New SOE for water infrastructure 

The name is The NWRI Agency

(legislation)

Water infrastructure development is the name of the game and a new SOE has been announced.  It’s called the National Water Resource Infrastructure Agency (NWRIA) and it could well become another centralised state monopoly but in this case, its asking for private sector funding (not taxpayer’s money for a change) to handle its own infrastructure build programme.   Its going to spend R900bn over the next ten years, it says.

Bubbling away in the background since 2022, rushed through Parliament at the last minute by the previous government together with the NHI Bill,  has been legislation to form the new, massive DWS water development project, the NWRIA.

Heavy traffic

The NWRIA Bill, creating this entity and the fund itself, were both products of the frantic rush by the ANC government before the close of the last Parliament to create a number of state entities and functions including the Small Business Fund, the NHI Fund and the Public Procurement Officer’s structure in Pretoria and the NWRIA Fund.

Much of the rush on 9 major pieces of legislation was created by the realization that polling was not going the right way and should the ease of passing legislation almost at will be lost, a whole stack ANC-favoured ideas might perish at the same time.    The ANC  whip was called to ensure consistency in voting since advance reseach polling had shown that the electorate were about to express their views very strongly on the shabby state of water reticulation, particularly in Gauteng.

Water, water

By all accounts, the problem haunting water development down the line at municipal and local level for a long while  has been an inability to manage the department and execute projects at a lower level.  Of fifteen projects described by DWS in a progress statement May 2024, the word “delayed” was used fifteen times in the report back.   No wonder that where water infrastructure development is concerned, urgency in delivery has become the daily talk on the subject of issues confronting the GNU amongst MPs.

The NWRIA, operating as an SOE in principle although called an agency,  will be run on a concept similar to that of SANRAL – but in this case the control entity will be offering up  a mixture of state water assets combined with other national water projects. “The NWRIA, it is hoped, will have a sufficiently solid balance sheet to private meet investor requirements,  the base assets being combined with those of the Trans-Caledon Tunnel Authority (TCTA).”

Mountains of the Moon

 Originally, the TCTA’s original mandate was to finance the build the South African contribution to the Lesotho Highlands Water Project (LHWP), delivering water into the SA’s Vaal River System.    TCTA now also handles DWS water infrastructure projects in the Olifants, Crocodile, Berg and uMzibuvubu Rivers.

In its passage through Parliament, the NWRIA Bill, on coming before the portfolio committees, the wording snagged on the operation of the Fund.   What the DA MPs disliked intensely about the NWRIA’s founding legislation was the manner in which the then ANC Minister, David Mahlobo,  now a GNU Deputy Minister, were hugging on to control of the Fund to be formed and had gained government’s ability to appoint its board running the Fund. The same applies to the new minister.

NEDLAC process

They also disliked the manner in which the socio-economic impact assessment had been quietly approved by National Treasury alone. The DA would not support the Bill on this basis but it was carried by the ANC chairperson, using the  majority swing vote which the applied to all committees.

 Legislation is now therefore in place introducing an entity called NWRI SOC Ltd in order to raise “non-fiscus finance” (meaning private sector finance in govspeak) and with a substantial balance sheet to attract.  Each water infrastructure project, we note, is ringfenced with its own bank account, income agreement and funding programme.

A spokesman for DWS told MPs said that the NWRIA Act does not replace or trump in any way the National Water Act, “but is to be read in conjunction with all other legislation”. The Bill will not cause any state institution to be changed and such is allowed in terms of the Constitution, the Minister said.

Water infrastructure needs

The department has also said in recent days , “In spending R900bn on water-supply, water infrastructure and water storage by 2030, we believe that a state utility operated without too much heavyweight political oversight, could be more efficient at raising the necessary finance and running assets.”   So, let’s see who appoints the controling board amd who they are.

Earlier, Parliament had been told by DWS in their briefing on the Bill that what is involved was the setting up funding and managing of another state fund of some R10m into government with Development Bank of SA “in order to take advantage of the Trans Caledon Dam opportunity.” This seed money, Parliament was told, will be added to the funds already received in the form of the internationally sourced Green Climate Fund (GCF) of some R70m held in suspension.

“GCF” of Green Climate Fund  is the term used to describe the funds held by the South African National Biodiversity Institute (SANBI) who are the accredited “direct access entity” to the funds received from the world body– a critical element of the historic Paris Agreement –  known as the Green Climate Fund and the world’s largest climate fund.

Recent reports on the water supply system in South Africa have described the situation as “disastrous” and water supply professionals have advised media outlets that the establishment of new water infrastructure must be started in 2024 or it will be too late to recover from past inaction.