Fears over funding for critical water scheme
Department debt report may affect Nooitgedacht
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.