The water crisis appears to be growing, although it is difficult to get a grip on the extent of delivery failure across the country. That is because water services are a local government responsibility and the degree to which municipalities are meeting their constitutional duty to provide water varies widely. Among the 257 municipalities there are no doubt examples of success and failure, but it is hard to get a consolidated picture of how well they are doing, at least in the short term. But the anecdotes of failing water infrastructure reported in the media are too frequent – from Tshwane to Hammanskraal water availability and quality are failing, resulting in tragedy.
While local government provides the services, it is the responsibility of provincial and national government to monitor and oversee their provision of water. They must support and strengthen the capacity of municipalities to manage their affairs and deliver. When a municipality is incapable, the province can assume the responsibility of delivering water to an area.
The data that is available does not give confidence. The Blue Drop Audit Report released late last year by the Department of Water and Sanitation, which is meant to ensure accountability of those that provide water services, showed that things are dire. Nearly half of the country’s drinkable water poses acute health risks because of bacteria and other pathogens. More than two-thirds of water treatment plants are close to failure. Almost half of all treated water is lost through leaks that are simply not accounted for. Only 26 of the country’s 958 water supply systems met the Blue Drop certification level for high-quality water.
The report highlighted the serious skills shortage. Across the system, an additional 400 people are needed, including 203 technical staff and 197 scientists. Many in the private sector have committed to assisting stretched local governments, with businesses sending their own staff to support maintenance and repair. In 2022 BLSA partnered with USAID and the National Business Initiative’s TAMDEV programme to assist in identifying and repairing water leaks in 72 schools in Nelson Mandela Bay. TAMDEV works by mobilising private sector skills to support government and it placed mentors in that metro to assist with communication, operations, maintenance and mitigation strategies.
Ultimately, however, national government must ensure that water services are effectively provided. There has been some progress on the bulk water side, with legislation now making progress to establish a National Water Resource Infrastructure Agency that will be able to raise commercial finance and partner with the private sector to deliver bulk water infrastructure. But more must be done on the final service delivery front, to ensure failing municipalities are turned around. Deputy President Paul Mashatile last week said he was chairing a war room that can respond rapidly to delivery failure at municipalities. This is welcome, but firefighting does not fix the problem for the long term – there needs to be development of skills in municipalities to enable them to proactively manage systems that are properly maintained. Business can and does partner with local government to enable such skills development through mentoring schemes and we can do so again.
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When government announced in 2021 that it would sell a controlling stake in SAA, I described it as a “massive step in the SOE reform agenda” and a pragmatic resolution of a situation the state had manifestly been unable to resolve on its own. However, last week the deal that was purportedly done fell apart and government has said it will continue to hold 100% of the airline. This is an example of how not to restructure a state asset and is somewhat of an embarrassment.
The restructuring of state assets is a priority if we are to put the era of perpetual bailouts behind us. In its most recent reported financial year, 2022 when it was barely flying, SAA lost R3.6bn, bringing its cumulative losses to over R60bn, money that the state has had to pump into the airline to keep it flying. That money could have been spent on service delivery, instead of trying to compete where there is no conceivable public benefit to the state operating an airline.
I am left wondering where the disposal of a majority stake went wrong. A better and more transparent disposal process should have been followed, in which potential buyers submit offers and the state chooses the best one. Such a process may not have resulted in much money for government, but it could have taken a headache off its hands. Given the performance of the airline, it will not have been worth much, but that is not the point.
The failure of the disposal will leave the private sector cautious about any future engagement regarding state assets.
*This column was first published in the Business Leadership South Africa (BLSA) weekly newsletter. The author Busisiwe “Busi” Mavuso, is the CEO of BLSA.
