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The sector is currently under immense pressure due to a combination of factors The water sector in South Africa is under immense pressure, however efforts are being made at national and local levels to expedite infrastructure projects by mobilising the private sector. This represents a business opportunity for water sector technology, products and service providers and investors interested in the public water sector market, says a reference guide produced recently by non-profit organisation GreenCape and the Western Cape Government. The guide – Entering the public water sector market – is particularly pertinent for water and wastewater businesses and investors looking to start or grow their public sector market share. It covers understanding the water sector, and procurement legislation, models and requirements, to innovation platforms. The brief provides an overview on how to best position businesses when bidding for public sector projects. “South African metro municipalities are investing significantly in water and wastewater treatment, sanitation and stormwater infrastructure, providing key opportunities for businesses in these areas.” Municipal spend on water infrastructure “The combined metro planned water and sanitation infrastructure spend over the medium term (2023/24-2025/26) is approximately R54.6 billion, of which R22.4 billion is planned by the City of Cape Town (CCT). “Collectively, the Western Cape local municipalities are planning to invest ~R7.7 billion in water infrastructure over the same period,” says the guide. It points out that legislative updates such as the Public Procurement Act (2024), the National Water Resources Infrastructure Agency (NWRIA) Act (2024) and other policies and guidelines aim to streamline procurement processes, promote transparency, and involve the private sector more actively in water infrastructure projects. “The water sector in South Africa is currently under immense pressure due to a combination of factors, including climate change, ageing infrastructure, and inadequate management practices. “Climate change is exacerbating water scarcity, flooding and water quality risks in many parts of South Africa.” The guide says ageing infrastructure due to underinvestment and lack of maintenance has led to an increase in non-revenue water from 37% in 2014 to 47% in 2023. “This inefficiency intensifies the supply shortages, especially in urban areas where water demand is projected to grow by 3.5% annually. Without intervention, the national water deficit could reach between 17% and 22% by 2030.” In addition to the system inefficiencies, the guide says, municipalities are facing severe financial and operational constraints. “Currently approximately 60% of municipalities are classified as financially distressed, which hampers their ability to invest in and maintain critical water infrastructure (National Treasury, 2024). Many municipalities also lack the technical expertise required to manage complex water projects effectively.” Government policy to improve the sector The National Water and Sanitation Masterplan outlines a strategic approach to upgrade infrastructure, secure water resources and enhance governance across the sector. The masterplan also estimated that ~R900 billion in investments is needed over the next decade to address the sector’s infrastructure needs, modernise water facilities and ensure efficient water resource management. The expenditure on water resource and bulk water infrastructure projects for the 2022/23 fiscal year was R18.6bn and is expected to increase at an annual rate of 11.7% to R25.9 billion by the 2025/26 fiscal year, according to National Treasury. The guide says this demonstrates a shortfall in investment in water infrastructure projects. “At a national level, efforts are being made to increase the involvement of the private sector to assist in solving the water challenges. At a municipal level, infrastructure projects looking into the refurbishment, expansion and building of new water assets are underway. “This presents an opportunity for businesses to bid for work to provide consultation services, construction, technologies and other project consumables.” The brief gives an overview on how to best position businesses when bidding for the projects. |
