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Johannesburg - A looming shortage in the supply of water may have serious cost implications for businesses and consumers, warned experts.
One of the people who recently warned the country is on the brink of a water crisis is Deputy President Kgalema Motlanthe.
"If we don't do this [address the problem], we're going to have big problems," Motlanthe said, addressing the National Council of Provinces. "Our landscape is semi-desert and water is a scarce commodity. Our next crisis will stem from this."
A recent article in Business Day cited a new study compiled by the Water Research Commission, claiming SA has 4% less water than previously believed. This may lead to the postponement of new mines and power stations because of insufficient water resources.
"We've behaved like a water-rich country when we're not," it cited the study's project director, Brian Middleton. "We're actually a semi-arid country and our mean annual rainfall is below the world average."
The article suggested the findings would also have serious implications for water tariffs.
This is also a confirmation of a water report compiled by Anthony Turton, a former researcher at the CSIR who had lost his job as a result of controversial research pointing to a looming water crisis.
Change the country
If water got to a point where the whole system was shut down, it would change the country, said Cannon Asset Managers' Adrian Saville. "I can't even begin to tell you how extensive the costs would be, but it could be a material threat on businesses and consumers alike."
Murray & Roberts CEO Brian Bruce said the issue isn't about water supply, but rather on the quality of water, referring to sanitation and waste. "People demand purified water and sanitation of water. If the source of water gets spoiled by the lack of sanitation, it becomes a health problem."
Bruce said the core of the problem lies at municipalities. "There are projects like [the building of] dams, pipelines and treatment plants, but the challenges lie in the municipal space, who might not know how to deal with the magnitude of the challenge."
Construction and geo-technical group Esorfranki's pipelines division, a company exposed to the sector, shared Bruce's concerns. "We believe that a water crisis is looming, if it is not already with us," said managing director Andrew Toy.
Construction will benefit
Any implemented strategy that aims to address SA's water concerns will benefit the construction industry directly.
"This is exactly the work that Group Five does," said Group Five CEO Mike Upton.
Also, Esorfranki Pipelines is already tendering for a portion of the work that has come to market. "Currently around 90% of our pipeline projects out to tender are in the water sector and emanating mainly from government, regional water authorities, provinces, municipalities and state enterprises," said Toy.
Further projects include an accelerated construction programme of the De Hoop Dam and the implementation of the proposed phase two of the Lesotho Highlands water project.
"We should learn from Eskom," Upton said, adding that future capacity expansion could still be done, but shouldn't be as much of a priority as addressing the current system.
However, he said it all depends on government's ability to fund. "It's going to put strain on the fiscus," he said.
Upton suggested the privatisation of water work on pipelines and the like, and believed concessions in the industry would be the way to go. "I see the opportunity, I just don't know whether the appetite is there."
- Fin24.com
