In 2000 the Johannesburg council defied massive resistance to any form of privatisation and corporatised some of its entities as part of the much-maligned Igoli 2002 plan.
Corporatisation meant a utility was created that was supposed to manage itself and be sustainable although it was still 100% owned by the council.
Members of the two unions, the Independent Municipal and Allied Trade Unions and the South African Municipal Workers’ Union, raised concerns that such corporatisation would result in job losses and poorer service to residents.
The services in question were the Johannesburg zoo, Metrobus, the Civic Theatre and the Fresh Produce Market. Three years on and the zoo and Metrobus are struggling but the Civic Theatre and the Fresh Produce Market are the council’s cash cows.
The market has achieved substantial revenue growth, established numerous empowerment initiatives and restored producer confidence. The Fresh Produce Market is Southern Africa’s biggest fruit, vegetable and meat trading market, attracting customers even from outside the country.
Big farm producers sell their wares at the market and these are then rapidly sold off to street vendors, small retailers and big supermarkets.
Some of the market’s impressive statistics include growth from a R1,2-billion to a R1,8-billion enterprise, a 63% increase in profit from R19-million to R31-million, and an 11% increase in its market share since 2000.
Market CEO Bernard Magabe said: “We will always grow because we provide basic food for every household in one form or the other. We also exercise quality control by making sure that whatever goes through our gates complies with basic minimum food standards. Products that do not qualify are sent back.
“We also have cold-storage facilities to preserve products as well as ripening facilities for products, like tomatoes and bananas, which cannot be brought in already too ripe.”
Marketing manager Rowan de Klerk said the biggest difference to the days before corporatisation was that some profit was being reinvested in the company instead of just being thrown into council coffers.
“It used to be just another council department. But now we are proud that we contribute financially to the council so that it develops the lives of the poor and improves infrastructure such as roads.
“We also contribute to job creation because thousands are employed here. About 35 000 people come through to the market every day. If we exclude agents who work for producers in the market, in our own direct staff the lowest-paid workers, the tea lady and cleaners, earn R3 200 month.
“Instead of the projected job losses, we have achieved the opposite — more jobs.”