The state

By 1998, four years after the contract was signed, divisions between council and the company ran deep. For example, in October 1998 the Fort Beaufort councillors asked the WSSA to stop attending council committee meetings. Instead, remarkably, the council felt WSSA workers (now transferred to the private company), should attend meetings of the Standing Technical Committee. Instead of outsourcing political relations with "troublesome" unions, a major original motivation for privatization (see WSSA 1995a) the councillors sought closer ties. WSSA's ability to keep up morale and standards in the labour force was in doubt and so council had to intervene, thereby negating the "arms-length" rationale behind the contract.

In further examples of mistrust, council also demanded guarantees on new meters from WSSA, suspecting it had installed low-grade meters. On the 11 October 1999 the council resolved to do its own repairs on the sewer works. WSSA apparently refused to repair leaking yard taps, a common practice when the council ran the system. WSSA and local bureaucrats had blamed councillors for not taking tough action against consumers and encouraging a non-payment "culture" by making many concessions and soft-pedalling with township residents. When councillors eventually took tough action to recover its costs in delivering water services, it is significant that it was against squatters, the most vulnerable and politically weak segment of the local population. In an ironic letter WSSA (2000c) notes, "as per council decision, the bucket service to informal areas in Hillside will be terminated". WSSA warned that health hazards and civil unrest could follow, and it would not be responsible for council losses.

Councillors also felt overwhelmed by the complexity of the contract and the company's technical reporting. For example, the new Town Clerk, Mr Makana had very little knowledge of the contract (Personal interview 1998). Councillors did not understand how contract costs had quadrupled over six years from the initial quoted amounts (from R95,000 to R400,000). Cost and savings projections were based on unrealistic assumptions such as a 95 percent collection rate of tariffs. In the second half of 2000, council faced a calamitous R475,000 in monthly charges to WSSA, excluding penalties for late payments.

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