Connecting Waterpeople

Sustainable PPPs the future of water commodities in South Africa

About the blog

Zaid Railoun
Investment Associate experienced in both private and public organizations and international market research analyst in spaces of water and renewable industries in Sub-Saharan Africa.
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Themes

  • Sustainable PPPs the future of water commodities in South Africa

Globally, there is an increasing demand for clean water particularly due to the scarcity of water, with 2 billion people living in countries experiencing high water stress. In South Africa, water shortage is felt across many strategic sectors of the economy because of rapid population growth, climate change effect leading to drought and rising sea levels accelerated by climate change, water-related pollution risks, inconsistent governance and ageing of water infrastructure. If the current rate of water usage and management continues, the demand is likely to exceed the supply. Over a third of South Africa’s water supply is lost due to ageing and leaking infrastructure before it can be used. Public infrastructure, particularly at the municipal level plays an important role in achieving increased levels of economic growth and social upliftment. However, the mismanagement of public infrastructure and the inability to effectively maintain it could result in limited water required for economic development, which can affect other sectors such as education and health.

The use of Public-Private Partnerships (PPP’s) in the water services sector in South Africa is needed to address issues that might be catastrophic for future generations. But even this must be adapted through investments in institutions and water infrastructure, looking at ways to always make people the priority. This is echoed in the realism of People-first PPPs as stated in the webinar series ‘infrastructure & Financing’ by David Baxter.

Over a third of South Africa’s water supply is lost due to ageing and leaking infrastructure before it can be used

The People-first PPP approach ensures that out of all stakeholders, ‘people are on the top’. Its focus is on improving the quality of life of the communities, particularly those that are fighting poverty, by creating local and sustainable employment. Additionally, the People-first PPP approach aims to eradicate hunger and promote well-being, access to water, energy, transport, and education for all. This will also support social cohesion. The People-first PPP’s must expand in scale and speed, with more people having access to better services.

Our hope is for the new National Water Resources Infrastructure Agency (NWRIA) to be more transformable and not transactional as our other state-owned enterprise (SOE), i.e. South Africa’s Electricity Supply Commission (Eskom). The establishment of the NWRIA was announced by President Cyril Ramaphosa during his State of the Nation Address (SONA) in February 2021. The strategic intent of the Agency is to be a well-resourced, state-owned enterprise (SOE) with appropriate governance structures, to ensure greater efficiency and accountability in the socio-economic development and management of water resources infrastructure. It would also be prudent for the new agency and the Department of Water and Sanitation (DWS) to work adjacent to the private sector with organizations. In the future the agency will act as the implementer of national water infrastructure while the national Department of Water and Sanitation will continue to monitor water demand and availability and do the over-arching planning to meet future demand. It will work with the agency to identify the best options to meet those needs. The agency will then implement the agreed strategy. It will also operate the national bulk water systems and collect revenue, making it clearly accountable for the management of its systems.

The partnership between NWRIA and DWS would ensure non-politicized management of South Africa’s water allocations and infrastructure management. It is envisaged that soon an independent water sector regulating authority shall be established to ensure effective regulation of all role players in the water sector value chain.

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