“Failing infrastructure, service interruptions and massive tariff increases” – these words have become somewhat synonymous with Eskom and South Africa’s electricity supply. Recently, however, those same statements can just as easily be applied to the country’s aging water supply system.
This is according to Andre Agenbag, Divisional Head of Energy Partners Water (EP Water) – a division of Energy Partners and part of the PSG Group. “With the Department of Water and Sanitation (DWS) considering tariff hikes of anything up to 16.5% for the 2020/21 financial year, water restrictions, supply interruptions due to maintenance issues, and talk of ‘water shedding’ – the similarities to the energy crisis are obvious.”
Municipalities remain hampered by old infrastructure, inefficiencies and various other challenges, explains Agenbag, who expects these water price hikes to continue. “The reality is that only 59% of water distributed by municipalities actually generates revenue, which means that water needs to be priced 70% higher, just to fund the non-revenue generating portion“.
“In times of water shortages, municipalities can sell less water. This means they collect less revenue, which means even less can be invested in maintenance of water infrastructure. The only option is to increase tariffs – the similarity to Eskom is uncanny,” he states.
However, having lived through the Eskom crisis, many businesses are now taking steps to become less dependent on municipal water supply. For commercial and industrial property owners, Agenbag says that ground water is a good alternative solution.
“A ground water solution, such as a borehole with a water treatment system, does not only offer a reliable, alternative water supply, it can actually significantly reduce a property’s operational costs and increase the owner’s yield on investment“.
“This is because, in addition to bypassing all of the inefficiencies that are costed into the price of municipal water, ground water sources can often be found on the site of the property, which eliminates distribution costs,” Agenbag explains.
These cost-savings, he says, will be particularly substantial for larger properties with considerable daily water consumption levels. “For a commercial property that uses more than 40m3 of water a day, the decision to implement a ground water supply solution has become a ‘no brainer’”.
“In these cases, the property owner can essentially get access to a secure water supply and reduce water costs – all without taking any risk or investing a cent of their own capital,” says Agenbag.
He notes, however, that there is no guarantee that a borehole will yield enough water, nor what the quality of the water would be. “This is why it is important to work with an expert who understands these risks and can help mitigate them. In EP Water’s case, we will take all of these risks on ourselves“.
“We also work with independent environmental consultants and geohydrologists to ensure we utilise ground water resources responsibly and in a sustainable manner. Obtaining Water Use Licenses and permits can be a lengthy process, which is why we encourage our clients to start the process before it is too late,” Agenbag concludes.
