Billions of rands will be needed to fix the water infrastructure in the eThekwini Municipality.
The much anticipated draft turnaround strategy (TAS) report on trading services reform strategy for the eThekwini Water and Sanitation (EWS) unit was presented at an eThekwini Executive Committee (EXCO) meeting on Wednesday.
The progress on the implementation of the TAS was outlined at the meeting with the report stating that there are 128 council approved goals of which only 22.66% are complete and 0.78% require assistance. The report stated the projected capital requirements over the next 5 and 10 years.
The EWS currently has insufficient financial resources to implement all the plans, due to the shortfall of R3,201 billion which has been identified in the financial years 2025/26 and 2026/27.
The report stated that the funding shortfall is primarily due to the already approved Medium Term Revenue and Expenditure Framework (MTREF) for Financial Year 2025/26 and 2026/27 which did not include the TAS projects. Additional funding is therefore required to cover the shortfall.
Head of the EWS Ednick Msweli stated that the National Treasury (NT) recognised the deteriorating state of infrastructure platforms that is driving the decline in the performance of trading services in municipalities. Among them are declining cash revenues; and progressively fewer investments into the sector.
Msweli said that the NT has initiated reforms in metropolitan municipalities through performance based financial incentives to reward good decisions and performance. Msweli said the implementation of these goals and strategic objectives are being further assisted by NT through the recently released guidance note on Urban Settlements Development Grant (USDG) infrastructure reforms.
Msweli said that in the 2025/26 financial year, additional funding could be unlocked. The municipality is also expecting a USDG incentive grant in the 2025/26 financial year.
The EWS proposed these projects:
The EWS plans to reduce non-revenue water (NRW) from 54% to 25% over the next five years. This would reduce the financial implications of non-revenue water losses, which is over R2 billion annually.
The EWS plan is to invest R4 billion in 5 years to offset these losses to manageable levels. The EWS plans to improve its collection rate from 84% to 95%, saying this will result in increased revenue inflows and make the EWS business sustainable in line with the TAS.
Msweli said the construction of the Southern Aqueduct would be completed in the 2026/2027 financial year at about R1,1 billion to bring major relief in terms of water supply in the southern areas, which have been under constant intermittent supply.
This investment would also reduce the need of water tankers in the area. The EWS also plans to spend R25 billion on Public-Private Partnerships (PPP) projects to commence within 5 years. The first major projects being the two new regional wastewater treatment works to be constructed in 2027/2028 financial year at a cost of R2,1 billion.
The EWS is also looking at its annual fleet replacement which will reduce the cost of fleet hire and water tankering.
Msweli said the EWS Business and Investment Plan (BIP) was submitted to the NT who would then work on the design of the financial incentive with first allocations under this financial assessment to be reflected in the Division of Revenue Bill (DoRB) in February 2025.
Msweli said agreements will also be confirmed regarding the overall funding of the incentive programme. He said that from July 2025, Metros will receive first allocations of incentive funding made available on achievement of the key performance indicators (KPI) captured in the Performance Improvement Action Plan.
zainul.dawood@inl.co.za
Related Topics: