An abridged version of this letter was published by GroundUp, 16 April 2025.
A group of water justice researchers warn against the expensive disasters ahead if citizens agree to the City of Cape Town’s proposal to “externalise” the implementation and operation of the Faure New Water Scheme.
The City of Cape Town (CoCT) wants to outsource a very expensive, very risky new water project to turn sewerage water into drinking water, called the Faure New Water Scheme (Faure NWS). The City (CoCT) owns and operates our drinking water supply system, and is responsible for ensuring these services meet the human rights obligations enshrined in the constitution. In accordance with the Municipal Systems Act, the City is also required to ensure that any outsourcing arrangements do not undermine the public interest mandate of municipal services. This includes establishing meaningful consultation mechanisms that give the public a fair opportunity to provide input.
The City is asking for public comment on a proposal to hand over the implementation and operation of the Faure New Water Scheme (FNWS) to an external service delivery mechanism- in other words, a private for-profit corporation. As a group of researchers in alliance with various water justice networks across the Western Cape we call on the public to reject this proposal to privatize Cape Town’s new water treatment plan based on decades of evidence regarding the detrimental social, environmental and health-related impacts of public-private partnerships in the water and sanitation sector.
The City is rightly thinking ahead about long term water strategies to meet our growing water needs in the context of drought, population growth, the capacity of our dams, and changing climate. They have committed R3.3 billion to the construction of the FNWS, which is set to be completed in 2029. While there is some debate regarding direct potable reuse as a strategy to diversify and expand Cape Town’s water supply, we focus our comments on the dangers of privatising a critical public service, especially given Cape Town’s context of deep-seated inequalities.
We identify and explore multiple points of concern below:
High costs and deeper inequity
International experiences with water privatisation have shown that it often leads to increased tariffs making water more expensive for all, and less affordable for lower-income communities. In addition, privatisation has worsened accountability. How will communities be expected to “cost-share” (i.e. what end-user fees are anticipated) and how will the proposed private partner be prevented from raising user fees without consultation? An economic perspective is not sensitive to the differing, and highly unequal in our context, access to water services by different communities. Privatisation adds shareholder profits, executive bonuses and the additional costs of private debt financing, to the price of water services. While additional costs are transferred to water users through their monthly water bills, revenues are distributed to shareholders as dividends rather than being re-invested in the maintenance and expansion of public infrastructure. Further, it reduces the level of accountability should these services not be adequate or result in poor quality water. In the UK shareholders made massive profits and nine private company executives received over £56m in salary and benefits over a five year period while citizens saw their bills skyrocket.
The pursuit of profit often results in unequal service distribution, leaving marginalised communities with inadequate access to clean water. Already, 600 000 households (comprising millions of people) in Cape Town rely on the “Free Basic Water” system which does not allocate enough water for their needs and causes extreme stress and illness because households cannot afford to pay for the water they need beyond this minimum allocation.
Health and environmental risks
Private corporations are much more likely to violate health standards and environmental regulations in order to cut costs and maximize profits. Thames Water, the private utility, has repeatedly violated environmental regulation by dumping raw sewage into the river. Veolia is notorious for its violations of water pollution laws in the United States. Since 2000, the company has racked up more than $USD 85 million in penalties for 163 violations of environmental, safety-related and consumer protection regulations.
This type of relatively new toilet-to-tap, or direct potable reuse (DPR) project proposed by the City is inherently risky with little long-term data to draw on. A Private-Public Partnership would compound the risks. The technology is expensive and relatively new, making public ownership and operation all the more vital. The few wastewater-to-drinking water operations running successfully by public utilities across the world include Singapore’s NeWater, Orange County California, which is also fully public; and the Old Goreangab Water Reclamation Plant in Namibia.
Loss of public accountability
Involving private companies in this work poses serious risks as there is a lack of accountability. For private companies, accountability to shareholders takes precedence over accountability to the public. Private companies are protected by privacy laws and investment treaties that guarantee their freedom to generate revenues. These measures reduce public oversight and undermine the ability of governments to fulfill obligations to ensure equitable distribution of water and sanitation services.
The private sector generally lacks experience in managing sewerage systems. While over 90% of the world’s water services remain publicly owned, the figure is even higher for sewerage—97% in the United States, which likely reflects the global norm. As a result, private companies have minimal experience with these complex systems.
When private firms have been contracted to “build-operate-transfer” (BOT) wastewater treatment plants (WWTPs), their performance has often been poor. A striking example is Brussels, where Veolia built a plant that failed to function properly. When the city refused to make payments until the problems were fixed, the company simply shut down operations. A 2006 report by the Public Services International Research Unit documents numerous BOT failures in drinking water treatment across the globe.
Private companies also have a troubling track record of pushing governments into costly, unnecessary infrastructure projects under the guise of climate or drought preparedness. In Australia, for example, a $20 billion desalination plant was built in 2012 following a major drought. Despite never being brought into operation, the facility continues to drain public funds.
Making a bigger mess to clean up in the future
Because using “external mechanisms” to outsource public services never serves the majority, thousands of cities across the world have had to undo this disastrous experiment, and “remunicipalise.” In the last 20 years, over 1620 cities in 73 countries have taken back public control of vital public services by remunicipalisation (also called ‘in-sourcing’ or ‘de-privatisation’), a process of bringing privately owned and/or managed services back into local government full ownership, management and control. Public Services International has documented how local authorities, citizens, service users, inhabitants and workers have taken the lead in pushing de-privatisations of public services and infrastructure common goods, and how these new forms of public ownership are often encompassing and experimenting with mechanisms of democratic governance, accountability and participation. In other words, there are many public-public partnership alternatives, and we should be building them now, rather than passively watch while the corporates and consultants convince our City that it cannot manage its hard won Constitutional obligation to protect and provide water, for all.
Conclusion
The City says it is assessing the feasibility of outsourcing. But feasible for whom, and by what standards? Is it accounting for democratic accountability, long-term affordability, environmental justice? Has it considered full public provision? Shouldn’t this have happened before committing R3.3 billion?
The City claims that grant funding from national government is unlikely—but what’s the basis for that claim? Has it actually approached national government?
The City also suggests that a “special purpose vehicle” (SPV) would carry substantial financial, technical and operational risk over 25–30 years. But who will own the plant? What happens if the plant becomes a costly white elephant? If private firms rack up high costs, those will fall on the public through skyrocketing tariffs. And when ownership and decision-making are separated, corruption and rent-seeking can flourish. How will this be prevented?
The City argues it already uses external providers for waste management and transport. But water is not just any service—if it’s contaminated or cut off, the consequences are far-reaching. We saw glimpses of this during Day Zero, when outsourced companies installed faulty water meters, later admitted by the City to be problematic.
Outsourcing the FNWS undermines municipal responsibility and ability to ensure water access. It could set a precedent for the creeping privatisation of Cape Town’s entire water system. We need to acknowledge the entanglement of water and financial power. Inviting corporations into our water systems will only deepen water poverty.
Once an essential service like water supply is handed over to a private company, it becomes difficult to reclaim public control. This could limit the City’s ability to adapt to future challenges, including climate change and population growth. It will also impact the City’s motivation to maintain water infrastructure and build expertise. Privatisation will leach expertise from the City and create ongoing dependence on outside “expertise” instead of building in-house capacities; this will also influence the City’s commitment to maintenance and upkeep which are already- known problems affecting existing water infrastructure.
What we need is a well-resourced internal (i.e. public) mechanism to ensure access to clean, affordable water for all. Water is a basic human right—not a commodity for corporate profit. The City, as the designated water services provider, has a constitutional duty to ensure it stays public. Rather than outsourcing, the City should focus on strengthening its internal capacity to operate and maintain the Faure New Water Scheme efficiently. This would ensure that the project remains accountable to the residents of Cape Town, maintains fair pricing, and prioritises long-term water security over short-term profits.
We urge everyone—individuals, organisations, communities—to make their voices heard by the 17 April deadline. Say no to water privatisation. This can be done in person at any sub council office, by email, or through the following online form:
https://web1.capetown.gov.za/web1/websitefeedback/?id=b254ff9a-9cfc-44f3-bce9-fb90c75f9633
Written by
Ferrial Adam, Activist Citizen Science: Water and Environment
Koni Benson, Associate Professor, Department of Historical Studies, University of the Western Cape and member of the African Water Commons Collective
Rehad Desai, Uhuru Productions director of Capturing Water
Meera Karunananthan, Assistant Professor of Environment and Geographical Sciences, Carleton University
Vanessa Farr, co-director of Mycelium Media Colab working on the Water Stories Project team.
Cecilia Y. Ojemaye, Research Fellow, Environmental Humanities South, University of Cape Town
Nobukhosi Ngwenya, Research Fellow, Environmental Humanities South, University of Cape Town
David Hall, Visiting Professor, Public Services International Research Unit (PSIRU), University of Greenwich
Janine Lange, Tshisimani Centre for Activist Education
Faeza Meyer, founding member of African Water Commons Collective
Adrian Murray, Blue Planet Project
Suraya Scheba, Senior Lecturer, Department of Environmental and Geographical Science, University of Cape Town
Sandra van Niekerk, Public Services International (PSI)