Ramaphosa signs law creating a new state-owned company for South Africa

President Cyril Ramaphosa has enacted legislation to create a new state-owned company focused on water infrastructure.

The Presidency said that this would allow South Africa to expand bulk water infrastructure and improve the management of existing water assets to ensure water security over the next ten years.

The assertion of the South African National Water Resources Infrastructure Agency SOC Ltd Bill establishes a new agency responsible for developing and managing national water infrastructure.

The agency can get financing for new projects through new models that attract private investment.

The new legislation forms part of the reforms in the water sector to improve investment in the maintenance and construction of water infrastructure and improve water quality.

These reforms are driven by Operation Vulindlela, a joint initiative of the Presidency and National Treasury to support economic recovery through structural reforms.

The initiative hopes to modernise and transform network industries like electricity, water, transport and digital communications.

The new law follows a Department of Water and Sanitation initiative to reform the South African national water resources infrastructure.

“Over the past few years, there has been an emerging recognition of the need for a stronger public sector in the key area of infrastructure development, effective maintenance, operation and management of existing infrastructure, and to support social and economic development,” said the Presidency.

“The South African National Water Resources Infrastructure Agency SOC Ltd Act establishes the National Water Resources Infrastructure Agency SOC Limited as a vehicle to achieve the strategic objectives of government to eradicate poverty and to ensure sustainable and equitable development.”

The new legislation addresses the current fragmentation in water resource management between the Department of Water and Sanitation, the Trans-Caledon Tunnel Authority (TCTA) and the Water Trading Entity.

The new state-owned company comes as South Africa faces extreme water supply issues, with taps regularly running dry in Johannesburg, the nation’s richest city.

Coronation’s 2023 Stewardship report also stated that “water is an increasing business risk for South African companies both from the perspective of climate change exacerbating water stress and deteriorating municipal infrastructure.”

Big changes for state-owned companies

The establishment of the National Water Resources Infrastructure Agency comes after Ramaphosa made significant changes to the oversight structures of other state-owned companies.

On Monday (26 August), the president assigned shareholder responsibility for each state-owned enterprise previously under the stewardship of the now-defunct Department of Public Enterprises to the respective line-function Ministries.

Ramaphosa signed proclamations which, in terms of Section 97 of the Constitution of the Republic of South Africa of 1996, transfer the administration, powers and functions entrusted by the specified legislation as follows:

• Alexkor: Minister of Mineral and Petroleum Resources
• Denel: Minister of Defence and Military Veterans
• Eskom: Minister of Electricity and Energy
• Safcol: Minister of Forestry, Fisheries and the Environment
• South African Airways: Minister of Transport
• South African Express: Minister of Transport
• Transnet: Minister of Transport

Moreover, the Minister of Water and Sanitation is vested with certain sections of the Overvaal Resorts Limited Act of 1993 and the Overvaal Resorts Limited Act Repeal Act of 2019.

Ramaphosa also signed a proclamation appointing the Minister in the Presidency responsible for Planning, Monitoring and Evaluation as the executive authority of the Department of Public Enterprises (DPE) until the human and financial resources are transferred.

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