Privatizing Cape Town : service delivery and policy reforms since 1996
Files
Date
2002
Journal Title
Journal ISSN
Volume Title
Publisher
Queens University, Kingston, ON, CA
Abstract
This booklet is about the privatization of municipal services such
as water, waste and electricity in the city of Cape Town. The
term ‘privatization’ is used to cover a range of private sector
activities, including outsourcing and the introduction of private
sector principles such as performance
-based management and full-cost
recovery into service delivery reforms. We also include the corporatization
of services in this broad definition.
Chapter One argues that there has been a fundamental shift away
from the ‘statist’ service delivery models of the past where the state
subsidized and delivered municipal services (albeit in a racially-biased
manner), towards a more ‘neoliberal’ service delivery model where the
private sector (and private sector principles) dominate. In the latter model,
the state acts as a service ‘ensurer’ rather than a service ‘provider’ – in
the now-fashionable language of the World Bank – and municipal services
are ‘run more like a business’, with financial cost recovery becoming the
most important measure of performance. The chapter is based on extensive
interviews with senior city managers and politicians, as well as a review of
relevant policy documents, political party position papers and an evaluation
of council activities since the first democratic elections in 1996.
Chapter Two provides a detailed account of the increasing
commercialization of water in Cape Town, with a focus on current efforts
to corporatize the service into a ring-fenced business unit. Although
different from the outright divestiture of state assets in that the city retains
control and ownership of water facilities, corporatization nevertheless
raises many of the same concerns about access and affordability as
privatization and introduces many of the same profit-oriented motives
and operating principles. It is also often the first step towards
outright privatization. This chapter provides an overview of the city’s
water corporatization plans followed by a list of concerns as to their
appropriateness for Cape Town, the most important of which relate to
issues of accountability and regulation, the continued fragmentation of
service delivery decision making, heightened pressures for cost recovery,
and the process by which the corporatization proposals have been
developed.
Underlying much of this discussion is the argument that neither the
promise nor the potential of public sector reform have been achieved in
Cape Town. Contrary to written guarantees on the part of the African
National Congress (ANC) that the public sector would be the ‘preferred
service provider’, local ANC councils have failed to adequately explore
the public sector option and have actively promoted privatization and
corporatization.
The other major political parties in Cape Town – the Democratic Party
(DP) and the New National Party (NNP) – have been equally unwilling to
explore and promote public sector reform but have been open about their
private sector preferences. So too have senior municipal managers, many
of whom are responsible for the daily operation and decision making of
service delivery in the city. It is at this level of the civil service that the
most concrete (albeit unofficial and ad hoc) expression of privatization and
corporatization is to be found.
Our objective with this report is to document – for the first time
since the end of apartheid – both the scale and character of privatization
initiatives in Cape Town and to situate these policy changes within the
broader national and international policy-making environment on service
delivery. There are different opinions on privatization in Cape Town, and
we attempt to capture these nuances in our analysis, but there is an
overwhelmingly pro-privatization philosophy, representing a shift in policy
orientation as profound as any that Cape Town has experienced in its long
and tumultuous history. That this ideological shift should be discussed, and
its relevance to service delivery in Cape Town debated, is the motivation
for this report.
Description
item.page.type
Book
item.page.format
Text
Keywords
PRIVATISATION, LOCAL GOVERNMENT, PUBLIC SERVICES, WATER MANAGEMENT, PRIVATE SECTOR, SOUTH AFRICA, POLICY MAKING, DECISION MAKING, POLITICAL PARTIES