Voelvlei Dam near Cape Town. Picture: REUTERS
Voelvlei Dam near Cape Town. Picture: REUTERS

Nelson Mandela Bay’s water crisis is more severe than the one Cape Town faced last summer, with dam levels dropping to less than 20% and no meaningful rainfall in sight. The whole of Gauteng is at risk of severe water restrictions. So is eThekwini. These risks are no longer small and local; they have become large and systemic, affecting all of SA. Unless they are addressed, the costs to the economy and citizens are likely to dwarf those already incurred in Cape Town.

The solution lies in four key areas:

The relationship between cities and the national department of water and sanitation should change;

Commercial financing should play a much larger role, supported by cost-recovery tariffs;

Investment decisions should be made with the long term in mind, unaffected by short-term election cycles; and

Sound leadership will be required to achieve the necessary shifts.

Water supply failure in a city has serious consequences. At an individual level, having no piped water is highly inconvenient. At a community level, low water use and inadequate sanitation increase health risks. At the level of the economy, water insecurity affects investor confidence and reduces economic growth. At a political level, water crises have toppled governments, as in the case of Bolivia.

Graphic: KAREN MOOLMAN
Graphic: KAREN MOOLMAN

The crisis in Cape Town caused significant economic harm — billions of rand in lost revenue and investments. There is a high and growing risk of water crises in Gauteng, eThekwini and Nelson Mandela Bay.

In the summer of 2016-17, seven of SA’s eight metros had to restrict supplies due to low dam levels. Augmentation projects in three areas are late by many years. Lack of timely investment is a fundamental reason for the crisis in most areas. But poor management, with ageing and deteriorating assets, is also to blame.

The combination of low investment and poor management is fatal — water availability and reliability are reduced, and water quality is compromised. Water is a capital-intensive business. Because water infrastructure can degrade slowly, problems may not be recognised until it is too late. It takes years to plan and build new infrastructure. Consequently, at the point of system failure, no palatable remedies are available, and the political consequences may be severe. Timely investments in the required infrastructure, appropriately managed, are key to SA’s future water security. But current infrastructure spending is inadequate and is often poorly allocated and managed.

The following four shifts are necessary:

From blame to accountable partnering. Responsibility for investment in water infrastructure lies with national and local government. It is tempting and too easy for each sphere of government to avoid responsibility when problems arise. In Nelson Mandela Bay, the known necessary investments in supply augmentation were thus long delayed.

A stronger and more explicit partnership approach between cities and the government is needed. Effective partnerships require clear mandates, a suitable convener, the right people to make decisions, regular meetings for effective communication, and accountability for implementation, along with consequences. The partnership should include information gathering and analysis, developing water resource management and augmentation plans for the "problem shed" (the water management areas supplying water to the metro area), monitoring the implementation of these plans, and regular updates as circumstances change and new information becomes available.

From reliance on grants to greater use of commercial financing, supported by cost-reflective tariffs. Many municipalities have become overreliant on grant financing for water investments. But the fiscal space for government grants has narrowed considerably. Limited grants will need to prioritise social investments, and investments in water infrastructure will have to make greater use of loan financing. Stronger incentives for cash-backed depreciation provisions and their use for asset renewal should be considered. This will require higher water tariffs that recover costs, with subsidies limited to the provision of a basic service.

From short-term incentives to long-term rewards. Infrastructure is capital intensive and requires long-term planning and financing. However, long-term imperatives are not aligned with short-term incentives associated with political cycles. Consequently, the national and local government tend to underinvest in capital assets and neglect maintenance. The problem of underspending is exacerbated by patronage and corruption in the procurement of capital goods and services. This results in inappropriate spending priorities and outcomes that do not represent value for money. Water infrastructure is thus ageing, and performance has declined throughout the value chain, from dams, pipelines, pumps, treatment works and distribution networks to water meters, sewers and wastewater treatment. Technical and commercial water losses average 35% in the metros and compares poorly with top-performing cities in developing countries such as Phnom Penh in Cambodia where there is less than 15% water loss.

Water quality is also a concern. The deteriorating quality of surface water increases the cost of treating the water. The main reason for the deterioration is the poor performance of wastewater treatment plants, which stems from inadequate maintenance and ineffective operation. The department of water & sanitation reported that 56% of municipal wastewater treatment works are in a poor or critical condition.

Weak governance is the root cause of poor performance. The antidote is the same as has been applied by President Cyril Ramaphosa’s administration to Eskom: appoint competent leadership and increase transparency and accountability. The national and local government should consider the benefits of deeper structural reforms, including the institutional separation of the water provision function from local government. Investment decisions should be made with the long term in mind.

From crisis management to public leadership. SA is water scarce. Fresh-water resources are already used intensively. Water emergencies are caused by poor planning, infrastructure management and governance, and can be triggered by shocks such as a drought. Sound management, timely water resource development, and good contingency planning for more severe and frequent droughts or floods are critical, especially in the context of the unpredictable effects of climate change.

It is thus misleading to see the current and emerging water crises as the result of "drought", requiring a "drought response". SA is a permanently water-scarce country. It is therefore more accurate to characterise the situation as arising from failures in infrastructure management and governance. The choices are stark and need to be made very soon.

Eberhard is an economist and public policy professional.

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