SOUTH AFRICA: first water concession goes to Saur

The 30-year concession contract – valued at £100M – is with the Borough of Dolphin Coast, an Indian Ocean resort area 70km north of Durban in the province of Kwazulu Natal. As part of the deal, Siza Water Company – the Saur-led consortium – will manage water and wastewater services, maintain existing infrastructure, and finance and build any new infrastructure needed to supply water to local residents. At the height of the tourist season, the region has a peak population of approximately 60,000.
Saur Services, a Saur UK subsidiary, has a 58% stake in Siza Water. Local partners include Metropolitan Life, a Johannesburg and Namibia stock market-listed life assurance company, and the Women’s Development Bank Investment Holding.
Saur UK beat off strong competition from three other consortia at RFP stage. Other bidders included Thames Water/Black & Veatch, Lyonnaise des Eaux, and Umgeni Water/Générale des Eaux. Umgeni Water is the bulk water supplier in Kwazulu Natal.
The concession contract was signed in the wake of a bitter dispute between the Congress of South African Trade Unions (COSATU) and the SA Department of Constitutional Development. At press time, COSATU was considering legal action against Local Government and Constitutional Affairs Minister, Valli Moosa, who endorsed the deal.
COSATU views the government’s endorsement of the contract while negotiations were ongoing as an act of bad faith. A dialogue is now underway between COSATU and Moosa’s department to protect municipal workers’ interests in such privatisation contracts.