Green Economy Journal Issue 61

WATER
South Africa’s year-end
WATER UPDATE
National policy is clear on private funding and increased private
sector funding but still at local government the embracing of this
policy is yet to manifest itself demonstrably. What can be done to
overcome this peculiar yet very crucial issue that is the backbone of
a civilised and thriving society? Three things come to mind:
1. Depoliticise key basic services such as water, electricity
and waste.
2. Civil society and business must start to hold local government
accountable for delivering on its mandate.
3. Incentivise local government to embrace national government
policies such as the National Infrastructure Plan 2050 (NIP 2050)
via conditional grants for example and access to collective funding
instruments available in the market via the Water Partnership
Office (WPO) a vehicle established by government to address
these problems.
An industry workshop was recently held in the Western Cape to
brainstorm ideas on how to better inculcate water security on
the back of the current water crisis. I had the pleasure of being
the first presenter, allowing the scene to be set with the topic
“What government is doing, and what can industry do, to mitigate
increasing threats to South Africa’s water security”.
What is striking is the clear lack of industry leaders’ insight into what
government has done over the past years to smoothen out policies
and establish various solutions. So, the update shared with this
gathering was not only way overdue but necessary to equip industry
with the knowledge of where we are going and what interventions
can be successfully embarked upon to secure dependable water. The
concept of collaborating with government, a founding principal of
the SA Water Chamber, was well-received.
Presentations were made by a large food industry group with
several large processing facilities that require significant volumes
of good quality water to process their products where the local
municipalities had failed to supply the required water. The only
solution in the first processing plant was to secure water rights
WATER
and abstract directly from a river, purify its water for onsite use and
reuse it through an effluent treatment system. This was done by
bypassing the failed Water Service Authority (WSA), which resulted
in the security of water supply and associated jobs at the facility.
The clear loser is the WSA that has lost that water revenue forever
and stands less chance of recovering itself to supply the rest of the
over 100 000 citizens in its supply area.
This is termed Independent Water Provision, as espoused in the
NIP 2050, and like electricity, we see the private sector migrate away
from state services that have collapsed. This will place further strain
on local government’s mandate to provide water for all, including the
growing indigent population consequently, like the Eskom situation.
A metropolitan business chamber demonstrated how public-private
collaboration can unlock economic security. Various basic public
infrastructure assets for water and electricity were “adopted” by private
business to secure the assets and involve the local community in its
security of supply of services. The collaboration between public and
private sector during these crises is encouraging. It bodes well for
our future as we work towards reviving our economy and inculcating
the required water security where growing population and climate
change add existential threats to business as normal.
Infrastructure has a finite life, and
this lifespan is highly dependent on the
judicious management thereof.
On the back of what has been a very problematic year for our
country’s water security, the dire need to reform our practices has
been acknowledged by all stakeholders. New ways of going forward
are being explored, albeit at a very modest pace. We have started to
move in the private sector and will do our best to collaborate with
the pubic sector for a win-win outcome for our country.
2023 has been a topical year for water. On the positive side, the crisis in the South African
water sector has been brought to the fore and is receiving major attention by all spheres of
government and the private sector – increasing the odds of resolution. However, it’s mostly
still “talk shops” and “workshops” as all report.
OPINION PIECE BY BENOÎT LE ROY, SA WATER CHAMBER CEO
In 2018, the Water and Sanitation Masterplan, published by the
South African government, stated that it required R900-billion
between 2020 and 2030 to return to a water secure economy.
On average, R90-billion per annum would have to be spent. Since
then, very little has been published outside the Western Cape on
how this masterplan has been implemented. What we do know is in
the latter part of this year the fiscus is facing serious liquidity issues
and National Treasury has mentioned infrastructure spending curbs.
In 2018, the masterplan mentioned a one-third funding shortfall. It
is probable that this funding gap is now at 100%, which means that
without private sector funding the masterplan will remain dormant.
So, let’s unpack this funding conundrum first.
The funding of urban water and sanitation infrastructure is sourced
from local municipal client revenues and national government grants
where both are under severe strain for various reasons. Local society
has suffered from the severe economic decline and is unable to
pay for water-related services. Stats SA reports that in 2018, 59% of
society did not pay for these services compared to 50.8% in 2009.
Infrastructure has a finite life, and this lifespan is highly dependent
on the judicious management thereof, which we know is not
the case resulting in high levels of failure, not unlike the Eskom
situation. A total of 97% of South Africa’s sewage plants do not
comply to their own Green Drop standards. Sewage plant assets are
not adequately operated and maintained, and non-revenue water
(NRW) has increased from around 30% to 46% in the last decade.
The majority of the NRW quantum are physical losses due to
unmaintained water distribution systems. The higher the NRW
trend the higher the non-payment of services and the higher the
cost to the consumers as NRW is a pure form of inefficiency. One
can logically conclude that water is 46% overpriced as 46% is lost to
system delivery inefficiencies and not the consumer as often alleged.
We are in a spiral towards total water security collapse unless these
services are paid for by all, one way or another.
Secondly, the fiscus is running dry as we all know, and this means
that the state can longer bail out local water asset rejuvenation,
which leaves the private sector as the last and only source of funding.
Water is 46% overpriced
as 46% is lost to system
delivery inefficiencies.
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