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Partial privatisation of water infrastructure punted as possible solution

9th April 2021

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

     

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The partial privatisation of South Africa’s water infrastructure and systems can help mitigate the country’s ongoing water shortages.

A collaboration between companies and governments to solve the conundrum of how to create an efficient and sustainable system is a potential solution to the complex water issue which continues to leave many underserviced areas out in the cold.

“The complete privatisation of water in South Africa may not be a solution, but it has become clear that a hybrid system between municipal governments and private companies is the answer, if we are ever to reach the ideal that our Constitution is built upon and secure a better future for all,” says water storage solutions company Abeco COO Mannie Ramos Jnr.

Access to water depends on two distinct components – the natural ecological infrastructure, which consists of the ecosystems that collect fresh water such as dams and aquifers, and the civil infrastructure that disperses and recycles water – both of which are critical to provide all South Africans with sufficient fresh water every day.

“The reality is that the task of providing every South African with fresh water, although essential, is immense and after many political setbacks and the Covid-19 pandemic, our government is unlikely to have the necessary resources to deliver and sustain the access to water, [as] promised in our Constitution,” he explains.

The privatisation of the development, maintenance and expansion of the civil infrastructure systems, such as water treatment plants, with government controlling the ecological infrastructure, would ensure the division of power between the public and private sectors remains relatively equal.

“Government could reallocate funds to help mitigate the profound impact of global warming on these ecological systems as well as build new structures,” Ramos Jnr adds, noting that there would also be an added incentive to work together, as stored water has little social value without a civil infrastructure network, and the private owners of these networks cannot make a profit without the water provided by ecological resources.

Government should be motivated to release its monopoly over the limited resource, as the state of the water system is “simply too far gone” for government to fix alone.

“Unlike private companies, government-owned companies are sheltered from market forces, so there is little holding them accountable when negligence towards the maintenance of infrastructure results in the inefficient and wasteful use of water,” Ramos Jnr says.

“Private firms are driven by a profit incentive, so it makes sense that in their mission to make every cent from every drop [that] they would be good candidates to control the efficient use of a scarce resource like water.”

As efficiency is good for profit margins, the private sector is likely to be financially efficient in maintaining plants and productively efficient in upskilling communities to raise labour productivity, as well as invest significantly in the research and development of new technologies.

“This means they are motivated to hire experts in engineering, infrastructure and prediction experts to calculate the best use of our resources and the expected population increase. Through this consistent research, we are far more likely to have a better water continuity over the next 50 years and not only the next 10.”

A collaborative approach could offset the significant capital outlay of privatising and building water infrastructure and could potentially be profitable for government as it stands to gain significant revenue from the sale of any of the infrastructure assets.

Addressing concerns about what will happen when decisions about the basic resources are made from a profit perspective and not a human rights one, and what will happen if citizens stop paying their water bills, he assures, constitutionally speaking, that companies cannot deny someone water.

However, this could leave companies with little recourse to recoup debts, with the need for negotiations between government and private corporations to provide those unable to pay with free water and make provisions such as prepaid water for any use over and above that.

“Government and private companies must be held accountable by the public and legal structures for any issues that arise during the implementation of this structure, so a high level of transparency is essential in this approach,” Ramos Jnr says.

“If private companies and governments were held accountable in a structure that demanded collaboration by splitting ecological and civil infrastructure resources, it would also be far easier to detect the abuse and enforce the correct use of our water resources,” he concludes.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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