A legacy of bad water management
The Lesotho Highlands Water Project, which is supposed to help secure South Africa's current and Future water supply, has been bled dry by corruption and wasteful expenditure putting the project years behind schedule and the country at risk of water shortages.
water demand in South Africa is expected to exceed supply by 17% in 2030 as a lack of planning and investment in infrastructure, and the impact of global warming threaten to leave more cities without sufficient supply. While Cape Town’s water crisis has been welldocumented, Gauteng, the economic heartland of the SA economy, has its own water scarcity issues, exacerbated by major delays in phase II of the Lesotho Highlands Water Project (LHWP).
The first part of phase II of the LHWP was meant to come online in 2018, but has been delayed until 2025. Phase II is expected to increase the supply rate of 780m cubic metres a year incrementally to more than 1.26bn cubic metres a year. (See sidebar.)
South Africa currently consumes between 15bn and 16bn cubic metres of water a year, but has a water yield of 15bn cubic metres a year, according to consultancy firm Green Cape’s 2018 water market intelligence report.
Environmentalist and water expert Anthony Turton says the delays in the LHWP have placed the Gauteng province at risk of water shortages until 2025.
Mike Muller, professor at the Wits School of Governance and a former department of water affairs director-general, agrees. “If we [Gauteng] have a drought like Cape Town has had, we will be in serious trouble,” he says.
The Institute of Risk Management South Africa ranks the water crisis in South Africa in its 2017 report as the second-highest risk. The highest risk is increasing corruption.
Consumption exceeds supply
South Africa is the 30th driest country in the world, and its water supply is currently under major stress. Yet, average per capita consumption sits at 233 litres per day, compared to the international benchmark of 180 litres per day.
Agriculture is the major consumer, using 62% of our water supply, followed by municipalities with 27%.
While SA officially became a water-constrained country in 2002, the last time an empirical study of its water resources was done was in 1988, according to Turton.
Recent research conducted by the Water Research Commission shows that SA’s water resources are less than the 1988 data suggested.
“The numbers have been getting progressively lower,” says Turton. He suggests that this backs up the belief that the impact of climate change is being felt.
Major investment required
Over the next decade, investments of over R70bn a year in water infrastructure will be required to ensure security of supply, according to Green Cape’s report.
Yet the SA public sees news reports about the national department of water and sanitation (DWS) being broke.
For years alleged corruption involving water infrastructure have been ventilated in the media. Earlier this year, Parliament’s Standing Committee on Public Accounts (Scopa) resolved to establish a commission of inquiry into the affairs of the department, which has been described as being in a “financial crisis”.
New minister Gugile Nkwinti, who took over from Nomvula Mokonyane, has told Scopa that the current organisational structure within the department makes it near impossible to hold anyone accountable for the R686m of wasteful expenditure during the 2016/17 financial year.
The Special Investigating Unit is busy with civil action against contractors and DWS officials to claw back some of the irregular expenditure, while still investigating some water-related cases.
However, Nkwinti has publically stated that he is going to give guilty DWS officials a second chance, insisting he will not “condemn them”.
Muller says Nkwinti’s decision to forgive guilty officials means attempts to rebuild the department are starting off a bad base.
Opposition politicians have insisted that former minister Mokonyane, who is now the minister of
communications, is to blame for the mess.
Mokonyane has repeatedly denied any wrongdoing during her term at the department and when finweek contacted her for comment, her spokesperson referred finweek to press releases on the DWS website published during her term.
The department of water and sanitation did not respond to requests for comment.
Turning the department around
Muller suggests that, similar to the split of African Bank, the water department should be split into a “good” and “bad” department, where the “bad” department would include all projects that are very costly but don’t really meet a need. Describing these projects as ways to “siphon off money”, Muller says National Treasury’s regional bulk infrastructure grants have been used as a “gravy train”, incentivising the use of big solutions, rather than smaller-scale projects which can be effective.
Claire Pengelly, from Green Cape’s water division, agrees and says all solutions should be considered, especially local smaller solutions, which would require less involvement from the department and will allow municipalities to secure their own water future.
However, some thinking needs to go into the mechanisms and funding of these projects, she says.
Planning and monitoring
A major concern right now is that with the national department having run out of money, cutbacks are being made to the planning budget. “If that system collapses, we are driving in the dark,” Muller says.
Complicated computer modeling is used to drive the planning and operations involved in managing SA’s water supply systems – practices that are required in order to flag potential problems early.
Muller says the impact of climate change on South Africa’s water supply is uncertain and the country needs intensive monitoring to pick up changes if and as they occur. “Water is going to be affected by climate change,” he says. “We need to adapt.”
From a water management perspective, level
restrictions are key and demand reduction has a “huge” role to play, says Pengelly. “You can’t build your way out of a crisis,” she says.
Restrictions should be considered aggressively, Pengelly says, adding that enforcement is key to its success.
One thing is clear – government doesn’t have the required R700bn to invest in water infrastructure over the next decade.
This means serious thought is going to have to go into private participation in water infrastructure.
Turton estimates that it is going to cost R800bn just to repair existing water infrastructure. Once you look at upgrading infrastructure and rolling out new infrastructure he expects the number to balloon past a trillion rand.
He says the “war on white monopoly capital” and the ANC’s proposed changes to the Constitution to explicitly allow land expropriation without compensation have chased away significant foreign direct investment into the country and now SA faces significant capital constraints.
“How do we grow our economy at 6% per annum when we have constraints on water and capital? How do we attract capital, technology and skills back into the water sector?”
Muller says that water is not very “amenable” to private sector players wanting to “come in and make money”. Global practice has shown that often incentives are created for the private sector player to do the wrong thing, he says.
Green Cape’s report identifies water efficiency, water reuse, desalination, water metering and monitoring, and alternative water supply as key areas where opportunities are opening up for private sector players.
Pengelly says there has been a lot of talk about private sector participation in the water sector but no real movement, with very few public/private partnerships in water.
“There has been no real thinking,” she says. “What will it look like?”
Questions need to be asked about how private sector players are attracted to a sector where there is huge risk. “How do we reduce that risk to make it a viable commercial opportunity?” she asks.
Gugile Nkwinti Minister of water and sanitation
Nomvula Mokonyane Former minister of water and sanitation