The Department of Water and Sanitation, in collaboration with the Development Bank of Southern Africa (DBSA) and the South African Local Government Association (SALGA), has established an office to support municipalities in forming partnerships with the private sector. This initiative aims to address the significant challenge of poor investment in water and sanitation infrastructure by municipalities.
Water and Sanitation Minister Pemmy Majodina highlighted this development while presenting the department’s Budget Vote in Cape Town on Friday. Although South Africa has made strides in mobilizing private sector finance for national water resource infrastructure, Majodina pointed out that private sector financing for municipal water and sanitation infrastructure remains inadequate.
“Aging infrastructure, pipe leaks, and a lack of operation and maintenance are major contributors to high levels of non-revenue water in municipalities,” Majodina said. She noted that the water partnerships office is currently assisting municipalities such as eThekwini, Mangaung, Buffalo City, Nelson Mandela Bay, and Tshwane in mobilizing private sector finance to replace leaking municipal water distribution pipes.
Majodina also mentioned that other focus areas include private sector investment in municipal water-reuse and desalination projects.
National Water Resource Infrastructure Agency
In a significant move, Majodina announced the establishment of the National Water Resource Infrastructure Agency. This new entity will own all national water resource infrastructure assets and manage the associated revenue streams, enabling it to borrow additional funds based on its balance sheet strength.
“The establishment of the agency will be a major focus area for the department over the coming year,” Majodina stated. She noted that Parliament passed the National Water Infrastructure Agency Bill in May, and it is expected to be signed by the President soon.
The agency’s formation will involve transferring all national water resource infrastructure assets currently owned by the department to the agency, along with the staff responsible for their operation and maintenance. The Trans Caledon Tunnel Authority (TCTA) and the water trading entity within the department, which handles revenue collection from the sale of raw or untreated water, will be merged into the new agency.
“A transition plan is in place, and we aim to complete the establishment of the agency by May 2025. This financial year, the department will focus on implementing the major structural changes and staff transfers necessary for the agency’s establishment,” Majodina said.
The Minister emphasized her commitment to ensuring the continuity of reforms and improvements initiated by former Minister Senzo Mchunu, many of which were mandated by the National Development Plan and the Presidency’s Operation Vulindlela.