Cash crunch blocks Gauteng water fix

Two of Gauteng’s biggest metros are recording water losses of about R5bn a year as they drown in a massive financial crisis.

The Sunday Times has seen two reports — one to Cyril Ramaphosa’s Presidential Johannesburg Working Group (PJWG) and the other compiled for Tshwane’s utility services committee — which lift the lid on the scale of the water crisis in both cities.

They reveal that water losses for the last eight months stand at R2.4bn in Johannesburg, while Tshwane has been recording water losses amounting to an average of R1.9bn a year.

The report by Johannesburg Water (JW) to the PJWG, dated February 13, highlights that the dilemma facing its water systems is not only widespread structural decline but also a massive financial crisis that means there is no money to pay Rand Water, contractors and repair crews.

JW owes its contractors R265m. It owes bulk water supplier Rand Water R377m. To fix the 43 structurally leaking reservoirs in the city is going to cost in excess of R1.3bn.

Now Rand Water is demanding a deposit of more than R2bn to secure future payments from the city. This is R1bn more than JW’s capital expenditure budget. JW owed Rand Water R1.18bn in January, and even though 60% of this was paid, the outstanding balance is R377m as of this month. The city’s average monthly account from Rand Water is around R800m.

Besides the money owed to bulk supplier Rand Water, the report lays bare the full extent of infrastructure challenges that the city’s water system faces.

Of the city’s 98 reservoirs, only 55 were in good working order, the report said. Only two reservoirs were being worked on — Hurst Hill 2 (at a cost of R36m) and the Meadowlands reservoirs (R78m). They were at less than 20% completion. Work on the Aeroton, Dunkeld, Jabulani, Ennerdale and Alexander Park reservoirs had either not started or was standing at less than 5% completion.

While other reservoirs were “under procurement”, the report noted that “the programme is dependent on the availability of funding”.

And therein lies the problem, said WaterCAN executive director Ferrial Adam. “There is no money for these projects. The city is still sweeping money out of JW’s accounts. The unavoidable conclusion is that neither JW nor the City of Johannesburg are currently capable of managing the city’s spiralling water and associated debt crisis. This is why the president’s water committee must intervene. JW cannot reliably assess a plan around its own revenue due to the continued use of sweeping money from its account.

“You cannot repair, refurbish and stabilise a collapsing system when JW’s revenue is treated as a floating pool for other needs.”

While the payments to Rand Water and contractors were a constant problem, said Adam, it also meant that the debt faced by JW compounded the situation and that there was a bigger backlog in projects and maintenance.

If they cannot get their budget ring-fenced, then all the projects the mayor and the deputy president are promising are just on paper.
— WaterCAN executive director Ferrial Adam

“If they cannot get their budget ring-fenced, then all the projects the mayor and the deputy president are promising are just on paper. The immediate problems of the Commando system and Selby have not been fixed, meaning they are always in crisis management.”

Another report by JW to the PJWG said the Commando system, around which most of last week’s water protests were centred, suffers from insufficient infrastructure, such as bulk lines, pump stations and storage reservoirs.

Hurst Hill 1 and 2 are on bypass because of leaks, and this affects supply to Coronationville, Newlands, Claremont, Westbury, Westdene, Sophiatown, Emmarentia and Melville. Hurst Hill 2, first expected to be completed by April, will now only be ready in September.

“These systems experience intermittent supply at times, especially during high demand. Densification as well as multiple-dwelling student rentals have placed strains on the supply system, coupled with a fair degree of illegal connections,” the report said.

In addition, incoming supply is insufficient to keep reservoirs at optimum capacity as demand outstrips supply.

Since January this year, the Commando system has had 13 burst mains, four leaking valves, two leaking hydrants and 28 leaking meters.

The other problem area is the Midrand water system. Since the Rand Water Zuikerbosch water treatment plant explosion on January 27, this system has battled to recover.

Joburg Water's infrastructure spend. (Nolo Moima)

Meanwhile, a report compiled last November for the Tshwane utility services committee paints a bleak picture of its ability to arrest the water crisis, which has plagued most of Gauteng.

According to the report, water leaks make up 80% of the city’s total losses, while apparent losses from theft and illegal consumption equate to 20%.

The report cautioned that its bulk system was under “extreme pressure”, with most of its systems “very old”, and that resources to perform the required routine maintenance were constrained. Theft and vandalism were also adding strain.

Ramaphosa has declared water the single most important issue facing South Africans. During his state of the nation address, he blamed poor planning and inadequate maintenance of water systems by municipalities as the main cause of the problems.

He elevated the government’s response to a national water crisis committee, which he would chair.

The Tshwane report noted that the ability to respond to reported water leaks had declined dramatically and was a cause for concern.

The current average response time for water leaks was said to be 26 days, a significant decline from the 2023/24 financial year, when it was 20 days. In 2020/21, the response was 14 days, while in 2010/11 it was two days.

The report said pressure management remained one of the most effective methods of reducing water leaks. “The basic principle behind pressure management is that leakage is driven by pressure. If the pressure can be reduced, even if only during off-peak demand periods, the leakage will be reduced.”

Its technical analysis showed that Tshwane needed between R3.3bn and R5.4bn for pipe replacement, yet only R60m of its capital expenditure was allocated for this.

City spokesperson Lindela Mashigo said the metro needs R58bn to meet its infrastructure demands over the next 10 years, but at the current investment rate it would take 34 years to catch up.

The city had engaged with the Danish foreign ministry and that country’s Impact Fund, as well as with the EU, for investment support on water projects, Mashigo said.

Gauteng’s other large metro, Ekurhuleni, reported last September that 29% of its water supply was lost to leaks or theft. While it has not directly mentioned the monetary loss, the city is facing significant debt to service providers. In April last year it owed R600m to Rand Water.