Executive Director of the Water Integrity Network (WIN), Barbara Schreiner, has urged the Bulawayo City Council (BCC) to implement strong regulatory measures for the water sector, if it moves forward with plans to create a private water and sanitation utility.
This advice follows the BCC’s ongoing discussions to establish a private water and sanitation utility in collaboration with the Dutch company Vitens Evides International (VEI).
Schreiner shared these insights during a webinar organised by the Matabeleland Institute for Human Rights (MIHR) on Tuesday, focused on water utility companies that featured representatives from South Africa and Kenya.
MIHR Coordinator Khumbulani Maphosa noted that while the organisation has not yet taken a formal position on the matter, they are gathering information from neighboring countries that have undertaken similar initiatives.
Schreiner emphasised that investments in water utilities typically come from public funds, government taxes, or water user tariffs, making it crucial to conduct thorough consultations and establish strong regulatory frameworks before moving forward.
โThere are only three sources of finance in the water sector: taxes, tariffs, and transfers. Water is primarily supposed to be publicly funded. Unlike MIHR, which has not yet taken a position, I believe that privatisation of water is problematic,โ said the expert.
Schreiner added that one of the challenges of involving the private sector in water provision is that their primary goal is profit.
โSome international private companies are owned by financial organisations and pension funds, which is not how we want water to be managed. Additionally, without a strong regulator, it becomes difficult to manage the sector, and Zimbabwe currently lacks a strong water regulator. It is essential to understand the difference between private and publicly owned utilities,โ she said.
She noted that โmost utilities in Africa are publicly owned, either by municipalities or national governmentsโ while the โadvantage of public ownership is that these utilities are not profit-driven,โ meaning they are not obligated to pay shareholders, and their revenues are more likely to be reinvested in the business.
Schreiner also acknowledged that partnerships with private entities can be beneficial if the goals are clearly defined.
She cited the example of Johannesburg, which partnered with an international private utility company for five years under a well-defined management contract.
โThis was to make sure that it had in place the necessary facilities, with the staff and management trained effectively. By the time the company left the municipality of Johannesburg was an extremely well managed water utility,โ she said.
However, she clarified that VEI is not a private company but a public one that supports countries in the global south through the Global Water Operator Partnerships Association (GWOPA).
โIt is trying to create partnerships among fellow water operators so that there can be peer to peer learning where one operator can learn from the other. Water operators in the north will be brought to help water operators in the south,โ she said.
She also addressed concerns about potential impacts on water bills, explaining that revenue for water utilities typically comes from taxes and tariffs, noting that most utilities in the global south struggle because tariffs are not set at levels that cover operational costs, often due to political reluctance to raise them.
โMost of the water utilities in the global south are underperforming because tariffs are not set appropriately. They are not bringing in enough money to cover even the operational costs. Sometimes they (tariffs) are kept low because of politicians who would not want to raise tariffs as that would upset people,โ she said.
โIf a utility is to run appropriately, money will have to come from both taxes and tariffs. That means that a tariffs policy needs to be developed, which takes into account the real capability of people to pay and how to balance the need to bring in money from the users and what comes from the government taxes as a subsidy. Bulawayo has a history of being very consultative so all these issues need to be clarified prior to arriving at a decision.โ
Schreiner said to operate effectively, a utility must draw revenue from both taxes and tariffs. โThat means a tariffs policy needs to be developed, which takes into account the real capability of people to pay and how to balance the need to bring in money from the users and what comes from the government taxes as a subsidy. Bulawayo has a history of being very consultative so all these issues need to be clarified prior to arriving at a decision,โ Schreiner concluded.
