BUSINESS AND TRAINING: MIKE’S MESSAGE
49
SA does not need an
independent water regulator
One of the saddest things about South Africa today is
how we are going backwards.
By Mike Muller
This is particularly obvious in the water sector. It is not
just the falling number of people with reliable water
supplies. Policy proposals tabled at the end of last
year are re-running discussions held 20 years ago,
when South Africa’s water policy and laws were
being reviewed.
Back then, water privatisation was top of the world’s
agenda. There were hungry multinational water companies
from France, Britain, and the United States all clamouring
for a share of what they believed would be the next big
thing: running the world’s water supplies.
To do that, they needed friendly local arrangements that
would protect their interests. Specifically, they wanted
national water regulators that had the power to set prices
and conditions that even government ministers could not
change.
So, their friends at the World Bank encouraged — some
would say blackmailed — countries that borrowed its
money into establishing these regulators. I went to so
many meetings where this was the agenda that I eventually
asked them — at a large internal meeting — if it was
true that staff only got bonuses if they promoted water
privatisation and independent regulation. Many in the
audience wriggled uncomfortably.
The world has changed a lot since then. The private French
water companies have long retreated from big contracts
in places like Argentina and been thrown out of places like
Jakarta, Indonesia. British firm Biwater recently suffered
a similar fate in Dar es Salaam, Tanzania. Even at home,
the companies are not having an easy time. The French
companies no longer run the water supply of Paris, their
capital city. And Britain is going through contortions as
people realise that its experiment with water privatisation
has failed.
One indicator of that failure is the mess around Thames
Water, the company that supplies London. The Financial
Times, often seen as the mouthpiece of global capital,
www.plumbingafrica.co.za
concluded recently that there were serious problems.
Describing Macquarie, the Australian bank that until
recently owned a large share of Thames Water as the
‘vampire kangaroo’, it said that private companies were
treating the water utilities as an ATM. This was echoed by
Sir Ian Byatt, who established OFWAT, the British regulator.
“The public interest is so easily forgotten, and consumers
are paying more for their water bills because of it.” Byatt,
by the way, told me that South Africa was in no position to
establish a regulator.
Meanwhile, it is back to the 20th century for South
Africa’s policymakers, who appear to be blissfully
unaware that the world has moved on. The draft water
law that has been supposed to go to Parliament for
some years now, still proposes the establishment of an
independent water regulator.
Aside from ignoring international trends, this ignores the
manifest failure of the independent regulator, the National
Energy Regulator of South Africa (NERSA), to control price
rises in the electricity industry that, with just one major
generator, is arguably much simpler to monitor and control.
Mike Muller
Mike Muller is a visiting
adjunct professor at the
University of Witwatersrand
School of Governance.
After working in water and
sanitation for over forty
years, he thinks that he is
beginning to understand
some of its complexities.
Power stations, after all, are built and operated by people.
They have not noticed that the hydrological cycle that feeds
water supplies is controlled by higher powers that do not
take kindly to human attempts to regulate them.
What the water sector needs urgently is not a new law that
will give politicians and officials an excuse to do nothing for
another five years. They need to get to work and implement
the laws they already have. Let us hope that message is
beginning to hit home. PA
Meanwhile, it is back to the
20th century for South Africa’s
policymakers, who appear to
be blissfully unaware that the
world has moved on.
February 2018 Volume 23 I Number 12