The various projects under the umbrella of the Trans-Caledon Tunnel Authority (TCTA) are gaining traction, said TCTA CEO Percy Sechemane when providing an update on the state of the multiproject entity.

This is despite the challenges faced, including the fragmentation of responsibilities within the sector.

“In the year 2022/23, many of those challenges were overcome to allow funding to be raised,” he says, noting that, throughout the 2022/23 financial year, the TCTA diligently pursued its mandate, engaging with financial markets to facilitate the successful implementation of essential bulk raw water infrastructure projects.

Discussing some of the projects, which are at various phases of preparation, implementation and closure, he pointed to two of the projects which are moving from the preparation stage into implementation, namely the uMkhomazi Water Project Phase 1 (uMWP-1) and the Berg River Voëlvlei Augmentation Scheme (BRVAS).

The uMWP-1 aims to augment the in- deficit uMgeni System, which is the main water source supplying about six-million people and industries in the Durban and Pietermaritzburg regions, from 394-million m3/y to 608-million m3/y.

The project comprises the 81-m-high Smithfield dam and associated infrastructure in the uMkhomazi river near Bulwer, water conveyance infrastructure, including a 33 km, 3.5-m-diameter raw water tunnel from the Smithfield dam reservoir to the uMlaza river valley and a 5.1 km, 2.6-m-diameter raw water pipeline from the outlet portal of the transfer tunnel to Umgeni Water’s proposed water treatment works in the uMlazi river valley.

The R23.2-billion project is in the concept design phase, and the tender for the professional service providers for the dam and water conveyance infrastructure is currently in the market.

The TCTA further facilitated negotiations between Umgeni Water and the six water user municipalities in its area of supply on the water user agreements, with the draft agreements approved by the respective councils for public participation in terms of the Municipal Finance Management Act.

The funding model was finalised with the approval by the National Treasury of a budget under the Budget Facility for infrastructure for a 25% capital grant and a 25% interest-free loan to improve the affordability of the project to end-users.

The loan will be made available through the Infrastructure Fund, while the balance will be funded through commercial debt to be serviced from water tariffs.

The TCTA is also undertaking the BRVAS project, which was identified as the preferred option to augment the yield of the in- deficit Western Cape Water Supply System in the short term and will operate during the winter months, abstracting water from the Berg river and pumping it to the Voëlvlei dam.

The R1.2-billion project comprises a diversion weir in the Berg river, a pumpstation and a 6.3-km-long pipeline and ancillary works, improving the yield of the Western Cape Water Supply System by 23-million m3/y.

There has been good progress made in the implementation activities of the BRVAS during the year under review, Sechemane says.

The TCTA is currently negotiating with three lenders on the proposals received and the tender documents for the professional services provider for the detailed design will be issued during this financial year.

The TCTA chairperson Precious Sibiya points to the start of the negotiations following an approved borrowing limit and a successful market bid, underscoring the organisation’s effective debt management, maintaining a 15% liquidity margin across all projects, aided by prompt bulk water revenue receipts from the Department of Water and Sanitation (DWS).

Besides the two projects in the preparation phase, the TCTA continued to do work on the R42.5-billion Lesotho Highlands Water Project Phase 2 (LHWP 2).

Phase 2 comprises the Polihali dam and a transfer tunnel to Katse dam and will augment the water supply in the Vaal River System by 480-million m3/y.

The Vaal River System supplies water to 46% of the country’s economy and 33% of its population.

“The TCTA was ready with funding for the LHWP 2 when the Lesotho Highlands Development Authority needed to award contracts,” Sechemane adds, highlighting a R3.7-billion loan concluded with the New Development Bank established by BRICS (Brazil, Russia, India, China and South Africa).

Meanwhile, the full implementation of Phase 2A of the Mokolo–Crocodile River (West) Water Augmentation, or MCWAP-2A, project, which is intended to increase the water supply to State-owned power utility Eskom for the Medupi and Matimba power stations, mining group Exxaro, the local municipality and others, has started.

Sibiya, reflecting on a transformative year, highlights the overachievement in securing funding for MCWAP-2A, which is indicative of robust market interest in well-structured ventures.

“uMWP’s first phase, having resolved affordability issues with a strategic mix of fiscal grants and interest-free loans, is progressing well, enhancing the Umgeni System’s water security,” she says.

The R12.3-billion project, which is in the fundraising and tender design and procurement phase, comprises a 125 m3/y abstraction weir at the Crocodile river, pumpstations and a 160 km pipeline to transfer 75 m3/y of water from the Crocodile river, near Thabazimbi, to the Lephalale area, as well as a River Management System, initially designated for completion in a third phase, which is now incorporated into Phase 2A.

While celebrating these achievements, the TCTA remains aware of the historical complexities within South Africa’s water sector.

“We remain optimistic that the planned National Water Resources Infrastructure Agency will emerge as a problem-solver in these trying times,” Sibiya continues, pledging the TCTA’s unwavering support and commitment towards working hand in hand with the DWS, ensuring the agency’s eventual success.

“Our shared vision revolves around the belief that the agency will be instrumental in resolving the fragmented nature of the water sector and further bolstering water security for all South Africans,” she concludes.

During the 2022/23 financial year, the TCTA received an unqualified audit opinion from the Auditor-General, affirming the soundness of its financial practices.