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Dear International Comrades
This is an update on the situation in Johannesburg. Yesterday, the water was privatised to Suez Lyonnaise - the worst water multinational in the world.
Please see:
The contract only comes into effect on 1 April 2001. Therefore we need as many letters of protest to council and the South African press as possible. Your solidarity would be greatly appreciated.
The e-mail contact addresses are:
We need letters of protest to Council bosses. These are the names in Joburg:
EXCO Chair Kenny Fihla afihla@gjtmc.org.za
Co-ordinator in office of the Mayor pmoloka@gjtmc.org.za
Acting CEO Mavela Dlamini mdlamini@mj.org.za
Makgane Thobejane, Labour Relations mthobeja@mj.org.za (former General
Secretary of Public Sector Union NEHAWU)
Roland Hunter, Chief Financial Officer rhunter@mj.org.za
Pascal Moloi, Transformation Project Manager pmoloi@gjtmc.org.za
Phindile Nzimande, Legal Adviser pnzimand@mj.org.za
Anthony Still, Transition Manager of Water Utility astill@mj.org.za
Rest of the councillors: pandrade@gjtmc.org.za; busnet@mweb.co.za; mmokoena@gjtmc.org.za; imogase@gjtmc.org.za; jbriggs@gjtmc.org.za; pbuthele@mj.org.za; jbriggs@hixnet.co.za; fkendall@global.co.za; iisaacs@gjtmc.org.za; cfortuin@gjtmc.org.za; mm44@pixie.co.za; pdewet@gjtmc.org.za; rdubazan@gjtmc.org.za; donaldforbes@yahoo.com; mmoriarty@gjtmc.org.za; smgidlana@gjtmc.org.za; ymakda@gjtmc.org.za; smabuza@gjtmc.org.za; emabe@gjtmc.org.za; panda@mweb.co.za; mlombard@gjtmc.org.za ; alewis@gjtmc.org.za
We also need letters to the South African Press. Here are their e-mail
addresses. Please send your press statements or letters putting their
addresses in the Bcc: line.
alive@safm.co.za; xundux@tml.co.za; phumzile@kaya-fm.co.za; raborokj@sowetan.co.za; editor@kaya-fm.co.za; belnews@wn.apc.org; israel@sapa.org.za; sapa@iafrica.com; mahap@woza.co.za; lungile@yfm.co.za
haffajeef@bdfm.co.za ; alackay@beeld.com; tcelean@tml.co.za; bramdawn@tml.co.za
Letters to the Editor should be sent to: Please send letters to the Editor
on the situation to these newspapers: The Sowetan mangaa@sowetan.co.za
Mail and Guardian editor@mg.co.za
The Star newspaper sma@star.co.za
Business Day busday@bdfm.co.za;
Sunday Times suntimes@tml.co.za
Please send a copy back to me so I can upload it to the SAMWU website.
Yours in the struggle against privatisation, SAMWU Media Officer
14/02/2001 Lyonnaise des Eaux Signs the Water Management Contract of Johannesburg
In association with its South African partners, Lyonnaise des Eaux, Suez Lyonnaise des Eaux Group, has been awarded a management contract to supply water and wastewater services to the 3.5 million inhabitants of Johannesburg, South Africa's economic, financial and industrial capital. The population supplied by Lyonnaise des Eaux grows twofold in South Africa.
The five-year management contract will start on April 1st, 2001. It will cover the City's six municipal water and wastewater structures brought into one single utility organization - Johannesburg Water. It comprises the management of water and wastewater services, billing and customer services as well as extensive training and capital expenditure programs.
The main objectives of the contract are to improve the services provided to customers, the City's infrastructure, and local environment, and to deliver a fully operational and sustainable utility organization at the close of the contract.
Key issues involve the provision of adequate water and wastewater services to low income communities, the reduction of non-revenue water and the empowerment and training of previously disadvantaged South African individuals in Johannesburg Water.
City of Johannesburg's Executive Mayor, Councilor Amos Masondo welcomed the move as part of the city's overall transformation plan. " The city and its people will benefit from this partnership. Residents and businesses can in the near future look forward to improved levels of services and a company that is customer orientated".
Gerard Payen, Chairman and CEO of the Suez Lyonnaise des Eaux Water Division commented: "We look forward to a successful partnership with the city of Johannesburg and to actively contribute in making the city a world-class African metropolis."
The Johannesburg contract gives a new dimension to Public Private Partnership in South Africa, enhancing the provision of quality water services, community involvement and empowerment.
With a workforce exceeding 2500 employees, Johannesburg's existing Utility organization has annual sales of Rand 1.3 billion (Euro 200 million) and covers a service area of over 3 million inhabitants, about 0.5 million connections and water and wastewater networks of about 8000 Km length each.
Suez Lyonnaise des Eaux' subsidiary, Northumbrian Water Group operates in South Africa through its local subsidiary Water and Sanitation Services South Africa (WSSA) a joint venture with Group 5. It runs a 25- year concession in Queenstown and provides water and wastewater services to over 2 million people in the provinces of Kwa-Zulu Natal, Eastern Cape, Western Cape Northern Province and Gauteng.
WSSA also leads in the implementation of the innovative BoTT (Build, Operate, Train and Transfer) projects to supply water services to low income communities in Eastern Cape, and Northern Province, in partnership with South Africa's Department of Water Affairs and Forestry. WSSA is the first water company in South Africa to be certified with both ISO 9002 and ISO 14001 by SABS.
Lyonnaise des Eaux, world leader in water management services, currently supplies 110 million people with water and wastewater services around the world, including in large cities such as Atlanta, Buenos Aires, Casablanca, Jakarta, Manaus, Manila and Sydney. Lyonnaise des Eaux has experience on the entire water cycle form water resources management, potable water treatment, wastewater treatment and sludge treatment. Lyonnaise des Eaux is a subsidiary of the Suez Lyonnaise des Eaux Group. http://www.press.suez-lyonnaise.com/english/
SAMWU Press Statement
Wednesday 14th February 2001
3pm
Joburg privatises water to world's worst multinational
The South African Municipal Workers Union condemns today's public launch of Johannesburg Water Pty Ltd, which privatised the city's water to one of the world's worst multinational companies, Suez-Lyonnaise. This took place at a time when Alexandra residents have been forcibly removed from the Jukskei river to areas where there are no services rather than getting the clean water they thought they were voting for.
Suez-Lyonnaise/Johannesburg Water must share the blame for the violence, injuries and trauma that Alex residents were subjected to yesterday. The company's only response to the threat of cholera in Alexandra was to check up on the few chemical toilets in the area. The company showed no sign that they would install even basic taps needed by Jukskei residents in order to escape cholera. Neither council nor the company have released any detailed plans for extending water to the poor of Johannesburg. It seemed that the company won the contract on the basis of their vague promise to "improve services rendered" to customers.
The track record of Suez-Lyonnaise across the world is abominable. They have drastically increased water charges in every city or town where they have a contract. In Paris, France water is privatised to a 'partnership' between the city of Paris and Suez-Lyonnaise. Auditors have now been brought in to investigate excessive water prices. The auditors have reported so far that "the administrative, legal and financial arrangements are characterised by an absence of financial transparency". The report estimates that the company 's "true profit margin is two and a half times the officially reported figure".
The council's smokescreen set up of the privatisation as a public utility is also not likely to deter Suez-Lyonnaise from making a massive profit. EMOS, the water company in Santiago, Chile, was privatised in 1999 to Suez-Lyonnaise, which appoints 4 out of 7 directors of the board, giving it a guaranteed management control, despite only holding 42% of the shares. And the state is guaranteeing EMOS a profit margin of 33%. .
In Grenoble, France in 1996, a former mayor and a senior executive of Lyonnaise des Eaux (now Suez-Lyonnaise) both received prison sentences for receiving and giving bribes to award the water contract. Rostock in eastern Germany privatised its water and sewage systems for 25 years to Eurawasser, (owned 50% by Lyonnaise des Eaux). Two years later water charges in Rostock were increased by 24%, and sewage levies by 30%.
The union believes that all these experiences are likely to be repeated here. SAMWU is highly suspicious that former Council spokesperson, Jameel Chand, has now been employed at Johannesburg Water. This means that there could have been an improper relationship between council staff and the company when it was still one of several prospective bidders.
SAMWU has been blocked from seeing any of the contract documents. The experience in Fort Beaufort, Eastern Cape, with Suez-Lyonnaise's subsidiary in South Africa, WSSA, is that a secrecy clause has been built into the contract which prevents any member of the public from seeing the contract without the explicit approval of Lyonnaise des Eaux'."2.2.2: Confidentiality: the documentation contained herein has been developed exclusively by the operator (WSSA) and shall not be disclosed to third parties without the written approval of the operator." The union believes this is unconstitutional and not in the interests of the public or of workers.
....../ends
For comment call the Media Officer on 083 7141899
Suez-Lyonnaise, which put in the lowest tender of all the bidders, was chosen to partner Johannesburg Water even though its senior executives have been jailed for bribing city officials in the past. Rob Rose reports
The new-look water services authority, Johannesburg Water Pty Ltd, has been launched amidst severe criticism for partnering a multinational company with a proven record of corruption and bribery.
Suez-Lyonnaise, which put in the lowest tender of all the bidders, was chosen by Johannesburg Water as one of the three companies that will help run Johannesburg Water for the next five years, being chosen despite a record of bribery, fraud and underhanded dealing involving top executives.
The most publicised instance of corruption took place in 1996 in Grenoble, France when a senior executive at Lyonnaise des Eaux (Suez's Lyonnaise's forerunner) went on trial for bribing the city mayor to accept contracts to provide water.
Both the executive, Jean Jacques Prompsey, and the Grenoble mayor Alain Carignon were prosecuted and convicted for paying and accepting bribes respectively.
In addition, public service organisation Eau Secours estimates that between 1989 and 1995, Lyonnaise de Eaux invoiced double the amount of water that was actually consumed, profiting by over FF21m (R23.4m) in the process.
"The amount invoiced in excess corresponded to over 51% cent of the total volume," Eau Secours reported.
Johannesburg Water is phlegmatic about the record of their chosen partner.
"They have got a record of corruption but they also have a proven record of service delivery," Johannesburg Water spokesman Jameel Chand admitted to I-Net Bridge.
"It's a question of weighing up the two," he said.
Chand says that the company's previous history had been considered in the selection process and Johannesburg Water was "happy with the results of the investigation."
"The selection process was audited by an independent auditor. In any international consortium you get allegations of this kind," Chand said.
"In any event the process was audited by an independent auditor and we feel that their experience in providing water makes Suez-Lyonnaise the best partner," she adds.
The organisations that have panned the multinational are Eau Secours and the Association for Democracy, Ecology and Solidarity.
The South African Municipal Workers Union spokesperson Anna Weekes told I-Net Bridge that aside from Suez-Lyonnaise's record of corruption, the low bid put in by the multinational indicates that it will be hard pressed to turn a profit.
"They bid the lowest of all, so low that we believe that they can never make a profit unless they raise their tariffs or cut their costs."
Weekes says that any cost cutting would probably come from funds allocated to ensuring health and safety.
"Normally, it is health and safety costs that are cut. This is what it has done in other parts of the world"
If they don't cut costs, Weekes maintains that the other option is to raise its tariffs.
"Suez-Lyonnaise has drastically increased water charges in every city or town where they have a contract."
She cites the example of the situation in Paris, France where water is privatised to a 'partnership' between the city of Paris and Suez-Lyonnaise.
In Paris, auditors have been brought in to investigate water pricing and Weekes quotes these auditors reports as saying that "the administrative, legal and financial arrangements are characterised by an absence of financial transparency".
She points out that the report estimates that the company's "true profit margin (to be) two and a half times the officially reported figure".
With regard to raising the tariffs, Eau Secours estimates that between 1990 and 1995, "tariff increases brought Lyonnaise des Eaux excess income of FF70m (US$10m or R78m) for water supply and FF26m for sewerage."
Delivery incentives Chand aggressively dispute that Suez-Lyonnaise will not be able to turn a profit.
"Of course they can make a profit. In fact, their management fee depends on a turnaround."
Chand explains that an incentive clause in the contract means that if the company does not deliver, it will only be able to claim a lower percentage.
Suez-Lyonnaise is one of three companies collectively acting as the main contractor guiding the transformation of Johannesburg's water sector.
These three companies - Suez (from France), Northumbrian Water (from the UK) and Water and Sanitation Services South Africa - will help run the new-look Johannesburg Water for a period of five years.
Chand is at pains to point out that this is not a privatised body.
"The management contractor - of which Suez forms one component - is only helping run the company. The Johannesburg City Council remains the sole shareholder in Johannesburg Water Pty Ltd," he elaborates.
While the signing ceremony between the contractors and Johannesburg Water took place yesterday on February 14, the contract only becomes effective from April 1
By Rob Rose, I-Net Bridge
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