WEBVTT 00:00:05.099 --> 00:00:08.599 Hello, and welcome to the So What podcast, in 00:00:08.599 --> 00:00:11.099 which political economic analyst J .P. Landman 00:00:11.099 --> 00:00:13.919 discusses the issues uppermost in the minds of 00:00:13.919 --> 00:00:16.640 South Africans. You can find a written version 00:00:16.640 --> 00:00:19.719 of this content on J .P.'s website, jpluntman 00:00:19.719 --> 00:00:24.120 .co .za. I am Ruda Landman, and I am your host. 00:00:26.510 --> 00:00:30.089 This conversation goes with JP's newsletter dated 00:00:30.089 --> 00:00:34.469 the 4th of April 2025 and titled South Africa's 00:00:34.469 --> 00:00:38.869 Water Crisis and the Reform Agenda. JP, your 00:00:38.869 --> 00:00:42.509 first point is that we as South Africans don't 00:00:42.509 --> 00:00:45.810 have water to waste, but we do. What are the 00:00:45.810 --> 00:00:48.729 facts behind that? Yeah, indeed. South Africa 00:00:48.729 --> 00:00:51.149 is one of the 30 driest countries in the world. 00:00:51.329 --> 00:00:53.490 Now, if you consider that there are more than 00:00:53.490 --> 00:00:56.140 190 countries in the world, It gives you a clear 00:00:56.140 --> 00:00:58.280 idea where we fit in. It's a dry country and 00:00:58.280 --> 00:01:00.960 we're dependent on irregular and intermittent 00:01:00.960 --> 00:01:05.239 rainfall. Why do I say we waste it? Because our 00:01:05.239 --> 00:01:08.359 average consumption per person in South Africa 00:01:08.359 --> 00:01:13.280 is running at 233 liters per day per person, 00:01:13.340 --> 00:01:17.120 per capita consumption, 233. The global average 00:01:17.120 --> 00:01:21.219 is 173. In Gateng alone, just that province, 00:01:21.459 --> 00:01:24.329 we... Our consumption is approaching 300 liters 00:01:24.329 --> 00:01:27.689 per person per day. So consumer awareness about 00:01:27.689 --> 00:01:29.909 water in South Africa is very, very low, and 00:01:29.909 --> 00:01:31.810 that will certainly have to change. One of the 00:01:31.810 --> 00:01:33.569 contributing factors is, of course, the fact 00:01:33.569 --> 00:01:37.450 that the water is so cheap. If it was the cost 00:01:37.450 --> 00:01:41.510 of wine or beer, then we wouldn't waste it like 00:01:41.510 --> 00:01:44.750 that. But the fact remains our consumption per 00:01:44.750 --> 00:01:47.709 person per day is way above the global average. 00:01:48.359 --> 00:01:50.879 But there's also something called non -revenue 00:01:50.879 --> 00:01:54.140 water. What is that and how do we score on that? 00:01:54.540 --> 00:01:58.000 We score badly. First, what is it? It's water 00:01:58.000 --> 00:02:01.760 which is billed to municipalities and which municipalities 00:02:01.760 --> 00:02:04.939 distribute, but for which no income is coming 00:02:04.939 --> 00:02:09.080 in. And that sits at 47 % of total water supply. 00:02:09.479 --> 00:02:12.139 That's a very huge percentage. And again, it's 00:02:12.139 --> 00:02:15.240 almost half. And again, it's way above the global 00:02:15.240 --> 00:02:18.159 average. Middle -income countries like South 00:02:18.159 --> 00:02:21.000 Africa, that number is sitting at about 30%. 00:02:21.000 --> 00:02:25.139 In some countries, it's higher. For example, 00:02:25.139 --> 00:02:28.800 in Mexico, it's sitting at between 40 % and 50%. 00:02:28.800 --> 00:02:32.639 In Kenya and Nairobi, it's sitting at 45%. So 00:02:32.639 --> 00:02:36.659 for South Africa, to sit at 47 % is a higher 00:02:36.659 --> 00:02:40.879 percentage. And that's burst pipes and that kind 00:02:40.879 --> 00:02:44.419 of thing? It's burst pipes, it's illegal connections 00:02:44.419 --> 00:02:49.360 or theft, of which there's a lot, all over society, 00:02:49.500 --> 00:02:53.599 from residences, from farms, from factories, 00:02:53.659 --> 00:02:56.020 where people don't actually pay for the water 00:02:56.020 --> 00:02:59.120 that they extract. So there are a variety of 00:02:59.120 --> 00:03:02.159 reasons, but I think the main one would be poor 00:03:02.159 --> 00:03:05.199 maintenance and poor infrastructure. Actually, 00:03:05.240 --> 00:03:07.259 the infrastructure is not that poor, but poorly 00:03:07.259 --> 00:03:10.159 maintained infrastructure. That is what's causing 00:03:10.159 --> 00:03:13.340 a lot of the non -revenue water. Well, at least 00:03:13.340 --> 00:03:16.060 these days we do know what's going on. There 00:03:16.060 --> 00:03:18.680 are the so -called drop reports, the blue drop, 00:03:18.780 --> 00:03:22.139 green drop, no drop reports. They were introduced 00:03:22.139 --> 00:03:25.400 in 2008, but they were suspended under the Zuma 00:03:25.400 --> 00:03:29.639 administration in 2014. And then reinstated in 00:03:29.639 --> 00:03:33.979 2022 by Cyril Ramaphosa's government. What do 00:03:33.979 --> 00:03:36.699 they show us? It goes to the fundamental point 00:03:36.699 --> 00:03:39.400 that what you measure, you can manage. And if 00:03:39.400 --> 00:03:40.979 you don't have those reports, well, then you 00:03:40.979 --> 00:03:43.780 can't manage the problem. The Blue Drop report 00:03:43.780 --> 00:03:47.319 measures water quality. Is the water that comes 00:03:47.319 --> 00:03:49.919 out of your tap safe? And does it meet all the 00:03:49.919 --> 00:03:54.080 standards for water to be consumed? Now, in South 00:03:54.080 --> 00:03:58.919 Africa, 52 % of water treatment systems failed 00:03:58.919 --> 00:04:02.139 or barely passed the quality test. They didn't 00:04:02.139 --> 00:04:04.460 score. Even if they passed, they didn't score 00:04:04.460 --> 00:04:09.039 very high. 48 % of water distribution systems 00:04:09.039 --> 00:04:13.500 were found to be okay. There's no risk there. 00:04:13.539 --> 00:04:16.160 It's fine. So it's a story of two halves. That's 00:04:16.160 --> 00:04:19.240 blue water. It's the quality of water. No drop 00:04:19.240 --> 00:04:22.360 is non -revenue water, which we have just discussed. 00:04:23.040 --> 00:04:27.220 And it reveals in South Africa 47 % losses. And 00:04:27.220 --> 00:04:30.459 interestingly enough, that's up from 35 % in 00:04:30.459 --> 00:04:33.680 2014 when the reports, the publication of the 00:04:33.680 --> 00:04:36.699 reports were suspended. And probably if we didn't 00:04:36.699 --> 00:04:40.240 suspend the publication, we could have, you know, 00:04:40.259 --> 00:04:42.759 managed the problem earlier. And then the last 00:04:42.759 --> 00:04:45.459 one is Green Drop, and that measures wastewater 00:04:45.459 --> 00:04:49.560 treatment. The report found that 64 % of wastewater 00:04:49.560 --> 00:04:54.699 plants are at a high or critical risk of discharging 00:04:54.699 --> 00:04:57.540 untreated or partially treated water into the 00:04:57.540 --> 00:05:00.459 environment. So those three reports helps us 00:05:00.459 --> 00:05:02.839 to understand what's going on and one can now 00:05:02.839 --> 00:05:06.120 manage the situation better. Not a pretty picture. 00:05:06.300 --> 00:05:10.259 No. But how does the system work? How does water 00:05:10.259 --> 00:05:14.699 get from, say, the Vaal Dam or Steenbras or Theewaterskloof 00:05:14.699 --> 00:05:17.740 in the Western Cape to the consumer? It starts 00:05:17.740 --> 00:05:20.720 with strategic water areas, which we find in 00:05:20.720 --> 00:05:22.959 South Africa in five provinces. Four provinces 00:05:22.959 --> 00:05:25.279 have got no strategic water areas, so you've 00:05:25.279 --> 00:05:27.259 got to distribute water to them. How does that 00:05:27.259 --> 00:05:31.160 work? First of all, these strategic water areas 00:05:31.160 --> 00:05:33.480 feed water into dams. The Waal River that you've 00:05:33.480 --> 00:05:36.180 mentioned. the Berggevier Dam and the Western 00:05:36.180 --> 00:05:40.100 Cape and so on. The dams get filled from the 00:05:40.100 --> 00:05:42.040 strategic water sources and the dams are run 00:05:42.040 --> 00:05:44.980 by the Department of Water and Sanitation. And 00:05:44.980 --> 00:05:47.839 that is what one can call the beginning of the 00:05:47.839 --> 00:05:51.060 system. Then we have seven water boards in the 00:05:51.060 --> 00:05:54.139 country. There used to be 15, but they have been 00:05:54.139 --> 00:05:57.699 rationalized to only seven. Those seven water 00:05:57.699 --> 00:06:01.160 boards distribute water. They are basically what 00:06:01.160 --> 00:06:04.399 you can call wholesalers. they distribute water 00:06:04.399 --> 00:06:07.779 to the country's municipalities. And the municipalities 00:06:07.779 --> 00:06:10.860 form the third level. Now here we must distinguish 00:06:10.860 --> 00:06:13.680 between two things. Municipalities are water 00:06:13.680 --> 00:06:16.120 services authorities. That's the mandate that 00:06:16.120 --> 00:06:18.199 was given to them in the constitution. They're 00:06:18.199 --> 00:06:21.339 responsible for ensuring that the citizens in 00:06:21.339 --> 00:06:24.800 a municipality has got access to water. It's 00:06:24.800 --> 00:06:28.100 a constitutional obligation. But then most municipalities 00:06:28.100 --> 00:06:30.920 have also taken on the duty of a water service 00:06:30.920 --> 00:06:34.810 provider. which actually runs the pipes and the 00:06:34.810 --> 00:06:37.410 taps in a particular municipality. So there's 00:06:37.410 --> 00:06:41.230 a water services authority, which has the responsibility 00:06:41.230 --> 00:06:45.389 to make a plan. And then there's the water services 00:06:45.389 --> 00:06:48.250 provider. But it doesn't have to be the same 00:06:48.250 --> 00:06:50.790 entity. It doesn't have to be. But in practice, 00:06:50.889 --> 00:06:53.269 it is. It mostly is. And that's one of the areas 00:06:53.269 --> 00:06:55.810 where change is now going to take place, where 00:06:55.810 --> 00:06:57.930 you separate the authority from the provider. 00:06:58.649 --> 00:07:01.029 The authority is a constitutional thing and it's 00:07:01.029 --> 00:07:03.750 a political responsibility to citizens. Provider 00:07:03.750 --> 00:07:06.850 is the technical function to get water out, to 00:07:06.850 --> 00:07:08.610 maintain the system and to collect the money 00:07:08.610 --> 00:07:11.529 for selling water. So let's take it from the 00:07:11.529 --> 00:07:14.189 top. What's happening with bulk water supply? 00:07:14.610 --> 00:07:16.930 Quite a lot has actually happened. And in Appendix 00:07:16.930 --> 00:07:21.970 A to the document, there's quite a list detailing 00:07:21.970 --> 00:07:25.949 the projects that we've had since 1994 and ongoing 00:07:25.949 --> 00:07:29.139 projects right at the moment. Right now, government 00:07:29.139 --> 00:07:33.240 has committed about 150 billion rand to 11 big 00:07:33.240 --> 00:07:36.639 water projects all over the country in the provinces 00:07:36.639 --> 00:07:40.300 where there are strategic water supply sources. 00:07:40.699 --> 00:07:43.839 The biggest one is, of course, the Lesotho Highlands 00:07:43.839 --> 00:07:47.600 Water Scheme Phase 2. Phase 1 was completed in 00:07:47.600 --> 00:07:52.319 respectively 1996 and 2003. Phase 2 was supposed 00:07:52.319 --> 00:07:55.410 to be completed already, but... Corruption allegations 00:07:55.410 --> 00:07:58.430 in the Zuma time, plus, of course, COVID, plus 00:07:58.430 --> 00:08:00.370 the fact that you had to resettle communities 00:08:00.370 --> 00:08:03.250 in Lesotho from land which will now be covered 00:08:03.250 --> 00:08:06.089 by water, delayed that project. But I must say, 00:08:06.149 --> 00:08:09.509 again, the Ramaphosa administration has succeeded 00:08:09.509 --> 00:08:12.129 in getting that thing going. And currently, their 00:08:12.129 --> 00:08:15.170 three big construction works ongoing. It's the 00:08:15.170 --> 00:08:17.870 building of the Polyagli Dam. It's the building 00:08:17.870 --> 00:08:21.189 of a tunnel to transfer water from Polyagli to 00:08:21.189 --> 00:08:23.389 Dikatsi Dam, which is the biggest dam in the 00:08:23.389 --> 00:08:25.689 system, and it's the building of roads and bridges 00:08:25.689 --> 00:08:28.870 to service that. And that scheme delivers water 00:08:28.870 --> 00:08:31.930 to Gauteng. It will be operational on current 00:08:31.930 --> 00:08:37.509 planning by 2028, and that will enhance the Gauteng 00:08:37.509 --> 00:08:40.409 water supply system quite considerably. Some 00:08:40.409 --> 00:08:42.450 of the other provinces, the one where there is 00:08:42.450 --> 00:08:44.919 the largest number of The projects and money 00:08:44.919 --> 00:08:47.639 is KwaZulu -Natal, both the north and the south 00:08:47.639 --> 00:08:49.580 coast. There are three big projects on the go 00:08:49.580 --> 00:08:51.980 there. And I think that will make a big difference 00:08:51.980 --> 00:08:54.659 to the water supply problems on both the north 00:08:54.659 --> 00:08:57.440 and the south coast of Natal. And then there 00:08:57.440 --> 00:08:59.899 are two projects in the Western Cape. There are 00:08:59.899 --> 00:09:02.360 two projects in Mpopo and so on. But all those 00:09:02.360 --> 00:09:07.240 details are in Appendix A to the document. And 00:09:07.240 --> 00:09:10.340 if we come to the seven water boards, are they 00:09:10.340 --> 00:09:13.679 functioning well? One of the reasons why the 00:09:13.679 --> 00:09:16.779 15 were rationalized to 7 was precisely to cut 00:09:16.779 --> 00:09:19.100 wastage and expense and try to get them to function 00:09:19.100 --> 00:09:23.559 better. The Achilles heel there is municipalities 00:09:23.559 --> 00:09:26.460 who don't pay. And at the moment, municipalities 00:09:26.460 --> 00:09:32.080 owe the water boards about 22 billion rand in 00:09:32.080 --> 00:09:35.120 water that has not been paid for. That's a substantial 00:09:35.120 --> 00:09:39.750 151 % increase over the last five years. And 00:09:39.750 --> 00:09:42.629 the problem there is that although municipalities 00:09:42.629 --> 00:09:45.769 receive 62 billion rand annually from National 00:09:45.769 --> 00:09:50.690 Treasury for water and sanitation projects, not 00:09:50.690 --> 00:09:53.269 all that money gets spent on water by the local 00:09:53.269 --> 00:09:55.330 municipality. They spend it on other priorities. 00:09:55.610 --> 00:09:58.330 So that brings the issue of ring fencing to the 00:09:58.330 --> 00:10:01.789 fore. It sounds as if the municipalities really 00:10:01.789 --> 00:10:05.950 are... The weakest link. No, they absolutely 00:10:05.950 --> 00:10:07.750 are. There's no question. I think bulk water 00:10:07.750 --> 00:10:11.789 supply, you know, that's going on. The water 00:10:11.789 --> 00:10:14.990 boards have been reorganized and they are proceeding. 00:10:15.330 --> 00:10:18.070 The real problem is the municipalities. That 00:10:18.070 --> 00:10:21.269 is where things are falling apart. What the drop 00:10:21.269 --> 00:10:26.169 reports tell us is that in December 2023, There 00:10:26.169 --> 00:10:29.750 were 144 water service authorities in South Africa, 00:10:29.950 --> 00:10:32.330 in other words, municipalities which are designated 00:10:32.330 --> 00:10:35.769 as water service authorities. They run close 00:10:35.769 --> 00:10:39.909 to a thousand water systems, 958 to be precise. 00:10:40.269 --> 00:10:46.309 Only 26 of those 958 systems, that's 3%, achieve 00:10:46.309 --> 00:10:49.590 blue drop status. I earlier made a point that 00:10:49.590 --> 00:10:53.169 about 52 % of systems either failed or barely 00:10:53.169 --> 00:10:57.039 passed the quality test. But only 3 % got 95 00:10:57.039 --> 00:11:01.519 % score or scored 95%. So you can see where the 00:11:01.519 --> 00:11:04.840 problem lies. It lies with the local water systems 00:11:04.840 --> 00:11:08.820 in various municipalities. Is it just aging infrastructure? 00:11:09.419 --> 00:11:12.799 No, it's not just aging infrastructure. The same 00:11:12.799 --> 00:11:16.320 reports found that 85 % of drinking water systems 00:11:16.320 --> 00:11:19.639 are of an average or better condition, average 00:11:19.639 --> 00:11:21.899 or better. So it's not so much the infrastructure 00:11:21.899 --> 00:11:24.500 that's not working. It's more a question of skills. 00:11:24.639 --> 00:11:27.620 It's more a question of process flow. It's more 00:11:27.620 --> 00:11:29.740 a question of maintenance. Maintenance is a very, 00:11:29.779 --> 00:11:34.679 very big story. Treasury requires that 8 % of 00:11:34.679 --> 00:11:37.399 a budget must be spent on maintenance. But in 00:11:37.399 --> 00:11:40.639 real life, only about 2 % gets spent on maintenance. 00:11:40.820 --> 00:11:43.759 So maintenance is really the big problem. Linked 00:11:43.759 --> 00:11:47.059 to that is simply a lack of management. The Minister 00:11:47.059 --> 00:11:50.799 of Water, Minister Pemi Majordina. has said in 00:11:50.799 --> 00:11:53.779 parliament that her department has given a whole 00:11:53.779 --> 00:11:57.580 lot of very doable tasks to Johannesburg Water 00:11:57.580 --> 00:12:00.940 and to other Gauteng municipalities, but that 00:12:00.940 --> 00:12:04.440 they simply do not respond. The water board for 00:12:04.440 --> 00:12:07.200 Gauteng, Rand Water, which is actually functioning 00:12:07.200 --> 00:12:10.799 quite well, reported that they had some 40 meetings 00:12:10.799 --> 00:12:13.500 with Gauteng municipalities to give them practical 00:12:13.500 --> 00:12:16.559 advice. on how to improve water distribution 00:12:16.559 --> 00:12:19.100 systems, and there's simply been no appropriate 00:12:19.100 --> 00:12:21.899 reaction. So no, it's not so much the infrastructure 00:12:21.899 --> 00:12:25.279 as people. Is there something about this system 00:12:25.279 --> 00:12:28.740 which could possibly be different to make it 00:12:28.740 --> 00:12:32.100 better? Yes, most certainly. And that is where 00:12:32.100 --> 00:12:34.820 a number of reforms have now been initiated, 00:12:35.080 --> 00:12:37.519 which should change it, and let's go through 00:12:37.519 --> 00:12:41.059 them. The first and most important one is a licensing 00:12:41.059 --> 00:12:44.230 system. I've said earlier that we've discussed 00:12:44.230 --> 00:12:45.909 the fact that there's a water service authority 00:12:45.909 --> 00:12:48.169 which deals with the constitutional obligation 00:12:48.169 --> 00:12:51.929 and a water service provider. Legislation has 00:12:51.929 --> 00:12:54.429 now been amended. It's going through the parliamentary 00:12:54.429 --> 00:12:58.389 process to compel every water service authority 00:12:58.389 --> 00:13:02.129 to have a license before they can be a water 00:13:02.129 --> 00:13:04.669 service provider. And what is the point about 00:13:04.669 --> 00:13:07.590 the license? The point about the license is certain 00:13:07.590 --> 00:13:10.230 minimum performance standards and certain... 00:13:10.879 --> 00:13:13.879 achievements that must be maintained by the water 00:13:13.879 --> 00:13:16.460 service provider. If the water service provider 00:13:16.460 --> 00:13:19.100 does not meet those license requirements, then 00:13:19.100 --> 00:13:21.700 the license can be revoked and given to somebody 00:13:21.700 --> 00:13:25.620 else. And that somebody else can be the for -profit 00:13:25.620 --> 00:13:28.279 private sector. It can be the not -for -profit 00:13:28.279 --> 00:13:31.500 private sector, like an NGO or a community -based 00:13:31.500 --> 00:13:35.259 organization. It can be a different water services 00:13:35.259 --> 00:13:38.120 authority. There's no limitation. It can go to 00:13:38.120 --> 00:13:41.899 any licensee. That is best place to deliver the 00:13:41.899 --> 00:13:45.759 water and fulfill the water provision functions. 00:13:46.279 --> 00:13:49.179 That's an important change. Brazil has done this, 00:13:49.259 --> 00:13:51.980 not so. And what happened? Absolutely right. 00:13:52.080 --> 00:13:54.480 Brazil has. They've got similar problems than 00:13:54.480 --> 00:13:57.340 what we've got. They made this change. It led 00:13:57.340 --> 00:14:02.259 to a huge influx of private service, water service 00:14:02.259 --> 00:14:04.919 providers coming in. Some for profit, some not 00:14:04.919 --> 00:14:07.220 for profit. And I've said some community based 00:14:07.220 --> 00:14:10.340 and so on. and it led to an improvement in both 00:14:10.340 --> 00:14:14.480 water and sanitation supply in Brazil. In South 00:14:14.480 --> 00:14:18.279 Africa, we only, or we do have, two examples 00:14:18.279 --> 00:14:21.840 where the water service provider in a municipality 00:14:21.840 --> 00:14:25.480 is a private entity. The one is Mombella, in 00:14:25.480 --> 00:14:28.080 Mupumalanga, and the other one is on the Dolphin 00:14:28.080 --> 00:14:30.919 Coast, in the northern part of Guazula Natal. 00:14:31.200 --> 00:14:33.980 And in both those areas, what we see is we see 00:14:33.980 --> 00:14:37.000 very efficient water provision. Water losses 00:14:37.000 --> 00:14:40.240 have been cut down, so non -revenue water has 00:14:40.240 --> 00:14:43.080 come down substantially in both cases. Maintenance 00:14:43.080 --> 00:14:45.799 is being done, and there's a consistent and reliable 00:14:45.799 --> 00:14:49.379 water supply. So all we really have to do is 00:14:49.379 --> 00:14:54.539 to expand the Bombella and Dolphin Coast examples 00:14:54.539 --> 00:14:57.980 to the rest of the country, and we will see a 00:14:57.980 --> 00:15:00.759 substantial improvement. But that means that 00:15:00.759 --> 00:15:05.220 municipalities must give up some of their authority 00:15:05.220 --> 00:15:08.000 or some of, well, also some of their revenue. 00:15:08.139 --> 00:15:10.639 And municipalities are set in their ways and 00:15:10.639 --> 00:15:13.440 constitutionally protected. How are they being 00:15:13.440 --> 00:15:16.379 chivvied along? That is exactly the problem. 00:15:16.659 --> 00:15:18.320 They've got a vested interest in the current 00:15:18.320 --> 00:15:20.799 system and they would like to maintain it. And 00:15:20.799 --> 00:15:22.879 as I've said earlier, they also get money from 00:15:22.879 --> 00:15:25.409 National Treasury. for a subsidy for the poor 00:15:25.409 --> 00:15:28.029 and they use that subsidy for other things like 00:15:28.029 --> 00:15:31.029 cars and salaries and so on. So yes, the municipalities 00:15:31.029 --> 00:15:34.110 will have to change their behavior quite considerably. 00:15:34.529 --> 00:15:37.169 But I think this legislative amendment forcing 00:15:37.169 --> 00:15:39.809 them to become a licensee and losing their license 00:15:39.809 --> 00:15:43.389 will do a lot to address that. Also, there are 00:15:43.389 --> 00:15:46.570 currently both carrots and sticks being employed 00:15:46.570 --> 00:15:49.820 by government. What are the CARATs? The CARATs 00:15:49.820 --> 00:15:52.259 are a program the Treasury is running called 00:15:52.259 --> 00:15:55.100 the Metro Trading Services Reform Program, very 00:15:55.100 --> 00:15:59.519 long title, which essentially pay incentives 00:15:59.519 --> 00:16:01.779 to municipalities if they meet certain performance 00:16:01.779 --> 00:16:05.840 standards. So that's a CARAT, and it looks like 00:16:05.840 --> 00:16:08.940 it's working quite well. Six of the eight metros 00:16:08.940 --> 00:16:11.799 in the country have bought into the system and 00:16:11.799 --> 00:16:14.860 are participating in this Treasury framework. 00:16:15.059 --> 00:16:18.769 And it's all about... having better control over 00:16:18.769 --> 00:16:22.389 what's happening. Another carrot which is being 00:16:22.389 --> 00:16:25.289 employed is that the Department of Water and 00:16:25.289 --> 00:16:27.669 Sanitation is now being authorized by changes 00:16:27.669 --> 00:16:31.190 in the legislation that they can take over the 00:16:31.190 --> 00:16:34.190 water service provider if that water service 00:16:34.190 --> 00:16:36.629 provider is not doing a proper job. So you take 00:16:36.629 --> 00:16:38.590 Johannesburg, for example, where Joburg water 00:16:38.590 --> 00:16:41.269 is really not functioning well. It is possible, 00:16:41.330 --> 00:16:43.529 it will be possible once the legislation is passed. 00:16:44.279 --> 00:16:46.419 for the department to step in and take it over. 00:16:46.679 --> 00:16:50.659 Those are the carrots. How far is the legislation? 00:16:51.200 --> 00:16:53.379 It's still in the parliamentary process. It takes 00:16:53.379 --> 00:16:56.480 time to write legislation. You're looking at 00:16:56.480 --> 00:16:58.679 between six months and a year. You said there 00:16:58.679 --> 00:17:02.059 were carrots and sticks? Sticks. The most important 00:17:02.059 --> 00:17:04.660 stick is, I've now several times we talked about 00:17:04.660 --> 00:17:07.819 the Treasury's equitable share, which is paid 00:17:07.819 --> 00:17:11.099 to municipalities and then gets misused. The 00:17:11.099 --> 00:17:14.740 Treasury in December last year started withholding 00:17:14.740 --> 00:17:17.480 the transfer of equitable shares to municipalities 00:17:17.480 --> 00:17:20.559 who are in the rears. They were the usual threats 00:17:20.559 --> 00:17:23.000 of court cases and so on. In South Africa, everybody 00:17:23.000 --> 00:17:25.700 runs to the courts when they're not happy. But 00:17:25.700 --> 00:17:28.180 the legal position is quite clear. Treasury has 00:17:28.180 --> 00:17:31.819 got the authority to do that kind of thing in 00:17:31.819 --> 00:17:34.740 cases where there's consistent poor performance. 00:17:35.019 --> 00:17:37.920 So withholding the equitable share is hitting 00:17:37.920 --> 00:17:42.549 where it's hurt, as you say. And that's an important 00:17:42.549 --> 00:17:45.269 stick. Another stick is criminal accountability. 00:17:45.710 --> 00:17:50.369 The Department of Water has started criminally 00:17:50.369 --> 00:17:54.170 prosecuting municipalities. And 36 cases have 00:17:54.170 --> 00:17:58.049 been opened against 26 municipalities in six 00:17:58.049 --> 00:18:01.930 provinces for discharging untreated sewage into 00:18:01.930 --> 00:18:12.910 public water systems. to the government. Yeah, 00:18:12.990 --> 00:18:16.269 so those are the main sticks that are around. 00:18:16.849 --> 00:18:20.210 We've seen stunning success in involving the 00:18:20.210 --> 00:18:24.009 private sector in electricity. Are there moves 00:18:24.009 --> 00:18:27.730 to make that happen with regard to water? Yes, 00:18:27.730 --> 00:18:30.529 absolutely. The Department of Water Affairs, 00:18:30.890 --> 00:18:33.950 with the help of or in partnership with the local 00:18:33.950 --> 00:18:37.109 government association, SOLGA, has created a 00:18:37.109 --> 00:18:39.869 water partnership office in the Development Bank. 00:18:40.279 --> 00:18:42.700 And the idea of that water partnership office 00:18:42.700 --> 00:18:45.700 is to help the municipalities to involve private 00:18:45.700 --> 00:18:49.180 companies in the provision of water. It's run 00:18:49.180 --> 00:18:51.579 by Johan Libbe, who's an engineer with about 00:18:51.579 --> 00:18:55.339 20 years experience. And essentially, they run 00:18:55.339 --> 00:18:57.960 six programs. What do they do? First of all, 00:18:58.000 --> 00:19:00.960 they develop a model of how you can run things 00:19:00.960 --> 00:19:03.680 in those six areas so that municipalities don't 00:19:03.680 --> 00:19:06.170 have to reinvent the wheel. In that way, you 00:19:06.170 --> 00:19:08.930 want to make projects easier and more bankable. 00:19:09.009 --> 00:19:11.309 If you take care of the admin and you standardize 00:19:11.309 --> 00:19:13.769 the standards and you standardize the technical 00:19:13.769 --> 00:19:15.970 requirements and those things, then you can just 00:19:15.970 --> 00:19:20.509 copy and paste and it will help to improve projects 00:19:20.509 --> 00:19:23.269 run. What are the six areas? I think it's important 00:19:23.269 --> 00:19:26.569 to point them out. It's non -revenue water, which 00:19:26.569 --> 00:19:28.369 we've already said is one of the biggest problems 00:19:28.369 --> 00:19:30.950 in the country. It's management contract. It's 00:19:30.950 --> 00:19:33.509 wastewater treatment. It's the reuse of water. 00:19:34.190 --> 00:19:37.089 of which we don't do a lot in South Africa, desalination, 00:19:37.109 --> 00:19:39.789 of which we also don't do a lot, and off -grid 00:19:39.789 --> 00:19:43.109 water. So if you can get standardized procedures 00:19:43.109 --> 00:19:46.569 for involving private companies in those areas, 00:19:46.589 --> 00:19:49.170 helping municipalities, then I think it is a 00:19:49.170 --> 00:19:51.730 win -win for everybody. And are the municipalities 00:19:51.730 --> 00:19:55.369 coming on board? The six biggest metros are currently 00:19:55.369 --> 00:19:58.990 working with the water office, water partnership 00:19:58.990 --> 00:20:03.089 office, to employ some of those. programs in 00:20:03.089 --> 00:20:05.849 their areas. Yes, and I think success breeds 00:20:05.849 --> 00:20:08.309 success. Once you've had two or three places 00:20:08.309 --> 00:20:10.390 where they can show a demonstrable improvement, 00:20:10.769 --> 00:20:13.250 you will find other people also coming along. 00:20:13.529 --> 00:20:16.490 This will have a political impact, not so? In 00:20:16.490 --> 00:20:20.869 what way? If you have demonstrable success, then 00:20:20.869 --> 00:20:23.930 it looks good for the municipality. It looks 00:20:23.930 --> 00:20:26.450 good for the municipality, absolutely. And that's 00:20:26.450 --> 00:20:28.250 the only thing that the municipalities has got 00:20:28.250 --> 00:20:30.789 to get their mind around. It is quite possible, 00:20:30.849 --> 00:20:34.390 as in Bombella and on the Dolphin Coast, to rent 00:20:34.390 --> 00:20:36.609 your infrastructure out. Infrastructure belongs 00:20:36.609 --> 00:20:38.650 to the municipality. It's their asset. It's their 00:20:38.650 --> 00:20:42.410 thing. Rent it out, charge a fee for it, regulate 00:20:42.410 --> 00:20:45.250 the price at which that private entity can sell 00:20:45.250 --> 00:20:49.109 the water. You don't want to lose that. And take 00:20:49.109 --> 00:20:51.529 a part of the equitable portion and pay that 00:20:51.529 --> 00:20:54.430 over to the... service provider to provide water 00:20:54.430 --> 00:20:56.970 to poor people. So you really can do everything 00:20:56.970 --> 00:20:59.190 which is required, but you do it through a different 00:20:59.190 --> 00:21:02.730 operator, not a municipality. Yes, it can have 00:21:02.730 --> 00:21:06.369 a big impact. There's also another brand new 00:21:06.369 --> 00:21:10.329 animal called the National Water Resource Infrastructure 00:21:10.329 --> 00:21:13.829 Agency. Who are they and what do they do? Yeah, 00:21:13.869 --> 00:21:16.609 I call it the three -in -one agency because they 00:21:16.609 --> 00:21:19.849 combine three functions which are currently handled 00:21:19.849 --> 00:21:22.680 by different people. The first one is they take 00:21:22.680 --> 00:21:25.559 the functions of the Trans -Caledon Tunnel Authority, 00:21:25.839 --> 00:21:29.500 which its name belies what it does. The Trans 00:21:29.500 --> 00:21:31.799 -Caledon Tunnel Authority is responsible for 00:21:31.799 --> 00:21:34.940 raising money on the capital market for bulk 00:21:34.940 --> 00:21:37.480 water projects. And that is what they've done 00:21:37.480 --> 00:21:40.359 for many years now. So this function will go 00:21:40.359 --> 00:21:43.559 into the National Water Agency, raising capital. 00:21:44.599 --> 00:21:47.339 The second thing is in the Department of Water, 00:21:47.460 --> 00:21:50.240 there's a water trading entity. They sell water 00:21:50.240 --> 00:21:53.119 from the various dams to the seven water boards 00:21:53.119 --> 00:21:55.039 and from the water boards on to municipalities. 00:21:56.039 --> 00:21:58.539 That trading of water, collecting the money, 00:21:58.619 --> 00:22:00.400 making sure everybody pays what they have to 00:22:00.400 --> 00:22:04.059 pay, that will go into the water resource agency, 00:22:04.339 --> 00:22:07.359 the three -in -one agency. And lastly, the department's 00:22:07.359 --> 00:22:09.920 infrastructure branch, engineers and technical 00:22:09.920 --> 00:22:12.859 people responsible for overseeing the dams. Now, 00:22:12.880 --> 00:22:16.490 what this reorganization doing is this. It takes 00:22:16.490 --> 00:22:19.230 the dams and the distribution systems, which 00:22:19.230 --> 00:22:22.529 has got a value. You build a dam, it's costing 00:22:22.529 --> 00:22:26.009 millions or billions of rands. It's a real asset. 00:22:26.309 --> 00:22:29.170 That asset is generating money. You sell water, 00:22:29.250 --> 00:22:31.930 the water, the income comes in. You take that 00:22:31.930 --> 00:22:33.609 and you put it on the balance sheet of the agency. 00:22:33.869 --> 00:22:37.150 Now the agency has got assets, a balance sheet, 00:22:37.230 --> 00:22:39.349 against which they can go and borrow more money. 00:22:39.869 --> 00:22:42.950 from banks and insurance companies and so on, 00:22:42.990 --> 00:22:45.869 to build more dams and to build more water systems. 00:22:46.390 --> 00:22:49.750 It's quite a clever way of overcoming the fact 00:22:49.750 --> 00:22:51.990 that government itself, the taxpayer, doesn't 00:22:51.990 --> 00:22:54.950 have enough money to pay for backwater provision. 00:22:55.549 --> 00:22:57.930 It works very well in, for example, the case 00:22:57.930 --> 00:23:00.410 of national roads. We've got Sunroll, the national 00:23:00.410 --> 00:23:03.170 road agency, and if you travel through the country, 00:23:03.289 --> 00:23:05.309 all you have to do is compare a national road 00:23:05.309 --> 00:23:07.990 to a provincial road or a municipal road, and 00:23:07.990 --> 00:23:10.099 you can't believe the difference. And that's 00:23:10.099 --> 00:23:12.339 what they do. National roads belong to the National 00:23:12.339 --> 00:23:15.539 Road Agency. There's income against it, against 00:23:15.539 --> 00:23:18.359 tolls. You take that income and the balance sheet, 00:23:18.400 --> 00:23:20.400 you go to the bank, you borrow money and you 00:23:20.400 --> 00:23:23.059 can build more roads. It's exactly the same idea 00:23:23.059 --> 00:23:26.099 with water. That legislation has been signed 00:23:26.099 --> 00:23:28.180 by the president and they're busy setting it 00:23:28.180 --> 00:23:31.059 up. And the target date to get it going is the 00:23:31.059 --> 00:23:34.339 beginning of the financial year in 2026. So what, 00:23:34.519 --> 00:23:37.380 if you have to summarize all of this? I think 00:23:37.380 --> 00:23:40.430 this first, so what is this? been happening and 00:23:40.430 --> 00:23:43.670 has happened, especially around bulk water supply. 00:23:44.950 --> 00:23:48.230 And again, PNXA give a lot of detail, not all 00:23:48.230 --> 00:23:51.049 of it. It's not exhaustive, but it paints a picture 00:23:51.049 --> 00:23:53.170 of that something is being done about the fact 00:23:53.170 --> 00:23:56.750 that we need more bulk water supply. That's not 00:23:56.750 --> 00:23:59.450 the area that I would be very worried about. 00:24:00.210 --> 00:24:05.390 The two areas where we actually need huge in 00:24:05.390 --> 00:24:08.210 progress is on the on the distribution side, 00:24:08.430 --> 00:24:11.529 on the municipality side, in respect of non -revenue 00:24:11.529 --> 00:24:14.710 water, as well as poor maintenance. If we can 00:24:14.710 --> 00:24:17.529 sort just those two things out, it will make 00:24:17.529 --> 00:24:19.869 a real difference to the lives of ordinary people. 00:24:19.990 --> 00:24:24.109 It's maintenance and non -revenue water. To achieve 00:24:24.109 --> 00:24:26.829 those two things, and that's the third so what, 00:24:26.970 --> 00:24:29.450 is we've got to make legislative changes. And 00:24:29.450 --> 00:24:32.049 those changes are now in process. So it's not 00:24:32.049 --> 00:24:34.269 something that will happen. It's something that 00:24:34.269 --> 00:24:37.460 is happening. We also have changes in the regulations, 00:24:37.539 --> 00:24:40.140 for example, around not paying the equitable 00:24:40.140 --> 00:24:43.519 share of municipalities if they fall in arrears 00:24:43.519 --> 00:24:47.059 with their payments. So there are administrative, 00:24:47.299 --> 00:24:49.619 legislative, regulatory changes taking place 00:24:49.619 --> 00:24:53.000 to deal with those two big problems. In the end, 00:24:53.000 --> 00:24:56.339 it comes down to local government and local municipalities. 00:24:56.700 --> 00:24:59.420 They have to step up and improve their performance. 00:24:59.680 --> 00:25:01.940 And the only way that you can really force them... 00:25:02.480 --> 00:25:05.599 is you can do legislation and you can do regulations 00:25:05.599 --> 00:25:08.079 and so on, and that's being done. But in the 00:25:08.079 --> 00:25:10.480 end, it is the voters that must decide who must 00:25:10.480 --> 00:25:13.720 run the water system in their municipality. They 00:25:13.720 --> 00:25:16.640 have to exert the pressure on councillors and 00:25:16.640 --> 00:25:19.359 on municipalities. So let's hope that with the 00:25:19.359 --> 00:25:22.140 local government elections, that voters will 00:25:22.140 --> 00:25:25.539 step up and deliver a lesson to their councillors. 00:25:26.180 --> 00:25:29.470 Thank you very much. You will find two extra 00:25:29.470 --> 00:25:32.170 sections in the written version of this newsletter. 00:25:32.369 --> 00:25:35.329 The first is the appendix that JP has referred 00:25:35.329 --> 00:25:38.890 to. That's not a complete list of projects, but 00:25:38.890 --> 00:25:41.190 it gives an indication that as far as bulk water 00:25:41.190 --> 00:25:43.950 supply is concerned, a lot has been done. But 00:25:43.950 --> 00:25:46.970 then there's a second extra page, which is an 00:25:46.970 --> 00:25:50.130 executive summary, an overview of all this information. 00:25:51.950 --> 00:25:54.329 Thank you for listening to the So What Podcast. 00:25:54.730 --> 00:25:57.529 If you enjoy this content, please don't forget 00:25:57.529 --> 00:26:00.490 to leave a review and a rating, and please consider 00:26:00.490 --> 00:26:03.369 subscribing so you don't miss any future episodes. 00:26:03.650 --> 00:26:07.029 Also, tell your friends. Remember, you can find 00:26:07.029 --> 00:26:10.589 a written version of all JP's content at jplandman 00:26:10.589 --> 00:26:11.890.co.za.