Nelspruit

In the dawn of the post-apartheid period, the historically small white town of Nelspruit became the capital of the new province of Mpumulanga in South Africa, in 1994. With re-demarcation, since 1994, Nelspruit inherited the former homeland of KaNgwane and the massive service responsibilities associated with this area, where most communities had hitherto relied on communal water standpipes. The Nelspruit re-scaling incorporated areas more than 20 kilometres from the town centre. The core town clearly had an unequal relationship to the surrounding poorly serviced dormitory townships (Maralack 1999).

The 1994 demarcation of Nelspruit increased the population from 24,000 to 230,000 overnight and significantly changed the profile of the communities to be serviced by local government (Kotze et al. 1999). Many of the newly incorporated areas had never received water and sanitation services. Although the population grew by 10 times, the total income of the new municipality had only grown by 38 percent (Kotze et al. 1999).

The local authority then turned to provincial and national authorities for financial assistance in meeting its service delivery obligations to township residents but was turned down. Instead, national government chose to pilot a water concession. The Nelspruit experiment could prove to become the opportunity for the ANC to promote foreign investment in South Africa's water sector. After four years of negotiations and with massive community and labour protest, a 30-year concession was signed in 1999. The primary source of financing for this concession came from the South African state through the Development Bank of South Africa (DBSA) through a R150 million loan.

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