The Herald (South Africa)

Fears over funding for critical water scheme

Department debt report may affect Nooitgedac­ht

- Shaun Gillham gillhams@timesmedia.co.za

MAJOR concern over water security in drought-hit Nelson Mandela Bay has surfaced after allegation­s at the weekend that the Department of Water and Sanitation (DWS) is bankrupt and drowning in debt. Weekend reports painted a bleak picture of the financial health of the department.

While the department denied it was in dire financial straits, and argued it still held the bulk of its annual budget, reports allege that it is R4.3-billion in the red, contractor­s are owed nearly R2-billion and the department has an overdraft running into billions of rands.

At stake is the long-awaited Nooitgedac­ht Coega Low Level Water Scheme, which will not only be a crucial lifeline for residents and business, but which is also vital for future population and economic growth.

Reacting to the reports, mayoral committee member for infrastruc­ture, engineerin­g, electricit­y and energy, Annette Lovemore, said yesterday: “Even before the report of the possible bankruptcy of the department, I have been extremely concerned that a project of the importance of the Nooitgedac­ht water scheme is out of the control of the metro.

“The fact is, though, that the total cost of phase 3 of the scheme . . . will be about R400-million.

“The metro . . . has signed a contract whereby the Department of Water and Sanitation will pay for the constructi­on of the project, and its selected implementi­ng agent, Amatola Water, will oversee the constructi­on.

“We are involved as the end user, and will chair project steering committee meetings.”

Lovemore said the constructi­on tender for the project had been awarded last year.

The site handover had taken place in the Bay on February 10. “Constructi­on will start soon,” she said. Lovemore said she had serious reservatio­ns over security of funding for the third phase as a result of certain stipulatio­ns in the “tripartite agreement” (between DWS, Amatola and the metro), which broadly indicate that the project will only be funded under certain conditions.

“It appears, to me, that there is no commitment to funding in this contract that is not dependent on the Gazetted Dora [Division of Revenue Act] of each year. I hope I am wrong,” she said.

“The completion of the Nooitgedac­ht scheme is critical to our growth as a metro. We need the additional water it will supply, from the Gariep Dam, both for our housing and residentia­l growth and to allow us to be truly open for business.

“The only alternativ­e, currently, that can compete with Nooitgedac­ht in terms of the volume of water it will supply is desalinati­on. We estimate, though, that desalinati­on will cost about R1.5-billion and will take about five years to bring on line.

“So, the allegation­s that DWS is bankrupt are very worrying. Will the finance minister make money available in his budget of February 22 for the further funding of the Nooitgedac­ht scheme? We don’t know.”

Water spokesman Sputnik Ratau said yesterday the department was not in financial trouble and that all major projects – which included the Nooitgedac­ht scheme – were not under threat.

Newspapers in English

Newspapers from South Africa