Is water privatisation the answer to urban crisis?

Terrence Tazvivinga, [email protected] 

ONE of the topical issues in Zimbabwe in recent times is the proposed reforms in the supply of water in urban areas. In January this year, the Government approved the privatisation of water supply in Harare. Private players will take control of the entire water supply chain and the Government has already invited interested companies to submit their proposals.

Bulawayo City Council (BCC) have also announced plans to set up a standalone water utility to take charge of the water supply system. In the case of Bulawayo, the water utility will be a private company wholly owned by the city council. Although BCC has given assurance that it will retain full control of the water utility, the prospect of bringing in private players to raise funding for the utility cannot be ruled out. Other urban local authorities are also mulling going the same way as Harare and Bulawayo. 

These developments have sparked widespread outcry from civil rights organisations, pressure groups and residents’ associations.  Privatisation of water supply is being viewed with great suspicion by the public as there are fears that water will become unaffordable. Rights groups argue that privatisation could lead to higher tariffs as private players seek to get a return on their investment. Private players will also favour supplying the precious liquid to communities deemed to be able to afford paying for the service at the expense of marginalised communities. It is also feared that handing over water supply function to the private sector will result in loss of public oversight and accountability.  

Section 77(a) of the country’s Constitution states that every person has a right to safe, clean, and potable water. While the constitution guarantees access to water as a right for every Zimbabwean, the reality on the ground is that water is not accessible in many urban areas. Urban local authorities in Zimbabwe are struggling to provide water to their residents. 

Over the past two decades, the country has registered a significant growth in urban population with new suburbs sprouting in all directions. There has however been no investment in water supply infrastructure to increase water supply capacity to match the rapid growth in urban population.

Cash strapped local authorities lack the capacity to make such huge investments in the face of competing needs for the little resources available. Some suburbs across the country’s cities have gone for many years without a single drop of water coming through their taps. In Bulawayo, residents have to endure water cuts of up to five days a week as the local authority tries to ration the scarce liquid.

In Harare, suburbs like Southlea Park, Hopley, Granary Park and Ushewokunze are not connected to the city’s water supply system. The same predicament prevails for Mbundane, Reigate, Emthunzini, Rangemore and parts of Cowdray Park. Despite their willingness, the respective local authorities simply do not have the capacity to provide the required infrastructure. As a result, the right to clean and potable water is now available only in theory. Water supply in urban areas has become more of a privilege than a right. Residents have resigned to fate with most of them resorting to coping mechanisms including open water sources which are often unsafe. Borehole drilling companies have witnessed a boom in business as residents resort to private solutions to the water crisis. If quantified, the cost of the water crisis to residents runs into millions of dollars.

This then begs the question: which is better, to protect a non-existent right to water or to pave way to a solution which will likely result in more efficient supply of water despite the deemed higher cost?

It is important for us to note that the current situation has significant cost implications to residents. Residents spend a lot of time in search of water and often do this during unsafe times. There have been reports of women being raped while going to fetch water from unconventional sources in the dead of the night. Productive time is lost as people queue for water.

In many instances, residents are having to buy untreated borehole water from private suppliers at a cost much higher than what the local authorities are charging. Effectively, there is a thriving “water black market” and residents are paying whatever the private suppliers feel is a viable price for them. Water distillers are also enjoying brisk business as residents buy safe water for drinking. At the same time, residents are still paying local authorities for non-existent water supply based on estimated water bills. Most properties no longer have functional water meters and local authorities do not have the resources to take readings from the remaining functional meters.

Is it therefore not prudent to curtail this “water black market” by officially roping in the private sector to supply water? We have to choose the better of the two devils.

Setting up standalone water utilities will help attract investment into the water supply sector. The revenue streams will become more defined and can be ring-fenced to service obligations to lenders. Under the current scenario, funds collected from residents for water supply are being diverted to other local authority functions.

This deters any potential private lenders to provide loans for water supply projects. Private sector operators will also bring efficiency to water supply as they strive to make the business less costly to enhance profitability. At the moment, councils are losing revenue due to the high ratio of non-revenue water.

Non-revenue water refers to treated water lost along the supply system mainly through leakages and is not paid for. Private players have the capacity to employ modern technologies including Artificial Intelligence to detect and plug leakages in the supply system. Evidence from other countries shows that the introduction of private players in urban water supply has resulted in reduction in non-revenue water loss. These efficiencies may actually translate into lower tariffs as revenue generation is boosted while costs are minimised.

Unlike local authorities, private sector players are motivated to operate efficiently and profitably to maintain their going concern status. This is in contrast with local authorities which will remain operational even under insolvency conditions. This gives impetus to the private water supply sector to do all it can to maintain good relations with its customers (rate payers) and creditors. This means upholding the interests of the ratepayers in line with the adage “customer is king”.

Involvement of private sector players will introduce efficiencies across the water supply chain. This will start from production, supply and bill collection. It is also anticipated that there will be greater efficiencies in management as executives will focus solely on water supply. Even if the introduction of private players results in slight increases in tariffs, this option will remain a better devil as it guarantees availability of clean water thus upholding the right to water as enshrined in the constitution. Where a choice has to be made between the two devils, we have to choose the better devil. 

Terrence Tazvivinga works for a local development finance institution. He has experience in development and financing of infrastructure projects and writes in his own capacity. He can be contacted via email [email protected] or through 0773453310.