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Commercial vs social
The question is , now that we know what we need , how do we achieve this , given that according to former Minister of Finance Pravin Gordhan , “ R18.4-billion has been allocated over the medium term to the Regional Bulk Infrastructure Grant and R12.5-billion to the Water Services Infrastructure Grant . These allocations continue to prioritise water provision in the 27 most impoverished district municipalities .”
Haripersad grins wryly and says : “ The issue is multi-faceted . How do we ignite investment in what is essentially public sector-related infrastructure ?” The challenge here is that the public sector purse is a limited resource , while the private sector is sitting on enough money to fund a small country .
The University of Johannesburg ’ s Centre for Competition , Regulation and Economic Development reported that South African companies are hoarding R1.4-trillion in cash , accumulating reserves and not investing in the economy , while acquisition-led growth has increased concentration and led to anticompetitive behaviour .
Haripersad continues : “ The public sector doesn ’ t have access to unlimited funds , so the government cannot do everything that it wants to do ,” he says and observes , “ Whereas the private sector ( institutional funders , fund managers , and the like ) has a specific commercial view to investment around what is public infrastructure , in terms of revenue return versus what should be a social commitment .”
He says that until the mindset changes as to what constitutes a sound investment — not based entirely on the rate of return — getting out of the present cycle is going to be challenging .
Infra-related business , however , remains tentative around investing , with business confidence at an all-time low ( below the neutral 50-point mark ), according to the last assessment of the Construction Industry Development Board , putting the drop squarely at the door of the public sector , the largest contributor for civil engineering works .
Short-term maladministration within government is clouding investment in people , Haripersad says . “ Securing the public water supply should not be tempered by shortterm political manoeuvrings , because a politician ’ s life ( as well as that of a president ) is limited ,” he observes .
He believes the ongoing political shenanigans that is crippling the
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country is “ in the moment politics ” and will pass , while the infra investment needed must be more long term , “ What is the social rate of return we can expect over the next two decades ?” he asks . The commercial and social investment viewpoints are at odds , he believes .
Paul Fairall , principal consultant for Emifula , says with absolute candour that the water crisis is nothing short of a lack of management , right from the top . “ Find the proper management to manage any project to do with the environment or building .” He adds , “ We have a tremendous country that has plans ; plans that it doesn ’ t implement .”
He draws attention to the Lesotho Highlands Water Project ( LHWP ), with Phase ll recently announced by the Lesotho Highlands Development Authority ( LHDA ). The announcement stated that the design and construction supervision on the second phase of the LHWP will mainly include construction of the Polihali Dam , of which the primary design was set to commence in August . The project will cost R445-million .
“ The plan has been lying there for many years , while it should have been implemented six years ago ,” Fairall points out . “ The planning stage is now only taking place , namely Polihali Dam , which means South Africa will be running out of water for human and commercial use from about 2018 , while 2022 will be extremely harsh . Polihali Dam should have come into full production in 2020 , which is now overshot , and it ’ s not inconceivable that ( in the future ) some households will be allocated water for about five or six hours a day . That is what is going to happen ,” he adds ominously .
He cites that of the available water in the country , 98 % has been spoken for , of which a small percentage is used by humans domestically and adds : “ Of that , 46 % is used on gardens and swimming pools . Johannesburg loses 40 % of its water from Rand Water through leaks , before it gets to the public , through ailing infrastructure or the lack of infrastructure maintenance .”
Defunct monitoring systems
Gordon Allen , director of GuruManzi , a water technology and solutions provider , speaking at a Moneyweb and Standard Bank business breakfast on the state of the Western Cape water infrastructure , says that South Africa ’ s water crisis is owing to an infrastructure failure in general .
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While the country ’ s water crisis stems from drought conditions and inadequate infrastructure , added to the water supply problem is a collapse in the systems that measure , monitor , and predict water resources . Allen adds that water delivery is compromised by a variety of transformational objectives from government , infrastructure failure , and an inability to deliver .
Major infrastructure programmes have been delayed , compounding South Africa ’ s overstretched water resources with projections of a significant national water deficit by 2025 , while nearly a quarter of South Africa ’ s over 1 000 water treatment plants are operating below specification . The country has 824 bulk wastewater treatment plants , treating 5.13 billion litres a day . However , only 16 % of these are discharged to specification , according to Allen .
A multitude of contaminants and toxins are also on the rise , compromising health care and facilities of the poorest citizens and , according to Allen , the Western Cape ’ s rainwater gauging stations are dysfunctional , “ so the ability to predict has been compromised severely ,” he stresses .
There are numerous infrastructure failures , including six closed loops on the Olifants River system and locations along the Gauteng supply via Rand Water , which allow sewage to flow into the river . The utility is increasing chlorine levels to compensate for rising levels of bacteria , he says .
He believes that an integrated water and environmental management plan to provide a strategic response to identified risks should ensure an uninterrupted water supply , fit for purpose .
The trend towards a digital economy , which could enable people to work from anywhere , begs the question of whether there will even be a need for commercial buildings , and how many buildings will have a single , dedicated use .
Allen adds that the correct response into the future , whether it be new or existing property development , would be to “ consider water as a business risk ”.
Whatever the viewpoint , the outlook is bleak ; there is no escaping the fact that our water resources are running dry , with few solutions in the future to look forward to . u
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