WATER

SA in crisis

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When former Vice-President of the World Bank Dr Ismail Serageldin warned the world in 1995: “…the wars of the next century will be fought over water-unless we change our approach to managing this precious and vital resource”, many sceptics frowned, while others even referred to it as paranoia. 

Yet just over a decade later, there are clear signs that clean fresh water, the one thing we take for granted---and the one thing this planet cannot do without---is becoming a scarce commodity in the world. And South Africa is no exception to this, as large parts of the country are currently experiencing water shortages, which inherently affects not just our every day lives, but the county’s economy at large.

In a matter of months the cost of water in South Africa has skyrocketed and households and businesses alike are battling to keep head above water in an already volatile economy.

While the blame for the growing water crises in South Africa has been shifted from corruption at municipal level, to a lack of maintenance planning at water treatment facilities, to copper theft and electricity infrastructure failures, and most recently, to the unexpected hot weather, the fact remains; our water shortage is a sign of the times 

However, the Water Institute of Southern Africa’s CEO, Lester Goldman, says now is not the time to find fault and lay blame, when he recently appealed to all South African private and corporate citizens to temporarily put discussions and frustrations about the well-known challenges of climate change, infrastructure planning and maintenance, increasing demand, and skills concerns on hold. 

“All these challenges need to be addressed in due time, but first, let’s get through the heatwaves and water shortages together as a nation united in using our water supply sparingly, and to the benefit of the greater good. Times of crisis call for unusual actions and an amount of restraint that South African consumers aren’t used to being exposed to. The only way to resolve the current water crisis is to tackle the issue as a united team in supporting the authorities in any way possible.”

The Institute of Directors in Southern Africa’s (IoDSA’s) Chairperson of the Sustainable Development Forum, Karin Ireton, says escalating water prices are just one risk of water scarcity for business.

“Water prices look set to escalate to reflect its importance and scarcity, but I believe this price escalation will be the catalyst for greater efficiency in the use of water, and stimulate the necessary broad co-operation across all stakeholder groups. 

“The Department of Water Affairs and Sanitation’s revised pricing strategy is now available for comment, but it’s clear that prices will rise in order to reflect the fact that this is an essential resource and one that is in short supply,” Ireton explains. “The proposed pricing model is based on ‘user pays’, and will also cover the costs of pollution and future infrastructure. Business, industry and agriculture are the biggest users (and polluters) of water, and also thought to be the best able to pay, so it can be expected that higher water prices will be a reality.”

IoDSA’s Sustainable Development Forum

Ireton’s comments are based on a recent panel discussion hosted by the IoDSA’s Sustainable Development Forum. The event focused on water scarcity and the impact on business and brought in the views of Professor Coleen Vogel (Environmental Scientist and Disaster Risk Specialist), Dr Arthur Kamp (Insurance and Investment Risk Expert) Dr Nezar Eldidy (Infrastructure Consultant and member of the Water Institute of South Africa). The dialogue focused on equipping directors and executive managers to improve management of water risks.

Ireton says that while boards need to start developing strategies around mitigating water risks, they also need to be aware of the complexities. The challenges they face are not restricted only to increased water pricing, or the many technical issues relating to water quality and access to reliable supply. Access to water is also a social justice issue and the cause of numerous service delivery protests. The challenges also stem from a lack of technical and managerial skills within the multiple players in the governance structure as well as the inefficient---and sometimes corrupt---allocation of funds.

At a more practical and immediate level, Ireton argues that businesses generally need to take a highly proactive approach to water use. Research has shown that there is a wide variation in the efficiency with which businesses in the same industry use water. Benchmarking themselves against their peers, locally and globally, would provide businesses with realistic targets based on what is achievable. Starting to report on water impact separately in their integrated reports should thus be a priority because it will take some years for companies to understand the complexities and start generating accurate and meaningful reporting. 

“Water presents business, and society more broadly, with a complex set of challenges. We need to put the right governance processes in place to ensure we come up with the solutions,” adds Parmi Natesan, Executive: Centre for Corporate Governance at the IoDSA.

A man who is well qualified to talk about the country’s water issues, is Kevin Cilliers, regional manager for the National Cleaner Production Centre of South Africa for KwaZulu-Natal, who says the recent escalation of the current drought, resulting in seven of the nine provinces being declared disaster areas, has certainly forced industry to take a different approach to water use in their operations in order to ensure their long- term survival.

Risk of no water supply

With water restrictions and cuts having been implemented in a number of municipalities, industry is no longer having to only absorb higher costs for exceeding supply, but are actually faced with the risk of no water supply at all. This has prompted industry to consider alternate options. Whilst plans are underway to upgrade the water supply infrastructure to allow transfer from less stressed areas and to implement alternate water generation technologies, these are longer- term projects with high investment costs. Currently general consensus is that the implementation of water efficiency and conservation measures at production process level is likely to yield the quickest and biggest impact in addressing the current water challenges in the short to medium term, until such time alternate solutions can come on line. The result is that industry are now well primed to engage the water consulting service practitioners fraternity and to consider the adoption of new technology options.

“With 98% of South Africa’s available water resources having been allocated across the various sectors, it is imperative that industrial operations review their practices with the aim of recovering and recirculating their water in closed loop systems. This now opens opportunities for emerging water practitioners to develop their skills to service the industry with long-term sustainable solutions, not affiliated with any particular technology service provider.

“At the same time this opens the door to the development of relevant training materials and courses to build awareness and capacitate industry sector representatives and service providers with the required skillsets to tackle the water challenge. Similarly this will also expose industry to latest technology trends such as the establishment of grey water reticulation systems to recover storm water, sewerage and industrial effluent. This tentatively paves the way for the development and emergence of new and additional green jobs within the South African economy,” he told Opportunity.

With population growth driving higher water demand (while changing weather patterns decreasing the supply of fresh water), one could ask what should businesses in South Africa need to consider to achieve higher levels of water efficiency? Cilliers says firstly, awareness remains a key response strategy to addressing water use in any organization---and staff need to understand the impact of their actions or failure to act and take ownership to do their bit to saving water. “Organisations need to adopt a systematic approach to dealing with and managing water use in their processes. Regular and proactive maintenance schedules can also go some way to avoiding leaks and losses before they occur. Regular reviews of their current water use processes and understanding where water is used, why and how much should be used will also enable businesses and industries to identify weak points or areas of opportunity to reduce.

“Lastly, measurement and monitoring of water use can be a powerful tool for businesses and industry to track their usage patterns and trends, and use such plots to establish their baselines and ultimately set targets to measure and monitor performance,” says Cilliers.

According to him, the role of public private partnerships (PPPs) in the South African landscape will ultimately need to become the end goal. With the drive and push to get industry to start managing water use and more specifically effluent treatment at point of generation, more investment will need to be made by business and industry to achieve this. 

Extensive capital investment

“Unfortunately these technologies often involve extensive capital investment, outside the acceptable investment returns for the organisation. In such instances opportunity may exist for PPPs. The reasoning behind this is that when one considers the value chain risk cost associated with not being able to supply one cubic metre of water, this may well exceed the investment cost to implement relevant water optimisation technologies. In the same vein with effluent treatment, the cost of implementing a localised technology solution is far less than the investment required to extend or build a new municipal treatment works. Therefore in the long-term it is in the best interest of private entities and public institutions to consider partnering in water efficiency and effluent treatment technology solutions to achieve win-win outcomes for both parties.”

Cilliers says, concerning the involvement of the private sector to supply water and dispose of waste water in SA and Africa, we are gaining ground, but we’re not anywhere near what it could be. This is largely attributable to the current pricing structures for water, not realising the full cost of supply and red tape when dealing with public institutions specifically regarding financial management requirements such as the Public Finance Management Act and the Municipal Finance Management Act requirements and current legislation regarding water supply and effluent treatment.

As to why this is happening? “I think there are certain private and public institutions that are looking more at the longer-term benefits than the immediate payback and are making sound financial decisions based on the full life cycle cost of the technology against the cost of not doing it.

Whether there enough companies in South Africa specialising in water conservation technologies remains debatable, but Cilliers says the question isn’t so much whether there are enough companies specialising in the water field, but about more whether they fully understand the landscape and technologies available to address this issue.

“With the bulk of technology solutions originating from outside South Africa, many companies in the water services arena have a very narrow focus of what is available, or don’t fully understand the true extent of the technology’s capabilities. The reliance on foreign companies to provide leading technologies also raises the question: do they truly understand the South African conditions and landscape? This is further exacerbated by the fact that many service providers are also preferentially linked to particular brands or technology suppliers which can limit the interested companies’ exposure to all the available technology solutions. It is therefore important to develop a water specialist service sector that is able to asses each opportunity on its own merit and apply the most appropriate solution available.” 

Water conservation and investing in our water resources and delivering innovative solutions to South Africa’s precious water resources cannot happen without the right skilled people in place. However, the big issue really is broader awareness of all levels from the consumer to top management. It is imperative that every person understands the impact of their actions when using water. The NCPC-SA’s proposed programme provides a platform to develop and present skills training where there are gaps, until such time the normal market forces can pick these up as commercial offerings to the business and industry market place.

Desalination

Cilliers says, in terms of opportunities, looking at the future, desalination comes up as an option. However this remains an energy intensive process and is likely to place further strain on our already stressed energy grid.

With SA’s current constrained energy grid, desalination is still largely not viewed as the first choice option. In addition, desalination also generates large volumes of highly concentrated brine effluent streams, which also need to be disposed of unless commercial markets can be identified for this stream. Considering the ecologically sensitive coastline, more research will need to be done to understand the long-term impact of disposing this back into the ocean.

Cilliers advises that, although technology will play a functional role in solving global water issues, it is important to note that the starting point to addressing water efficiency shouldn’t be technology, but rather to ensure first that existing operations are being undertaken within the design and process specified parameters.

“By ensuring that the existing process optimisation has been maximised, only then should technology changes or investment be considered. This approach will not only minimise over design, but it will also impact investment cost significantly.”

Juanita Vorster, James van den Heever & Lindsay King

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