The Experience of Private Investment in the South African Water Sector: The Mbombela Concession

South Africa is a water-stressed country that over a protracted period has suffered from poor water service delivery. The major problems are inefficient operations, lack of capacity in spending allocated budgets, unclear management structures, and a long term decline in capital expenditure. Economists have long argued that private investment will bring good fiscal control and efficient structures and improve service delivery. However, there may be trade-offs between this improved economic efficiency and the necessity to pursue more egalitarian social outcomes. The purpose of this research is to explore the experience of private sector investment on operational efficiencies and social objectives in the South African water sector in the Mbombela concession. The study concludes that in this case private investment has enhanced service delivery by improving efficiency, technical skills and the capacity to spend allocated budgets without any significant negative impacts on equitable water distribution.