Water Affairs Minister Edna Molewa, on Tuesday said that South Africa needs to invest R670 bn in water and sanitation infrastructure over the next decade and that more than half of the required investment will have to come from the private sector. The message remains the same: we have to involve the private sector. But is government serious about involving the private sector?
One would assume that the majority of the water and sanitation infrastructure referred to by Minister Molewa will reside at local municipalities as the relevant water services authorities. The same local municipalities who are facing severe challenges with regard to their capacity, sustainability and service delivery. The question may therefore be asked whether it is responsible to leave this up to the local municipalities. My answer is a resounding ‘yes’! – on condition that we use the opportunity to create capacitated, functioning and sustainable local authorities on the back of large scale infrastructure projects. This can definitely be done with the assistance of and in partnership with the private sector.
But is government really ready for the private sector to become involved? The private sector will typically require and enforce best practice in the areas such as planning, operation and maintenance, cost recovery, tariff structures, good governance, etc. But this is nothing new. This is how things are supposed to be done, isn’t it? To me it seems that it is this very requirement that often leads to a break-down in the involvement of the private sector.
Minister Molewa, why doesn’t the Department of Water Affairs identify a project and create the opportunities to involve the private sector in this project? Let’s work together under the leadership of your Department and create a success story and recipe which can be used on other projects. We have the ‘will’, let’s create the ‘way’.
Understanding the diffence between having infrastructure and having infrastructure that can do the appropriate job is crucial. Too often public investment decisions are resulting in under provision of a level of service because this differentiation is not understood – going for the cheapest and not necessary the correct solution. Building cheap houses with low levels of services, for example, resulting inevitable in slums. What do we want – housing in slums without economic benefit to the urban poor or housing in suburbs with economic benefit to pull people out of poverty. Cheap is often just nasty.
Another burning issue in the big urban toll debate is regarding the choice of appropriate revenue mechanism to apply. The anti-urban toll camp argues for a general tax (fuel levy, licence fees etc) to be collected and distributed through the central fiscus. Really? What in the history of Weberian bureacracy suggest that a tax mechanism for economic infrastructure is either efficient or effective? Are we really suggesting that South Africans trust the state so much that we are prepared to leave economic infrastructure in state hands. Was that not the precise reason why we have experienced such a decline in the urban road network in the first place? The DA is perhaps climbing the populist bandwagon against urban tolling (which is incidentaly ideologically counter to the DA’s economic policy dogma) in the hope that it may never have to implement their “solution”.