Mchunu Calls For Private Sector Partnership To Build Infrastructure 

Water and Sanitation Minister Senzo Mchunu (white hat) visited the Uthukela-Goedertrouw Water Transfer Scheme in Kwazulu-Natal. He has called on private sector players to partner with his department to fast-track multi-billion infrastructure development projects.

Water and Sanitation Minister Senzo Mchunu has called on private sector players to come forward and partner with his department to fast-track multi-billion infrastructure development projects.

Amid crippling water shortage and deteriorating infrastructure nationwide, Mchunu says he has established a partnership office in his department to allow private companies to work with the government to upgrade dams and bulk water pipes in conjunction with the Development Bank of Southern Africa (DBSA). 

Addressing Mvula Trust’s 30th Anniversary celebrations in Midrand on March 19, which he used to give a progress report to stakeholders, Mchunu said he had implemented a raft of measures to improve service delivery and eliminate red tape. This included opening the sector to private investors and stripping municipalities of water service management powers in favour of water boards, non-governmental organizations and private companies appointed and supervised by the same councils.  

Government and industry sources told African Times that some water boards and provincial water utilities allegedly sidelined competent companies with capacity in favour of well-connected firms, which largely failed to deliver on major projects, including the Giyani Bulk Water Project. They fingered the Umgeni Water Board in Kwazulu-Natal, Lepelle Northern Water (LNW) Board in Limpopo and Magalies Water Board in North West, which re-advertised tenders at least twice since last year. 

In some cases, the sidelining of some companies with capacity and infighting over the appointment of senior officials are said to have negatively affected water and infrastructure projects such as the Kwazulu-Natal post floods intervention and other projects in the North West.

The R4.1 billion Giyani project was marred by a 10-year delay until new contractors appointed by the Department of Water and Sanitation turned it around in November last year. Mchunu said he would visit the controversial Giyani project this month after his department “made substantial progress on it”.

Water and Sanitation Minister Senzo Mchunu says he has established a partnership office in his department to allow private companies to work with the government to upgrade or build infrastructure, such as the Jozini Dam in Kwazulu-Natal (pictured), in conjunction with the Development Bank of South Africa (DBSA). 

The minister said while his department had spent billions of rands on water infrastructure over the past five years, and allocated more than R120 billion to build new dams and upgrade old ones, the government did not have the money to address the backlog at once.

This was because most bulk water pipes connecting water to the residential areas were between 75 and 100 years old, while others kept bursting because they serviced more communities than they were built for.

The minister added that the City of Johannesburg alone, for instance, needed R27 billion to address its water infrastructure backlog. 

“But we realize, to be honest, that you can’t go far with the fiscus, via [the] grants that we give them. Something else needs to happen. What is this thing? One, we have opened an office called the partnership office, with DBSA and with them, we are running five programs so that we allow the private sector to get into the business of water services and sanitation services. We really want to plead with the private sector, all of you who are here, to go to DBSA and look at the five programs, including non-revenue water, including managing contracts, because the municipalities are experiencing huge problems just managing contracts, just managing non-revenue water,” Mchunu said. 

“Now, we have realized that even the programs that are in the partnership office are not adequate to catch up with what we need to do: renewing our infrastructure, refurbishing it, and upgrading it so that a reservoir that used to be there and supply people with water adequately, now needs to be upgraded because there is now more people there. It’s the case throughout.” 

The Hartebeespoort Dam in Magaliesburg, North West, is one of the country’s prominent water infrastructure projects.

Mchunu says he has moved to strip municipalities of water service management powers, leaving them with water resource management powers, because water supply has deteriorated alongside most municipalities in the country. This means that designated municipalities would remain water authorities but give up the powers to do water reticulation, repair pipes and pumps, and manage water treatment plants. 

“You can’t run pipes until they speak to you that we are tired, and when you realize that you can’t repair it anymore, you then decommission it. You switch off water during the day, you give people water during the night or vice versa. It’s not good because water is a right.”

We are not going to allow it. But let me come back, we say separate. We leave the municipalities with their status of being water service authorities, because we realize that we would need to go and review the constitution and so on. We don’t have time for that. But give away this task of water services, that is reticulated water. Now, who will do that? We are saying they can appoint, by agreement, a water board in their province. Two, they can appoint a municipality that is doing better next door. ‘

“Three, they can appoint an NGO like Mvula Trust to be their water service provider on a professional basis based on their capacity, based on their muscle to provide this at a level that is reliable, because all we want is the reliability of the service. Now, they can even appoint a private company if they so wish. So, we have opened up the sector ourselves. Now I know it is difficult for the municipalities to easily give into this thing because they think that it’s going to affect our power. But we are talking about two different things here. We are not talking about power. We are talking [about a] service,” Mchunu said. 

He said municipalities designated as water authorities under the Water Act and the Water Services Act would retain the powers to appoint and supervise service providers responsible for managing and operating their systems. 

“We will not touch that, but instead of you running reticulation, doing repairs on pipes, doing operation and monitoring (O&M) and managing your systems – your treatment plant, your pumps, your pipes that reticulate water, your leaks and everything, we think that somebody else better positioned to do so under your authority should be allowed to do that. You would still be key as a water service authority. And we don’t see a problem with that,” he stressed. 

Water and Sanitation Minister Senzo Mchunu during his visit to the Uthukela-Goedertrouw Water Transfer Project in Kwazulu-Natal.
The Department of Water and Sanitation says it needs private-sector investors to help it address its infrastructure backlog. Most bulk water pipes, like these in Kwazulu-Natal, are between 75 and 100 years old.

Mchunu said he had given the water boards the green light to source money from the banks to finance water reticulation projects rather than focus exclusively on their mandate, which is bulk water supply. 

“They ask us where would we get money to do that. We say, ‘go and borrow money yourselves’, because the reason why we are working with the boards in this particular area is because they have the muscle that we do not have. They can go to the market, borrow money, and do the projects that need to be attended to.”

Mchunu said his interventions were part of efforts to “extricate” water supply from other municipal basic service delivery failures. He admitted that his department allowed the problem “to move in that direction for too long”, adding “it was an error.” 

“We needed to have looked at this and decided some time ago to say that water can’t be allowed to deteriorate further with municipalities. We needed to have corrected it by repositioning the Department of Water and Sanitation such that it has a role in the whole of the value chain of water, right from the river through to the water treatment plant, to the pumps, right up to reticulation working together with municipalities at a very close range, monitoring them on various aspects of their work so that water services can take a different turn,” the minister said.



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