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Infrastructure development and private investment key to the plan
Increased investment in infrastructure and partnerships with businesses are two of the main interventions announced for the public water sector in South Africa by Finance Minister Enoch Godongwana.
In the 2024 Medium Term Budget Policy Statement (MTBPS) he delivered yesterday (30 October), Godongwana emphasised the need for infrastructure investment to be bolstered.
“We are establishing dedicated capacity to plan, prepare and design programmes that will generate a credible pipeline of projects that can be taken to the market,” he said.
An example of this is the Department of Water and Sanitation’s Water Partnerships Office which has two priority programmes for non-revenue water (the revenue lost from leaking water infrastructure) and recycling wastewater for different uses.
“The private sector can participate through performance-based contracts and PPPs,” said Godongwana.
He confirmed that performance-based contracts for the non-revenue water programme are being fast-tracked in the eThekwini, Tshwane, Nelson Mandela Bay, Buffalo City and Mangaung Metros.
“In water, the focus is on creating independent economic regulation and strengthening the local water services regulatory environment,” he said.
Water projects in the SA pipeline
The MTBPS document on infrastructure also listed the following water projects that have been approved for execution using the government’s new appraisal and financing system from 2025/26:
City of Johannesburg: Alternative Wastewater Treatment Technology PPP to convert 500,000 tonnes of solid waste per year to energy.
eThekwini: Non-Revenue Water Project for infrastructure upgrades to reduce leaks.
Department of Water and Sanitation: Olifants Management Model Programme Phase 2D and 2F for bulk distribution water infrastructure, including pipelines reservoirs and reticulation.
Godongwana said the government is making “a concerted effort to increase the pool of funders to diversify public infrastructure financing through new mechanisms and instruments. These include build-operate-transfer (BOT) structures and other concessions.”
But municipal debt remains a concern, with Metros owing bulk water authorities more than R19 billion.
Municipalities, in turn, are however owed more than R355bn by residents and businesses in unpaid water and electricity bills.
Responding to climate-related disasters
The Minister said that the increasing frequency and intensity of climate disasters is costly, and “we must proactively work to reduce their impact on the fiscus and on society.”
“One aspect of disaster financing is response and rehabilitation, after an event occurs. A slow response to these emergencies results in communities having to wait lengthy periods before they are finally assisted.
“The recommendations of the disaster risk financing strategy will be implemented from 2025 to improve readiness and response time.
“The National Treasury is undertaking a detailed analysis of the experience of local governments regarding their access to emergency financing and their ability to disburse it.
“This analysis will help us better understand their capacity to manage a multi-layered, disaster risk finance approach. It will look into the willingness of municipalities to independently manage their financial response to disasters, existing incentives to invest in readiness, and their ability to set aside sufficient funds for their response.” |
