Friday, July 07, 2006

Water, Water Everywhere.

Ofwat's decision not to fine Thames Water for being useless raises an interesting problem, or rather their reasoning does, that fining them would mean that there was less money available to repair the leaking pipes. This creates a dilemma, if bad water companies can't be fined because they need the money to improve their performance then there is little incentive to actually do a good job. The solution though seems rather obvious to me, if a water company doesn't do a good job give Ofwat the right to spend the money raised by fines to pay subcontractors to sort out the problems Thames has been unable to perform. Am I missing something? because this seems to be an obvious solution but one I haven't seen elsewhere.

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