Industry can ease the water crisis

The drought has brought home not only the extent of the country’s water scarcity but also the dismal state of its water infrastructure and the state’s constrained ability to repair and fund it.

As concerns over water losses and declining water quality mount the department of water and sanitation has estimated that about R800-billion is needed over the next 10 years to fix South Africa’s water infrastructure.

Water experts argue that, as with electricity, there is scope for the private sector to address some of the water challenges.

Some large industries are taking steps to use water more efficiently. But this raises questions of revenue implications for municipalities because, as services like water become decentralised, certain consumers become more self-reliant.

Mike Muller of the University of the Witwatersrand’s school of governance said that, should large customers cut ties with state water providers, it could be expensive for industry and reduce economic productivity. Poor consumers could be left without support because of municipal revenue loss.

A more “sensible” approach is the one taken by petrochemical giant Sasol in the Emfuleni district in south Gauteng, he said. The company found that it could save 10 times more water by reducing leaks in the townships than it could by making water savings in its plant.

According to a 2014 presentation, Sasol needs about 150-million cubic litres each year to operate, 80% of which is sourced from the Vaal River system. This equates to roughly 4% of the demand on the river.

In addition to efforts to increase its water efficiency, in 2011 the company embarked on a joint water conservation project with the Emfuleni municipality, which includes the Sebokeng and Evaton areas, aided by the German Agency for International Co-operation. The project tackled leaks – in many cases simply by replacing tap washers – and taught residents about water conservation.

Between April 2012 and June 2014 some 6.8-million cubic metres of water were saved in Sebokeng and Evaton. This represented an 8.4% reduction in demand and saved the council an estimated R37-million.

Another project is a R1.3-billion water recovery growth project at Sasol’s Secunda complex, which will treat about 3.4-million cubic metres of high organic waste water.

In research published by the South African Institute of Race Relations, water specialist Anthony Turton, a scientist at the University of the Free State’s centre for environmental management, argued that more public-private partnerships in the water sector could alleviate the pressure on water sources. Similar models have been adopted in other parts of Africa, he noted.

By law, the state is the custodian of the country’s water resources, but through partnerships the private sector can help the public sector build new infrastructure.

Options include the BOT (build, own, transfer) model, where the private sector establishes new infrastructure to hand over to the state.

Examples include a 2009 contract for a wastewater treatment plant near Cairo in Egypt, which attracted $200-million in private investment, according to Turton. This model has also been used for a number of potable water treatment plants, including desalination plants, predominantly in North African countries.

Another model is the affermage or lease agreement, in which the public sector retains ownership of water infrastructure but the responsibility for day-to-day operations is transferred to the private sector, Turton explained.

This model was successfully implemented in Côte d’Ivoire in 1959, and continues to provide seven million people with water.

Lynley Donnelly
Lynley Donnelly
Lynley is a senior business reporter at the Mail & Guardian. But she has covered everything from social justice to general news to parliament - with the occasional segue into fashion and arts. She keeps coming to work because she loves stories, especially the kind that help people make sense of their world.

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