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Privatisation of water on the Dolphin coast

SAMWU Press Statement
5 May 1998 11am

Minister Valli Moosa is expected to arrive within the hour at the Dolphin Coast municipality in KwaZulu-Natal to announce to the media the winning bidder for the privatisation of water and sewerage in the area. The privatisation initiative has been lauded by the Town Clerk as a project of "national importance." Yet among the bidders are the notorious French multinationals Lyonnaise Des Eaux and Generales Des Eaux, as well as British privateer Thames Water. These three companies have privatised water in different parts of the world with disastrous effects for communities as these case studies reveal:

Buenos Aires, Argentina - Lyonnaise Des Eaux privatises water, increases the rates way above the prices agreed on in the contract, and then threatens to cut people off completely when they cannot afford to pay

Tucuman province, Argentina - after long-standing problems with the quality of water, a Generales Des Eaux subsidiary pulls out of the contract. Government money spent on the initial bidding process is wasted. One wonders how many millions council has spent on this Dolphin Coast bidding process?

Water privateers claim to be investing billions of rands to improve water delivery when they first privatise. In actual fact, they usually take up loans instead and cover the repayment costs by raising the prices charged to consumers - in Britain, 70 per cent of all the investment made since privatisation has been paid for by consumers. Why else would Thames Water be bidding for a contract here in South Africa?

Privatisation will ultimately cost the government more money. The U.K. Department of Trade and Industry has acknowledged that some R480m was given to various British water privateers up to five years after privatisation. Similarily in Khayelitsha last year when the private refuse removers could not keep up with their work, council had to send municipal workers back into the area to assist with cleaning!

The Dolphin Coast privatisation initiative goes completely against the binding ruling of the South African Local Government Bargaining Council last year that the "public sector is the preferred deliverer of services". SAMWU has already demanded that Minister Valli Moosa intervene decisively in privatisation initiatives at municipal level, which SAMWU alleges are often initiated by councillors for personal gain. SAMWU has already used the Commission for Conciliation, Mediation and Arbitration (CCMA) to halt the privatisation of refuse removal in Khayelitsha. We will not hesitate to make full use of the Commission to enforce the Bargaining Council decision.

SAMWU would like to take this opportunity to make an press announcement of its own - this coming Friday, 8th May 1998, SAMWU will be taking up this issue in the KZN provincial Bargaining Council to demand an immediate stop to the privatisation of Dolphin Coast's water and sewerage. Failing that, general meetings will take place among membership, who will then decide on a course of action.