Eskom’s debt mountain – R419 billion and growing – is a significant threat to the country’s fiscal strength. Some would argue that it is the single biggest factor influencing our sovereign credit rating.
Operationally, the unexpected wave of load shedding has been disruptive and will drag on economic growth. But load shedding is a controlled way of dealing with a national supply-side crisis.
The plan by the government to split Eskom into three will yield two good assets and one bad one. The transmission and distribution entities are still arguably world-class, especially the former. In Joburg, direct distribution to households and businesses by Eskom in greater Sandton and Soweto is significantly better than the job done by City Power. In fact, there are strong arguments for the distribution business of Eskom to take over this function nationally (a story for another day).
The reality is that the bad asset – generation – is plagued by reliability problems, decades of underinvestment, poor maintenance and artificially high input costs (among other things). Despite multiple power stations, the fact that we receive power from a national grid means generation is, practically speaking, a single point of failure.
There is a far bigger crisis looming. And because the supply side is completely distributed to regional, district and even municipal level, it isn’t as easily manageable as Eskom. And it’s going to take an almighty effort to solve over the medium term.
Day Zero in Cape Town captured the headlines last year because this affected a massive city – arguably the country’s second most important – and the seat of Parliament. As much as this ‘only’ affected 4.2 million residents, it became a national crisis. The local and provincial governments coordinated a response, business mounted an enormous effort to reduce consumption and augment supply, and residents reduced consumption on a scale never seen before globally. The taps kept running. Rainfall was decent and the crisis was averted.
There are far bigger crises playing out in smaller cities and districts across South Africa, but we simply don’t hear about them.
Vast stretches of the Northern, Eastern and Western Cape are still experiencing severe drought conditions. The taps are drying up.
Beaufort West, probably the most well-known of these due to its location on the N1 transport route, has been in crisis for months. This is not mismanagement; far lower-than-average rainfall means boreholes (a major source of the town’s water) are drying up.
A similar scenario is playing out in Makhanda (formerly Grahamstown), but this is a crisis caused by the almost completely dysfunctional Makana Local Municipality. A similar situation played out in 2013.
In Kimberley, the entire town’s water supply is shut off by the Sol Plaatje Municipality every evening from 6 pm and restored at 4 am the next morning. Reservoir levels are critically low and this ‘intervention’ is the only realistic way for the municipality to maintain supply (water is pumped to Kimberley from the Vaal River, about 30km away). The recent deterioration in raw water quality poses real risks to a host of towns and cities that rely on the Vaal River System, including Kimberley. This is an entire provincial capital, without water.
Along with this, dozens of smaller towns including Philipstown, Petrusville, Harrismith, Bethal, Welkom, Ladysmith and Laingsburg are in crisis. Many more communities in towns and districts (especially in Limpopo and North West Province) are experiencing chronic water quality issues.
The Department of Water and Sanitation maintains that it is not the department’s responsibility to deliver emergency water supplies to towns in crisis. Beaufort West and Makhanda are relying on Gift of the Givers to truck in bottled water. No one in government can, or will, help.
The National Water and Sanitation Master Plan published last October is sombre reading.
There are problems everywhere you look: on the supply, demand and environmental sides.
Easily the most alarming is the fact that each person in South Africa, on average, uses 237 litres per day. That is “64 litres per person per day more than the world average of 173 litres per person per day”. The report says “the high water use is partly due to ‘municipal non-revenue water’ which is currently at an unacceptably high 41%”.
It adds that “35% is lost through leakage” (a number helped by relatively good performance in the Western Cape and Gauteng). “Municipalities losing about 1 660 million m3 per year through non-revenue water. At a unit cost of R6/m3, this amounts to R9.9 billion each year.” This equates to nearly 2 000 Olympic-sized swimming pools a day in lost drinking/potable water.
This is water that is literally running away.
In Limpopo and the North West, more than half of all water supplied is lost.
Operationally, local government infrastructure is a mess and this almost always manifests itself in water supply issues. The plan says about 44% of the 962 water treatment works, and 56% of the 1 150 municipal wastewater treatment works are in a poor or critical condition. They are described by the report as “in need of urgent rehabilitation and skilled operators”.
“Some 11% of this infrastructure is completely dysfunctional”.
Take a drive through small and medium towns in South Africa. You will be horrified.
The surface water we do have is being mismanaged on a colossal scale: “Between 1999 and 2011 the extent of main rivers in South Africa classified as having a poor ecological condition increased by 500%, with some rivers pushed beyond the point of recovery. South Africa has lost over 50% of its wetlands and of the remaining 3.2 million hectares, one third [is] already in a poor condition”.
The plan says “water is severely underpriced” and “cost recovery is not being achieved”.
“To achieve water security, an estimated capital funding gap of around R33 billion per annum for the next 10 years must be closed, through a combination of improved revenue generation and a significant reduction of costs.”
The projected water deficit in 2030 is 17%. Think about this for a second: the 2010 Fifa World Cup was nine years ago. In that same amount of time, we will have run out of water, unless radical changes are made.
Government’s only plan, really, is to force down domestic (residential) consumption.
Is it at all realistic to expect this course of events to unfold without water supply descending into the load shedding chaos we’re seeing in the provision of electricity?
‘Water demand management’ equals water cuts on a metro/city/district level because it is virtually impossible to manage demand effectively across tens or hundreds of thousands of households – ask Cape Town or eThekwini. In severe drought, this is what these metros resorted to.
‘Water shedding’ has entered the lexicon and regular cuts are surely going to be a way of life sooner than many think. In Gauteng, delays in commencing Phase II of the Lesotho Highlands Water Project will hit hard.
This is already a disaster. No one – apart from the millions of South Africans who live in these cities, towns and districts – realises it yet. No task team will be able to fix this.
Hilton Tarrant works at YFM. He can still be contacted at email@example.com.