The outlines of Umgeni Waters problems

Perhaps the core problem in all this lay in Umgeni Water's skill at raising finance but its inability to find good profitable outlets in which to sink the money it was able to borrow. This, I would argue, is related to a broader crisis of overaccumulation within the South African economy (see Bond 2001). Thus, in the early 1990s, Umgeni had raised about R2.5 billion in the bond market (the UG50 and UG 55 gilt megabonds referred to previously). It then became increasingly urgent for it to find profitable outlets for the money raised here. At first, the rural projects seemed to provide just such fertile terrain. With the board of Umgeni Water increasingly comprised of staunch ANC loyalists,5 it was possible that there was an assumption amongst the board that the national government would be quite supportive in providing subsidies to such new projects. Certainly, in this period of the 1990s, the relationship between the board of Umgeni Water and the national government was a highly cooperative one. Rumours abound that the award of the Vulindlela water supply contract—a Presidential Lead Project—was aided by such close links. When the rural projects started to falter, however, and when it looked more like they would be loss-making, rather than profit-making ventures, Umgeni Water "had Rl-billion in surplus cash, which it needed to invest profitably in order to make its long-term debt repayments and mitigate its losses" (Mail and Guardian 2002a).

Capital, after all, as I discussed in the first section of this chapter, is value in motion. A danger arises if profitable outlets cannot be found and a glut builds up in what should be an ever-augmenting flow of capital. All too often, it seems that Umgeni Water had simply run out of useful outlets in which to sink its capital. Above all, they required new areas to be prised open for profitable investment. Whilst prising open new aspects of the socio-natural environment through the market in rural water services had proven deeply problematic, managers within the organization began to feel that, in future, its survival would be better guaranteed in competing for management service contracts for district municipalities.

Through assisting municipalities it can partner with similar organizations and offer management contracts to municipalities. District Municipalities could then hire an Umgeni Company.. .The only way Umgeni will survive is if it takes on public service provision in a commercial way.

(Cummings, personal interview, 11 December 2002)

Whilst it seems this might be Umgeni Water's best means of survival, the market for such services is by no means guaranteed within the borders of South Africa. Another possible outlet for capital is some kind of a spatial fix to local crises (Harvey 1982:417). Thus, the possibility remained that Umgeni Water could extend its frontiers into other regions of the world.

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