Hemispheric ambitions local crises

Once again, however, the perceived potential in the Port Harcourt investment failed to materialize. The overcoming of what had been thought to be a barrier to profitability failed to produce the results hoped for. As the Nigerian municipality failed to make quarterly payments (Mail and Guardian 2002b), Umgeni Water pulled out. This generated a further loss for the organization of R14 million (Parliamentary Monitoring Group 2003). Prior to this, corporate scandals had engulfed the utility as it was accused of illegally subcontracting its debt management to a company set up by a former senior manager. Then, in 2001, the Chief Executive Officer was forced to resign amidst accusations that he had bugged the offices of board members (Zondi 2002). As Harvey (2003) notes, corporate scandals, such as the Enron debacle in the States, can often be seen as a symptom of deeper structural crises. This, I would argue, is clearly the case with Umgeni Water. Thus, in the midst of serious negative publicity, the entity still had to find somewhere to be able to invest its excess capital and, above all, somewhere to be able to garner the necessary profits to keep up with its debt repayments.

The most reliable source of income, indeed "the core of Umgeni's business operations" had, of course, always been from bulk-water sales to Durban and Pietermaritzburg. Perhaps then, it is not surprising that it was to this branch of the business that Umgeni was to turn. First, it sank some of the mounting "glut" of capital into expanding bulk supplies. Such longer-term investments allow what might be considered to be a temporal displacement of some of Umgeni's problems (see Harvey 1982). Indeed dam projects (profitable investments lasting for several decades) are one of the most frequently cited examples of such a temporal fix. A problem, however, remained: with falling demand from its main customer, Durban, there was little reason to invest in such infrastructure. In spite of this, a large inter-basin transfer scheme is in the process of construction from the Mooi to the Umgeni River in order to ensure that the two municipalities' supplies can be guaranteed over a longer period than ever before. Interestingly, the Department for Water Affairs and Forestry (DWAF) is the body responsible for financing this expansion. However, with Umgeni Water in a far better position to raise finance quickly (to the extent that it is a little awash with such finance), the DWAF was able to secure a loan from Umgeni Water (Lusignea, personal interview, 11 December 2002). Indirectly, Umgeni Water bondholders were lending money to the government for the construction of a project from which Umgeni was set to benefit. The state was thereby able to provide something of an outlet for overaccumulated capital, whilst also ensuring that private bondholders would remain beneficiaries. Here, once again, a symbiotic or mutually constitutive relationship between state institutions and capital can be seen to have been reinforced through each one's response to a broader crisis.

Such an expansion was authorized after Umgeni Water's 1997 projections had indicated a steady increase in Durban's demand for water. At the same time, Durban

Metro Water Services6 had produced a separate forecast, suggesting that demand would remain constant for the next five years. Durban's estimate was far closer to what actually amounted to a fall in demand, but the plans for infrastructure development went ahead according to Umgeni's forecast (Gilham, personal interview, 11 December 2002). The most recent estimates are for ten years of flat demand, suggesting that the new infrastructure will remain unnecessary for at least the near future. In spite of this and in spite of the acknowledged difficulties in forecasting demand, the DWAf concurred with Umgeni Water's estimates of rising demand, before borrowing money from them and beginning construction of a vast augmentation scheme. On top of this, a vast R200 million project known as the Western Bypass Aqueduct has been mooted which would carry water directly from the Midmar to the Inanda dam. For the moment, however, this will remain a distant possibility, pending an increase in demand for water in Durban (Bailey, personal interview, 29 November 2002; Gilham, personal interview, 11 December 2002). The cost of constructing this would fall largely on Umgeni Water. Once again, however, it is the kind of long-term investment that, if allied with an increase in either water sales or the water tariff to Durban, would help to pull the bulk supplier out of its current difficulties.

The question of increasing the tariff has, over the last few years, been one of the most contentious issues over which the bulk supplier and the municipality have confronted one another. Bulk water-charges to Umsunduzi and eThekwini municipalities have been through several large increases in the past few years. Thus, in 2000, as financial difficulties worsened, Umgeni Water announced a bulk-water tariff increase to Durban and Pietermaritzburg of 13 percent. Then, in 2001, its increase was set at an even larger 22.3 percent. (Inflation over the period averaged between 7 percent and 8 percent.) When passed on to consumers in Durban, the average tariff increase would amount to 28.3 percent (Mhlange 2001; Bisetty 2001). Perhaps unsurprisingly, both Durban and Pietermaritzburg rebelled against the increases, arguing that they were both unfair and too high for them to cope with. As was quoted previously, over the same period that Umgeni Water was requesting higher charges, it had made significant profits from bulk-water supplies. Its problems lay not in the primary activity of supplying water to municipalities but in the debt it had acquired and the losses it was making in its secondary activities.

In this instance, the pressure from the municipalities succeeded in forcing Umgeni Water to limit its tariff increases to 19.5 percent and then to keep future increases fixed to the rate of inflation. Umgeni Water's wings appear to have been clipped as it is limited to much smaller tariff increases in future. However, the longterm effect of Umgeni's actions is a transformation of the terrain on which the municipal water provider in Durban is acting. The result for many local residents has been a far more severe separation from their means of existence through eThekwini Municipality's vicious disconnection programme. As the limits to various spatio-temporal fixes have been reached, Umgeni Water has turned to a classic, if indirect, strategy of accumulating through dispossession.

Throughout this, as I hope to have shown, the state's role has been at times symbiotic, whilst at others, antithetical. In the case of the raised tariffs to Durban, yet another line of friction emerged when a conflict developed between the local and the national states. As the national state (in both its apartheid and its post-apartheid incarnations) had been the original source of the fractious relationship between bulk supplier and municipality, its role had often clashed with the needs and interests of the local state. In the past, such tensions were seen as rooted in the bitter resentment between a National Party controlled central state and a potential (although often hypocritical) liberal opposition in Durban. Now, however, the conflict revolved more around the national state's opening up of opportunities for capital that were in direct opposition to the need of local constituents. Interestingly, part of the subsequent pressure on the municipality to resist these increases came from the threat (whether real or not) that a large number of Durban's textile manufacturers would almost instantly relocate if the increase was imposed (Butler, personal interview, 14 April 2003). Links between eTWS and the Chamber of Commerce had traditionally not been confrontational and, in this instance, they seemed able to form an alliance against Umgeni Water (an alliance which appeared not for the direct benefit of the poorest of the city, it should be noted). Capital can clearly not be considered as an undifferentiated bloc as we see through the conflicting accumulation strategies of Umgeni Water and local capitalists in Durban.

I noted at the start of this, however, that accumulation by dispossession, involved another crucial aspect, that of separating the mass of the population from the means through which they might be able to collectively reproduce. In this lies a final ambiguity. Whereas two tiers of state appear to play a role that should be seen as mutually shaped by struggles within the accumulation process, both also seemed to intervene to support a free water policy struggled for by groups actively opposed to further capitalist involvement in the water sector. On the surface this has a profoundly social-democratic flavour. Beneath, however, we may see the underhand fashion through which local capitalists have been able to shift the burden of redistribution onto individual poor households and away from a wider tax that might impinge on profit rates. Accumulation by dispossession continues through the rational mechanization of water supplies and the fencing in of supplies to individual households.

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