Asset manager Coronation has warned that “water-shedding” incidents are on the rise outside the Western Cape, and that Gauteng is particularly affected, which threatens potential investment inflows.
The Cape Town-based company said water security was arguably one of the most critical risks to SA’s social, economic, and political long-term future, highlighting the importance of water as a business necessity.
“SA has no navigable rivers, which are traditionally critical to economic and industrial development because they provide a natural source of necessary water and transport. The larger rivers — the Orange, Vaal and parts of the Limpopo — occur in parts of the country where there is little industry, while SA’s commercial and industrial heartland, Gauteng, has no sustaining water source,” analysts from the asset manager said in a note.
“Seven out of nine provinces rely on water from other provinces for around 60% of their economic activity. Gauteng is 100% reliant on water from elsewhere. This increases the vulnerability of SA’s economic heartland to water scarcity and climate change.”
Commercial property owner Redefine warned last week that disruptions to water supply in Gauteng far outweighed the effects of load-shedding. Water outages posed a greater threat to business operations, and could lead to commercial buildings becoming uninsurable, the company told Business Day.
To this end, Redefine has set aside more than R200m for the installation of new water tanks to guarantee water supply for up to five days at its Gauteng properties.
Delays to the second phase of the R38bn Lesotho Highlands Water Project had left Gauteng — and a wider region that accounts for about 60% of SA’s economic activity and in which 26-million people live — without adequate supply, Sean Phillips, director-general of the department of water & sanitation, said during a webinar organised by Creamer Media earlier this year.
Johannesburg Water’s business plan for 2023/24 reveals an infrastructure backlog of R24bn, underscoring the infrastructure challenges in the province.
Coronation said businesses faced the dual dilemma of water stress worsened by climate change, as well as municipal infrastructure challenges, which affected the availability of sufficient, usable water required to run a business.
“The processes which are necessary to sustain and maintain these systems are also at risk. Water monitoring and measurement at source has seen three decades of reduced fiscal and human resources, as people are needed to monitor rainfall, river flow and groundwater at source regularly and over long periods of time.
“Most of the larger rivers are dammed to capacity. Maintenance of and investment in the engineering of these ageing systems has been poor,” it said.
“However, the very weakest part of these complex systems is right at the end of the supply chain. Population growth ... water scarcity and climate change have increased the strain on water resources and infrastructure, but this has been materially exacerbated by the poor performance of entities tasked with maintaining water and sanitation infrastructure.
“The widespread breakdown in governance at the municipal level has exacerbated poor maintenance of water systems, leading to polluted systems, poor treatment and massive physical and revenue loss (non-revenue water).”
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