Public and private organisations in the water sector and financiers are ready to build water infrastructure projects and deal with demand, as well as water loss and delivery barriers, to improve water management and long-term security.
These projects include bulk water supply infrastructure, and infrastructure repair and maintenance works.
A panel of six experts acknowledged the key challenges hampering the improvement of water security and the development of sustainable infrastructure during the water and sanitation and human settlements roundtable discussion held as part of the Sustainable Infrastructure Development Symposium on June 23.
The experts provided key objectives and methods to overcome them, and committed to playing a key role in furthering the long-term infrastructure development required to reduce the country’s vulnerability to droughts and improve its water security.
National Housing Finance Corporation chairperson Sizwe Tati delivered an address on behalf of Water and Sanitation Minister Lindiwe Sisulu, during which he noted dire gaps in effective water use and management, particularly at municipal level, where inefficient water use, water losses, lack of skills, inappropriate and ageing infrastructure, as well as insufficient maintenance and investment, accentuated supply and quality problems.
Nonrevenue water comprises about 41% of all water use, including water losses that comprise about 35% of all water use. He also highlighted that more than three-million people remain without access to basic water and that only 64% of South Africans have reliable water supply. There is also a R33-billion-a-year funding gap over ten years to prevent a 17% water deficit by 2030.
“Given the limited public funding available, also in the aftermath of the Covid-19 pandemic, it is important to ensure that financially viable projects financed by private and public funds are prioritised, and we must build on the successes to date and mobilise loan finance to supply urban and industrial activity,” Tati said.
“The department is reviewing and prioritising the implementation of the strategic water resource development projects with the aim to expedite the development of planned and ongoing national infrastructure projects to ensure their timely completion. These will maintain the water security of urban economic centres, such as the Gauteng region, eThekwini, Nelson Mandela Bay and the City of Cape Town.”
Tati added that the Trans-Caledon Tunnel Authority will serve as the funding and liability manager for the following projects, which are implementation ready and prioritised for private-sector funding.
The R32-billion Lesotho Highlands Water Project Phase 2 will augment supply to the Vaal system to specifically meet the increase in water demand from Gauteng and other downstream users.
The R12.4-billion Phase 2a of the Mokolo and Crocodile West Water Augmentation Project will increase water supply for energy generation at the Medupi power station and coal mining project.
The R23.2-billion uMkhomazi project will augment water supply for the eThekwini metropolitan.
Further, the R798-million Bergvlei-Voëlvlei augmentation scheme will increase water security to the City of Cape Town. This transfer scheme will ensure that the winter rainfall runoff will augment storage in the existing Voëlvlei dam.
He added that more projects are ready for development by public–private partnerships and that the funding gap needed to be reduced through policy reviews, enhanced regulation, the implementation of cost-efficiency measures and proper management to meet user expectations and demands.
Although professional industry body Consulting Engineers South Africa (CESA) CEO Chris Campbell emphasised CESA members’ readiness, he warned that consulting engineering firms, as well as construction companies, cement and aggregate producers, steel producers and civil contractors, could not build capacity and scale up production, only for projects to “vanish three years later”.
If demand for these products and services is sustained, then these companies and projects can use the skills of unemployed people, and create jobs, new companies and a new generation of water and built environment professionals.
Further, South African Forum for Civil Engineering Contractors CEO Webster Mfebe highlighted that all projects must be monitored and subjected to cost and performance benchmarks, as well as asset management and construction standards that reflect global best practices.
“What makes a project successful is maintaining demand through a short-, medium- and long-term project pipeline that is credible and sustainable, as well as open and transparent, so that companies can plan training and local involvement in projects.”
The private-sector finance organisations’ and engineering industry bodies’ representatives on the panel also signalled their willingness to provide funding, alongside government funding, to accelerate the development of water infrastructure and practices.
The Association for Savings and Investment South Africa representative and investment service Ashburton Investments impact investing head Heather Jackson highlighted that, similar to South Africa, funding for infrastructure globally was insufficient and unsustainable to achieve the United Nations Sustainable Development Goals.
“The role of blended finance strategies, such as those we provide, is to work with development banks and funding sources to correctly package and provide attractive risk and reward characteristics so that these investment areas can see much more private- sector investment, including long-dated investments, such as pension funds, and investors who require steady long-term returns that infrastructure can provide.”
Tati acknowledged that water and sanitation investments were not financially sustainable, especially amid the limited fiscal space available to contribute more funding, which, in turn, emphasised the need for private- and public-sector collaboration.
Funding would comprise capital for infrastructure, operational and maintenance costs along the supply chain, the effective management of sanitation services, as well as funding for governance, administration and control, he added.
Campbell noted that, with the signalled change in government policy and development approach, it made more sense to use private- sector capacity in a well-governed manner to supplement and complement the capacity of the State.
He also advocated for change in the way that smaller companies were capacitated and developed as part of infrastructure development, noting that hiring smaller companies that outsourced the work to larger companies added to costs and did not promote capacity development.
An alternative approach would be to leverage companies with sufficient capacity, capabilities and skills, and then bring in local and smaller companies to develop future capacity, he suggested.
Municipal Infrastructure Support Agency CEO Ntandazo Vimba highlighted that local government capacity was crucial, and that partnerships must be fostered to deal with the lack of technical skills and capacity to effectively deliver infrastructure projects that are shovel-ready and bankable.
“Delivering shovel-ready and bankable projects needs engineering capacity, which is currently not present in most municipalities.”
He suggested that private-sector partners and national government work closely with municipalities to build capacity and prepare projects for funding and development.
Vimba also highlighted that closing the R330-billion funding gap over ten years through government and private funding required that the State create an environment to sustain cooperation, primarily through ensuring stability in the water sector, ensuring responsibility of local government and promote accountability and traceability in local government.
Campbell highlighted the significant engineering capacity in the private sector that has offered to partner with local government, municipalities and water boards.
“The crisis is an opportunity for us as a country and collective citizenry to get the country back on track and rebuild the trust deficit that has grown over time.”
Further, research and innovation organisation Water Research Commission CEO Dhesigan Naidoo added that there was significant water research and innovation in the country.
He unpacked a framework for the water sector to not only overcome its challenges but also create new services and industries.
“Using innovative responses, we can not only attain water self-sufficiency but also accelerate our achievement of Sustainable Development Goals,” he said, but emphasised that South Africa must take a regional approach to water security, in addition to its focus on national self-sufficiency, which would foster a more globally economically competitive region.
Water-sensitive designs and organisation of systems can increase water security, alongside smart wastewater management. Further, wastewater is also emerging as a resource for power, chemicals and healthcare data, including monitoring the level of Covid-19 infections in populations.
Naidoo added that better stewardship and management could provide significant gains in local water use, highlighting that the world average consumption per person was about 177 ℓ/d, compared with the local average use of 253 ℓ/d .
“We have been thrust into the Fourth Industrial Revolution. So, why am I confident this [improvement in water security] can happen?
“Covid-19 has done what 50 years of negotiations have not been able to achieve, which is to flatten the landscape and give us an opportunity to change the patterns of production and consumption. Water can serve as a new industry platform.”
While noting that new innovative non-sewage solutions for sanitation and wastewater were necessary to provide sanitation, Naidoo also emphasised that water and sanitation infrastructure reduced the risks of other investments, and was critical to allow for the construction of the industrial framework required for the country.
He said that South Africa must start industrialising water and sanitation, and put people to work to increase water security, the country’s investment potential and its direct earnings from global markets.