INDUSTRY CHIEFS
A year into the post, Natasha Wiseman finds Thames Water chief executive Martin Baggs fascinated with the company – and passionate about the issues
Dig for victory
hames Water boss Martin Baggs is celebrating a year in the post of chief executive of the UK’s largest water company, but his colleagues have neglected to buy him a cake. Baggs jokes good naturedly about this ‘oversight’, but it is soon clear that the bread and butter issue of providing water and sewerage for 8.7M customers across London and the Thames Valley holds much greater attraction for him.
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Having been awarded the permanent post on 4 March 2010, Baggs has clocked up some 25 years in the industry, 19 with Southern Water, then a brief period as chief executive of South East Water (SEW) when it was part of the Macquarie Group.
He describes himself as a “simple engineer”, but while working for Macquarie Infrastructure Funds, Baggs managed the divestiture of SEW, which had to happen for the bank to make its £8B acquisition of Thames Water in 2006. And prior to taking up the post, he sat on the board of Thames Water as well as looking after Macquarie’s utility investments across Europe. Baggs is proud of the record of the UK industry and Thames Water since privatisation in 1989. He also boasts that great improvements have been made since the acquisition. “Thames Water is currently investing about £1B a year, so the current investment programme is huge, and that’s just Thames Water. But if you look at our £5B capital programme for the next five years, and the industry’s capital programme for the next five years of £22B, it’s massive.”
“The industry’s achieved a hell of a lot,” he says. “In terms of efficiency, it’s improved over that 25-year period. But also customer service and levels of service has improved.” Baggs reveals that the bad press coverage of 2005/2006 has had a lasting impact on the way Thames operates: “Headlines all over the Evening Standard, poor customer service, hosepipe bans, leakage – we’ve shifted away from that,” he asserts.
Regulation
Baggs on site at the start of the new Lee Tunnel – capacity of the sewerage system is coming to an end, he says
14 Water & Wastewater Treatment April 2011
There is a lot of regulatory uncertainty in the air, with a review of the regulator and a Water White Paper on the way. One thing Baggs is sure about, is that Thames’ investors do not want to see “wholesale change, without understanding the benefits of making that change.” Thames Water is owned by a consortium of infrastructure fund or pension fund investors. Baggs says they like the “long-term, predictable, transparent, mature regulatory regime. “ He continues: “The industry has very successfully invested £90B since privatisation, there’s probably another £90B+ looking forward as well. We can’t afford to disrupt that balance,
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