It's often a disaster

South Africa's experience with privatisation

By Patrick Bond
Published: Sunday 28 June 2015

It's often a disaster

i would like to disagree with the idea, stated in Down To Earth, that the "private sector can also be asked to set the price and recover dues."

Our experience in South Africa has shown that when tariff-setting is left to private companies, there is a tendency to 'cherry-pick' wealthier households and underserve the poor who cannot pay market-related rates. The World Bank -- the brain behind global privatisation -- advised us in 1995 to avoid subsidies for the poor because that "may limit options with respect to tertiary providers". Instead the bank insisted on pricing water and establishing a "credible threat of cutting service". The bank's advice was crucial in privatising water supplies in Johannesburg and other South African cities. Elsewhere in Africa, the bank has instructed its staff that "work is still needed to persuade political leaders to move away from the concept of free water for all". " Ensure 100 per cent recovery of operation and maintenance costs, are the bank's instructions.

In pushing cost recovery and privatisation, the bank ignores factors such as public health (tackling water-borne diseases), gender equity and environmental protection. It fails to acknowledge that only the state/society has an interest in such public and merit goods such as water. The bank blames repressed tariffs for Africa's water sector crises, while paying short shrift to real causes such as the fallouts of the 1980s and 1990s structural adjustment programmes, corrupt state bureaucrats, weak trade unions and disempowered consumers/ communities.

Following the bank's directives, South African municipalities have thrown open water supplies to firms from London and Paris. In the wake of privatisation, many connections have been terminated -- mostly in localities of the poor. There has been an unprecedented rise in cholera and diarrhoea epidemics and water resources have been subjected to rampant abuse by agribusiness, commercial timber plantations and mines.

This situation has precipitated revolts by progressive and mass-democratic community organisations (mainly led by women at grassroots levels), with support from local trade unions and international organisations. South Africa's debt-cancellation movement and our grassroots activist groups have called for reparations of damages.

Privatisation has clearly not worked in our country. I propose that access to water be made a human right. Those fighting against its privatisation have much to unite in the run-up to the 2004 World Social Forum and beyond.

Patrick Bond is with the Municipal Services Project, Johannesburg, South Africa

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