Special Focus: What’s Happened to Free Basic Services?

Access to free basic services was an important plank in the ANC’s previous election manifesto. Jenny Grice looks at what has happened to promises of free basic water and electricity?

If rolling out water and electricity to consumers was the ANC government’s chief concern around basic services, then it would be happy with its delivery targets – by 2000 it had doubled access to grid electricity from 35% of the population to 70% and access to clean water from 60% of households in 1996 to 85% in 2001. But, it went further than promising delivery. Building on earlier undertakings it had made in the Reconstruction and Development Programme, in 2000 it announced that it would roll out free basic water and electricity to the poorest of the poor. Giving itself two years to implement, it defined basic water as 6000 litres (6kl) per household per month and basic electricity as 50 kilowatt hours per household per month. The SA Human Rights Commission estimates that 43% of the population have access to free basic water. Statistics for electricity are not available. But its philanthropic announcement has not been easy for government bureaucrats and providers to deliver and it hasn’t been without criticism.

Difficulties of delivery

For urban areas where there is a mix of industry and rich and poor residences, some local authorities cross-subsidise using the big consumers to subsidise the provision of free basic services. As consumers consume more electricity or water, so the price per unit increases. This is the case in urban areas like Durban , where the municipality chose to provide 6kl free per household per month because it was costing them more to bill low consumption clients than the consumers owed them. In smaller localities where there is not a strong mix of rich and poor, industry and residential, the challenge is greater. ‘We cannot even afford to supply half of our population in Bushbuckridge with water, so how can we afford free water?’ Patience Nyakane Bushbuckridge councillor and member of Bushbuckridge water board, Sept 2001.Even so, some localities are succeeding better than others. Harrismith is a case in point. Rand Water provides management expertise to the local authority. The local authority has encouraged households that earn less than R1100 per month to register as indigent households and in return receive free basic services. When the Centre for Policy Studies did its research, 30% of the 10 000 users had already registered as indigent and were thus eligible for free basic services. The unemployment rate in the area was estimated at 38%. To fund the free basic services, the local authority relies on taking money from the ‘equitable share grant’. This is a grant provided by central government to every local authority to fund service delivery. However, in areas where there are public private partnerships to deliver water, where the profit motive drives delivery, the cracks are starting to show. Nelspruit epitomises this problem. In 1999, the local authority signed a water concession with British multinational Biwater and Dutch utility, NUON. When ‘free basic water’ was announced, the local authority suddenly had to find money for this because it was not in the contract with its private sector partner. It was forced to use 30% of its equitable share grant to fund this instead of using it to extend services to those that fell outside of the concession area. But their problems didn’t end there. When the politicians announced ‘free basic water’ prior to the last general elections, they didn’t say that if you consume more you will have to pay more. Confusion was created and payment levels plummeted. Nuon/Biwater responded – ‘no more spending on capital to extend services until payment levels have reached 50%’. In January 2002, payment levels in Nelspruit’s two townships were at 8% and 35%. Unemployment in those areas was estimated at 52%. And Numsa Nelspruit local administrator Margaret Nhlengethwa, who lives in Matsulu township in Nelspruit still complains that “we have standpipes on our stand, but no water.” Centre for Policy Studies researcher, Dr Laila Smith even went as far as to say “the evidence suggests that this model is not suitable for the delivery of an essential service like water in areas with high levels of poverty.”

Criticisms of amount

Even where there is provision of free basic electricity, Cosatu, the South African Council of Churches and the South African NGO Coalition, believe that “these very low levels of (electricity) supply are only adequate for lighting. That means that free basic services will not assist, as the RDP had hoped, in reducing the household labour facing women and children or in providing a basis for household enterprises.” Rural women and children will still need to gather wood for cooking. Other groupings have also criticised government’s fixation on 6kl as the amount of water that should be given free. Samwu believes that it is too little. The World Health Organisation (WHO) describes ‘basic access’ to water as one where consumers live at least 1 kilometre or 30 minutes from the water supply. In other words, consumers would have to walk to fetch their water and therefore the average consumption, in WHO words, “is unlikely to exceed approximately 20 litres per capita per day” precisely because residents have to fetch it. To use this measure and transpose it onto townships with flush toilets and taps inside the household is mischievous. The kind of access that township residents have, compares with the WHO’s definition of ‘intermediate access’ where ‘water is provided on-plot through at least one tap’. With this kind of access, the WHO estimates that the average consumption would be 50 litres per capita per day. And yet in some areas, councils have introduced trickle meters into people’s houses. These ‘trickle’ 200 litres of water per day to ensure that only 6kl of water is delivered to the household for that month. Lance Veotte, SA Municipal Workers’ Union national co-ordinator of water and sanitation, derides the trickle meter as a “self-disconnecting mechanism.” Consumers call them “inhuman. Water is a necessity. Really we try and save water and use as little as possible. But with seven people in the house, it’s not easy to cope with what we get. We often run short. And this thing plays havoc with the sewerage. It takes long for the toilet to fill up. So if someone uses the toilet, you will have to wait for very long before it can be used again. What is the sense of having (infrastructure) this when you can’t use it when you need it? How must you relieve yourself?” (Consumer in Harrismith quoted in CPS research) Even a councillor from the Harrismith area has criticised them – ‘tricklers’ “should only be used for those people who can afford to pay for water but who don’t. What purpose does it serve when applied to poor people, apart from just giving them less water?” In Johannesburg , water utility Johannesburg Water has begun to introduce pre-paid water meters as another way of controlling water consumption. Consumers get cards that have the 6kl free water included in them. Anything that they use over 6kl they must pay for. Johannesburg Water’s attempts have already come under fire from some residents of Phiri in Soweto. Calling the plan a violation of human rights, Anti-Privatisation Forum spokesperson, Tebogo Mashoto, told SAFM radio listeners that “those with money will get water and those without won’t. Pre-paid is some kind of cost recovery that is trying to force people into paying to buy water. It is saying that water is not a right but a privilege.”

Water provider, Johannesburg Water, counters that:

consumers will pay less than under the current system where every consumer pays a flat rate of R103,40 per month, regardless of litres consumed.
it will enable them to give free water to those that use less than 6kl per month.
the pre-paid meters will give consumers “the peace of mind knowing on a daily basis what the household water consumption is”. Its web site boasts a pamphlet giving consumers advice on how they can keep within their 6kl free per month. While water and electricity has been delivered to the majority of the population, the question of providing ‘free basic services’ will continue to challenge government.
At the Cosatu congress in September last year, Cosatu raised the plight of the ‘working poor’ – those that earn between R1500 to R3000. Falling outside the ‘indigent’ category, many are spending “between 10% and 20% of their income” on water and electricity. This contrasts with the wealthy who spend less than 3% of their income on these same services! Is this expenditure sustainable or will we see a growth in cut-offs of services as we have seen with telephones?
You can’t get ‘free basic services’ until you have services. Much of the areas that have been electrified and provided with water, represent the ‘easy options’. Areas that remain are largely rural. Although DWAF had earlier promised that by 2008 all backlogs would be eradicated, Ronnie Kasrils recently told Johannesburg newspaper, The Star, that ‘about a million people would not receive water as planned’. He put the problem down to remote rural villages where the cost of supplying water is closer to R5000 per person rather than the national average of R600. The same goes for electrification, where a large number of areas that are unelectrified, are outside the electricity grid and costs to electrify are very high.
Unemployment has grown from 16% in 1995 to 31% now. Large numbers of households have no income at all because they fall outside the social security net – too old to get a childcare grant and too young to receive an old age pension.

Such pointers highlight the necessity of government continuing and increasing its subsidies if it wants to see free basic services expanded across the whole country. Alternatively it will have to address the serious income poverty that results in 42% of households in the country living in food poverty. Perhaps the basic income grant is not such a bad idea after all!

BIG is affordable!

Delegates attending a Basic Income Grant (BIG) conference held from December 2 to 4 last year, reiterated their call for a basic income grant for all South Africans. This was essential to tackle the extreme poverty faced by a large portion of South Africans. 14 million people in South Africa lack food security, 42% of households live in food poverty and 13 million South Africans are living below the poverty line with no access to social security. Delegates were also warned of World Bank predictions that even with a 4-5% per annum economic growth rate, that 30% of the population will still be unemployed and unskilled.

Economists’ findings

Delegates heard reports of research done by four separate groups of economists into whether SA can afford the BIG. They calculated that by increasing taxes on the rich and raising VAT on luxury items, BIG was ‘affordable’. All economists estimated that it would cost government between R19 billion and R30 billion per annum. This would pay every person in South Africa R100 monthly (in 2000 prices – i.e. R120 in 2003). Those already receiving social grants eg. old age pensions, disability grants, would not get the BIG on top of their existing grant. The researchers present agreed that the BIG would have an important impact on economic growth in areas where growth is desperately needed. Studies already show that of those that receive grants, only 22% are living in poverty. BIG would also address the problem of ‘income poverty’ rather than ‘asset poverty’. Asset poverty is what government has addressed up to now in terms of providing water, electricity, housing etc. While this is welcomed, it does not provide people with food on the table nor does it assist households in paying for services beyond the basic that government has started to provide free.

Public works programmes (PWPs)

While speakers welcomed public works programmes (PWPs) and their planned expansion, problems with them were highlighted. They would still only give jobs to between 1,4% – 2% of the official unemployed. Because government does not have the capacity to drive the programmes themselves, it is forced to sub-contract. This results in much of the budget going to contractors rather than the workers. Often those that are targeted are not the very poor that really need the income, but the ‘nearly poor’. The temporary nature of the jobs also came in for criticism. They are unable to pull a person permanently out of poverty. Although training is provided, often the duration is too short to impart real skills. There is also the fear that PWP jobs could replace the jobs of those that are permanently employed.