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Quelle: SAMWU

World's worst French multinational water company to colonise Johannesburg's water

Council Exco is to endorse today the awarding of a 5year management contract of Joburg's water to Suez Lyonnaise Des Eaux. Suez-L beat two other bidders: Thames Water, and Vivendi/Rand Water Board. It is not known whether this is a 20 year contract or what it is.

Suez-Lyonnaise beat the other bidders because their bid was so low. A low bid is not good news however. There are 3 parts to the contract. The first is a fixed core management fee of R20 million (GBP 2 million) per 5 years. They pay that to the company. This is NOT for anything other than management. It is not for extending the infrastructure or anything like that. It seems a high price to pay for managers. Apparently that is the price you pay for international expertise. A lot of managers are going to be coming out from overseas.

The second part is a variable fee that will be paid for performance incentives, such as speedy responses to calls, control of pollution - R 25 million has been set aside by council for that.

The third part of the contract is a percentage of the total bid that was supposed to be set aside for further performance incentives. This third part is normally where they get their profit from. They would get paid this for financial improvements etc. This part is normally the same as the amount set aside for performance incentives [20-25 million]. However Suez Lyonnaise has ignored this in their bid.

Whereas:

This means that they will make no profit at all! The only way for them to make a profit is

  1. to get clever lawyers to re-negotiate the bid afterwards (this has been done before and normally the municipality capitulates because they have spent too much money on the tendering process etc to turn back)
  2. to cut normal costs of labour, health and safety and others.
  3. this can easily be done in a completely unregulated environment

Also, Suez Lyonnaise does not have a local partner in the bid, other than WSSA which is their subsidiary operating in Queenstown, Fort Beaufort and Stutterheim.

There is also massive confusion as to how payments for water will be collected as Council is currently restructuring their revenue department. Some of the payments will be collected by the department and others by Suez-L.

Insiders say that it is impossible for any company to make any profit at all from a management contract by asking for less than 0.9% of the bid as a performance incentive.

Suez Lyonnaise has done this before - bid low just to get the contract. The Head Office of PSI in Belgium just faxed me a copy of an article in "Der Potsdamer" a German paper. On 28 June this year they reported that Suez Lyonnaise des Eaux had put their prices up in Potsdam massively. Thus the municipality had decided to take the water back. The prices were already 8.80 DM higher per cubic metre than in nearby Berlin, which until very recently had public water. Now they wanted to put up the prices another 1.3 DM. The PSI World Water co-ordinator says this is a very big increase.

This was only three years into the 20 yr contract. Thus the municipality had decided to take the water back. In order to do this, the city has to pay back the consortium what the consortium has paid so far - 4,9 million DM! Even with this disincentive for the municipality they still say it will be cheaper to pay them and get rid of them. The city says the constant price increases are clearly unsustainable. It is clear that they bid at a low price to get the contract and then charges shoot up.

German citizens and members of the working class: please help us kick out the company like you did in Potsdam. We require a massive amount of complaints to be sent to these council people:

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

Please urge these journalists to take up the story: 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


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