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Mateso Helix Kazembe

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Privatise Water Boards
By Mateso Helix Kazembe   
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Last edited: Thursday, January 22, 2009
Posted: Thursday, January 22, 2009

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Water boaards in Malawi are inefficient and below par. This is a debate on privatising them...

Tension has started brewing upon recent media reports that government is advancing plans to privatise the country’s water services in particular Blantyre Water Board (BWB) and Lilongwe Water Board (LWB). This has generated concerns and debate about government’s wisdom of wanting to privatise the water services both from individuals and the civil service organisations.

 
There is no gainsaying that lately, privatisation of state owned enterprises (SOEs) has become both politically unpopular and detestable among most Malawians. This is evident from the rising tides of public discontent that emanate from rumours or reports that government is privatising a certain firm.
 
One then may tend to wonder why government despite constant protests that privatisation is harmful to the poor masses, it still continue privatising SOEs.    
 
From my point of view, it appears, most Malawians out there do not have a complete vivid view and understanding of the activities embracing privatisation; that is why the most quoted “evils” of privatising SOEs are job loss, company closure and unemployment. Everything said against it is taken as gospel and creates its own panic.
 
However, it ought to be noted that privatisation is not black as it is painted and the debate surrounding privatisation of SOEs obscures the variety of roles private enterprises play. This article then will act as a glimpse why government has kept its ‘chin up’ and said it want to privatise water boards though there are fears that this would put the poor Malawian in a very awkward situation.
 
It is to the knowledge of every Malawian that good water services are crucial for both public health and national economic development. However, water services in the country are characterised by a huge disparity between the urban and rural areas. Most areas in Blantyre and Lilongwe suffer from a deficit of coverage. Thousands and thousands are still unconnected to piped water. On top of that, despite the country having one of Africa’s largest lakes and a horde of rivers that run all year round in all three regions, there comes a time when piped water becomes a real problem. Industries using water as a raw material in their production process have their operations ground to a halt and in the process, a lot of billions of kwacha being lost. All this is because of lack of government capacity.
 
Hence, by privatising water boards, the government is looking for a lasting solution. It has a desire to have improved water services to the satisfaction of every Malawian; the constant grumbling about water boards being inefficient to be forgotten and become history. Industries’ operations will ground to a halt from other problems but not water shortage.
 
The precarious state of the country’s water services-if one is to judge from the traditional yearly acute water shortages or the presence of faeces in treated water, as was the reported case in Ndirande-can be attributed to government’s lack of funds necessary to carry out the improvement and expansion of water services and water boards in general. Our water boards have also been affected by indebtedness and other financial problems. Often times, they do not have access to sources of commercial finance, as they lack such requisites as creditworthiness: this consequently posses growing pressure on the public budget.
 
This being the case, I do not see any reason why the government should not privatise the water boards.
 
There is mounting evidence that private sector participation has provided significant improvement in public sector delivery. Bakhresa Grain and Milling (G&M), Mapeto (DWSM) and Mchenga Coal Mine are some of the quintessence of the goodness of privatisation. There was a time when production of wheat and maize flour at Bakhresa G&M was zero, but barely some months after private hands took over, production rose to 24 697 metric tonnes of wheat milled and 3 400 metric tonnes of maize milled respectively. As for Mchenga mine, coal extraction was a mere 85 metric tonnes per day, which later increased to an outstanding 560 metric tonnes a day when a private firm took over. Similarly, Mapeto (DWSM) is currently enjoying a production of 70 000 linear metres of cloth a day from a meagre 1 200 linear metres, all this due to privatisation. This entails that Mapeto (DWSM) can now produce export and as a result bring in the much-needed foreign exchange.
 
I have every reason to believe the very same thing would result from the privatisation of our water services because private enterprises are more efficient than public enterprises. They also increase the financial resources needed for service improvement. Private operators seek the highest possible efficiency in order to maximize commercial returns and reduce possible losses from inefficiency and non-paying customers. In return efficiency gains benefit all service users, in particular, the poor.
 
It is also without question that the country’s water boards are characterised by too much political “interference” and corruption. The management also, most of the times, is an unqualified and mostly chosen based on political appeasement policy. The consequences of such actions are that the standard of work is compromised and gross abuse of public resources in form of unpaid bills and use of vehicles to ferry party loyalists. We can only say bye to all this if the water boards are in private hands.
 
In addition, by being in private hands, it means the government would no longer subsidise operations of the water boards which entails they will no longer be using tax payers money to survive. This implies that the government would be dishing fewer subventions. The saved money will in turn be used on other pressing social needs.
 
Lastly, it is quite sad that only the shortfalls of privatisation of SOEs are highlighted. People do argue that private firms driven by the lust for more profits would retrench workers to achieve this motive. As I agree that there might be some grain of truth in these claims, at times the opposite happens: jobs are saved and others created. There is an insurmountable evidence to back up this. At one time, Bakhresa G&M and Mapeto (DWSM) were in a very convoluted situation. Government had halted production, retrenched workers and was only maintaining a skeleton temporary staff. Creditors were filling injunctions and petitions to wind up the business. However, barely a few months these companies were privatised, a great many of these jobs were saved and all the creditors secured. Above all, there were increased investments. Mapeto invested K475 million in new machinery and repairs while Bakhresa G&M invested about K900 Million in a new mill. This I believe again would likely follow privatisation of water boards. New investments will come in, a lot more jobs created and water services will improve both in quality and quantity.
 
As an endnote, privatisation of water boards as well as bringing in new investments, creating new jobs and providing water services of improved quality and quantity will benefit every Malawian abundantly. Privatisation of water services should not disturb our peace. There is nothing to be jittery about; it is for our own especial benefit, not an economic suicide as others envisage it to be. Hence, let us all support the privatisation of water boards.



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