Corporatization of Water and Sanitation Services in South African Metropolitan Municipalities: A Critical Analysis

Abstract

Water and sanitation services across the world have for at least two decades been marred with poor performance and failure to collect revenue thus failing to be self-sustainable. Consistent bailouts by parent municipalities and government have been the order of the day. Before then, services such as water and electricity were collecting almost 100% of revenue and were self-sustainable and did not need financial support from municipalities. In many municipalities, especially South African municipalities they became municipal cash-cows and even cross-subsidized other municipal services. There are many challenges that have contributed to almost the collapse of water and sanitation services. Some of the challenges are dysfunctional political environments; ageing infrastructure; backlogs in water and sanitation reticulation caused by overpopulation and urbanization; brain-drain of technical skills; fraud and corruption; poor management and governance structures; operational inefficiencies; etc. Communities do not want to hear about the above-mentioned challenges and all they need is reliable, convenient and sustainable (uninterrupted) supply of water and sanitation services. In reaction to these concerns, especially poor performance of water and sanitation services, the World Bank commissioned a study in 2018 to come up with a Water Utility Turnaround Framework. This Framework has measures to improve operational and managerial capacity (efficiencies) of water and sanitation services. This study then became the basis within which National Treasury in South Africa came up with the Metropolitan Trading Services Reforms. It should be noted that the Trading Services Reforms target transformation of water and sanitation, electricity (energy) and waste management in Metropolitan Municipalities in South Africa however this article will only focus on the turnaround of water and sanitation services. The study therefore critically analyses these Reforms and purported strategy to turnaround the water and sanitation services in South African municipalities.