This is the conclusion drawn by the Stellenbosch University Bureau for Economic Research’s Impumelelo Economic Growth Lab research note Tapping into Efficiency: Private Sector Participation in Water.
In this episode of ESI Africa Insights, we sit down with Jay Bhagwan, Senior Research Manager for Water Quality and Health at the Water Research Commission, to discuss how South Africa—and the continent at large—can secure its water future through smarter policies, pricing reforms, and circular economy practices
“Two long-standing water concessions, Siza Water in iLembe District Municipality and Silulumanzi in Mbombela, suggest that correctly-structured private sector partnerships can improve efficiency.
“These case studies demonstrate that when structured correctly, private operators can achieve a level of technical and commercial excellence that far exceeds prevailing public-sector benchmarks. The two concessions dramatically reduced water losses.
“This metric is a direct indicator of operational control, infrastructure maintenance, and effective management. The performance of Siza Water is particularly noteworthy; upon taking over the concession in 1999, it inherited a system with water losses of 33% and has reduced these losses to a range of 8-15%. Similarly, the Silulumanzi concession maintains water losses between 15% and 20%. These figures stand in stark contrast to the national average of 40.7%,” says the research note.
Sounding the alarm, the research further posits that “South Africa is facing an escalating crisis in its water sector, characterised by deteriorating infrastructure, operational inefficiencies, and a failure to expand access to quality water for a significant portion of its population.”
This situation necessitates a critical evaluation of alternative models for water service provision, it says.
Available data also points to the fact that nearly half of South Africa’s water systems are in a state of distress.
According to the Department of Water and Sanitation (DWS), 47% of potable water systems are officially classified as being in a “poor or in a critical state,” a figure that rises to an 64% for wastewater systems.
Almost half of all treated water in South Africa is lost before it can generate revenue. This inefficiency puts the financial viability of municipal water services at risk. At a national level, water losses currently stand at 40.7%, while non-revenue water (NRW), in other words, water that is produced but never billed due to leaks, theft, or inaccurate metering, has reached 46.8%.
“This dynamic creates a self-perpetuating cycle of decline. The lost revenue is precisely what municipalities need to fund the capital expenditure required to repair and upgrade ageing infrastructure that is a primary cause of the losses.”
The research says that consequently, operational inefficiency contributes to financial losses, which in turn prevents the resolution of the operational failures.
“This cycle has proved difficult to break with public funds and grants alone, creating a compelling case for models that can inject both private capital and operational discipline into the system.”
Contact Us
VUKA is the trusted media partner to key professionals, policy makers, suppliers and
manufacturers. We provide unparalleled opportunities for industry-wide connection.
