EKONOMIESE ASPEKTE VAN DIE PRIVATISERING VAN DIE MARICO-BOSVELD- STAATSWATERSKEMA / Economic Aspects of the Privatization of the Marico-Bosveld Gpvernment Water Scheme

Abstract

The purpose of this research was to determine whether the Marico-Busveld Goverment Water Scheme can be successfully privatised. Representative farming units were developed and Dynamic Linear Programming was used as a diagnostic technique to model a planning horison of twenty years. The time value of money was calculated by discounting cash received against a chosen interest rate. The expected cash flow can then be expressed in a single value. The present value of the incremental capital expenditure is subtracted to obtain the net present value. Results show that two of the three representative farming units are financially viable after privatisation. The third representative farming unit will only be viable if gross margins are increased. The scheme can successhllv be privatised only if better management is applied at farm level.