Marion Edmunds
The dispute over privatisation has shifted to the Department of Constitutional Development, with labour determined to block the contracting-out of basic municipal services to large multinational companies.
Sensitive discussions are taking place between the department, provincial and national politicians, the South African Municipal Workers Union (Samwu) and representatives of the multinationals. Lyonnaise des Eaux — the largest multinational — has already secured a handful of water delivery contracts with municipalities in Kwazulu-Natal, the Eastern and Western Cape. These include Queenstown, Stutterheim and Khayelitsha.
The French-based international company, with an R85- billion annual turnover, is in partnership with the South African-based Group Five, and has contracts all over the developing world, specialising in the delivery of water and water-based sanitation systems.
Lyonnaise des Eaux representative Jean-Claude Ambert said this week that the South African venture, Lyonnaise Water Southern Africa, could provide services at a time when many local governments are in disarray and not functioning efficiently as a result of the merging of previously racially separated authorities.
“We can facilitate a quicker response to the expectations of people and we can bring finance for investment in infrastructure needed for the delivery of services, if necessary. For example, in Buenos Aires we invested $4-billion in infrastructure, bringing money to projects that do not usually attract investors,” said Ambert.
His company is pushing for lengthy contracts that would provide “delegated management” of water delivery and sanitation systems.
“We have to look at about 25 years as we would be putting infrastructure in place and we need to get some revenue and reward for that venture.”
Department of Constitutional Development director general Andrew Boraine said it was approaching proposals cautiously. However, he said Minmec — the forum of officials and political decision-makers involved in local government development — would be discussing draft guidelines to regulate such contracts on September 19.
Boraine said the government would insist on a number of pilot projects before encouraging wholesale outsourcing of delivery, and these should be monitored for a year, hopefully with labour providing their own experts to evaluate the project’s success.
However, he sees such contracts as part of the public-private partnership that lies at the heart of the Municipal Infrastructure Investment Framework, which the government hopes will put service delivery back on track.
Boraine and his department are in a particularly tight corner, because they cannot instruct municipalities one way or the other, as local government is, at this stage, a provincial function and municipalities have a degree of financial autonomy.
Furthermore, the debate on privatisation has become such a hot potato on a national level, that it is difficult to introduce it in a neutral environment for adaptation at local level. And while the national debate rages, delivery problems on the ground in many areas, particularly the poorer ones, are in crisis, and the Masakhane campaign fails to stimulate payment of rates and taxes.
Meanwhile, the secretary general of Samwu, Roger Ronalds, said labour was totally opposed to the concept of handing over service delivery to business concerns.
“We are opposed to the ideology underpinning the plan in the first place … we are opposed to privatisation. It removes accountability and democratic control of services by handing them over to private companies,” he said this week.
Ronalds said the boasts made by the companies that they bring with them finance for investment and better conditions for workers was untrue and quoted one — a water purification firm — as an example.
`This firm delivers water and the condition of the workers has deteriorated under them, nor have they followed up promises of training and promotion. Workers are earning between R600 and R1 500 gross a month, whereas the minimum wage in the municipalities in Cape Town, for example, is R1 600.”
Ronalds believes the solution lies in reorganising the municipal workforce and operations from within, but still tackling delivery as an agent of government.
All parties are committed to continuing discussions.