1. Implications of the World Bank's Privatisation Policy for South Africa

Providing potable water is a central issue for all nations and is of particular concern in developing countries where universal coverage does not exist. This paper eveluates the implications of the World Bank's privatisation policy for the water sector in developing countries using South Africa as an example. The authors conclude that regardless of private investment, cost accounting reform is needed both to provide universal services and to practice environmental stewardship. Based on theory and emperical evidence, concessions appear to be the optimal form of water sector privatisation. The structure of the water sector in South Africa favors the use of concessions if a privatisation strategy is persued. The South African case shows that the success of attempts to privatise a monopolistic water sector depends on developing adequate regulatory and administrative capacity. This conclusion aligns closely with the current World Bank privatisation policy. However, the authors argue that the Bank policy does not explicitly address several issues that are necessary to maximise the benefits of privatisation. In addition, the authors agree with other analysts who suggest that the World Bank would benefit from a new paradigm for infrastructure privatisation that is more transparent and includes a coalition of stakeholders with community involvement.