Mapping cholera

Mapping cholera: Washington-Paris-Pretoria-Ngwelezane 
 

Metered to Death: How a Water Experiment Caused Riots
and a Cholera Epidemic 


JOHANNESBURG, South Africa, Feb. 5 - Every morning, as
the sun rises over the Indian Ocean and paints the sky
a brilliant yellow, David Radebe crosses the N2
freeway into another world. 

Winding like a black snake through green sugar cane
fields and over rolling hills, the freeway divides two
very different communities along KwaZulu-Natal's
spectacular Dolphin Coast.

Thirty miles (50 kilometers) north of the harbor city
of Durban, the turnoff to the right leads to the
resort towns of Ballito Bay, Salt Rock and Tinley
Manor, where holiday homes of the upwardly mobile and
absentee landlords perch on rocky cliffs overlooking
brilliant white beaches. Radebe comes here to look for
work.

On the other side of the freeway, heading toward the
interior and scattered between sugar cane estates, lie
the houses and dwellings of small ethnic Indian
communities and three black township settlements that
are home to about 12,000 people. This is Nkobongo,
where Radebe lives.

Rows of new government housing line the tidy township
streets. Roads and curbs are well maintained.
Electrical cables crisscross the landscape above the
tin roofs, and township kids, dressed neatly in blue
uniforms, make their way to "Indian schools" that now
have been integrated.

But the air of progress and order belies a quiet
desperation. Eighty percent of township residents live
in dire poverty, well below the minimum living
standard of R800 ($80) per household a month. The
mobile clinic that serves the townships reports an
alarming increase in cases of HIV/AIDS, tuberculosis
and malnourished children. Six in 10 residents say
their children went hungry in the last year.

 Women at a standpipe in Empangeni (Photo: Bob Carty) 

Their biggest problem, however, is water. Not because
of a shortage, but because they can't afford it.

It was in this stricken community in 1999 that South
Africa initiated one of five water privatization
programs as part of a government policy aimed at
making people pay for the full cost of having running
water in their homes. The South Africans call it
"total cost recovery."

Unlike many countries, where residents pay only a
fraction of the total cost of having running water in
their homes, the idea behind "total cost recovery" -
the brainchild of private water companies and World
Bank economists - is that ending subsidies will help
finance improved waterworks and build the country's
economy.

Free water "is not so good an idea," Yves Picaud,
managing director of Vivendi Water in South Africa,
said in an interview with ICIJ. "It is better to ask
people to pay very little, but to pay something." Free
water, he said, "gives the impression that water is
free, service is free and you can use water as much as
you want."

But in practice, total cost recovery may have caused
more misery than development. In poor areas where
privatization has been implemented, millions of people
have been cut off because they cannot afford to pay
water bills that often make up 30 percent of their
incomes.

As many as 10 million South Africans have had their
water cut off for various periods of time since 1994,
according to a 2002 national survey by the Municipal
Services Project, a university-based research center
with offices in South Africa and Canada. Two million
people have been evicted from their homes for not
paying utility bills. Many poor families pay up to 40
percent of their monthly income for water and
electricity.

The water cutoffs have forced thousands of poor people
to seek water from polluted rivers and lakes and led
to South Africa's worst outbreak of cholera, in which
thousands of people were sickened and hundreds died.
In the end, the government spent millions of dollars
to control the spread of the disease and to truck
clean water to the stricken areas.

"The cost recovery program sounds good, but…it forced
people to go back to the original sources of water,
polluted streams and rivers and the like," said David
Hemson of South Africa's Human Sciences Research
Council, Africa's largest and most-respected social
science research organization.

"That was the direct cause of the cholera epidemic,"
Hemson said. "There is no doubt about that." [Listen
to David Hemson]

"People are saying: I have to choose between water and
food - or between electricity and sending my child to
school," said Canadian researcher David McDonald. When
it comes to cost recovery, McDonald observed, "Nobody
really ever bothered to find out if people could
afford these services. And, as it turns out, people
can't."

Soaking the poor

In South Africa, total cost recovery has been
implemented in different ways. Some local governments
have privatized public utilities by awarding water
concessions to foreign companies. Others have
transformed their utilities into profit-driven,
publicly owned enterprises.

In Nkobongo, where David Radebe lives, the French
water company Saur won a 30-year concession in 1999 to
provide water and purification services to the area's
diverse population of 40,000. Saur formed a local
company in consortium with four South African
companies, called Siza Water Company. Saur was the
majority shareholder, while the majority black South
African companies shared the rest.

Water that once was free for the poor suddenly carried
a price tag. Initially, families such as Radebe's
could afford it. Pleased to have cool, fresh running
water in his new home for the first time in his life,
Radebe gladly paid the connection fee and his first
water bill - totaling 63.58 Rand ($6.40) - a copy of
which he retains as a keepsake.

But in 2001, Radebe lost his job as a gardener at a
construction company. School fees, food costs and
rising water and power rates quickly drove the family
into debt. The household's electricity was cut off,
and the water stopped flowing. Radebe tried to install
a pipe to bypass his water meter but was arrested and
released on a warning. He had to beg the school
headmaster to reschedule the kids' school fees. With
no water, his vegetable patch dried out and the
electric stove - of no use since the electricity had
been cut - was repossessed.

Radebe told city officials he would never be able to
pay. So they removed his water meter altogether. Many
of his neighbors and friends also have been cut off.
Ninety percent of township residents now access water
from sources other than the Siza Water Company,
according to Hemson.

Facing mounting losses, Siza Water Company did what
most private and public water utilities are doing. It
raised water rates - by between 98 percent and 140
percent since the inception of the concession nearly
four years ago.

Other, more inventive tactics are being employed
across the country.

Many townships have put meters on communal taps. To
access them, residents must buy a prepaid water card,
which works like a phone card. The customer slips the
card into a meter and takes water from an activated
tap. The water stops when the card is removed. When
the card runs out, the customer has to buy another.
Trouble is, people like Radebe can not afford $4.02
for a prepaid water card.

The prepaid meters are "the most insidious device,"
said McDonald, who co-directs the Municipal Services
Project, a research center based at University of the
Witwatersrand in South Africa and at Queens University
in Kingston, Ontario. "People won't buy what they need
- they'll buy what they can afford. So people are
simply cutting themselves off rather than having the
state come in and do it."

Some of the metered communal taps have been
vandalized. Others just don't work; they eat the water
cards so that customers not only lose their money,
they lose any chance for water.

 The trickler (Photo: Bob Carty)  
Another tactic of water control involves a simple disc
with two tiny holes, called "the trickler." When
people miss a certain number of payments, the water
company inserts a disc into a valve, causing water to
trickle through to their pipes at greatly reduced
pressure. Residents can still get a minimum amount of
water - but only once or twice a day.

Although Section 27 of the South African Constitution
guarantees citizens access to sufficient food and
water, families like Radebe's have neither.

Instead, families desperate for water in Nkobongo turn
to the nearby Mhlali River and other streams. Radebe
said he borrows drinking water from neighbors when he
can, but at times he has had to send his kids to the
river with plastic buckets to fetch wash water.

The trouble is, KwaZulu-Natal's natural water
resources can be deadly.

19th century epidemic, 21st century economics

There was a time, said Wilson Xaba, when the taps in
the Ngwelezane township just ran and ran. The water
was clean and free.

Ngwelezane is a two-hour drive north of Radebe's
township of Nkobongo in the former homeland of
KwaZulu. Of a population of 1.5 million people, 79
percent do not have access to clean water, according
to Edward Cottle of the Rural Development Services
Network, a private group that conducts research on
social issues.

Xaba leads a community group called Shona Khona, which
means "Go There." It was started in response to the
community's dissatisfaction with increasing service
cutoffs by the municipality's "commercialized" water
works.

In 1982, KwaZulu suffered a major outbreak of cholera.
More than 12,000 cases were reported, and 24 people
died. As part of a relief program, nine communal taps
were erected by the apartheid government on the border
of Ngwelezane.

It was a historic milestone for Ngwelezane. For the
first time, residents were able to access purified
water. According to Xaba, some residents made personal
connections to these taps and had running water in
their houses. For the next 17 years, the community had
free water.

Until 1998, the municipality covered all costs of
water from the nine communal taps. But then the town
council introduced measures for more rigorous
financial management.

Residents were required to pay a flat monthly rate of
$4.50 for water and electricity. At the end of 1998,
the nine communal taps were converted to prepaid
meters. To access water, residents had to pay a
connection fee of $5. Only 700 households could afford
the registration fee. Two-thousand families remained
unconnected.

"They came to us and said we are wasting water," Xaba
recalled. "We were not consulted, they just told us.
For those houses with taps, they put meters in. Then
they put the prepaid meters in. We said 'no' and then
they cut our water. They said the water belonged to
the municipality. They used a phrase, 'No money, no
water.'"

In August 2000, at least four of the meters stopped
working. "We could not get water from anywhere. Nobody
explained anything. It took three weeks before the
meters were working again. The boreholes were dry. We
had no choice but to get water from the rivers."

A survey by the Municipal Services Project found that
11 percent of Ngwelezane's residents said they got
water from the river as a result of the cutoff.

They started using ponds and streams contaminated with
cholera bacteria, and the disease spread like
wildfire.

The Ngwelezane/Empangeni municipality, which includes
the mostly white town of Empangeni, had $10 million in
reserves that could have been used to address the
crisis, according to Edward Cottle and David Hemson.
But the municipal government remained "impassive" in
the wake of the outbreak, Cottle said.

"There had been no attempt to subsidize the extension
of services to poor communities," Cottle told ICIJ.
"The municipality rather sought to impose prepaid
water meters on the existing free water supply and to
subsidize industry through the introduction of tax
breaks and incentives."

The first cholera case in Ngwelezane was reported in
August 2000. Within four months there were thousands
of cases of the disease, which spreads through food or
water contaminated with cholera. The causes of cholera
have been understood since the mid 19th century.

The disease ultimately spread to the Eastern Cape and
then to the capital, Johannesburg, becoming the
largest cholera outbreak in South African history
before it ended in early 2002.

According to government figures, about 120,000 people
were infected and 265 were killed. Hemson, who was
sent by the government to investigate the outbreak,
disputed the official figures and said more than
250,000 people were infected and just under 300 people
died.

Hemson said he discovered that the municipal
government had put locks on people's taps, forcing
them to take water from the lake and river. "That
spread this cholera epidemic throughout the entire
community," he said.

The local council eventually reacted by removing the
prepaid meters from communal taps and charging people
a flat rate of $2 to $2.50 per month for water. The
South African government gave KwaZulu-Natal $2.5
million in emergency funds to fight cholera in the
province. It also trucked water into the affected
areas at a cost of $45,000 per month.

"It is hard to fathom how a democratic government,
which prides itself with promoting seemingly
progressive water legislation, could experience one of
the biggest outbreaks of cholera," Cottle said.

Unless the government gets rid of its policy of cost
recovery, "cholera will continue to haunt South Africa
for a long time to come," he said.

And it will be costly. As a result of trying to recoup
its water costs, the state is now paying "tens if not
hundreds of times more dealing with the health
crisis,'' said David McDonald of the Municipal
Services Project.

Despite best intentions, the ANC blunders

Ronnie Kasrils got the first hint that his
government's cost recovery policy was not working in
1999 during a visit to a village in the former
homeland of Transkei. Kasrils, once a committed
communist and soldier in the African National
Congress' armed wing, had just become the minister of
Water Affairs and Forestry.

His department was coordinating a project in the
village of Lutschenko in which each resident was
contributing 10R ($1) a month to receive basic water
service. While touring the village, according to press
reports at the time, he came upon a woman digging in a
riverbed.

"You don't have to do this anymore - we have this
project now."

"I have to," she replied., "I haven't got 10 Rand."

In February 2000, Kasrils issued a new policy, giving
six cubic meters (1500 gallons) per month of free
water to every household in the country. But he failed
to provide rules to implement the policy.

By the end of 2002, 57 percent of all South Africans
were getting the free water, but fewer than a third of
them were poor. The remainder didn't need free water,
according to Kasril's department. And millions of poor
people still did not have the clean water they needed.

The ruling African National Congress makes impressive
claims for its record on water delivery. When it took
power in 1994, 13 million South Africans did not have
access to clean drinking water. By February 2002, the
government said, it had reduced that number to 6
million. Kasrils has promised "basic supplies" of
water and electricity for all by 2008. [Listen to the
government's water promotion]

But the ANC's progress report seems exaggerated.
According to Cosatu, South Africa's biggest trade
union, 98 percent of whites, but only 27 percent of
blacks, had access to clean water in their homes in
March 2001. In rural areas, only 2 percent of blacks
had indoor plumbing.

Despite South Africa's rating by the United Nations
Development Index as a middle-to-upper-income country,
one child in every 22 dies before reaching the age of
1. Diarrhea is a frequent cause of these deaths and
often is directly attributable to poor water and
sanitation. In many ways, South Africa still remains
two countries. The 13 percent white minority is 18th
on the Human Development Index, equal to New Zealand.
The dominant black majority is 118, in line with
Bolivia.

Of all the countries in the world, in 2001, only
Guatemala had a wider gap between rich and poor than
the one that exists in South Africa.

The World Bank takes credit

According to a 1999 World Bank strategy report, the
bank played an important role in charting South
Africa's privatization strategy.

It used South Africa as a sort of test laboratory to
"pilot our evolving role as a 'knowledge bank,'" the
report stated.

"The Bank has provided technical assistance and policy
advice in virtually all sectors of the economy,"
Pamela Cox, World Bank director for South Africa,
wrote in the introduction to "South Africa Country
Assistance Strategy," a bank report. The report stated
that the Bank's International Financial Corporation
has played an "active role in the further development
of infrastructure in South Africa and promote the
increased participation of the private sector in this
area."

 World Bank headquarters in Washington, D.C. (Photo:
World Bank)  
It goes on to say that the bank's primary objective in
influencing South African policies was to "help reduce
the apartheid legacy of poverty and inequality."
Unfortunately, it didn't turn out that way.

The bank sent its own experts and brought in others to
help South Africa fashion a new economic policy that
involved decentralizing power partially through
privatizing utilities.

Patrick Bond, a professor at the University of the
Witwatersrand in Johannesburg who has written
extensively on water privatization and the World Bank,
told ICIJ that the Bank sent what he called
"reconnaissance missions" in the 1990s to prepare the
new ANC government for privatization and
cost-recovery.

By the time the ANC took over, World Bank advice was
explicitly biased toward privatization.

By November 1994, Bank staff, led by the deputy
resident representative, Junaid Ahmed, had drafted the
main sections of South Africa's "Urban Infrastructure
Investment Framework." A final draft was issued four
months later under the auspices of the Reconstruction
and Development Ministry in the office of President
Nelson Mandela. The framework provided for communal
taps and for pit latrines in areas where households
earned less than $80 a month, Bond said.

In October 1995, the World Bank's main water expert on
Lesotho and South Africa, John Roome, advised
then-Minister of Water Affairs Kader Asmal to make
several policy changes. These included introducing a
"credible threat of cutting service" to non-paying
consumers.

In 1996, total cost recovery became an official policy
of the government when it adopted its fiscally
conservative Growth, Employment and Redistribution
macro-economic policy, known as GEAR. The central
features of the policy are a reduced role for the
state, fiscal restraint and the promotion of
privatization.

Mike Muller, director-general of the Department of
Water Affairs and Forestry, acknowledged the bank's
contribution but claimed privatization was a
government policy before the World Bank. "It's
absolutely the most sensible way of running a water
system, and it's the way most water systems are run in
most of the world," he said.

Bond disagrees. "Much of cost recovery to date in
South Africa has been driven by a blind ideological
faith in neo-liberalism," he told ICIJ. "There has
been no effort to explore alternatives."

Call me a Thatcherite

After taking office as president in May 1994, Nelson
Mandela proclaimed, with a nod to Britain's proponent
of privatization, former Prime Minister Margaret
Thatcher, "Privatization is the fundamental policy of
our government. Call me a Thatcherite, if you will."

Thabo Mbeki, who at the time was Mandela's deputy
president and succeeded him in 1999, agreed with that
position.

Municipalities have used harsh tactics to enforce
total cost recovery. In certain towns in the Eastern
Cape - the traditional heartland of the ANC -
municipalities resorted to "apartheid style" tactics
to force people to pay. In Stutterheim, streetlights
were switched off to "punish" non-payers. In
Queenstown, special debt collectors and private
security firms were appointed to collect arrears and
cut off water of errant residents. In Fort Beaufort,
local council officials refused to collect sewerage
buckets in so-called "squatter" camps - where the
poorest of the poor live in tiny tin shacks.

Township protests broke out around the country, with
people demanding an end to prepaid electricity meters
and water cutoffs. The demonstrations turned violent
in some areas, as protestors clashed with the police.

"People are very, very angry," McDonald, of the
Municipal Services Project, said. "We're starting to
see a ground swell of opposition."

The project, surveying the impact of cost recovery on
the poor, found that more than a third of the 2,530
respondents interviewed in July 2001 said they could
"not afford to pay for these services no matter how
hard they try" or that they could pay only if they
"cut back on other essential goods like food and
clothing."

In March 2000, one month after Kasrils promised free
water, the World Bank released its "Sourcebook on
Community Driven Development in the Africa Region -
Community Action Programs."

Despite the hardships already evident from total cost
recovery policies, the bank's report advised: "Promote
increased capital cost recovery from users. An up
front cash contribution based on their
willingness-to-pay is required from users to
demonstrate demand and develop community capacity to
administer funds and tariffs. Ensure hundred percent
recovery of operation and maintenance costs."

McDonald said officials disregarded the reality on the
ground.

According to his research, only 50 percent of
households are capable of paying a "reasonable fee"
for services such as water and electricity. Seventeen
percent of households can pay for services only if
they cut down on essentials, such as food and
clothing. Eighteen percent said they cannot pay at
all.

"Ability to pay is at the root of the payment crisis,
not a culture of non-payment. You cannot squeeze blood
from a stone," McDonald said.

Menahem Libhaber, the World Bank's senior water and
sanitation engineer in Latin America, told ICIJ there
are thresholds beyond which people simply cannot pay.

"Look, we can raise the tariffs only by a socially
acceptable amount - 3 to 4 percent of income - if you
get to more than that, they will not pay," Libhaber
said. "The World Health Organization suggested you
could go to 7 percent, but to me just percent. South
Africa is paying too much."

A countrywide study released in December 2002 by the
Department of Local Government shows that many
municipalities are charging unaffordable and
unreasonably high service rates and people simply
can't afford to pay them.

South Africa's 300 local councils are owed $670
million in outstanding water payments, the study said.

The French connection

While privatization was a post-apartheid policy, one
French company already had established deep roots in
the country.

Lyonnaise des Eaux, now Suez, was the first water
multinational to create a presence in South Africa -
and it didn't wait for the coming of democracy in
1994.

Ten years earlier, at the height of apartheid, French
foreign trade advisor Henry Castelnau and two advisors
to Lyonnaise des Eaux's chairman, Jérôme Monod,
arrived in South Africa for talks with the government
and local authorities.

Through its wholly owned subsidiary of Lyonnaise Water
Southern Africa, Suez bought interests in South
Africa's largest construction company and a pipe
manufacturer in the early 1990s. It then placed all of
its South African interests under Water and Sanitation
Services South Africa, a wholly owned subsidiary.

By 1995 the new firm, known as WSSA, had management
contracts in three Eastern Cape towns: Queenstown,
Stutterheim and Fort Beaufort.

To drum up business, the company used what
Witwatersrand University political scientist Greg
Ruiters calls a "panic strategy." Ruiters has
extensively researched the concession for the
Municipal Services Project.

WSSA officials met with Fort Beaufort council members
before the 1994 democratic elections and warned them
that the post-apartheid era was going to bring about
"demanding consumers, a payment crisis and militant
unions." The company claimed it could help the three
local councils solve these pending problems, as well
as provide substantial savings and a world-class
service. The Suez subsidiary said consumption would
rise and consumers would start paying as they became
more aware of the "value" of water.

A secrecy clause was written into the contracts
preventing any member of the public from seeing them
without the explicit approval of Suez, according to
union officials and Ruiters.

By 1996, the WSSA could boast in its annual report:
"Whilst these are early days in winning their
acceptance, we now have the support of the government.
We helped draw guidelines of private sector management
of water and sanitation services and are now helping
with a regulatory framework."

But Ruiters said water privatization in the three
towns proved to be disastrous. His research showed
that water tariffs increased up to 300 percent between
1994 and 1999. The municipalities did not derive a
cent of profit from its water revenue; all increases
went to paying off WSSA charges.

According to Ruiters, Fort Beaufort paid $40,000 a
month to the company.

By 1996, a typical township household was paying up to
30 percent of its income for water, sewerage and
electricity. Average income in the area at the time
was less than $60 per month, with more than 50 percent
unemployed.

The majority of township residents couldn't pay their
bills and were dealt with ruthlessly. Queenstown
appointed special debt collectors and introduced a
re-instatement fee that was almost twice the average
township income.

The assistant treasurer for Fort Beaufort, now called
Nkonkobe, said in his 2000 municipal report: "The
majority of debtors against whom action was taken are
pensioners or unemployed."

By the late 1990s, old-style, anti-apartheid
resistance tactics were reemerging in the communities,
with stone-throwing and violent confrontations between
local authorities and angry communities, protesting
the electricity and water cutoffs.

Ruiters said the WSSA showed "remarkable tenacity" in
clinging to its three contracts in the eastern Cape.
The company said in a 2000 monthly report: "Based on
our experience, we know that revenue can be gathered
humanely and fairly."

But something had to give. By 2000, Fort Beaufort
municipality no longer could pay the management fees
to WSSA, and in December 2001 it persuaded a High
Court judge to cancel its contract with the company.
WSSA was given two weeks to vacate the municipal
offices that they were occupying.

War by water pressure

In Nelspruit, a three-hour drive east of Johannesburg,
the water providers and the water drinkers have had
quite enough of each other.

Henry Nkuna, for one, is threatening war.

Nkuna was once a combatant in the Azanian People's
Liberation Army, the armed wing of the Pan Africanist
Congress, which continues to be a leftist political
party favoring land redistribution and black
empowerment. The armed Pan Africanists gained
notoriety during the apartheid struggle for
masterminding attacks on whites in churches, bars and
on farms.

Now, Nkuna is declaring his readiness to respond to
new water policies with violence. "If you dare to do
cost recovery in the townships, it will spark a fire,"
Nkuna warned in a November 2002 interview. "It will be
something you will regret forever."

Nkuna's new enemy is the Greater Nelspruit Utility
Company (GNUC), a consortium of the British water
company Biwater and a local black empowerment company,
Sivukile Holdings, which has a 30-year concession to
provide water and sanitation services to a population
of 240,000.

Brian Sims, GNUC's managing director and head of
Biwater in South Africa, is a veteran water man. He
has worked all over the world: New Zealand, Australia,
the Philippines. "Name it, I've been there."

"Never in my life have I seen such a culture of
non-payment than here in Nelspruit," Sims said in
disgust. "People simply don't pay. We are suffering
massive losses."

In the summer of 2002, GNUC instructed its lawyers to
proceed with legal action against 796 households in
Nelspruit that were more than $300 in arrears on their
water accounts.

"Letters of demand have been sent out. This is the
beginning of a process to break the culture of
non-payment in the townships," GNUC commercial manager
Harold Moeng said in a November 2002 interview.

Nkuna and his Anti-Privatization Forum are fighting to
force the municipality - now called Mbombela - to
cancel the GNUC contract and introduce a flat rate of
$3 a month for all municipal services in the
municipality and its surrounding townships and
villages.

"If it's necessary, we'll use violence," he warned.
"If they (GNUC) come into the township to cut our
water supplies or take our goods, we'll vandalize
their cars and beat up their workers."

The threat of violence is the latest in a series of
obstacles and setbacks for the concession, which has
seen youths marching on councilors' houses in the
townships, the destruction of water meters, illegal
water connections and one of the highest rates of
non-payment in the country.

 South African researcher David Hemson next to a
destroyed water meter. (Photo: Bob Carty)  
Like the rest of South Africa, Nelspruit is really two
cities. Old Nelspruit is white and prosperous with
average annual incomes of $13,000. The surrounding
townships are poor. About 60 percent of households
have an income of $100 per month or less.

When GNUC took over in 1999, residents in the old town
enjoyed First World living conditions: wide and
well-maintained tree-lined streets, libraries, parks,
superior medical facilities, good schools and a
high-level of municipal services. By comparison,
non-existent or low-level basic services, dirt roads
and inferior schools and medical facilities
characterized the townships.

The municipality privatized its water operation
because it needed $38 million to bring water and
sewage networks to the townships. Since then, GNUC
said it has laid 90 kilometers (55 miles) of new water
pipelines and 17 kilometers (10 miles) of new sewage
pipelines. It has installed 7,240 new water meters and
made 5,000 new water connections.

But Sims acknowledge in an interview that Biwater is
at a "crossroad" in its operations in South Africa.
Sims said Biwater can no longer afford to implement
its full obligations under the water concession, and
the company has suspended all capital expenditure
programs. Even with the suspension, water rates
increased in 2002 by 18 percent.

Sims blamed the problems on the "culture of
non-payment" in the township, fueled by trade unions
and their allies like the Pan Africanist Congress.

It costs the consortium $111,000 every month to supply
clean water to Kanyamazane township, which is part of
Nelspruit, Sims said, but the consortium receives only
$5,584 in revenue. Only about 20 percent of residents
pay their bills. They collectively owe the utility
$1.8 million in unpaid water bills.

"There is only one solution: we have to get people to
pay," Sims said, adding that even those township
consumers who can afford to pay for water don't.

But a journey into the poor areas of Nelspruit tells a
different story. It becomes clear that most people, at
least, don't pay because they cannot afford to pay.

People were used to a flat rate of about $7.50 for all
services before privatization, said Sam Sambo of the
South African Municipal Workers Union, a trade union
that stands at the forefront of the anti-privatization
campaign in South Africa.

Now, they get individual water bills of up to $20.
"It's beyond their ability to pay and that's why only
one out of every five residents pays their bills,"
Sambo said.

The Pan Africanist Congress initiated a campaign in
2001 called "Operation Vulamanzi," or Operation Open
Water, to reconnect water to all residents who had
been cut off for not paying their bills. Even so,
"debtors" receive their water through the so-called
"trickler system" in which GNUC installs a disc-like
device with two tiny holes that allows water only to
dribble into the pipes.

"People can still access their free [6 cubic meters]
of water every month. In fact, they can get even
more," said Harold Moeng, GNUC's commercial manager.

But the trickler makes life very unpleasant for those
who can't pay. Call it war by water pressure.

"People often have to get up at 3 a.m. to get water
before they go to work and then wait again for the
pressure to build up," Sambo said.

He said GNUC's attempt at total cost recovery is war
on the poor. "We will resist it with every possible
means we have."

Nkuna rattles his saber: "If they continue on this
path, we will start with meetings and rallies and
rolling mass action. Things can turn ugly. We will
meet violence with violence."

The water miracle?

Sitting in his office outside Johannesburg Development
Bank building, James Leigland - the man who brokered
the privatization deal in Nelspruit - is convinced
that the process has ground to a halt.

"Further privatization of water? It's not going to
happen in the near future. There will be no new
Nelspruits or Dolphin Coasts. There is too much of a
downside," he said.

Leigland represents the Municipal Infrastructure
Investment Unit, which the government created in 1997
to "encourage and optimize private sector investments
in local authority services." He praised the local
achievements of Biwater and GNUC as numerous and said
that bringing water to the poor in Nelspruit has been
very successful. "This would not have been possible
without privatization. We couldn't have done it
without Biwater."

But he acknowledged the concession is "very fragile."

"Private companies were anxious to get a foothold in
the country," Leigland explained. "They are still very
eager, and I don't think they have been totally
discouraged. But there is a lot of mistrust towards
them."

Indeed, the foreign multinationals appear to be
reassessing their position in southern Africa.

Saur has withdrawn from Mozambique and Zimbabwe. Suez
has not appealed the cancellation of its Nkonkobe
contract in the Eastern Cape. Biwater says it is
committed to Nelspruit, but is not seeking any further
concessions. Thames Water has no presence in the
country. Vivendi's one executive seems wary of the
situation.

"To be very honest, the municipal market is not
ready," said Picaud, the managing director of Vivendi
Water in South Africa.