Competition Policy and Privatisation in the South African Water Industry
The aim of this working paper is to investigate the optimal regulatory routes from a competition and public interest point of view for the South African water industry. The working paper presents the basic conditions of the water sector by outlining the main characteristics of water, providing an historical and international overview of water management in South Africa. The particular structure of the industry within the South African context is examined, describing the domestic market, the supply chain for water and institutional arrangements for water resource management and service provision. The conduct of the industry is explored through an analysis of domestic demand for water, and costs of water provision. Existing tariff structures, investment requirements, institutional funding and the presence of public-private partnerships (PPPs) are also discussed. Efficiency and delivery in the industry are assessed in order to highlight key performance indicators of the industry. Finally, the paper discusses the options available to policy-makers in South Africa, focussing on deregulation, price caps and price structure.
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