Irene Louw
18 December 2001
Rural communities, trade unions have misgivings about French firms expanding existing role in SA's supply network.
FRENCH water companies are eager to expand their existing operations in SA especially in remote rural areas.
But their desire to be involved in extending the country's water supply network is likely to be opposed by trade unions and local communities, who are vehemently against the privatisation of essential services.
During a trip to Paris last week, I interviewed representatives of France's three major water companies: Vivendi, Saur and Suez. These companies supply and manage water services for most of France, as well as in some foreign countries.
The companies all say they have an understanding of the situation in SA, where unions and communities have expressed fears about service levels and costs if water supply is privatised. But the firms also stress water cannot be free, as some interest groups have demanded.
A municipal infrastructure unit in SA, which works closely with provincial local government MECs as well as local councils, was set up in 1997. In its latest annual report, the unit reports it has "successfully finalised" 13 municipal service partnership projects worth R3,4bn in the 2000-01 financial year.
In France, only 15% of water supply is still the domain of local authority, while the remainder has been privatised.
Ondeo Degrémont which is owned by Suez and whose core businesses include energy, water and waste services says its mission is to "be the premier provider of sustainable water related solutions and services worldwide, through long-term partnerships that benefit our customers, communities, employees and the environment".
Suez in SA owns Water and Sanitation Services SA and Johannesburg Water, which provides locally tailored management services to communities, such as drinking water supply and waste water management.
The Fort Beaufort municipality in the Eastern Cape, now known as Nonkobe, won a court battle last week to cancel its contract with Water and Sanitation Services SA. The rural municipality argued it could save R20m in this way. It has withheld millions to the firm in management fees on the grounds the contract is not financially sustainable.
Vivendi Water SA, a Vivendi Environnement subsidiary, is the biggest water multinational firm in the world. It serves more than 110-million people in more than 100 countries and has 40000 industrial customers.
Vivendi Water says it can generate revenue of at least ŕ 150m in Africa this year and forecasts ŕ 330m for next year.
The firm is a partner in Business Partners for Development in SA, a programme set up by the World Bank, as well as producing water from domestic sewage for industrial use. However, its reputation has to an extent been tarnished by various controversies around the world.
The company's contract in Puerto Rico is about to be cancelled and water renationalised. Puerto Rican communities are said have experienced problems such as irregular water supply since Vivendi took over.
Philippe Bohn, director of African Development at Vivendi, says the firm has a strong policy of sustainable development.
"It is important to be socially responsible," he says. It is his view that the company, unions and communities can solve the problems together. in order to "find a way for the poor to access basic services".
Saur is a wholly owned subsidiary of the Bouygues group, and believes in "delegated management of utilities and providing local authorities and industry with water, energy, environmental and facilities management services". The firm supplies 6-million people with drinking water in 7000 French communities.
In SA, it has the controlling share in the Dolphin Coast private water consortium Siza Water. The contract was signed in 1999 and stipulates that water prices will not be increased during the five years thereafter.
"Yet, after less than two years they (this year) hired lawyers to change the contract so they could raise prices," says SA Municipal Workers' Union (Samwu) spokeswoman Anna Weeks.
"They say they thought the Dolphin Coast population would grow more than it did, and therefore they did not get all the profit they were hoping for."
She says Samwu predicts another increase in a few months.
Issues of delivery, sustainability and cost are due to be discussed at the Union of African Water Suppliers conference in Libreville, Gabon, in February.
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