- South Africa’s Department of Water and Sanitation, in collaboration with the Development Bank of Southern Africa (DBSA) and the South African Local Government Association (SALGA), has put in place an office to support municipalities in establishing partnerships with the private sector.
- Mismanagement, poor maintenance and poor investment in water and sanitation infrastructure by municipalities is one of the biggest challenges in the water sector currently.
- New Water and Sanitation Minister, Pemmy Madojina, said this when she tabled the department’s Budget Vote in Cape Town on Friday.
While South Africa is doing well in terms of mobilising private sector finance for investment in national water resource infrastructure, Majodina said it is not doing so well in terms of private sector financing of municipal water and sanitation infrastructure.
“Aging infrastructure, pipe leaks and lack of operation and maintenance, among others, are some of the main causes of high levels of non-revenue water in municipalities. For example, the water partnerships office is currently supporting the eThekwini, Mangaung, Buffalo City, Nelson Mandela Bay and Tshwane municipalities to mobilise private sector finance for the replacement of leaking municipal water distribution pipes which result in high levels of non-revenue water,” Majodina said.
She added that other focus areas include private sector investment in municipal water-reuse and desalination projects.
Water and Sanitation allocated over R130 billion budget
The Department of Water and Sanitation has been allocated an amount of R134.909 billion over the Medium-Term Expenditure Framework (MTEF).
Presenting the department’s Budget Vote in Parliament on Friday, Water and Sanitation Minister, Pemmy Mojodima, said the budget includes allocations of R42.604 billion, R46.362 billion and R45.941 billion in the 2024/25, 2025/26 and 2026/27 financial years respectively.
The department’s budget consists of two components, including the main account and water trading entity.
“On the main account, the department has been allocated R72.989 billion over the MTEF. This consists of allocations of R24.074 billion, R25.159 billion and R23.754 billion in 2024/25, 2025/26 and 2026/27 respectively.
“Included in the main account budget are conditional infrastructure grants for municipal water services totalling R36.305 billion over the MTEF. This includes R20.130 billion for the Regional Bulk Infrastructure Grant and R16.175 billion for the Water Services Infrastructure Grant,” Majodima explained.
She noted that the water trading entity is mostly funded through revenue collection from the sale of water, but also receives some transfers from the fiscus for infrastructure projects.
The water trading entity has been allocated R61.920 billion over the MTEF, including R18.530 billion, R21.202 billion and R22.187 billion in 2024/25, 2025/26 and 2026/27 respectively.
The department, said the Minister, will make every effort to ensure that the resources are deployed as efficiently as possible “to ensure that service delivery reaches our communities”.
The department will also continue to clear all the department’s historic incidents of unauthorised, irregular, fruitless and wasteful expenditure in collaboration with National Treasury and the law enforcement agencies.
Water resource infrastructure agency
The Minister further announced the establishment of the National Water Resource Infrastructure Agency, which will own all the national water resource infrastructure assets and obtain the revenue streams associated with those assets.
This will enable the agency to borrow additional funds on the strength of its balance sheet.
“The establishment of the agency will be one of the major focus areas of the department over the coming year. Parliament passed the National Water Infrastructure Agency Bill before it rose in May this year and we are expecting it to be signed by the President shortly.
“This will involve the transfer of all the national water resource infrastructure assets currently owned by the department to the agency, as well as the staff responsible for the operation and maintenance of the assets,” Majodina said.
The Trans Caledon Tunnel Authority (TCTA) will be merged into the National Water Infrastructure Agency, along with the water trading entity in the department, which is responsible for collecting revenue from the sale of raw or untreated water to the water boards, municipalities and industry.
“A transition plan is in place, and we aim to complete the establishment of the agency by May 2025. During this financial year, the department will be focusing on implementing the major structural changes and staff transfers associated with the establishment of this agency,” the Minister said.
The Minister shared her intentions to ensure that there is continuity of the various reforms and improvements that were initiated by the former Minister Senzo Mchunu. Many of them were mandated by the National Development Plan and the Presidency’s Operation Vulindlela.
Author: Bryan Groenendaal
