A SECOND LOOK
Sean Jacobs and Judith February
The recent events at Bredell near Kempton Park illustrate citizens’ growing impatience with the government’s failure to deliver more speedily. The government faces similar challenges of delivery of other basic services such as water, electricity and sewerage.
Because of a lack of resources, one of the ways in which the government has decided to tackle the problem is by means of public-private partnerships (PPPs). The World Bank reports that since 1984 86 industrialised and developing countries have privatised 547 infrastructure companies worth $357-billion.
In 1994 the government inherited a mixed but rapidly deteriorating infrastructural stock. Access to social and domestic infrastructure was restricted largely to urban, former white areas. People in rural and urban areas the majority black and poor had few services. In 1994 only 20% of rural people had access to electricity, 35% to clean water and only 5% to adequate sanitation.
Even in urban areas at least a fifth of the households could not access these basic public services. The government needed to provide infrastructure that would meet basic needs. Although the government has implemented a range of infrastructural delivery programmes that have to some extent increased access to services, large backlogs still remain.
The decision to pursue PPPs as a means to overcome massive infra-structural deficits (R200-billion at the last estimate in 1986) was first mooted a year after the adoption of the growth, employment and redistribution strategy by the South African government in 1997.
This year the National Treasury produced a strategic framework for delivering public services through PPPs and set up a dedicated unit, which has seen the initiation of a number of projects.
At a national level the most notable examples of PPPs are the Dolphin coast water concession, the N3 toll road between Johannesburg and Durban, and the Bloemfontein and Louis Trichardt prison contracts. Meanwhile, a number of city or municipal governments have embarked on privatising essential services such as water, sanitation or sewerage.
At the core of PPPs is collaboration between government departments or state-owned enterprises such as Eskom and Telkom. The aim is for the state to transfer some of the financing and operating risk of a project to the private sector, but to retain ownership of the scheme.
For example, in the case of toll roads, the public sector builds, maintains and operates the road on a long-term contract of up to 30 years, which allows it to recoup its investment. The road then reverts to public ownership. Under PPPs companies are contracted to take over the government’s service delivery, for example the paying out of pensions. While the formation of PPPs changes the means of service delivery, it does not change the accountability of the government for ensuring the services are delivered. The sectors usually targeted are transport, water and sanitation, energy, telecommunications, prisons, hospitals and schools.
The benefits of PPPs are believed to be in terms of achieving a greater efficiency in the use of public resources and a focused output orientation, job creation and training.
There are, however, still political sensitivities in the government over PPPs some argue that there are services that the state should provide and that some areas of delivery are tackled more cheaply by the public sector.
Groups closely allied to the African National Congress-led alliance advocate this position. Its earliest opposition was met when implementing the privatisation of a water project in Nelspruit. However, the protests only gained momentum with the formation in July last year of the Anti-Privatisation Forum, a merger of the Anti-iGoli 2002 Committee and the Wits University Crisis Committee.
Both these structures were formed in the fight against two major privatisation initiatives in Johannesburg: the iGoli 2002 plan to restructure the Greater Johannesburg Metropolitan Area, and the Wits 2001 plan to restructure the University of the Witwatersrand.
One of the more active members of the Anti-Privatisation Forum is the South African Municipal Workers’ Union. It has been the most articulate and vociferous in opposition to PPPs. The union opposes all new forms of municipal partnerships, such as PPPs, concessions and contracts, and argues that all public services must be delivered by the public sector.
This has set it on a collision course with most councils. The union remains influential within the Congress of South African Trade Unions, whose public sector unions set the tone of the federation often at odds with the ANC.
By introducing PPP’s the government walks a tightrope as it needs to balance the interests of an increasingly impatient majority with the opposition of its alliance partners. Only time will tell whether the balance can be struck.
Sean Jacobs and Judith February work for the Political Information and Monitoring Service at the Institute for Democracy in South Africa. This is an abridged version of an article that appeared in the recent edition of the institute’s online political journal ePoliticssa (www.epolitics.org.za)