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27 Mar 2014 12:48
SA could face a water crisis. (Reuters)
Neither a new water policy nor the National Infrastructure Development Plan (NDP) can address South Africa’s water challenges without the co-operation of all stakeholders, says Dr Nezar Eldidy, executive director at Sobek Engineering.
“There appears to be a lack of understanding of how water impacts the GDP and overall development plans,” he says.
“The simple fact is that water impacts everyone — from the domestic user to national government, and everyone has to play a role in averting a water crisis,” he says.
Last year, Water Affairs Minister Edna Molewa cited a report by WRP Consulting Engineers, which pegged South Africa’s annual supplied water loss at about 1.58-billion cubic metres, with a value of about R7.2-billion a year.
Eldidy believes the overall total for non-revenue water could, in fact, reach tens of billions per year. These losses must be addressed, he says. But this is not the only challenge facing the sector. “We are heading toward a crisis in terms of water treatment plant operation, maintenance and upgrades. In the water sector, the resource, treatment and distribution components are equally important — if one area is neglected, the entire system is impacted.”
Eldidy says that while the cost of water treatment is only 5% to 10% of the cost of the water system, it has a huge impact on whether the water is of an acceptable quality for domestic use.
“Much of South Africa’s water infrastructure is in a dilapidated state,” he says, “but worst off are the treatment plants — especially those for wastewater treatment. This is a source of contamination of the rivers and complicates the overall water treatment processes.
“Those plants that fall under municipalities have been passed from hand to hand since 1994, undergoing associated policy changes and perplexing the market. Meanwhile, some of these assets, which were in need of attention in 1994, have not been upgraded or even maintained, posing a critical risk.”
New water policy
Eldidy highlights the proposed new National Water Policy (NWP), gazetted in August last year. The policy proposes a redistribution of historically established water rights, most notably in the agricultural sector where, he says, it is very much needed. “In the agricultural sector, water rights were set in 1994, and have not allowed for expansion in demand, so competition arose between agriculture and domestic users.
“We see trading of rights between users and this became a business of trade in agriculture. “This new policy furthermore suggests possible amendments in respect of water licensees or the redistribution of water among those who make use of it.
“As much as the aforementioned shift is necessary, it triggered panic among some of the licensees, such as the mining companies, where some within the mining fraternity saw this as an operational risk that threatens their investments and future growth within South Africa.”
The plan also proposes amendments in respect of water licensees and suggests that the water boards (utilities) — primarily tasked or responsible of the bulk suppliers — become involved at the domestic water retail level of failed municipalities. Such a move would assist the municipalities, but could also result in overstretching the utilities and sinking them in the already heavily subsidised water distribution/retail sector, says Eldidy.
“Currently, there are about 16 water boards. Efficiency is a challenge among most of them. So amalgamating them into only four boards may build inherent inefficiencies into the new boards — they will effectively be born overloaded,” he says.
He adds that collation of several utilities with their assets under one shell water board depends on water demand and water allocation per capita. The latter is a function of affordability and the income elasticity of water users. Oversizing of assets may result in an increase of investment costs to reach even prohibitive levels of efficiency in some cases, he says.
Eldidy says the policy needs to address the possible introduction of a franchise model for water services delivery and must formulate a practical framework to facilitate such an approach in public private partnerships.
“It ought to allow for a greater efficiency in meeting demand, expanding markets vertically and horizontally, as well as a reduction of losses within the water sector without triggering serious political risks in peri-urban and rural communities.
“Such an approach may enhance staff dexterity to optimise costs, quality and simultaneously circumvent regulating barriers and interferences. Efficient cost recovery with optimum water loss management is paramount at this stage, to save scarce water resources.”
Crucially, he says, the role of the department of water affairs (DWA) should be revisited. “Setting the rules and operating under the rules at the same time is a conflict of interest.
“The DWA cannot be setting the rules and playing the game. We need a government model that creates an enabling environment in terms of participation by the private sector and attracts investors. We need an effective dispute resolution mechanism. We need to reduce losses, invest in infrastructure upgrades and maintenance, and enhance efficiencies in water management.
“If we do not, we will find ourselves facing the same crisis in the water sector as we do in the power sector,” he says.
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