The politics of privatising water

Tensions over the privatisation of water management in Mpumalanga are coming to a head as militant youths threaten violence to break the 30-year deal between the Mbombela municipality and Greater Nelspruit Utility Company (GNUC).

The protests, in which youths have marched on councillors' houses in the townships and destroyed water meters, were initially led by the Pan Africanist Congress' youth wing.

But disgruntled residents have now re-organised themselves into the "apolitical" Anti-Privatisation Forum (APF) that is ready for an all-out war against the GNUC.

"We may have to break the law," forum secretary and former Azanian People's Liberation Army (APLA) exile Henry Nkuna warned. "We'll vandalise their cars and beat up their workers."

The forum is demanding that the Mbombela municipality terminates the deal with the GNUC and introduces a flat rate of R30 a month for all municipal services in Nelspruit and its surrounding townships and villages.

The more than 230 000 residents in the former KaNgwane homeland used to pay a flat rate of about R14 before 1994, which was eventually increased to R88 under the democratic government.

When the GNUC was awarded the contract in 1999 to manage water and waste services in these areas, residents were alarmed when their bills shot up to R500 after they were charged according to their consumption.

The GNUC - a consortium of British multinational Biwater and local black empowerment company, Sivukile Holdings - has also been accused of giving "unclear" bills to residents, failing to teach them how to read meters and listing about 5 000 indebted residents with the credit bureau.

Nkuna fulminated: "The situation is deteriorating. We're not able to see when the free 6 000 litres have been used and residents have not been taught how to read the meters. Even the statements are not clear about how much water has been used and how much money is owed".

Residents owe the GNUC in the region of R17-million, which has prompted the company to suspend capital projects worth about R100-million, though regular maintenance and operations will continue in the already developed townships.

"If we view the protest holistically, it impacts (negatively) on the community," GNUC commercial manager Harold Moeng said.

He warned that the company would not be able to install new water networks in less developed peri-urban areas unless the payment rate improved. He warned, too, that anyone caught vandalising meters and water systems would be prosecuted.
"Where we inject money, we want to recover the costs," he explained.

The Greater Nelspruit area includes the townships of KaNyamazane, Matsulu A and C, Tekwane and six peri-urban areas of Daantjie, Zwelisha, Msogwaba, Mpakeni, Luphisi and Matsulu B.

Moeng stressed that the R17-million payment backlog was jeopardising the company's five-year plan that aims to supply water, for the first time, 24 hours a day to every household by 2005.

The GNUC has already spent almost R50m in capital expenditure to improve water services.

The money was spent on laying 108 500 metres of new water pipes, replacing over 4 000 broken water meters and installing 7 240 new meters.

According to the municipality's calculations at the start of negotiations for the privatisation of its water services in 1996, about R380-million was needed to upgrade water and sewage networks in the Greater Nelspruit area.

The municipality's annual capital budget at that time was only R50m, making it necessary to seek partnerships with the private sector.

Moeng insists that most residents have been co-operative and that payments had increased by about 17 per cent since January, after the introduction of the government's free basic water supply of 6 000 litres a month for every household.

"That has made a difference," he said. "We've also embarked on an intensive communication strategy to teach residents how they can use water sparingly and why they should pay for it."

"There are bills that are less than R10 a month now," he noted, adding that some residents were adequately trained to read meters and statements during workshops last year.

But the GNUC's attempts to encourage the residents, especially in KaNyamazane, to pay for water were hampered by militant youths.

The Pan Africanist Congress (PAC) initiated a campaign called Operation Vulamanzi (open water) and reconnected water to all residents who had been cut off for not paying their bills.
Moeng denied the forum's assertions that 5 000 residents had already been blacklisted.

Indebted residents had received final demand letters from July 5 and were encouraged to pay the money to the Mbombela municipal council and GNUC offices before November 5, he said.

After November 5 the GNUC would enforce debt-collecting processes including garnishee orders and listing with the credit bureau, he said.

"We've already compiled a debtors list and have identified houses with illegal connections for legal proceedings," Moeng warned.


"Those residents whose connections have been removed because they haven't paid will have to pay a reconnection fee and fill out a new service agreement," Moeng said.

Democratic Alliance (DA) representative in the Mbombela municipality, Jackie van Heerden, observed that the old homeland flat rate system was no longer viable.

"Those were the good old days," Van Heerden said. "But now the council does not get any grant from national government to provide water. The culture of paying is not there, but someone has to carry the cost. There's no income base to provide free water," he said.

The GNUC has also come under scathing criticism from the South African Municipal Workers Union (Samwu) and British public sector union, Unison, who accuse it of charging high tariffs and using subcontractors who underpaid their workers.

Unison representatives expressed shock earlier this year that some residents were still travelling more than five kilometres to fetch water and that those who could not pay were disconnected.

The GNUC's concession area includes rural areas that have never had water pipes leading to houses and where residents had to collect water from standpipes. Residents in townships did have water in their homes, but the supply was erratic until the GNUC took over.

The delegation concluded that privatisation could not work for poor communities.

According to Samwu, Biwater and its subsidiaries have been linked to irregularities including corruption, breach of contracts and water legislation in five countries, namely, India, Panama, Britain, The Netherlands and Philippines.

Samwu's spokeswoman Anna Weekes gave notice that her union and Public Services International plan to focus on water multinationals during the World Summit on Sustainable Development (WSSD) in Johannesburg in September.

"We support the R30 flat rate," she said. "People are completely destitute and that's all they can pay. Government should rather spend money on providing services to communities than on buying weapons."

Mbombela municipality's spokeswoman Delia Oosthuizen noted that the council was satisfied with the GNUC's performance to date. Since it took over, service delivery and the expansion of water infrastructure had improved dramatically, even though much still needs to be done, she stated.

"GNUC's performance to date shows that public-private partnerships can work to benefit consumers," she said.

She added that national government had endorsed the Nelspruit deal and wanted it to succeed so it could be duplicated elsewhere.

But the deal's success could be thwarted if the protest increases in intensity and duration.