Government smallholder irrigation schemes were developed in former homeland areas of South Africa during the apartheid era. Although experiencing serious financial, technical, and institutional problems, most of them are now earmarked for rehabilitation and transfer to water users' associations. Transfer operators find it difficult to evaluate the potential for viability, then to organise the transfer accordingly. The paper refers to a multi-disciplinary, action-research approach that has been proposed to address such issues. It has been implemented in a case study scheme of the Northern Province in 2001. A simulation tool has been developed. Its main features involves simulations and scenario-testing on the costs incurred by scheme management, the possible contributions by farmers to cover these costs, the possible charging system to be set up, and finally the impact of certain measures or decisions, or certain farmers' strategies on the financial viability of the scheme. The paper mainly presents and discusses some principles of the approach, especially the need for a sustained and multi-disciplinary partnership during scenario development and discussion, including farmers and transfer operators. Such an approach shows huge potential for information and decision-making support towards transfer operators, for training, and for farmers' participation.