Cost Recovery and the Crisis of Service Delivery in South Africa Free download from www.hsrc p ress.ac.za Free download from www.hsrc p ress.ac.za Cost Recovery and the Crisis of Service Delivery in South Africa DAVID A. MCDONALD &JOHN PAPE HSRC Publishers Zed Books London and New York Free download from www.hsrc p ress.ac.za Published by the Human Sciences Research Council Publishers Private Bag X9182, Cape Town, 8000, South Africa Editors: David A. McDonald and John Pape © 2002 Human Sciences Research Council First published 2002 Produced by comPress www.compress.co.za This book is printed on acid-free paper (Mondi Status 80gm2 uncoated woodfree smooth bond) Printed by Creda Press Distributed in South Africa exclusively by Blue Weaver Marketing and Distribution, P.O. Box 30370, Tokai, Cape Town, South Africa, 7966. Tel/Fax: (021) 701-7302, e-mail: blueweav@mweb.co.za ISBN 0-7969-1997-6 Published in the rest of the world by Zed Books, 7 Cynthia Street, London N1 9JF and Room 400, 175 Fifth Avenue, New York, NY 10010, USA Distributed in the USA exclusively by Palgrave, a division of St Martin’s Press, LLC, 175 Fifth Avenue, New York, NY 10010, USA ISBN 1 84277 330 5 hardback ISBN 1 84277 331 3 paperback The rights of the authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act, 1988 All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. A catalogue record for this book is available from the British Library US CIP data is available from the Library of Congress Free download from www.hsrc p ress.ac.za ACKNOWLEDGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii PREFACE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii LIST OF CONTRIBUTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 by John Pape and David A. McDonald CHAPTER 1 The Theory and Practice of Cost Recovery in South Africa . . . . . . . . . . . . . . . . . . 17 by David A. McDonald CHAPTER 2 Debt, Disconnection and Privatisation The Case of Fort Beaufort, Queenstown and Stutterheim . . . . . . . . . . . . . . . . . . . 41 by Greg Ruiters CHAPTER 3 “Massive Cutoffs” Cost Recovery and Electricity Service in Diepkloof, Soweto . . . . . . . . . . . . . . . . 61 by Grace Khunou CHAPTER 4 Cost Recovery and Prepaid Water Meters and the Cholera Outbreak in KwaZulu-Natal A case study in Madlebe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 by Hameda Deedat and Eddie Cottle Contents Free download from www.hsrc p ress.ac.za CHAPTER 5 “They are Killing us Alive” A Case Study of the Impact of Cost Recovery on Service Provision in Makhaza Section, Khayelitsha . . . . . . . . . . . . . . . . . . . . . . . 101 by Mthetho Xali CHAPTER 6 The Struggle Against Encroachment Constantia and the Defence of White Privilege in the “New” South Africa . . . . . . 123 by John Pape CHAPTER 7 Viva Prepaids, Viva! Assessing New Technology for Cost Recovery in the Rural Northern Cape . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 by Hameda Deedat CHAPTER 8 The Bell Tolls for Thee: Cost Recovery, Cutoffs, and the Affordability of Municipal Services in South Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 by David A. McDonald CHAPTER 9 Looking for Alternatives to Cost Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183 by John Pape INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195 Free download from www.hsrc p ress.ac.za vii We would like to thank the contributors to this volume for their commitment to a research methodology that not only sheds light on the growing crisis of service delivery in South Africa but also contributes to change through the development of participatory processes and action- oriented dialogue. We extend these thanks to those citizens, workers, NGOs and bureaucrats who assisted with and/or participated in the data collection and analysis. We owe particular gratitude to Maria April, Dudu Khumalo, Steve Seloane and Lance Veotte of SAMWU, Simphiwe Dada of the Alternative Information Development Centre (AIDC), and to Youth for Work. We dedicate this book to all those involved in the struggle for a more just and sustainable system of service delivery in South Africa. Meshack Khosa, formerly of the Human Sciences Research Council (HSRC), was instrumental in establishing the initial links between the HSRC and the Municipal Services Project and in establishing the basis for this joint initiative. To him we extend a warm thanks. John Daniel and Garry Rosenberg of HSRC publishing have been professional, courteous and supportive in the production of this volume, as has Robert Molteno of Zed Press. Finally, we would like to thank all of our colleagues at the Municipal Services Project. Funding for the research in the volume was provided by the project partners and by the International Development Research Centre of Canada (IDRC). Acknowledgements Free download from www.hsrc p ress.ac.za At present millions of South Africans face severe problems in accessing even the most basic services: water, sanitation, electricity, and refuse removal. All of us understand that the democratic government faced great difficulties and enormous backlogs due to the apartheid legacy. But unfortunately, the problems confronting many citizens today are not simply the result of historical factors. Much of what the authors of this book refer to as the “crisis of service delivery” is actually a result of the pro-market policies adopted by the South African government since 1994. This text goes a long way toward explaining this process. The authors have successfully combined rigorous theoretical analysis, copious statistical information, and a broad range of case study material. At the same time, the inclusion of numerous “live”" interviews lends the book a quality missing in so many academic works. But the book does more than just chronicle the complexities of our society. The writers included herein have also taken the initiative to further the discussion about where we might find opportunities to reverse this crisis. This book deserves to be widely read. I warmly commend it. The contents are not only relevant for those interested in the transition to democracy in South Africa, but for people across the world who are confronting the processes of a corporate driven globalisation which continues to swell the ranks of the poor in all countries of both the South and the North. Dennis Brutus Professor Emeritus, Professor of African Studies, University of Pittsburgh Former Robben Island Political Prisoner viii Preface Free download from www.hsrc p ress.ac.za Eddie Cottle is the Director of the Rural Development Services Network (RDSN). The major focus of his research has been water service delivery in rural areas. Hameda Deedat is a researcher at the International Labour Resource and Information Group (ILRIG) which is affiliated to the Sociology Department at the University of Cape Town. She has written on service delivery and gender issues. Grace Khunou has completed a Master’s in Sociology. She is currently a Doctoral research fellow at WISER, a social research institute at the University of the Witwatersrand. David A. McDonald is Director of Development Studies at Queen's University, Canada, and Co-director of the Municipal Services Project John Pape is Co-director of the International Labour Resource and Information Group (ILRIG) at the University of Cape Town. Greg Ruiters completed his Ph.D from Johns Hopkins University on the privatisation of services in the Eastern Cape. He is a lecturer in the Political Studies Department at the University of the Witwatersrand. Mthetho Xali is a researcher at the International Labour Resource and Information Group (ILRIG) which is affiliated to the Sociology Department at the University of Cape Town. He has written extensively on public-private partnerships. ix List of Contributors Free download from www.hsrc p ress.ac.za Free download from www.hsrc p ress.ac.za [...]... win votes in white suburbs and maintain puppet regimes in the “homelands”, but they were also driven by a “statist” vision of service delivery In direct contrast to the neoliberal view of cost recovery and privatisation that dominates official service delivery discourse in South Africa today, the apartheid state saw its role as one of providing and subsidising the delivery of essential municipal services... measures in commercial, industrial and high-income areas Consider the following The Durban Chamber of Commerce and Industry “has in recent years expressed the concern of its members regarding the increasing cost of doing business in the Durban Unicity area The cost of water is one of the major components of the total infrastructural cost, over which our members have no control … The prime concern of the. .. denied and he died within a few days after the denial The cases over housing and water are subjects of ongoing litigation 4 Introduction Free download from www.hsrcpress.ac.za Apart from eroding some of the gains of service delivery, the ideology and practice of cost recovery became more dominant in a number of ways First, there is the question of how cost recovery influenced the then-Department of Constitutional... policy of government Furthermore, in South Africa, an examination of cost recovery must be situated in the broader context of the political transition after 1994, and the linkages between South Africa and the process of globalisation Therefore apart from the case studies and the survey material, we have included chapters which consider the theoretical background of, as well as the vexing issue of alternatives... a service unit, as 18 The Theory and Practice of Cost Recovery in South Africa Free download from www.hsrcpress.ac.za well as monitor and evaluate their activities, but the daily management and long-term planning of the unit – including decisions about cost recovery – are carried out by the ringfenced management team, whose only concern is the management of its own sector In theory, therefore, the cost. .. together” But in ideological terms, Masakhane became the lodestar in the building of a hegemonic framework of cost recovery Since that time cost recovery has had a long, highly politicised journey in South Africa To explain why we have chosen cost recovery as the focus of our research, we need to outline that journey in some detail The International Context We must begin with an examination of the international... provided to their home, they would be expected to pay the cost of connecting the household to the electricity grid, a portion of the amortised operating and maintenance cost of the bulk infrastructure required to generate and distribute electricity, and a volumetric rate for the marginal cost of every kilowatt hour of electricity consumed There are several different ways of calculating these costs (Dinar... jointly with the HSRC The survey findings reiterate the main points made in the case studies: i) that cost recovery measures are having a serious negative effect on the majority of households in South Africa; ii) that the major reason people are cut off is that they cannot afford to pay Perhaps the most startling finding is that 13 per cent of the households interviewed had experienced water cutoffs,... form of punishment is to cut off a service to a household (or merely to threaten to do so) In the case of water and electricity this means disconnecting the household from the water and electricity mains In most situations this is temporary But in an increasing number of “delinquent” cases in South Africa, it involves shutting off services for weeks or months and sometimes the permanent removal of infrastructure... of providing services such as water and electricity In direct contrast to the long-standing practice of the state subsidising these services, consumers around the world are increasingly expected to pay in full for service delivery This chapter lays out the theory and practice of cost recovery in South Africa as it applies to basic municipal services such as water, electricity, sanitation and waste . was instrumental in establishing the initial links between the HSRC and the Municipal Services Project and in establishing the basis for this joint initiative of the gains of service delivery, the ideology and practice of cost recovery became more dominant in a number of ways. First, there is the question of