point about the investment class that

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<v Speaker 3>water represents is its stable, regulated monopoly. If you put

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<v Speaker 3>your money in, you're supposed to get guaranteed dividends, it's

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<v Speaker 3>inflation protected. It's not meant to be a roller coaster ride.

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<v Speaker 3>And you know, in this instance, the investors since twenty

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<v Speaker 3>seventeen for Thames Water have not seen a penny dividends

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<v Speaker 3>and now certainly two of them have written off their

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<v Speaker 3>stakes entirely. Basically the company is now in the hands

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<v Speaker 3>of its creditors, so the shoholding is worthless. So it's

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<v Speaker 3>a complete disaster. But there are sort of implications more

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<v Speaker 3>broadly for the UK as a whole as an investment

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<v Speaker 3>destinations because of the simple fact this should not be

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<v Speaker 3>happening to these regulated assets.

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<v Speaker 1>So is this a case study of how not to

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<v Speaker 1>run a water utility? And what exactly happened.

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<v Speaker 4>Well, it all comes back to debt and we've seen

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<v Speaker 4>this across the board in the UK. It's not just Thmeswater.

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<v Speaker 4>We've seen a bunch of private equity owned companies from Morrison's,

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<v Speaker 4>ASDA and so on that have struggled with a debt

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<v Speaker 4>load at a time when interest rates have gone up

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<v Speaker 4>at a rapid base. They're coming back down now, of course,

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<v Speaker 4>but the damage is done. And I think Thames Water

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<v Speaker 4>is another such case where the previous owner mcquarie piled

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<v Speaker 4>a huge amount of debt onto Demeswater's balance sheet, extracted

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<v Speaker 4>some dividends from it, and maybe didn't quite invest as

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<v Speaker 4>much as they should have to keep the pipes from leading.

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<v Speaker 4>I think they have something like a third of the water.

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<v Speaker 4>They have like a leakage of about a third of

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<v Speaker 4>the water that the process. So yeah, it is I

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<v Speaker 4>think it's a case of financial engineering. I think there

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<v Speaker 4>are even some echoes to the national crisis in this

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<v Speaker 4>particular story.

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<v Speaker 3>Thames is was is the extreme example in the water industry.

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<v Speaker 3>You know, you speak to people there and they do

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<v Speaker 3>say there was management failings as well as this massive

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<v Speaker 3>debt load that just parted up on the business.

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<v Speaker 1>Failings because they didn't identify the problem or they just.

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<v Speaker 3>They were just bad managers. They just didn't run the business. Well.

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<v Speaker 3>I mean, you can look at companies like seven Trent

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<v Speaker 3>that operationally they've been done, they've been run effectively that

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<v Speaker 3>it's sorto listed to it never quite had the same

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<v Speaker 3>amount of debt problems. But people just say that Thames

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<v Speaker 3>was just had you know, it's bosses, which is not

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<v Speaker 3>particularly good.

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<v Speaker 1>So what was the exact role of the regulator in this?

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<v Speaker 3>So the head of the regulator is appointed by the

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<v Speaker 3>government and obviously their role is to make sure that

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<v Speaker 3>these privatized monopolies operate as much as if it was

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<v Speaker 3>a comparative market. So their main objective is to balance

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<v Speaker 3>household bill levels against investment levels, and so they have

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<v Speaker 3>to determine how much bills go up or actually in

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<v Speaker 3>previously they've been bringing bills down and as a result

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<v Speaker 3>of bills are falling, then investment levels have been not

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<v Speaker 3>growing as much as the investors wanted. The way the

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<v Speaker 3>water industry works, you have the regulators who are being

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<v Speaker 3>given incentives by government or being effectively told by government

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<v Speaker 3>to keep bills low and that was the priority for them,

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<v Speaker 3>and so as a result, investment levels were cut. So

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<v Speaker 3>you know, in twenty nineteen, for example, when the water

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<v Speaker 3>industry as a whole, we're saying it wanted to invest

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<v Speaker 3>about five billion pounds more than what the regulator let

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<v Speaker 3>them invest. Now what happened after that is we had

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<v Speaker 3>more and more sewage bills, etc. And there was a

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<v Speaker 3>complete national outcry about the situation. And obviously penalties were

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<v Speaker 3>then imposed on these companies. So the companies feel as

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<v Speaker 3>though the regulator is not being fair to them by

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<v Speaker 3>blocking the investment that was required and then penalizing them

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<v Speaker 3>when these problems due to lack of investment arose. And

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<v Speaker 3>obviously the politicians don't want to have the nightmare of

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<v Speaker 3>sewage bills everywhere, but they also don't want households up

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<v Speaker 3>in ours because of rising bills. And so the warner

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<v Speaker 3>industry ended up being sort of trapped in this difficult

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<v Speaker 3>political place. And really it's all kind of broken now.

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<v Speaker 1>But why was it so leveraged? So what did they

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<v Speaker 1>use the debt to finance?

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<v Speaker 4>Well, I mean to some extent investment for some of

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<v Speaker 4>the necessary investment to upgrade the infrastructure, but there was

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<v Speaker 4>a lot of dividends bare out as well, and this

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<v Speaker 4>is one of the reasons why there's a lot of

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<v Speaker 4>customer dissatisfaction. In fact, I think it was a big

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<v Speaker 4>policy issue which led up to the general election earlier

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<v Speaker 4>this year, and I do think the leverage was egregious.

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<v Speaker 4>I think it's definitely over fifteen billion pounds the debt

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<v Speaker 4>on the operating company. Don't remember the exactly god, but

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<v Speaker 4>it is a huge amount of debt for water utility,

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<v Speaker 4>which has a monopoly over one of the biggest cities

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<v Speaker 4>in the world to have.

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<v Speaker 1>So when did the trouble start?

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<v Speaker 4>I don't want to get too nerdy, but like inflation

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<v Speaker 4>is a big part of this because a lot of

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<v Speaker 4>the debt issued by water utilities in the UK, the

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<v Speaker 4>interest payments or the coupons, are linked to inflation, which

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<v Speaker 4>means that a sharp increase in inflation was really troublesome

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<v Speaker 4>for many of these companies. The reason they do that

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<v Speaker 4>is because water bills also rise with inflation. But bizarrely

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<v Speaker 4>they used two different measures of inflation, which meant that

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<v Speaker 4>there was a mismatch between what they were paying out

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<v Speaker 4>in terms of their debt obligations and what they were

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<v Speaker 4>getting in in terms of the water bills that customer's paid.

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<v Speaker 1>And investors have been really badly, badly hurt by this.

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<v Speaker 1>Could the government have handled it better well?

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<v Speaker 3>Obviously the labor governments inherited this problem and they are

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<v Speaker 3>having to deal with it. In terms of sentiment for

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<v Speaker 3>the UK, this is not good. Labor desperately needs huge

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<v Speaker 3>amounts of money to invest with their plans for growth

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<v Speaker 3>are predicated on a lot of private investment. And if

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<v Speaker 3>you've got the safest of safe assets going bust and

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<v Speaker 3>then the regulator afterwards saying that your returns are not

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<v Speaker 3>going to be particularly good when clearly the risk premium

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<v Speaker 3>has gone up, they're worried about what that says about

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<v Speaker 3>the country as a whole, and whether it's investible in

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<v Speaker 3>these particularly safe sectors. And if you're going to be

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<v Speaker 3>doing joint investment with the government effectively, which would be

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<v Speaker 3>the green energy revolution, you know, are they trustworthy? So

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<v Speaker 3>this is a moment Labor has to seize and Labor

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<v Speaker 3>has to sort of reset the trust with these investors

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<v Speaker 3>in some format. So it's a tricky one.

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<v Speaker 1>Because essentially, I mean, things have gotten so badly right

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<v Speaker 1>for Thameswater, which serves, by the way, what a quarter

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<v Speaker 1>of the UK population that they're now talking about these

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<v Speaker 1>special measures, and so they could eventually be broken up

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<v Speaker 1>or nationalized. So if you're an investor, you lose everything absolutely.

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<v Speaker 4>And I was saying earlier that there are shades or

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<v Speaker 4>the financial crisis, and this is where I think, this

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<v Speaker 4>is where I see the similarity, which is where off

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<v Speaker 4>what seems fairly preoccupied I think with what is right

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<v Speaker 4>and what is wrong, as the Bank of England was

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<v Speaker 4>back when two thousand and eight happened. But at that point,

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<v Speaker 4>I think we have reached a point where what is

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<v Speaker 4>right and what is wrong is irrelevant. Now the only

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<v Speaker 4>question is what is best for the country as a whole.

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<v Speaker 4>Maybe mcquarie and the current owners of Thames Water were

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<v Speaker 4>in the wrong, maybe they shouldn't have made all those

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<v Speaker 4>bad management decisions, but that now fails into insignificance compared

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<v Speaker 4>to the bigger picture, which is that labor desperately needs

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<v Speaker 4>investors on board. But of course it's a political it's

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<v Speaker 4>a political mindfield, and.

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<v Speaker 3>Say I'll be talking about the moral hazard that in

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<v Speaker 3>Mervin King, Yeah, brewed up right at the moment where

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<v Speaker 3>you know, we needed to ditch moral hazard to make

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<v Speaker 3>sure that there wasn't a complete social meltdown. In twenty

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<v Speaker 3>seventeen thousand and eight, and obviously the bank changed time

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<v Speaker 3>later on. But absolutely, I mean, these water companies have

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<v Speaker 3>they've got over leverage. They definitely abused what they had

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<v Speaker 3>and took too much in dividends. But you can't change

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<v Speaker 3>the past bygones of bygones now and you've got to

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<v Speaker 3>sort of move on. You can, you can resent what

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<v Speaker 3>has happened. You can forever hold Macquarie to account to

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<v Speaker 3>a degree, but you know, we need the investment.

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<v Speaker 1>But there was a tipping point I think in March,

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<v Speaker 1>and I don't know whether it is useful talk about it,

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<v Speaker 1>where the investors didn't want to put an extra five

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<v Speaker 1>hundred million because they said the regulators were looking at

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<v Speaker 1>it wrong. So how does labor fix this? I mean,

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<v Speaker 1>if you if you want to a blueprint saying come

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<v Speaker 1>and invest in my country, it's safe and we take

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<v Speaker 1>right decisions. Does labor change the regulators? Do they change

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<v Speaker 1>off what the way this industry has looked at or

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<v Speaker 1>do they put five hundred million themselves?

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<v Speaker 4>Everyone needs to share a bit of the pain. I

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<v Speaker 4>think this will be what will what will happen? I

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<v Speaker 4>think creditors will take a bit of pain. There will

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<v Speaker 4>be a hair cut on Themswater debt to bring it

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<v Speaker 4>to a more manageable level. Because right now what off

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<v Speaker 4>what calls gearing, which is then measure of how indebted

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<v Speaker 4>a regulated entity is, is over eighty percent in the

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<v Speaker 4>case of Thames Water, and I think of what recommends

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<v Speaker 4>somewhere between fifty five and sixty five percent. So it's

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<v Speaker 4>immensely indebted. And in order to bring that down, I

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<v Speaker 4>think creators will have to take a hit, but you

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<v Speaker 4>have to walk that fine line where creators take a hit,

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<v Speaker 4>but not such a hit that they run away, and

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<v Speaker 4>then customers will also have to take a hit. Bills

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<v Speaker 4>will have to go up, but not to the extent that,

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<v Speaker 4>you know, you lose the electorate.

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<v Speaker 3>And in that situation, obviously the shareholders are wiped out.

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<v Speaker 3>The creditors are taking a hit. After the shaholders it

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<v Speaker 3>completely wiped out. So I mean there is that in

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<v Speaker 3>the terms example, So there definitely is burden. The shift

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<v Speaker 3>is going to have to be burned sharing and I

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<v Speaker 3>mean for the politicians, the cost is political in that

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<v Speaker 3>they've got to let they'll have to let bill's household

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<v Speaker 3>bills rise. The investment challenge is multi decade, right fix

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<v Speaker 3>the water. You can't fix the water the pipes and

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<v Speaker 3>get everything working in five years, and that's where they

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<v Speaker 3>have these five year investment horizons. And then with Thames,

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<v Speaker 3>if you I mean right now, we need the investment,

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<v Speaker 3>as a were saying, if the government comes in, puts

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<v Speaker 3>the business in special measures, then breaks it up and

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<v Speaker 3>tries to set up new operating companies, and that whole

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<v Speaker 3>process will take a year possibly more before the company

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<v Speaker 3>is up and running properly again, or it's various satellite companies,

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<v Speaker 3>and that's just going to delay the investment process and

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<v Speaker 3>labor are facing in three or four or five years

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<v Speaker 3>time when when the next election is held, they're going

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<v Speaker 3>to be judged not on where the bills came down,

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<v Speaker 3>but on whether the sewage is not being pumped into

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<v Speaker 3>the rivers any longer, right, And so for them, they

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<v Speaker 3>need to show that the investment and has been delivered

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<v Speaker 3>and the infrastructure is being upgraded. And that's what they're

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<v Speaker 3>going to be judged on, and which is very different

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<v Speaker 3>to what the Tories were believe that they were being

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<v Speaker 3>judged on until the last couple of years when the

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<v Speaker 3>when it really blew up and it became a national

0:12:02.679 --> 0:12:05.520
<v Speaker 3>outrage about it. So if you were to say politically,

0:12:05.559 --> 0:12:07.599
<v Speaker 3>what would be the balance to take, you would you

0:12:07.640 --> 0:12:11.000
<v Speaker 3>would presume they would choose rock bills rising over you know,

0:12:11.080 --> 0:12:13.240
<v Speaker 3>another five years of sewage pouring into the rivers.

0:12:13.760 --> 0:12:16.560
<v Speaker 1>But Phil, so this is extremely important because the Labor

0:12:16.600 --> 0:12:19.400
<v Speaker 1>government have been in charge for almost three three months.

0:12:19.800 --> 0:12:22.040
<v Speaker 1>They're trying to attract foreign investment, as you're saying, and

0:12:22.080 --> 0:12:24.439
<v Speaker 1>so this is seen as a kind of critical test, right,

0:12:24.520 --> 0:12:27.559
<v Speaker 1>how do they deal with investors? How do they deal

0:12:27.920 --> 0:12:30.880
<v Speaker 1>with this fallout? And that's kind of what you know,

0:12:30.920 --> 0:12:33.079
<v Speaker 1>investors will judge and decide whether they want to put

0:12:33.080 --> 0:12:34.240
<v Speaker 1>their money in the UK or not.

0:12:35.120 --> 0:12:36.760
<v Speaker 3>Yeah, I mean there's a big it's a big deal.

0:12:36.800 --> 0:12:42.560
<v Speaker 3>I mean there's a group, the Global Investor Forum. Forget,

0:12:43.040 --> 0:12:43.560
<v Speaker 3>there's a group.

0:12:43.880 --> 0:12:45.000
<v Speaker 1>There's always a Global investor.

0:12:45.120 --> 0:12:46.920
<v Speaker 3>Yeah, there's there's a there's a group called the g

0:12:47.040 --> 0:12:49.720
<v Speaker 3>I I A. And and that's this is the issue

0:12:49.760 --> 0:12:54.320
<v Speaker 3>that they're raising, is that the UK is now considered

0:12:54.360 --> 0:12:59.240
<v Speaker 3>to be less investible by these huge global asset managers

0:12:59.400 --> 0:13:02.800
<v Speaker 3>than the whole of Europe and the US. We're right

0:13:02.800 --> 0:13:04.920
<v Speaker 3>at the bottom of the detail. The sentiment in the

0:13:05.000 --> 0:13:08.079
<v Speaker 3>UK is as low as it has been one guys,

0:13:08.120 --> 0:13:10.680
<v Speaker 3>but it too said it was the only time it's

0:13:10.679 --> 0:13:14.360
<v Speaker 3>been lower in their memory was when Jeremy Corbyn was

0:13:14.760 --> 0:13:17.000
<v Speaker 3>standing to be Prime minister and he was going to

0:13:17.080 --> 0:13:21.640
<v Speaker 3>nationalize the nationalized, whilst swathes of the UK private sector.

0:13:21.720 --> 0:13:25.199
<v Speaker 3>So the investor community is definitely concerned about what's happening

0:13:25.200 --> 0:13:27.480
<v Speaker 3>in the UK. The good news is they're feeling a

0:13:27.520 --> 0:13:31.240
<v Speaker 3>lot happier with the conversations they're having with the Labor government,

0:13:31.440 --> 0:13:34.200
<v Speaker 3>so the sentiment is improving, but it's starting from a

0:13:34.280 --> 0:13:36.719
<v Speaker 3>very low place. And you know what happened in the

0:13:36.760 --> 0:13:39.160
<v Speaker 3>regulated as I say, these are supposed to be super safe,

0:13:39.240 --> 0:13:42.960
<v Speaker 3>regulated industries. Nothing you should never get a shock really.

0:13:43.640 --> 0:13:45.760
<v Speaker 3>Obviously this is partly to do with the poor management

0:13:45.760 --> 0:13:47.280
<v Speaker 3>of Thames Water that they got a shock. You can't

0:13:47.280 --> 0:13:49.840
<v Speaker 3>just blame it on the regulator, but certainly the regulator

0:13:49.880 --> 0:13:52.400
<v Speaker 3>has been from what the investors say, has been a

0:13:52.440 --> 0:13:55.480
<v Speaker 3>problem in the water sector. So if you can't get

0:13:55.559 --> 0:13:59.880
<v Speaker 3>the investment in their the sort of trust concern just spreads.

0:14:00.040 --> 0:14:04.559
<v Speaker 1>You say, I mean these are assets, I guess you know, airports, infrastructure,

0:14:04.679 --> 0:14:06.840
<v Speaker 1>what are there are meant to be if not boring. Certainly,

0:14:07.280 --> 0:14:10.000
<v Speaker 1>you know very little last predictable safe.

0:14:10.080 --> 0:14:11.839
<v Speaker 3>And you can go elsewhere in the world and you

0:14:11.880 --> 0:14:14.960
<v Speaker 3>can find those assets with good returns and they and

0:14:15.040 --> 0:14:18.560
<v Speaker 3>they're not they're not collapsing into administration like terms.

0:14:19.160 --> 0:14:23.080
<v Speaker 4>Absolutely. The good news though for good news good news.

0:14:23.160 --> 0:14:24.600
<v Speaker 4>The good news, I mean, I don't know if it's

0:14:24.600 --> 0:14:26.600
<v Speaker 4>a good news, but it's a comforting thought anyway, is

0:14:26.680 --> 0:14:29.960
<v Speaker 4>that investors have shot memories. I mean, I've seen this

0:14:30.000 --> 0:14:33.120
<v Speaker 4>time and time again in my financial reporting career. I

0:14:33.160 --> 0:14:36.080
<v Speaker 4>don't think it would take a huge amount for investors

0:14:36.080 --> 0:14:38.600
<v Speaker 4>to suddenly look at like a five six percent yield

0:14:38.680 --> 0:14:41.040
<v Speaker 4>from a regulated entity and be like, oh, that looks

0:14:41.120 --> 0:14:44.320
<v Speaker 4>quite good. I mean, there's a lot of anger out

0:14:44.360 --> 0:14:47.000
<v Speaker 4>there right now, but I do think it is fixable.

0:14:47.360 --> 0:14:49.280
<v Speaker 3>Yeah, they say, I mean, you speak to them, they say,

0:14:49.440 --> 0:14:51.320
<v Speaker 3>how do you rebuild trust? And they say, well, you

0:14:51.320 --> 0:14:53.320
<v Speaker 3>can start off by giving us a better return, And

0:14:53.400 --> 0:14:56.080
<v Speaker 3>you know that that's probably that's all that needs to happen,

0:14:56.160 --> 0:14:58.240
<v Speaker 3>give a better return. I think they do want They

0:14:58.280 --> 0:15:01.080
<v Speaker 3>just do want a little bit more around the regulator.

0:15:01.120 --> 0:15:03.160
<v Speaker 3>Fram they do not want to go through these kind

0:15:03.200 --> 0:15:06.760
<v Speaker 3>of absolutely tortuous problems that they've had with off WHATK

0:15:06.760 --> 0:15:09.960
<v Speaker 3>but that is certainly off What is is is the

0:15:10.000 --> 0:15:12.120
<v Speaker 3>core problem here. The other regulators there at the moment,

0:15:12.240 --> 0:15:14.640
<v Speaker 3>they don't have concerns with They'd worried that if what's

0:15:14.680 --> 0:15:16.880
<v Speaker 3>happened in off What spreads to OFF Gym or the

0:15:16.960 --> 0:15:21.040
<v Speaker 3>Civilization Authority and elsewhere, then you know, that could be bad.

0:15:21.120 --> 0:15:24.320
<v Speaker 3>But at the moment they feel it's really just a

0:15:24.320 --> 0:15:27.400
<v Speaker 3>specific off problem, which so it could be resolved. Like

0:15:27.440 --> 0:15:29.640
<v Speaker 3>you say, I've been pretty relatively quickly.

0:15:30.440 --> 0:15:33.000
<v Speaker 1>When more or less could this be resolved or at

0:15:33.080 --> 0:15:36.480
<v Speaker 1>least I mean, you know, investment memories are short. I do,

0:15:36.960 --> 0:15:40.440
<v Speaker 1>but we have a big budget October thirtieth. Like they're

0:15:40.480 --> 0:15:43.600
<v Speaker 1>just also trying to figure out this new government and

0:15:43.640 --> 0:15:46.280
<v Speaker 1>what they believe in fundamentally right the policies.

0:15:47.000 --> 0:15:50.040
<v Speaker 4>I mean, I'm looking at other sort of similar restructuring

0:15:50.080 --> 0:15:54.280
<v Speaker 4>situations and some of them last for years. But I

0:15:54.440 --> 0:15:57.920
<v Speaker 4>suspect that I think by the end of this year,

0:15:58.000 --> 0:16:01.280
<v Speaker 4>when so far we've only had drafted dominations from OFF

0:16:01.320 --> 0:16:03.640
<v Speaker 4>What or just a plan of what they might impause

0:16:03.640 --> 0:16:05.720
<v Speaker 4>on the industry, So by the end of the year

0:16:05.760 --> 0:16:08.960
<v Speaker 4>we'll probably have we'll have a fleshed out plan and

0:16:10.000 --> 0:16:13.720
<v Speaker 4>if that is acceptable to investors, we could see improvements

0:16:13.760 --> 0:16:15.480
<v Speaker 4>by the end of the year. If it's not acceptable

0:16:15.520 --> 0:16:17.800
<v Speaker 4>to investors, then you get like a challenge and it

0:16:17.880 --> 0:16:20.960
<v Speaker 4>might go to the CMA of the Competition Markets Authority,

0:16:21.200 --> 0:16:22.720
<v Speaker 4>or it might become.

0:16:23.840 --> 0:16:25.600
<v Speaker 3>It does feel like December is going to be this

0:16:25.680 --> 0:16:30.400
<v Speaker 3>kind of clinch moment where either the investors are given assurances,

0:16:30.400 --> 0:16:32.640
<v Speaker 3>particularly on the returns that they're going to get, and

0:16:32.680 --> 0:16:35.280
<v Speaker 3>they'll be happy to put their money in, and basically

0:16:35.280 --> 0:16:37.840
<v Speaker 3>the problem will go will slowly go away, and I

0:16:37.880 --> 0:16:40.920
<v Speaker 3>think there's even there talks about maybe reforming off What

0:16:41.040 --> 0:16:44.960
<v Speaker 3>a little bit, but you can see that this issue

0:16:44.960 --> 0:16:49.040
<v Speaker 3>would just retreat. If off What holds its line, then

0:16:49.200 --> 0:16:52.320
<v Speaker 3>the water companies are threatening to take the regulator court

0:16:52.600 --> 0:16:55.160
<v Speaker 3>through another regulator, and then it's begin to be it'll

0:16:55.160 --> 0:16:57.840
<v Speaker 3>blow up into a political issue as well, because that's

0:16:57.840 --> 0:17:00.560
<v Speaker 3>the start of the new five year investment period. So

0:17:00.600 --> 0:17:03.200
<v Speaker 3>that's just that's going to delay the whole process. So

0:17:03.680 --> 0:17:04.879
<v Speaker 3>you know, the end of the year is going to

0:17:04.880 --> 0:17:06.280
<v Speaker 3>be a clinching moment.

0:17:07.200 --> 0:17:10.560
<v Speaker 1>Thank you so much for joining us, phil and Abinov.

0:17:11.119 --> 0:17:13.880
<v Speaker 4>Thanks Vern, it was absolute pleasure. Thank you so much.

0:17:15.240 --> 0:17:17.720
<v Speaker 1>Thanks for listening to this Week's in the City from Bloomberg.

0:17:17.800 --> 0:17:20.600
<v Speaker 1>This episode was hosted by me Francin Laqua and it

0:17:20.720 --> 0:17:24.119
<v Speaker 1>was produced by Summersati. Production support from Isabella Award and

0:17:24.160 --> 0:17:27.320
<v Speaker 1>sound design from Blake Maples. Special thanks to Philip Aldrich

0:17:27.440 --> 0:17:31.280
<v Speaker 1>and Abanov rum n Ryan. Please subscribe, rate, and review

0:17:31.320 --> 0:17:33.400
<v Speaker 1>wherever you listen to podcasts.