Calls for national water body
BUSINESS WANTS TO GET BALL ROLLING
Companies that operate in the water space should jointly engage government to form a central, controlling body to partner with the private sector in tackling the country’s deepening water problem.
This was the message of Fred Platt, CEO of listed infrastructure group Accéntuate, at a recent Moneyweb Nedbank business breakfast focusing on infrastructure. Platt said technical water losses through leaks amount to more than 30% as the crisis deepens.
He said by 2030 there would be a gap between supply and demand of 2.7 billion m3 of water, with the total demand amounting to 17.7 billion m3.
Yet government expenditure on water has dropped to R2.9 billion a year while spending needed is R58 billion per year, Platt said.
Unlike electricity, there are no “green alternatives” to water. And delivery delays can be life threatening.
Platt said water has always been the biggest enabler of development of cities and business.
The investment opportunity lay in increasing the efficient use of water and finding alternative sources in ground water and through desalinisation.
Platt says the country however needs to change its approach to water. “Currently it is just an item on our income statement, often paired with electricity.” Especially the agricultural sector – which represents 60% of the country’s water usage – has to change its approach, Platt says.
He adds that water should be seen as a national asset and pricing should be conducive to investment under principles such as “user pays” and “polluter pays”.
In some areas it is currently underpriced, while the mechanisms to charge business for affluent water are lacking. The country further has a single water standard, namely potable water, with no differentiation between different applications. All of this has to be properly managed to understand the true cost of water, Platt says.
He says government cannot fund the necessary investment in water infrastructure on its own and a public private partnership type of model is needed. “Value is in the integration of technology, to unlock funding, navigate the political maze and the ability to execute,” he says.
He believes funding would be available under the right conditions. What is missing from the current model is the ability for the private sector to contract with one entity.
He says Accéntuate has had some engagement with National Treasury, but a wider initiative is needed to establish one controlling entity to link with the private sector.
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