SA water crisis: Upgrades, private deals to be prioritised over councillor salary hikes

• Water and Sanitation Minister Senzo Mchunu is planning to overhaul the South Africa's water industry. 
• He expects Parliament in coming weeks to approve the creation of a National Water Resources Infrastructure Agency to oversee major projects, and later in the year to amend existing legislation.
• The changes will also earmark income from water provision for the upgrade and repair of infrastructure and to fund partnerships with private companies, rather than increasing "salaries for councillors," he said.
• For more financial news, go to the News24 Business front page.

The sweeping reforms are intended to attract private investment, enforce accountability for non-performance and remedy a crisis that has seen outages nationwide, including this month across a swath of Johannesburg, a city of around six million people.

"I am very, very, very worried," Mchunu said in an interview at a sustainability conference in Johannesburg on Wednesday. "I want this thing to go."

Mchunu’s plans come as opposition politicians seize upon the interruptions as evidence that water supply is a developing crisis in Africa’s most industrialised economy, as they campaign ahead of the May 29 ballot. The country is already hindered by the failings of the state logistics company to fix snarled ports and freight-rail lines. Almost daily power cuts, one of which interrupted Mchunu’s speech at the conference, are also hindering economic growth.

Mchunu expects Parliament in coming weeks to approve the creation of a National Water Resources Infrastructure Agency to oversee major projects, and later in the year to amend existing legislation.

Those changes will see municipalities tasked with appointing water service providers whose licenses to operate will depend on a level of performance. If those standards aren’t met, municipalities will have to appoint alternative providers, he said.

The changes will also earmark income from water provision for the upgrade and repair of infrastructure and to fund partnerships with private companies, rather than increasing "salaries for councillors," he said.

Those providers could be existing agencies such as Johannesburg Water, with new rules about where its revenues go, private companies or other models, he said. 

"Municipalities are unlikely to turn themselves in the near future into formidable providers of water," he said in an earlier speech. "Indications are that it’s going to take a while and people want water now."

Other changes he sees include an independent body to set prices and tariffs for water in three-year cycles to provide certainty for consumers and investors. Even those who live in shanty towns should pay, he said, because if they can afford mobile phones and televisions, they can afford water.

Mchunu bemoaned the state of the water distribution system, saying Johannesburg loses about two fifths of the treated water it gets through leaks and theft. eThekwini Municipality, in which the city of Durban is located and 3.9 million people live, loses 46%.

'My Disappointment'

Consumption needs to fall as the country is short of water because of its climate and "that is not going to change," he said. 

Still, progress is being made. 

The second phase of the R40 billion Lesotho Highlands Water Project, which supplies water into the river system that Johannesburg and the wider commercial hub of Gauteng relies on, had stalled when he became minister in 2021 and has now been revived. It’s expected to be completed in 2028.

He listed a further R73 billion of projects under way but said Johannesburg Water alone needs R27 billion and will have to tap the private sector. 

"I’m still reviewing legislation, regulations, and I’m doing it late," he said, having explained that the department was short of senior staff when he joined. "It should have been done years ago. That’s my disappointment."