2005 - 2006 - Pinsent Masons Water Yearbook 2012

SOUTH AFRICA PART 2: COUNTRY ANALYSIS
MAJOR CITIES
City 2000 2015 Status
Cape Town 2,930,000 3,458,000 Some O&M outsourcing
Johannesburg 2,950,000 3,811,000 Private sector involvement under consideration
East Rand 1,552,000 1,703,000 N/A
Pretoria 1,590,000 2,152,000 N/A
Durban 2,391,000 3,020,000 Corporatisation of water provision in progress
West Rand 1,255,000 1,541,000 N/A
Satolburg 1,219,000 1,554,000 N/A
Port Elizabeth 1,006,000 1,150,000 N/A
A full privatisation - Nelspruit
The privatisation of Nelspruit water services was agreed in early 1999 after 28 months of negotiations.
The concession is worth R350 million for the running of the council’s water and sanitation services,
covering all of Greater Nelspruit's 260,000 residents. This is the first municipal deal for privatised
water and sanitation in South Africa. Two former townships and six peripheral urban areas have been
incorporated into Greater Nelspruit. Most of the people have not yet enjoyed regular running water, or
acceptable sanitation services. The JV is run by Biwater International (40%) and Sivukile Investments
(60%). The consortium will pay the council R1.25 million a year for monitoring the process. The
consortium will invest R150 million in the next five years to improve water and sanitation in the town.
Progress on the deal will be reviewed by the council in five years. In addition, billing arrears of more
than R20 million needs to be dealt with. This concession is seen as a battleground by the anti
privatisation lobby and thus it remains contentious irrespective of its actual performance.
Private sector contracts awarded (Please see the relevant company entry for details)
Location Contract Company
Dolphin Coast 30 year water and sewerage concession Siza Water Co.
Nelspruit 30 year water and sewerage concession Biwater
Queenstown 10 year BOTT concession WSSA
Fort Beaufort 10 year BOTT concession WSSA
Siza Water: A tourist resort concession
In 1999, the borough of Dolphin Coast (56,000 people) awarded a 30 year concession to SAUR’s Siza
Water. US$172 million of investments are to be made during the life of the concession. Siza Water
forecast a 40-50% increase in service demand after the contract award, but has subsequently seen
demand rise by just 5% in 2002. Since the concession award, operation and maintenance targets are
on track, it has increased the number of employees, uses 3% of salary bill for staff training and has
encouraged staff share ownership. Distribution losses have fallen from 30% to 16%, with an increase
in tariff collection from 75% to 97%. Customers choose from four levels of service: (1) Community
has own service (no service from Siza Water); (2) standpipe with VIP, per household; (3) 200 litre
water tank and septic tank, per household and (4) full water connection and flush toilet. Residents
may start at level 2 and upgrade to 3 or 4 as affordability levels improve. Future challenges include
further enlargement of the municipal area and a pricing policy, which is based on cost reduction and
cost recovery rather than a pro-poor policy.
Private sector company operations (Please see the relevant company entry for details)
Company Parent company
Population served
(country) Water Sewerage Total
Metsi a Sechaba Biwater (UK) 270,000 270,000 270,000
Siza Water Company SAUR/Bouygues (France) 56,000 56,000 56,000
WSSA Ondeo (France) 300,000 260,000 300,000
Source:
M Pillay & G Moloi (2002). Bridging the gap: greater understanding between public and private sectors will extract the best from
both – what could this mean for Africa’s water sector? Water 21, Africa Energy Forum, London, July 2002.
185 Pinsent Masons Water Yearbook 2005 – 2006