Last month, the South African Municipal Workers’ Union (Samwu) media officer Anna Weekes announced, as if it was common knowledge, that “privatisation has never succeeded anywhere in the world”. This month, Samwu deputy general secretary Tom Ngobeni aired his hope that the Odi public-public-partnership (sic) would help “sound the death knell for increased private sector involvement in water service delivery.”
Do we live on the same planet? What world-view enables them to stand common sense on its head? An unexpected gulf keeps opening. Can you believe it? In the year 2000, here are people who think that governments do things better. They reject the idea that private firms can deliver goods and services better, anywhere in the world. They reject the idea that allowing minority private-sector involvement in a “public-private-partnership” controlled by government could lead to more cost-effective service. They extol a new fancy, of “public-public” partnership as “a model of how arms of government could work together”.
In a nutshell, they deny that private-sector methods ever work, yet they want to import the same methods to make government work without private-sector help. Towards social goals rather than market ends, it goes without saying.
Business Day and The Star of December 8 report that the Odi water project was signed in September 1999 as a joint initiative of the parastatal Rand Water, the Winterveld and Mabopane municipalities, and several peri-urban areas in North West province. The aim was to provide water to more than 400 people and “assist in building the capacity of local authorities to operate and maintain the water service system of residents”. Winterveld and Mabopane municipalities agreed to contribute 20% of their equitable share grants to the project, and the Department of Water Affairs and Forestry promised financial support for basic infrastructure.
Now residents face water cut-offs and the project faces failure. The journalists do not say that residents have failed to pay for water, or that the delivery system is breaking down, but both are indicated by Ngobeni’s mention of “leaks and illegal connections”. He quotes research by something called the International Labour Resource Group which supposedly shows that “government does not have the will to ensure the success of the project.” He blames Water Affairs for failing to invest in the infrastructure, but a department spokesman says local councils have to raise funds for improvements. It sounds as if none of the stakeholders is playing the game, and Ngobeni is peeved.
Presumably “public-public partnerships” do not inevitably fail, but this failure is hardly exceptional. Yet Ngobeni had apparently been nurturing a “hope that the Odi project would be the first in a long line of such initiatives” and help sound that “death knell”. He was seriously hoping that such projects would succeed and thus stave off even watered-down forms of privatisation.
Weekes, Ngobeni and their colleagues actually seem to cherish a vision of efficient and effective government delivery of essential services. Nowadays this is so counter-intuitive that one has to suspect thinking marred by unworkable ideologies. No, that is not an explanation – let us try harder. Many in and around government in South Africa remain steeped in dirigism and the assumption that active micro-management is mandated and needed to ensure desired social outcomes. They hope to regulate better and “public-privatise” a little, and thus suck in the eager foreign investment needed for growth. They know what to do, and that they are right to act.
On the other hand, ambassadors of the developed world, unconsciously steeped in the ideas of macro- and micro-economic freedom, assume that any winning country leaves markets and entrepreneurs alone to get on with providing goods and services. When they start seeing South Africa’s government recognising its limitations and abandoning the field of business, then they will come bearing investment funds. Meanwhile, they can only gaze in wonder at those who believe that water can run uphill.
Source: Jim Harris, Council Member, Free Market Foundation (The views expressed in this article are those of the author and are not necessarily shared by the members, directors and staff of the Foundation – the article may be republished without consent but with acknowledgement).
