Percy Sechemane
Bulk infrastructure
The conference identified groundwater to be a resource for investments and for it to be included in most schemes put forward for investment opportunities.
Government made a commitment to engage black businesses in the water and sanitation infrastructure space. The black business society and other groups were equally encouraged to engage various departments for the purposes of consolidating this relationship.
The conference identified the need for one central point that interested parties can approach they are keen on starting or working on particular projects.
A structured project information memorandum is required that sets out issues regarding operative agreements and risk transfer on projects.
There is a need to come up with a defined project finance model with input from the private sector.
Municipal infrastructure
The conference resolved that there is an urgent need for municipalities to deal with some of the limitations and problems in the supply chain process, as this is sometimes very frustrating and does not encourage innovation.
The conference identified the need for municipalities to debate on the things they must process in terms of regulations.
The conference noted the challenge of water leakages and non-revenue water, which is as high as 40%. Investors were encouraged to come up with innovative solutions to assist municipalities with this challenge.
An open invitation was made to all participants to engage further on opportunities available in the municipalities by the new financial year.
Cutting-edge solutions and innovation
The public sector requires a shift to a mind-set that encourages and promotes innovation; this also calls for a collaboration of an inter-generational, business-minded mix of skills between the public and private sectors.
Consumers at times bypass municipalities to access available technology because the municipalities take too long to adopt new technologies. This shows that service providers can be barriers to the adoption of technological innovations, hence a critical needs assessment is required.
Investment packages should incorporate and promote localisation and partnerships with local companies.
Innovation strategies should look at developing start-ups to a point of viability. Investment assistance given to start-ups should guarantee certainty in order to attract investors as well as create opportunities for take-off agreements.
Dr Snowy Khoza, chief executive of infrastructure group Bigen Africa
Key outcomes of the summit
More cohesive strategies and an integrated water and sanitation master plan is required in order to tackle the challenges that have been addressed. Currently the integrated master plan is a work in progress.
Regulatory framework for water sector needs to be revised
There is a need for a structured project information memorandum that set out issues regarding operative agreements and risk transfer, among other things. The project information memorandum will help to clarify how the all aspects will be dealt with.
There is a need for one central point that interested parties can approach if they are keen on investing in a particular project.
Fragmentation within the water sector is causing a duplication of efforts in terms of projects, therefore institutions and boards in this sector need to start working together to solve this problem.
There is a need for different key stakeholders in the water sector to work together on the various projects by integrating their expertise.
The possibility of creating a one-stop shop in terms of a supply chain is a necessity for the water sector, as it will reduce costs for the government, therefore this agenda needs to be pushed.
Pipeline projects need to be sorted out in local government, so that investors know what projects they can invest in.
Projects need to reach a stage where they are bankable, in order for project owners to be able to acquire funding for them. Funding is also required for the projects to be able to get to the required bankability.
It is important to attract investment/funding by liaising with the water boards, rather than waiting to follow the PPP processes, which are rather lengthy; some projects need to be implemented timeously. The department of water and sanitation can issue directives to the water boards to implement projects, as it is the link between business and the water boards.
Information about the project pipeline is to be shared within two weeks post the summit, so investors have a list of all the projects that require funding in the short and long term.
There is a need for proper economic impact analysis of water in order to appreciate how increasing investments in the nation’s water infrastructure can have a positive impact on both economic growth and employment.
There is a need to review the projected capital needs of water, wastewater and storm-water utilities, and be able to estimate the associated economic benefits (the economic opportunities created by water infrastructure projects, the long-term productivity savings to the customers of water utilities, as well as the avoided costs of frequent disruptions in water and wastewater services to business) that would be realised if we were to make those investments.
There are mixed reactions to change in policy in the water sector, but the aim is to empower the current water and sanitation policy environment with a new partnership between the public sector, the private sector and civil society to build a strong, powerful and effective Team Water SA rather than replacing the policy altogether.
New partnerships are being sought with the business and investment sector to ensure water security in South Africa in a manner that firstly ensures access to safe water and sanitation universally and in line with the SDGs, secondly with the goal of making water available to enable and encourage economic growth and prosperity in way that enhances South Africa’s competitiveness, and thirdly, characterised by the best science and innovation that will help make South Africa one of the leading water countries that will enable us to play our role internationally to move the world to higher levels of water security.
South Africa needs to find means of reducing the current water consumption rate per capita from 235 litres a day in comparison to the 185 litres per capita world average.
There is a need for leak management, as a lot of the water is being lost through leakages and not actual consumption.
There is a need for more project feasibilities to be conducted; currently there are not enough experts in the sector.
Government has a big purse but SMME’s do not have access to these funds, as large infrastructure projects seem to dominate access to these funds. There is a need to include SMMEs in the water and sanitation sector.
There is a need to address poor revenue collection, precipitated by poor collection mechanisms, resulting in a culture of non-payment; the security of supply depends on payment.
At a local government level, there is a need to strengthen local structures; leaders don’t have a good understanding of the economics of their areas. They need to connect more with the government.
Lack of inter-developmental communication is constraining development, with projects undertaken in isolation. Local government has economic agencies in place but the right people need to be put into place.
There is no policy uncertainty in water or in energy, because water and energy are shared endowments. Investments in water and energy in Africa would be wise, but investors have to understand the government wanted partnerships, not a master-servant relationship.
There is a need to come up with a defined project finance model, with input from the private sector.
Individuals should identify areas of interest and get involved in generating more ideas and engagements in particular work streams that have been identified from workshop discussions.