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Cape Town - Water Affairs and Forestry Minister Buyelwa Sonjica signed agreements on Tuesday to pipe water from the Vaal river system to industries in Mpumalanga.
The water supply and payment agreements were with Sasol, Eskom and the Trans Caledon Tunnel Authority (TCTA).
They paved the way for the off-budget, long-term financing of the R2.5bn project - a government initiative to support sustainable economic growth in the country, said TCTA spokesperson Gijimani Vezi.
The 115km Vaal pipeline will transfer 160 million cubic metres of water a year to a distribution structure at Knoppiesfontein, near Secunda.
Work on the project is expected to start in November, with completion scheduled for November 2007. It is expected to provide 750 job opportunities.
The pipeline supply and installation contract is valued at R1.6bn. The contract for civil structures, mechanical, electrical and instrumentation - valued at about R600m - has yet to be awarded.