South Africa is pushing towards the formation of a state-owned enterprise (SOE) for water, which is expected to be established in the first half of 2025. <\/p>\n\n\n\n
However, experts are approaching the move with scepticism and caution.<\/p>\n\n\n\n
In March 2024, Parliament passed the consequential National Water Resources Infrastructure SOC (state-owned company) Bill, which President Cyril Ramaphosa signed into law<\/a> at the tail-end of August.<\/p>\n\n\n\n The Act<\/strong><\/a> was gazetted on 2 September 2024, but is not yet in force.<\/p>\n\n\n\n The bill establishes the National Water Resources Infrastructure Agency (NWRIA) as a significant public entity and state-owned company.<\/p>\n\n\n\n Ramaphosa said in a statement after signing the Bill into law that “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,\u201d particularly when it comes to the provision water.<\/p>\n\n\n\n Across South Africa, recent reports from the Department of Water and Sanitation (DWS) reveal widespread challenges for the critical resource, showing that at a national average:<\/p>\n\n\n\n In Coronation\u2019s July 2024 Correspondent<\/a>, economist Marie Antelme and ESG analyst Leila Joseph say that<\/a> \u201cwater security is arguably one of the most critical risks to South Africa\u2019s social, economic, and political long-term future.\u201d<\/p>\n\n\n\n Recently, Parliament’s Portfolio Committee on Water and Sanitation raised red flags over municipal debt to water boards, which has surged to R22.36 billion, up 151% since 2019, risking bankruptcy for some boards<\/strong><\/a>.<\/p>\n\n\n\n SOE to save the day<\/strong><\/p>\n\n\n\n “The [new] law seeks to address the current fragmentation in water resource management between the DWS, the Trans-Caledon Tunnel Authority (TCTA) and the Water Trading Entity, and to establish an agency that is able to raise funds on its own balance sheet to increase investment in water infrastructure,” said Ramaphosa.<\/p>\n\n\n\n The main mandates of the NWRIA are said to: <\/p>\n\n\n\n “The Bill creates an opportunity for the national government to address issues relating to water security outside of South Africa’s constrained fiscal environment,” said<\/a> legal experts at Webber Wentzel, Calvin Nchabeleng and Makgati Makgatho.<\/p>\n\n\n\n “It also creates further opportunities for increased public-private partnerships for the construction, operation and maintenance of national water infrastructure,” in line with the objectives of Operation Vulindlela, they added.<\/p>\n\n\n\n Visiting Professor at the Wits School of Governance, Mike Muller, previously\u00a0wrote<\/a>\u00a0that this new arrangement could ensure that the funds needed<\/span> are properly applied.<\/p>\n\n\n\n\n
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