THURSDAY, 4.00PM
NELSPRUIT, the capital of Mpumalanga, on Thursday began its final selection process to award the town’s contentious R350-million water and sewage service tender to a private sector company for 30 years.
The tender, portrayed as a private-public partnership by the council and not as pure privatisation, has been fiercely opposed by the South African Municipal Workers Union and Congress of South African Trade Unions.
Only three companies are still in the running for what Nelspruit chief executive Roelf Kotze said will be South Africa’s first municipal commercialisation of water and sanitation services. The winning company will be announced in October.
Kotze said Nelspruit was forced to look to partnerships with the private sector after realising that it would cost at least R350-million to upgrade water and sanitation in the town’s townships. “With an annual capital budget of only about R20-million, it would take us decades to provide the required standard of services to all our residents. And then we still wouldn’t have any money to expand the existing services in the town itself or to cope with the massive economic and population growth we’re experiencing,” he said.
Nelspruit’s proposed concession will ensure that the winning company will employ all affected council personnel at the same or better salaries and that the council will retain control of macro-planning, service standards, delivery timetables and community involvement. The council will also retain some control over rates charged to residents. At the end of the 30-year contract, ownership of all physical improvements and facilities will return to the council.
“The company is expected to plough profits back into the town’s economy by making use of local labour, professionals and emerging contractors. It will also have to make proposals on how to contribute towards the academic and practical skills upliftment of our unemployed youth,” Kotze said.