SA Facing Imminent Water Crisis in Face of Widespread Political Apathy

In the wake of ongoing water shortages in the Western Cape and other regions in South Africa, analysts are calling for a cohesive approach to what is a fast worsening problem. With the hospitality sector in the Western Cape all but on its knees, South Africa is facing a host of further costly fallouts as shortages continue.

“Our view is that water presents the next major crisis for the country,” says Mike Peo, Head of Infrastructure, Energy and Telecommunications for Nedbank Corporate and Investment Banking. “Climate change is really having an impact, and the droughts we are experiencing appear to be more severe than is the norm.”

Added to this, Peo notes that South Africa suffers massive water losses as a result of ageing infrastructure coupled with years of inadequate maintenance of water distribution networks.

The City of Cape Town has recently put out an RFI for short-term solutions to bring potable water to the city.

“We are currently working with developers to see if there are technical solutions here, and our role would be to provide the funding for water infrastructure,” says Peo.

In certain areas of Limpopo, he warns that people are spending their entire salaries on obtaining drinking water which is both economically and opolitically unsustainable. The regional problems include ageing infrastructure, (water loss) and increasing urbanisation – with people moving to nodes where there are insufficient established water supplies.

A Cohesive Framework

According to Peo, trying to solve the water issue is exponentially more complex than, for example, tackling energy challenges. This is because responsibility for water supply is fragmented and delves down to local councils and municipalities. In addition, the ownership of infrastructure and networks is also highly complex and more widely distributed.

“This issue requires a national plan and strong leadership, to formulate a cohesive strategy which can ultimately be rolled out at a municipal level,” he explains.

He says that while there is recognition of the problem, the ‘pace of engagement’ with the private sector is slow, given the severity of the issue. Furthermore, solutions are being implemented on an ad hoc basis rather than on a cohesive, national level.

“The private sector is capable of assuming the same role as they have fulfilled with IPPs within the energy space – in that the private sector is needed to replace the network infrastructure, build the dams and reservoirs. In my view, this needs a classical Public-Private partnership (PPP) framework – and there are many examples around the world of such a framework being successfully implemented.”

Looking ahead, it is clear that there is a leadership and strategy vacuum that needs to be addressed in order to find sustainable, long-term solutions to SA’s deepening water supply challenges.

 

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By | 2018-03-07T11:52:42+02:00 July 11th, 2017|Finance, General, Investment Banking, Renewable Energy|0 Comments

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