If you want to know what failure looks like you need search no further than Thames Water.

There are many ways to define failure. One would be a situation in which there are only losers. The eventual outcome of Thames Water’s current travails remains uncertain, but it’s hard to see any potential winners.

What is remarkable about this is that the company has a captive market of some 16 million customers and their raw material is completely free and falls out of the sky!

But the list of likely losers is a long one…

Shareholders – Past shareholders have done OK from their investments in Thames Water. Since privatisation £7.2 billion has been paid out in dividends (source: The Guardian based on company reports), and previous owners (RWE and Macquarie) also made a decent turn buying and selling the company. The current owners, however, face the prospect of being wiped out by renationalisation. No wonder they’re refusing to inject fresh equity unless they can hike bills by 56% by 2030.

Bondholders – In the last two weeks Thames’ parent company, Kemble Water, has defaulted on a bond payment. With debt across the business now standing at over £18 billion (source: FT) it seems unlikely that other lenders are going to escape unscathed, especially with shareholders withholding their support.

Customers – Roughly a quarter of the UK’s population use Thames Water’s services. Even if they all chose to buy bottled water they would still have to use the company to take waste water away from their homes: they have nowhere else to go. Although there is speculation that Ofwat (see below) will take a hard line with the company, bills are likely to rise.

Public – Inland waterways are a vital recreational resource, but two weeks ago Cambridge University’s stunning victory in the Boat Race was marred by the winning team deciding not to throw their cox in the water due to elevated pollution levels. One stark reminder of how the public are losing out.

Nature – Never mind the fun, the damage and loss to habitats in the Thames catchment will also have been profound.

Ofwat – The industry regulator’s duties can be summarised as: protecting consumers whilst making sure water companies do what they’re supposed to do and that they’re properly financed to ensure “long-term” resilience. When it comes to Thames Water they appear to have failed on all fronts.

Environment Agency – As part of Defra, the goal of the EA is to “work to create better places for people and wildlife, and support sustainable development”, including responsibility for water quality and resources, and inland waterways. Last year Thames admitted 47 of its overflows had discharged raw sewage over 100 times, and that’s just one statistic among many. Oh dear!

Government – The Tory Party now face the potential headache of a costly renationalisation in an election year. I guess ten Tory Environment Secretaries since 2010 can hardly have helped keep a grip on the water industry. Perhaps ultimately you reap what you sow with privatisation.

Ultimately another cautionary tale of “too big to fail”?