Privatisation of a municipal enterprise through competitive sale: The case of Metro Gas

The situation of Metro Gas, owned and operated by the Greater Johannesburg Metropolitan Council (GJMC), is an almost textbook example of the need for straightforward government divestiture of an enterprise. In late 1998, the GJMC took a decision to solicit bids for the 100 per cent sale of the assets and business of Metro Gas as a going concern. Privatisation, involving the complete, permanent alienation of governmental assets, is often viewed as the most extreme and controversial form of public‐private partnership. This is particularly the case in South Africa, where some stakeholders view privatisation as an unacceptable retreat from the challenges inherent in restructuring municipal service provision. This article reviews the decision process leading up to the sale of Metro Gas. This is an ideal example of the circumstances and conditions under which such privatisation activities are appropriate and worthwhile at the local level.

Notes

Respectively, Acting Strategic Executive, Metropolitan Infrastructure and Technical Services, Greater Johannesburg Metropolitan Council; Executive Officer, Metropolitan Gas, Greater Johannesburg Metropolitan Council.