YONELA DIKO: Corporatisation of water and the elusive distributive equity


The beginning
Many water researchers, contrary to some in our society with self-indulgent and rose-tinted glasses about our past, have pointed out the fact that the democratic government inherited a deteriorating water infrastructure from the apartheid government - burst mains and leaking pipes, and of course, extreme inequality. Many years of providing water services with poor cost recovery mechanisms and taking very little payment from a spoilt minority became unsustainable over the years as the old government became financially squeezed and the situation untenable.

The democratic government therefore had a twin task of restructuring a crumbling, inefficient and bloated government on one hand, and extending that government's reach and services to those least serviced for over half a century on the other hand. How would a democratic government, particularly its local municipalities, who are now getting further spread and diminishing national government funds, provide services to those who could not?Everyone wanted and deserved fresh water inside their homes. They deserved electricity connection and dignified sanitation.

As the country moved into unified territories under one government and national government transfers to local government became too thin, most municipalities were left to fend for themselves and find ways to generate income through the services they provided. They had to prioritise efficiency in order to charge properly for services and did not have the capacity at the time, they had to enter into partnerships with private entities. Some municipalities got into partnerships with foreign water companies to help them deliver services.

These partnerships forced municipalities to push service provision through state-owned entities, which could then be corporatised and reformed to be run like businesses. This naturally had serious implications to distributive equity as these state businesses then focused on providing services to those who could pay to help them generate an income to sustain provision of those services. The poor were on their own. It was all about efficiency in service provision and cost recovery.

The pursuit of efficiency and cost recovery for services rendered resulted in the corporatisation of government entities in the late 90s. This was both a practical move by it was also a prevailing thinking of the time, trickle-down economics and part of what some have come to call, 1996 class project. The idea was to provide services efficiently to those who could afford them and generate enough income in order to subsidise the provision of those services to the poor. According to Pycroft 2000 et al, in 1996, the National Growth, Economic and Redistribution (GEAR) programme called for restructuring of the state through liberalisation, deregulation and privatisation of service delivery in order to redistribute resources.

In a half-hearted attempt, particularly because of the huge number of those who could not pay for services, the democratic government initiated many projects in trying to deal with the question of distribute equity. But the demand for water has been so vast and ever growing as people move into more congested areas with limited capacity and resources. Then there are informal settlements that have been rising at a much higher rate as people have been trying to get closer to economic hubs and economic opportunities, free from flood control and discrimination. This has resulted in new struggles for infrastructure for these new communities.

Right now

The ANC government has had to deal with the dichotomy of corporatising its service provision on one hand in order to make money and then deal with extreme disparities of the past through cross subsidies, while trying to rebuild a potent state for effective service provisions. The time it takes to achieve this balance, to an impatient population weary of many years of economic exclusion and looking to waste no other day trying to build respectable livelihoods, has cost the ruling party a lot of political capital. Many things have come all at once for the democratic government overwhelming its vision of providing equitable basic services to all.

As the government closest to the people, enabling local government to deliver most of the basic service has been a critical task in dealing with distributive equity and procedural equity (public participation). The results have been far from ideal and have left many wondering if local government is the best vehicle for providing basic services to our people.

It’s important to analyse how the efforts to enable local government in order to be the most effective tool for service provision have been so underwhelming, along with hundreds of state-owned enterprises at that level. The ruling party had envisaged local government as its best bet in trying to achieve distributive and procedural equity in service provision in the democratic dispensation.

The issues

At the core of the problem is that the corporatised service provision, where quality services are provided to those who can afford them has served to entrench the Apartheid disparities of the past, along with their racial lines, where the apartheid privileged, now joined by a meagre black middle class, get the quality of services they are able to pay for and the poor, who were undone by the Apartheid policies, are now undone by democratic policies of corporatising the state.

Secondly, the corporatisation of government entities through water boards, with their own governing structure, and executive, have resulted in a governing party that is unable to dictate direction of its own entities, especially those that have partnered with the private sector. The result is that governments have been unable to effectively monitor or regulate its own entities, whether its ensuring that services are provided to those who cannot afford them, that these entities hire locals and acquire services from local companies, are BEE compliant, no racist policies, and are operating within local authority business guidelines.

Ultimately, all these government efforts, as imperfect as they have been, have been about finding the best water management model that will be both effective (able to generate income and sustain itself) and equitable. This involves an insurmountable task of reversing the inequalities of the past, ensuring universal access, while trying to ensure services are provided efficiently.

The task of transforming a state that was built exclusively to serve only 10% of the population, a state that was crumbling in the 80s into the 90s under the irrational and unsustainable governing ethos of providing services to a minority and asking very little payment, was always going to haunt the democratic government for a very long-time. There would be false starts and programmes that don’t work as planned. But ultimately, a right path would be found. That path remains elusive.

Our people are poor, many of them live below the poverty line, but they don’t deserve any less quality service. Mostly live in overcrowded housing units, in hostels and many are backyarders, but they still need quality services, particularly water. Those services must be provided.

Today, quality service delivery and high-end infrastructure is a preserve of those with high household incomes due to the corporatisation of basic services. Those with higher incomes have in-house water taps while the rest make do with yard taps (if you are lucky) and standpipes within 200-meter radius. There is of course the reality that the longer a community exists, the more durable and stable its infrastructure but the new informal settlements have very little service provision. These disparities naturally serve to entrench inequality as these people are unlikely to participate properly in the governance of their towns.

It is therefore important for the governing party to relook into its corporatisation of basic service provision and whether it has only served to entrench disparities of the past. Its also important to check whether those mandated to ensure quality service to the poor is delivered have not forgotten their mandate in these corporatised entities.

The status quo is untenable.

Yonela Diko is Head of Communications at the Department of Human Settlements, Water and Sanitation. You can follow him on Twitter.