Public is as Private Does: The Confused Case of Rand Water in South Africa

Critique and protests against private sector involvement in public water services have led to calls for the creation of ‘public-public partnerships’ (PUPs) as a mechanism for improving public services and negating private sector involvement. The assumption is that PUPs will protect the public nature of water services much better than PPPs and will be better at ensuring access to water for the poor and marginalized, particularly in countries in the South. It is in this context of changes in public sector management and in the water sector that we see Rand Water (RW), the biggest public water utility in Africa, entering the market on the continent, as well as engaging in other activities that are beyond its core function of providing bulk potable water to local government in the industrial heartland of South Africa. This report examines the expansion of RW into non-core activities in the period 1994-2006. The report covers RW’s expansion within South Africa and outside of it, considers the rationales offered by RW for that expansion, and deliberates on this expansion in the context of similar activities by other public sector operations both in South Africa and in other countries. What factors explain the expansion of public utilities beyond their original public service responsibility, both within their home country and beyond? What is the relationship between commercial activities and public service provision, and the unresolved tensions created by these seemingly contradictory activities as a result of the underlying processes of corporatization, commercialization and marketization? How and when do PUPs differ from PPPs? The research methods used to gather information for this study involved the analysis of various documents, including legislation and policies related to water provision, water boards and public sector reform in South Africa, minutes of RW board meetings, reports and papers written and presented by RW management and the in-house newsletter of RW. In-depth formal interviews were conducted with senior managers of RW on changes in the organization since 1994. Formal interviews were also conducted with local government officials with responsibility for water services who regularly interact with RW. Various informal discussions took place with other local government officials and councillors at the monthly Water Services Forum arranged by RW.