HomeIndustry SectorsAsset MaintenanceAddressing non-revenue water losses needs public private partnership

Addressing non-revenue water losses needs public private partnership

According to the 2030 Group’s Global Water Resources 41% of the water municipalities clean and send out in South Africa should be considered non-revenue water (NRW). That would be water that never reaches the customer it was intended for.

Against a global best practice figure of 15% that is a rather worrying figure. Municipalities around South Africa are losing too much of their potable water and thus looking for ways to manage the challenge.

Have you read?
Non-revenue water losses are bleeding municipalities dry

Siphindile Sikhosana, senior manager for the metering and revenue department of Johannesburg Water, says they are instituting a variety of strategies and system enhances for effective revenue collection.

“When we analyse the impact of what comes into our water balance calculation, there has been an improvement in that we focus more on apparent losses. Looking at illegal connections as a factor, the metering issues that impact on our billing and the items relating to the NRW from apparent losses position,” explained Sikhosana.

Sydney Masha, an engineer in the commercial and business section of eThekwini Water and Sanitation, is in charge of setting up a pilot project around performance-based contracting. The municipality noticed an uptick in NRW levels after the COVID-19 pandemic induced lockdown started and they are trying a pilot across four areas rather than applying ad hoc measures.

Using private sector financing and knowhow to help municipalities deal with non-revenue water losses

Using Phoenix, Inanda, Kwamashu and Ntuzuma gave a good mix of formal and informal settlements alongside peri-urban areas for the eThekwini feasibility study. “We are hoping to address through this contract, private sector involvement with us as a city to address non-revenue challenges,” said Masha.

Konstant Bruinette, a deal originator with the Development Bank of South Africa, working on a new programme the Bank wants to introduce around NRW. He pointed out that revamping existing systems is often viewed as a simple process of replacing old pipes with new ones, but achieving a sustainable water business that makes money is a complex exercise.

Have you read?
Identifying business opportunities in South Africa’s water sector

“It is important to note the quantum of investment required to sufficiently address the situation is often of a magnitude that lies outside of the normal capital expenditure range of a municipality,” said Bruinette.

One solution is for a municipality to secure external finance for the works. “But, the challenge is the credit and risk evaluation requirements of financiers go way beyond a simple plan to replace pipes. A holistic approach and focusing on institutional technical and financial risks is required in order for a municipality to raise funds in the market for these programmes,” said Bruinette.

Global best practices to change how SA municipalities work

In response to this problem the DBSA is working with stakeholders and partners to develop a national water programme, of which non-revenue water would form a sub-programme.

Through the establishment of a programme management unit, they will provide centralised expertise to project owners (municipalities) to help with project preparation, mobilising funding for scaled implementation across the municipalities systems and then to assist with monitoring of the implementation and maintenance activities.

“The PMO centre of excellence will provide support to what we see as key criteria required for successful project development and implementation. Things such as standardisation of documentation ITO references and feasibility studies in order to reduce transaction costs; looking at speed to market and providing capacity support to municipalities where required; assisting where required with procurement; looking at best practices and lessons learned across the globe and incorporating this into project preparation activities; best practice technology – what is in the market and how that can be incorporated into projects.

“A thing that is often overlooked is the issue of communication, consumer awareness campaigns,” explained Bruinette.

To find out more about the DBSA’s planned programme, how Johannesburg Water is using innovative ways to find and plug their leaks and how eThekwini Municipality’s performance-based contract pilot will play out, log into the Plugging the Revenue Leak session, now available on-demand on Enlit Africa connect. ESI

Theresa Smith
Theresa Smith is a Content Specialist for ESI Africa.