Rural Development Services Network: briefing

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Taking Parliament to People, and People to Parliament

Documents handed out:
RDSN Presentation (see Appendix one)
RDSN Water for All documentation
RDSN Annual Report

SUMMARY
The Rural Development Services Network (RDSN) highlighted some of the key areas of concern they have with aspects of water service delivery. These included the provision of water services by private companies and consortiums, and the lack of a free minimum potable water supply to all.

MINUTES
The Chairperson, Ms Sonjica (ANC) welcomed the RDSN to the meeting, thanking them for coming to the Cape Town to interact with the Committee. The RDSN was represented by Ms Shirin Motala, Mr Edward Cottle, and Mr Junaid Seedat. The RDSN began with an introduction to the organisation and the current Water For All campaign (See appendix 1).

Discussion
Mr Maimane (ANC) asked for clarity on the location of the RDSN operations, and whether the RDSN had any thoughts on why programmes were failing. The RDSN replied that they had affiliates in 7 of the 9 provinces, with the N. Cape and the Free State being the exceptions. The research and ongoing work of the organisation was based interaction with numerous communities throughout the provinces.

Mr Arendse (ANC) noted that the statistics presented were substantially different from those of the Department of Water Affairs and Forestry and Statistics South Africa. He asked for further information on the sources of the information, and how recently the research had been undertaken. He further asked for clarity on the meaning behind some of the statistics and demonstrations.

The RDSN replied that the statistics were results of research recently undertaken by the organisation and their affiliates. The research was undertaken by NGO's in conjunction with communities over decent periods of time. The results would therefore differ to those taken by consultants who visit a community for two hours and then leave. In respect of the statistics, it should be noted that some of them related to potable water. Therefore while rural communities may have access to water in a river or borehole a few kilometers away, this water may be polluted with water born diseases, and would not be included in the figures of peoples access to potable water.

Mr Arendse replied that the Portfolio Committee and the members of the committee would have the responsibility of following up on issues and figures presented to them. Therefore it was vital that they queried and examined statistics critically in an attempt to clearly define the scientific facts upon which they should act.

Ms Mothoagae (ANC) noted that the presenters had acknowledged the good policy and legislation, and the lack of delivery. She cautioned against impatience as there was very little growth in the budget, and that there were current developments in terms of the Medium Term Expenditure Framework that should aid in overcoming government delivery. The legacy of the past would take a long time to set right.

The Chair asked whether the statistics presented were recent, and whether they had taken into account the delivery that had been made in recent years. In addition she requested clarification on whether the statistics on the budget details had included capital expenditure and equitable share allocations. The RDSN indicated that the research did include current delivery results. However, while the official figure for new connections may be 2 million, their research indicated that only 780 000 of these actually aided people. In some cases people still walk to rivers a few kilometers away, as they could not afford the water that was available in the tap.

Mr Ditshetelo (United Christian Democratic Party) noted that the picture that had been presented was gloomy, and queried whether this was a national picture or in specific locations. The RDSN stated that the worse areas had been identified as being in the Northern Province, Kwazulu-Natal and the Eastern Cape.

Ms Shirin Motala made a presentation to the Portfolio Committee on the present policy and legislation framework relating to water service delivery (See Appendix 1). She noted that South Africa had made significant strides in good policy and legislation, but that there were a few key problems with regard to implementation.

The Chair asked the members for further questions on clarity. Some of the key questions are outlined below:

Ms Mothoagae (ANC) noted that the presentation noted a lack of capacity in local authorities. The Water Services Act and the constitution both state that local authorities are responsible for water supply. Recent years has seen new legislation dealing with local authorities in an attempt to improve the capacity and structure of local authorities. Therefore local authorities are evolving, and gradually becoming more empowered. With respect to the shortcomings of the Build, Operate, Train and Transfer (BOTT) schemes, the Departments are not throwing away the programs as had been implied in the presentation, but are re-evaluating them. With respect to the case study of privatization in water service providers in Britain, she asked whether this was the only case study undertaken, or whether there had been any African case studies. The RDSN indicated that no research had been undertaken into African case studies, and that perhaps it should be done.

Mr Mathebe (ANC) thanked the RDSN for a good presentation. He noted that the privatization of service delivery would reduce costs for the government, but that the problems associated with it should be taken into consideration. He was glad that the Advisor to the Minister, Ms Janet Love, was present at the meeting to note the concerns. He asked for clarity on who paid for the training part of the BOTT scheme. The RDSN replied that the training was part of the obligation of the private consortiums paid to implement the BOTT scheme. Therefore the government paid for the training. The guidelines indicate that the training should use roughly 10% of the BOTT budget, however most consortiums spent significantly less than 10%, thereby undermining the generation of increased capacity in the local authorities.

Mr Phala noted that the population was growing rapidly, especially in the rural areas. He noted that many concerns had been raised by the presentations. In addition there were other issues such as pipes with no water flowing through them, and the problem of illegal connections. He asked whether the presenters had recommendations for government to improve implementation. The RDSN noted that they would be looking at some of their proposals in a later presentation.

The Chair requested clarity on the issue of Self Disconnection that was referred to in the presentation. The RDSN replied that where there were pre-payment schemes for water, where people could not afford to pay or did not pay, they in affect disconnected themselves from the water service as water no longer was available to them. While in the past the issue of disconnection for non-payment of fees had involved the service provider physically going to the community or the individual and disconnecting the user, often in politically tense situations, the prepayment scheme effectively put the responsibility on the individual and removed any sense of responsibility from the authorities.

Ms Ngwenya (ANC) asked for the view of the RDSN as an NGO working with communities on the issue of pre-payment schemes. The RDSN noted that the general position was against pre-payment schemes, as they could fundamentally undermine people's access to a basic human need. If an individual could not pay, then the water would not be available automatically, with major consequences for the people needing water. Rather a normal metering system was preferable, with a basic supply for basic needs free of charge. Additional use over and above that of basic needs could then be charged for. In addition, the pre-payment system was expensive to implement and maintain.

Mr Van Wyk (ANC) noted that many believed there to be a problem with a culture of non payment. Did the RDSN have any solutions. The RDSN noted that in many circumstances the major defaulters of payments were businesses and well off people. However, real action against defaulters was most often taken against the poor, and not the rich. In many circumstances the poor did not pay as they were in desperate conditions. The issue of nonpayment was not only related to income levels, and there were deeper issues that were also relevant. These included the quality of the service being provided, and the political will to collect. The issue needed to be further examined.

Prof. Ngubane (Inkhata Freedom Party) noted the figures provided on the increase of bills by 67% in the British case study, and asked for clarity on what this meant for the quality of life of the people. The RDSN replied that in addition, 49% of the people self disconnected, there by greatly reducing the well being of the people in response to having a privatized water service.

In addition, the RDSN noted that there were five main multinational companies dominant in the business of the provision of water services. The activities therefore were a lucrative money making sector, where there was substantial accumulation of wealth occurring.

Mr Simmons (New National Party) asked whether there had been any investigations into the cost of maintaining the current infrastructure. The RDSN stated that Department of Water Affairs and Forestry had produced a figure of R550 million, of which R5 million was recovered through cost recovery. This figure was in respect of current infrastructure, and did not include new developments.

Mr Ditshetelo (UCDP) asked for clarity on the issue of a basic water need. The RSDN stated that often the key interpretation of basic water needs only included the water needed to drink, cook and wash. However, water should also be available for basic activities such as subsistence farming. Current proposed standards as set out in the Norms and Standards regulations did not include the wider need for water.

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Cape Town, 21 June 2000

• Edward Cottle

RDSN Research Co-ordinator

• Junaid M Seedat
• RDSN Media and Communications Co-ordinator Shirin Motala

Research Consultant

• Introduction
• RDSN's Water Vision
• An Overview of the WSA
• The Privatisation of Water Delivery
• Cross Subsidisation and Progressive Block Tarriffs.
• Conclusion

RDSN, as a network of independent rural development organisations aims to contribute to the eradication of poverty and the empowerment of rural people through campaigning, networking, collaborating and by building a wider and stronger membership base.

The eradication of poverty amongst rural people through holistic sustainable development of rural areas so that people have equitable access to resources and hence, control over their lives.

• Water is the life-blood of any society.
• 18,000 deaths per year through dysentery and diarrhea
• SA is one of 12 most lethal countries in terms of infant mortality
• 18 m people do not have basic water and sanitation
• Our constitution guarantees our right to access to water.

• More than 50% of SA water is used for agriculture of which half is wasted
• 25% of water used by mining and industry
• 12% consumed by households, of which 1% consumed by rural households
• 50% of domestic water is wasted in pools and gardens
• 27% of homes in SA have running water
• 37% of homes have flush toilets

Security R21B (13,5) R 35,5B (15,1) R 37,9B (15,9)

Transport R3B (1,9) R3,5B (1,6) R 4,1B (1,8)

Interest on Debt R28B (25,5) R48,2B (22,2) R46,5B (19,9)

And in real terms...

What does the 2000/2001 Budget tell us and what does it mean in real terms?

Water Decrease by 7,7 %

Security Increase by 5,3 %

Transport I ncrease by 8, 1 %

Other basic needs

Housing Decrease by 14,2 %

Education Decrease by 1,6 %

Pensions Decrease by 1,5%

Health No change 0 %

• To create a framework for mobilising rural communities and building functional NGO networks that are able collectively to lobby government around common issues (organisation);
• To revive and project rural issues to their rightful political profile. The commitment of the RDI is to go beyond policy rhetoric and to develop a rural development strategy with rural people (formulation of integrated rural development strategy with implementation plan).

WATER SERVICES IN SOUTH AFRICA

• Access to water - linked with access to land - 'Riparian Principle'

Chapter 1 - Equality

Chapter 2 - Bill of Rights

Chapter 3 - Cooperative Governance

• Water and Sanitation
• Water and Environment

The Convention on the Elimination of All Forms of Discrimination Against Women of 1979 (CEDAW)

PRINCIPLES

• Private ownership of water resources and the 'riparian principle' are done away with.
• State as "public trustee" of the nation's water resources.
• Respect environmental rights.
• "Reserved water"
• Ensure that essential water needs of people are met (eg water for drinking and cooking), and
• Protect the resource's ecosystem.
• This reserved water will not have to compete with other demands for water usage (eg industrial usage).
• Other uses of water will have to be authorised by Government through a system of licensing.

The goals of the Department of Water Affairs and Forestry are -:

"Some, For All, For Ever"

• access to a limited resource (some)
• on an equitable basis (for all)
• in a sustainable manner, now and in the future (for ever)

The National Water Act 1998

• Meeting basic human needs of present and future generations
• Promoting equitable access to water
• Facilitating social and economic development
• Reducing and preventing pollution of water resources.

Gives effect to "the right of access to basic water supply and the right to basic sanitation necessary to secure sufficient water and an environment not harmful to human health or well-being"

" The prescribed minimum standard of water supply services necessary for the reliable supply of a sufficient quantity and quality of water to households, including informal households, to support life and personal hygiene."(s1) The exact minimum standard will be published in Regulations that give effect to the Water Services Act.

• Five-year implementation programme
• Reflect current situation on access to water services and provide reasonable time frames for giving access to these rights.
• Public comment
• A water services body must prioritise the supply of basic water and sanitation if it cannot meet the needs of all its existing consumers.

Factors guiding setting of standards -:

• The need for everyone to have a reasonable quality of life
• Equitable access to water services, and
• Social equity, the needs and means of different users of water services and different geographical areas.

• Process whereby public enterprises are taken into private ownership
• Private participation: private companies involved but without necessarily taking ownership of a public utility.
• Joint ventures, competitive tendering, outsourcing.

PPP's (Public-private or public-public partnerships)

• The enthusiasm for PPP's rests on the idea that the public sector is incapable of delivering alone.
• Partnerships would assist in releasing resources from the private sector to implement major developmental objectives
• Privatisation, it is argued, will lead to the reduction of costs, improved delivery, a stimulus to the private sector, and better managerial practices associated with private corporations.
• Increasingly the World Bank and other international agencies speak of private sector participation (PSP)
• In the municipal context there are MSP (Municipal Service Partnerships) and MSC (Municipal Service Contracts).

The Changing Policy Environment

In the Reconstruction and Development Program (RDP) the predominant form of delivery is presented as public sector driven with a high level of participation by beneficiaries, the people.

In the Growth, Employment and Redistribution strategy (GEAR), privatisation both as the form of outright sale of public assets and private sector participation has been placed at the centre of delivery.

International Experience of Privatisation: Britain

• Water and sewerage bills increased by an average of 67% between 1989/90 and 1994/95
• Profit margins in water companies rose from 28.7 to 36.5 per cent in the period between 1989/90 and 1992/3
• Self-disconnection
• Pre-payment metering is greatly advantageous
• Cross subsidies are rooted out after privatisation

The BOTT programme

• In July 1997, DWAF awarded Build-operate-Train and Transfer (BOTT) contracts to specially created private sector consortia.
• The private sector was unwilling to commit finance, perhaps due to the generally poor record of cost recovery in rural areas
• The BOTT contract is thus a management contract with the private sector bearing no direct commercial risk.
• Time-frame: between two to six years depending on the scope of works, and the time required to effect hand-over to the competent local authority

BOTT in KwaZulu-Natal

• The actual costs of establishing the consortium, the core office staff, telefax expenses, offices, etc, are covered by Preliminary and General (P&G) costs within the BOTT contract.

• With the budget cuts in DWAF in 1998 which reduced the planned R1bn expenditure on rural delivery to a figure about half that, there was a crisis in funding and projects had to be reallocated from regional councils to the AquaAmanzi consortium.

• About 90% of rural water projects are not fully functional.
• We should in reality have been able to supply 9 million of the 18 million people without adequate clean water.
• Community and local government capacity is seriously undermined through private sector delivery.

Regulations on contracts between WSA's and WSP's

• Under sections 19(5) and 73(1)(h) of the Water Services Act
• Paves way for privatisation of water delivery!