Our Burning Planet

RESOURCE MANAGEMENT

New agency to fund, fix and expand South Africa’s vital water infrastructure

Midmar Dam near Howick is one of the largest dams in KwaZulu-Natal. Built in 1965, the dam wall had to be lifted to its current height of 30m in 2003 to provide for the growing water demand in Durban and Pietermaritzburg. (Photo: Umgeni Water)

It costs billions to capture, purify and shift water in one of the world’s most water-scarce countries. Yet, on average, at least 40% of South Africa’s water still goes down the drain every year due to leaks, non-payment and other factors. How can this be fixed?

National Water and Sanitation Minister Senzo Mchunu has revived plans to establish a national water infrastructure agency to refurbish and expand the country’s critical water infrastructure.

Mchunu, who took over the water and sanitation portfolio in August, acknowledges that sourcing new water and protecting existing resources will cost a fortune. But with regard to old or dysfunctional infrastructure, the country could only “slide to backyard status” if efforts did not start immediately.

“There will be expenses of course … it’s already very expensive. It requires billions of rands. But it’s still better to tackle the problem now rather than waiting for any other time when it gets more expensive,” he told Our Burning Planet in an interview.

Where will this money come from?

While some would come from his department’s own trading account, it was also planning to set up a new National Water Resources Infrastructure Agency which would be built around the existing Trans-Caledon Tunnel Authority (TCTA).

The TCTA is a state-owned entity set up in 1986 to finance and build the South African section of the Lesotho Highlands Water Project, but its mandate was later expanded to fund other water projects.

Mchunu said one of the new agency’s main duties would be to attract new investment by packaging major water infrastructure projects.

This idea dates back to at least 2008, when a Bill was published to give effect to a new water resources infrastructure agency that would raise private sector funds in an efficient and cost-effective manner.

Minister of Water and Sanitation Senzo Mchunu. (Photo: Gallo Images / Sunday Times / Esa Alexander)

A memorandum outlining the objectives of the new agency noted at the time that: “Currently, the Department of Water Affairs and Forestry cannot raise capital directly on the financial markets, and is reliant on special-purpose vehicles, such as the Trans-Caledon Tunnel Authority, to finance and implement viable economic projects. 

“The establishment of the Agency has the advantage of an institution that separates the policy development and regulatory responsibilities of the Department, as the custodian of the national water resources, from the development and implementation responsibilities for infrastructure management.”

While the agency would be owned by the State, there was acknowledgement that national water resources infrastructure should be funded, developed, operated and maintained “efficiently and effectively in a sustainable and reliable manner” and that “this can be more commercially viable by providing for the utilisation of private sector funds to achieve social and economic objectives of government”.

The exact reasons that the new water infrastructure agency model went off the boil some years back remain unclear, while last year government established a similar body – Infrastructure South Africa – albeit with a wider mandate to raise funds for roads, harbours, housing or energy.

Mchunu, however, said new efforts were needed to raise loans to rehabilitate existing infrastructure and to build new storage, reticulation and treatment schemes.

Apart from the well-documented failures of many municipalities in providing reliable water, or the sewage leaks that continue to pollute rivers, Mchunu believes his department has made good progress historically – particularly the water reticulation and law reform drive under former minister Kader Asmal.

“So I want to say to South Africa. Well done. Good progress… But, here is the problem that we now need to tackle. Of all the raw water that we take from any source, be it from underground  – but particularly piped water – before it gets to households we leak 40% generally around the country.

“That alone has huge implications because, whereas you may say we have covered 93% of the population with access to water, if you minus 40% it will tell you that 93% may not be accurate.”

The Nqweba Dam near Graaff-Reinet was built in 1925, but due to massive soil erosion in its catchment area over recent decades, the dam has lost much of its storage capacity due to siltation. (Photo: Dredging Africa)
Staff from the Duzi-uMngeni Conservation Trust clear litter and aquatic weeds from the increasingly polluted uMsunduze River. (Photo: DUCT)

It’s worth mentioning that at municipal level too, even greater losses have been documented. According to Democratic Alliance councillor and eThekwini Municipality Exco member Yogis Govender, access to water has been so severely compromised in Durban that the city consistently loses more than half of the billable water that it buys from Umgeni Water. 

“The latest statistic was a startling 54% of water lost to bursts and theft monthly. This sat at between 30% and 40% for the past 10 years, but is now out of control. This also has a significant impact on our finances and income,” she says,

To address these “difficulties”, Mchunu says his department is also considering a reconfiguring and “streamlining” of the country’s approximately 140 water service boards.

“Reticulation is where we have a backlog, which amongst what media says is a ‘crisis’, (but) which we are saying is not a crisis. It’s a difficulty if you want to use the dictionary definition. But if you want to be colloquial you can then use any term there… But from where we sit, it’s a result of us over a long period sort of concentrating on one stream of our work (water resource management).

“We have tended to leave water services management to water services authorities and municipalities, who are now saying we have no capacity – no money, no personnel and no skill to deal with this huge task.”

His officials could no longer “stand on the rooftops of Pretoria” but would rather have to climb down and make direct interventions at municipal level as they were empowered to do in terms of the National Water Act and the Constitution.

It was also establishing new partnerships with the private sector, especially in the mining and agriculture sector.

“Why the private sector? Because they too need water, just like communities… So we better partner and sit at the table together and delve into these matters together.”

The department was also engaging with a public-private partnership initiative led by businessmen and former politician Roelf Meyer on some of these plans.

“They have made themselves available and we welcome that.”

Other funding sources would include the department’s own trading account, the Municipal Infrastructure Grant and a proposal by the Development Bank of South Africa to establish a public-private partnership office to fund sanitation, pollution control or water supply projects.

“Treasury is open to us coming to them to say: This is a bankable project which we think will assist South Africa going forward and we need such and such an amount. In other words, directly approaching Treasury… For now, they are open to us approaching them for assistance on specific projects that are key for South Africa as a whole, if they are properly packaged.

“We don’t think we can fail. It’s a question of political will. It’s a question of being prepared to work very hard. It’s a question of being convinced that you will do it. That is what is more required than actual money… Once you overcome these other things that I’m talking about, I believe the final hurdle (money itself) will be less of a headache.” DM/OBP

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Absa OBP

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