Water companies, whether privatised or not, will have the same income streams
I think your example of Tideway is the exception rather than the rule. And in that scenario the government isn't actually borrowing the money, it's backing it. Governments can borrow at lower rates but
will they borrow, or rather, will they enact the legislation in the first place that means they will have to borrow. (2022 estimate for delivering the storm overflows bit of the Environment Act is £178bn, so add some inflation onto that. Source:
https://assets.publishing.service.gov.uk/media/624460a18fa8f527744f0655/storm-overflows-evidence-project-march-2022-addendum.pdf).
I'm not really arguing for or against privatisation, but I wish that people wouldn't talk about nationalisation like it's some silver bullet that will fix everything they don't like about the water environment. I'd love people to have clear ideas of what their aspirations for watercourses are, to know what it would take to get there, and to be cognisant of the challenges and implications (delivering the Environment Act is going to release A LOT of carbon. A LOT.) of getting there. I think the press have let the public down badly on this front. Just my opinion.