Private sector investment in water services needed to achieve SDGs

Mchunu said some of the challenges that hinder achieving the SDGs are the way municipalities run water and sanitation services.


Devdiscourse News Desk | Pretoria | Updated: 19-09-2022 16:21 IST | Created: 19-09-2022 16:21 IST
Private sector investment in water services needed to achieve SDGs
Mchunu was speaking at the International Water Association (IWA) World Water Congress held in Copenhagen, Denmark. Image Credit: Twitter(@SAgovnews)
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  • South Africa

Water and Sanitation Minister, Senzo Mchunu, says there is a need to increase private sector involvement in water services to achieve the 2030 Sustainable Development Goals (SDGs).

Mchunu was speaking at the International Water Association (IWA) World Water Congress held in Copenhagen, Denmark.

The congress, held from 11 - 15 September 2022, brought together core water sector groups, including those focused on urban water and urban water services.

It also included participants from industry and agriculture, architects and urban planners, soil and groundwater experts and hydrologists, social scientists, the Information and Communications Technology (ICT) sector and financial sector, amongst others.

This year's global meting conference focused on innovative funding for SDGs and climate change.

Mchunu was invited by Danish Ministers for Development Cooperation, Flemming MØller Mortensen and Environment, Lea Wermalin, to present at the high-level summit and to share South Africa's experiences.

During the visit, Mchunu strengthened bilateral cooperation between the two countries under the auspices of a programme run by the department's Director-General, Dr Sean Phillips.

Mchunu said some of the challenges that hinder achieving the SDGs are the way municipalities run water and sanitation services.

He said municipal water supply is supposed to be managed as a self-sustaining business, with maintenance, operation and refurbishment costs covered by revenue from the sale of water.

"In many municipalities, water and sanitation services are in a poor state and deteriorating, and the percentage of the population with access to reliable and safe water and sanitation services is declining.

"Causes include weak governance and corruption, poor billing and revenue collection, poor asset management, operations management, maintenance and a lack of recruitment of people with the required qualifications and experience," Mchunu said.

He added that, where there is a constraint in municipalities in terms of finance and expertise, there is substantial expertise in the private sector, and banks and pension funds.

However, he said private sector involvement in municipal water and sanitation services is considerably low compared to other middle-income countries.

"The reason for this is a lack of capacity in municipalities to take bankable projects to the market, coupled with a public-private partnership (PPP) regulatory framework, which means it takes 8 - 12 years to facilitate a PPP.

"In this context, we are… putting in place public-private collaboration agreements with industries, such as the mines and agriculture, for joint funding of infrastructure projects. This will simultaneously provide bulk water to industry and reticulated water to communities.

"[We are also] putting in place a Water Partnerships Office (WPO) to assist municipalities [on how] to contract for PPPs and independent water producers (IWPs)," Mchunu said.

The WPO is a ring-fenced entity in the Development Bank of Southern Africa, and the work of such a WPO will be assisted by reforms of the PPP regulatory framework currently being finalised by National Treasury.

Mchunu assured stakeholders that South Africa is keen to learn from the experience of other countries, as it embarks on this journey.

(With Inputs from South African Government Press Release)

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