Where is the money coming from for the Joburg water infrastructure upgrades?

Clear budgets, records of spending and timelines are needed to improve transparency and public confidence

Image: WaterCAN

WaterCAN, an initiative of the  Organisation Undoing Tax Abuse (OUTA), calls on the Gauteng water authorities to make their water infrastructure plans public, with detailed spending and timelines.

This would provide clarity for the public on what infrastructure is being built, how much it is expected to cost, when it is due to be delivered and who is funding what.

WaterCAN would like to see this information for Johannesburg area water infrastructure from the City of Johannesburg and its entity Johannesburg Water, the bulk water provider Rand Water and the national Department of Water and Sanitation.

The information available is patchy and does not provide a clear overall picture.

On 9 October, WaterCAN wrote to Johannesburg Water and Rand Water, asking for meetings to get clarity on the plans to address the water crisis. On 10 October, the City of Joburg and Joburg Water held a media briefing to outline infrastructure plans (see here and here and here). WaterCAN was not invited to this briefing, although we believe that engagement should include civil society and the people being affected not just the media.

A Joburg Water presentation (see below) to that briefing lists the reservoirs due to be completed by April 2024 to July 2025.

However, we note that there are discrepances between the projects listed in the Joburg Water presentation and the projects in the Joburg Water capital expenditure budget. We used the Joburg Water capital expenditure list from the City of Joburg’s draft 2023/24 budget, as the City has failed to publish the approved budget on its website as legally required and National Treasury has published only some of the documents from the approved budget.

• The 2ML Erand tower in Midrand, under construction (total cost estimate in the Joburg Water presentation R77.916 million, compared to the budget total cost estimate of R25 million with the full R25 million planned for 2023/24). This implies that they are going to spend more than is in the budget;
• The 2.25ML Robertsville tower, in procurement (Joburg Water presentation total cost R55 million, not in the budget);
• The 22ML Woodmead reservoir, under construction (Joburg Water presentation total cost R51.262 million, budget total cost R20 million all to be spent in 2023/24);
• The 20ML Halfway House reservoir, in procurement (Joburg Water presentation total cost R60 million, not in the budget);
• The 1.8ML Blue Hills tower, in design phase (Joburg Water presentation total cost R55 million, budget total cost R107.5 million with R2.5 million in 2023/24, R40 million in 2024/25 and R65 million in 2025/26);
• The 20ML Carlswald reservoir, in procurement (Joburg Water presentation total cost R80 million, budget total cost R41 million with R5 million in 2023/24 and R36 million in 2024/25);
• The 3ML Linbro towers, in design (Joburg Water presentation total cost R100 million, the budget says tower is 1.5ML with a total cost of R57.5 million with R2.5 million in 2023/24 and R55 million in 2024/25); and
• The Brixton reservoir and tower, 2.6ML and 2ML, in construction (Joburg Water presentation total cost R292 million, while the budget has a Brixton reservoir of 2.6ML only at a total cost of R200 million with R100 million in 2023/24 and R100 million in 2024/25).

The Joburg Water presentation projects would cost R771.178 million over the two years, but those projects are budgeted at R386m for those two years. The revamped spending adds another R385.178 million, effectively doubling spending on those projects.

How will this be funded? Will other projects be dropped to fund these? Is this even in the budget? If this is in the final approved budget, why has the City not made this available?

In June, when the City’s final budget was tabled at council for approval, the MMC’s budget speech included reference to a Water Resilience Action Plan but we have not found a copy.

While it is encouraging that the City is attempting to address the infrastructure crisis, it is a concern that such significant capital projects appear to have been planned in such a last-minute rush that they are not even in the budget.

The City’s draft budget, with the capital spending annexure, is on the City’s website here and the final approved budget is on the Treasury’s website here.

 

No help from national government

There is no help from the national Department of Water and Sanitation. While Minister Senzo Mchunu was in the City in March 2023, announcing that the City and Rand Water would upgrade infrastructure, the City does not receive anything from the relevant national infrastructure grants (the Regional Bulk Infrastructure Grant, the Water Services Infrastructure Grant or the Municipal Infrastructure Grant) either in the last-minute adjustments in March to the 2022/23 grants or in the 2023/24 grants.

 

Rand Water: what’s being hidden?

Rand Water has been having difficulty supplying the metros and implemented “water shifting”, reportedly at the instruction of Minister Mchunu (see here).

In February 2023, the national Budget 2023 Water and Sanitation vote recorded that Rand Water “will focus on refurbishing and augmenting its infrastructure through projects such as pipeline renewals and the construction of reservoirs at an estimated cost of R19.7 billion over the medium term”.

In March 2023, it was announced that Rand Water would spend R28 billion on water infrastructure over the next three years (see here), including expanding the Zuikerbosch water treatment works with section 5A started in August (see here). Rand Water’s Corporate Business Plan for 1 July 2023 to 30 June 2028 (see here) lists bulk water supply augmentation and renewal projects valued at about R35 billion planned over the next five years, with detailed project lists.

We are concerned about Rand Water’s revival of its wholly owned subsidiary, Rand Water Services (Pty) Ltd (RWS), as SOEs have used subsidiaries to hide spending by limiting their financial reporting to a few paragraphs in the parent SOE reports.

Rand Water’s Corporate Business Plan says RWS “is aimed at practicing as a private entity which executes special projects and water services business opportunities as authorised under Section 30 of Water Services Act”. RWS was made dormant in 2015 – although company records would seem to indicate that it was not deregistered – but in April 2023 the board of Rand Water decided to reactivate it. The Rand Water report links the RWS revival to the Minister’s appointment in April 2022 of Rand Water to rehabilitate the Vaal River Integrated System and capacitate Emfuleni Local Municipality to manage its water services authority operations. This is a crucial project.

We are concerned that RWS will be used to hide spending. We need greater transparency in government spending, not less, and attempts to reduce transparency give rise to suspicion of wrongdoing.

 

Below: JW presentation on 10 October 2023

 

Below: Johannesburg Water’s water infrastructure capital projects, from City of Joburg draft budget 2023/24

 

 

More info

A voicenote by Dr Ferrial Adam found here