WATER 2020 MARKET INTELLIGENCE REPORT - GREENCAPE
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Water 2020 Market Intelligence Report Water: Market Intelligence Report 2020 i
GreenCape
GreenCape is a non-profit organisation that works at the interface of business,
government, and academia to identify and remove barriers to economically
viable green economy infrastructure solutions. Working in developing countries,
GreenCape catalyses the replication and large-scale uptake of these solutions
to enable each country and its citizens to prosper.
Acknowledgements
We thank Ashton Mpofu, Raldo Kruger and Jane Reddick for the time and effort
that they have put into compiling this market intelligence report. We also thank
Chantal Ramcharan-Kotze from the Water Research Commission (WRC) for her
feedback on draft versions of the report.
Disclaimer
While every attempt has been made to ensure that the information published in
this report is accurate, no responsibility is accepted for any loss or damage to
any person or entity relying on any of the information contained in this report.
Copyright © GreenCape 2020
This document may be downloaded at no charge from www.greencape.co.za.
All rights reserved.
Subscribe to receive e-mail alerts or GreenCape news, events and publications
by registering as a member on our website: www.greencape.co.za.
Cover image courtesy of: Bruce Sutherland (City of Cape Town)
18 Roeland Street, Cape Town, 8001, South Africa
Authors: Ashton Busani Mpofu, Raldo Kruger, and Jane Reddick
Editorial and review: Cilnette Pienaar, Lauren Basson, Claire Pengelly
and Nicholas Fordyce
Images: GreenCape, Markus Spiske, Unsplash and Bruce
Sutherland (City of Cape Town)
Layout and design: Tamlin Lockhart Art Direction
ii Water: Market Intelligence Report 2020 Water: Market Intelligence Report 2020 iii
Contents List of figures
Executive summary 1 Figure 1:
What’s new? 3 Water sources in South Africa 7
1. Introduction and purpose 5 Figure 2:
2. Sector overview 7 Water use in South Africa 7
2.1. South African context 7 Figure 3:
2.2. Western Cape context 10 The gap between water supply and projected water demand under two scenarios by
2.2.1. Western Cape water supply system 11 2035 in South Africa 8
2.2.2. Long-term planning 13 Figure 4:
2.2.3. State of municipalities in South Africa 16 Predicted water supply vulnerability in 2050, under medium population growth and
3. Policies and regulations 19 climate change exposure scenarios 9
3.1. National legislation 19 Figure 5:
3.1.1. The National Water Act 19 Water Management Areas in South Africa (Western Cape outlined in black) 10
3.1.2. Categories of legal water use 19 Figure 6:
3.1.3. The National Building Regulations and Building Standards Act 20 Overview of WCWSS allocations by type 11
3.1.4. National Environmental Management: Waste Act (59 of 2008) 20 Figure 7:
3.1.5. Other key national legislation and standards 20 Historical water stored and projected future storage in the six
3.2. Municipal by-laws and tariffs 21 largest dams in the WCWSS, assuming pre-2015 demand and 2016/17 rainfall 12
3.2.1. Water restrictions 22 Figure 8:
3.2.2. Water tariffs 23 WCWSS annual runoff from 1928 to 2018 hydrological years 13
3.2.3. Alternative water use 26 Figure 9:
3.3. Municipal procurement 26 WCWSS planning scenario reconciliation of supply and demand 15
3.3.1. City of Cape Town procurement 27 Figure 10:
4. Opportunities and barriers 29 Planned increases in yield extracted from all published large-scale
4.1. Industrial market: Water efficiency and reuse in the SA agri-processing sector 31 reconciliation strategies 15
4.1.1. Market overview 31 Figure 11:
4.1.2. Opportunities 32 Geographical distribution (A) and number of municipalities (B) in South Africa according
4.1.3. Drivers 34 to the Municipal Grading Index, indicating Good, Intermediate and Poor scores based
4.1.4. Barriers and risks 35 on capacity criteria 17
4.2. Municipal market 37 Figure 12:
4.2.1. Market overview 37 Determination of water restriction levels based on dam levels at end of hydrological year for
4.2.2. Opportunities 39 the City of Cape Town 22
4.2.2.1. Wastewater Reuse 39 Figure 13:
4.2.2.2. Biogas production at WWTWs 42 Comparison of water tariffs for commercial and industrial businesses
4.2.2.3. Energy efficiency opportunities in municipal water services 45 across various metros 25
4.2.3. Drivers 46 Figure 14:
4.2.4. Barriers and risks 47 Commercial and industrial water tariffs when minimum restrictions (no restrictions)
5. Funding and incentives 49 are in place, for selected metros 2012-2020 25
5.1. General database web page 49 Figure 15:
5.1.1. Green Finance Database 49 Gross Fixed Capital Formation of selected sectors in SA 31
5.1.2. Government funding and incentives database 49 Figure 16:
5.1.3. Finfind database 49 Estimated water use in the agri-processing sector in South Africa: (A) comparing total
5.1.4. AlliedCrowds database 49 water use in pulp and paper sub-sector with food and beverages, and (B) total water use for
6. The Western Cape: Africa’s growing greentech hub 51 subsectors within food and beverage sector 32
7. GreenCape’s support to businesses and investors 55 Figure 17:
8. References 59 Estimated realisable water savings over the next four to six years, by intervention type
and sub-sector 33
iv Water: Market Intelligence Report 2020 Water: Market Intelligence Report 2020 v
List of tables Figure 18: Table 1: Estimated realisable water savings for key agri-processing sub-sectors over the next Required, budgeted and projected public sector funding for water & sanitation services four to six years and required investment 34 & infrastructure 10 Figure 19: Table 2: Expenditure trends for the Water Trading Entity from 2015/16 to 2018/19 (actual) and Water tariffs for selected metros (minimum restriction levels in place) for FY 2019/20 24 from 2019/20 to 2021/22 (estimated medium-term) 38 Table 3: Figure 20: Sanitation tariffs for selected metros (minimum restriction levels in place) for FY 2019/20 24 Capital expenditure on water and sanitation projects undertaken by metropolitan Table 4: municipalities between 2014/15 and 2017/18 38 Summary of market opportunities 30 Figure 21: Table 5: Theoretical investment potential for water reuse projects (at 2019 costs) Summary of current municipal scale projects (reuse, biogas/CHP) at various stages of development 41 summed by province 39 Figure 22: Planned water reuse augmentation projects and estimated capital investment potential in Western Cape (WC) district municipalities 40 Figure 23: Total investment cost of financially viable CHP projects at wastewater treatment plants aggregated by province 42 Figure 24: Indicative potential energy and cost savings from energy efficiency retrofits (efficient pumps and VSDs) in wastewater treatment plants in South African metros 45 Figure 25: GreenCape’s focus areas 56 vi Water: Market Intelligence Report 2020 Water: Market Intelligence Report 2020 vii
List of abbreviations Conversions
and acronyms 1 Megalitre = 1 million litres = 1 000 000 litres = 1 000 kl = 1 000 m3
AADD Annual Average Daily Demand
AD Anaerobic digestion
B-BBEE Broad-based Black Economic Empowerment
BOT Build-Operate-Transfer
C&I Commercial and Industrial
CCCI Cape Chamber of Commerce and Industry
CCT City of Cape Town
CHP Combined Heat and Power
CSAG Climate System Analysis Group
DEADP Department of Environmental Affairs and Development Planning
DFI Direct Foreign Investment
DHSWS Department of Human Settlements, Water and Sanitation
DLG Department of Local Government (Western Cape Government)
dti Department of Trade and Industry
dtic Department of Trade, Industry and Competition
DWA Department of Water Affairs (now DHSWS)
DWAF Department of Water Affairs and Forestry (now DHSWS)
DWS Department of Water and Sanitation (now DHSWS)
EME Exempted Micro Enterprise
GA General Authorisation
GDP Gross Domestic Product
GFCF Gross Fixed Capital Formation
GTAC Government Technical Advisory Centre
GVA Gross Value Add
ILI Infrastructure Leakage Index
MFMA Municipal Finance Management Act No. 56 of 2003
MIR Market Intelligence Report
MLD Megalitres (million litres) per day
NBI National Business Initiative
NBR National Building Regulations
NRW Non-Revenue Water
NWA National Water Act
PPP Public Private Partnership
QSE Qualifying Small Business Enterprise
RFQ Request for Quotation
SABIA Southern African Biogas Industry Association
SANS South African National Standard
SIV System input volume
VAT Value Added Tax
WCWDM Water Conservation and Water Demand Management
WCWSS Western Cape Water Supply System
WC Western Cape
WCG Western Cape Government
WEF World Economic Forum
WMA Water Management Area
WRC Water Research Commission
WSI Water Services Intermediary
WUL Water Use Licence
WWF World Wide Fund for Nature
WWTW Wastewater Treatment Works
viii Water: Market Intelligence Report 2020 Water: Market Intelligence Report 2020 ix
Executive summary
This market intelligence report (MIR) is aimed at investors interested
in the South African urban water sector.
Water scarcity has been a key driver for ■ cost-reflective water tariffs: enhancing the
investment in the Western Cape water sector due investment case for municipal water projects
to severe drought conditions and expected (as costs can be recovered through water
longer-term water constraints in the region. sales), and for private companies (as the
Based on population and economic growth business case for water projects is improved);
projections, South Africa could have a 17% gap
between supply and demand by 2030. However, a ■ regulatory compliance: water restrictions in
more recent analysis indicates that if water use is drought areas, and wastewater discharge limits;
reduced by just 7.5%, and planned additional
water supply projects are implemented, this gap ■ policies and government support/incentives:
can be narrowed significantly by 2035. This year’s the National Water and Sanitation Masterplan
report draws on market trends and emerging Volume 1 (2019) encourages cost-reflective
longer-term investment opportunities to improve tariffs, alternative water source development,
water security and resilience, as key enablers of and private sector financing for municipal
economic development. Specifically, the report infrastructure, while the agri-processing
focuses on insights and opportunities relating to sector is targeted for growth via incentives
two key urban water markets in South Africa: (including incentives for resource efficiency).
■ industrial market (opportunities in While the municipal sector represents the largest
agri-processing sector); and opportunity for investors, there are a few barriers
■ municipal market (opportunities in water specific to this market. They are related to the
works and wastewater treatment works). ability to access funding, capacity constraints,
procurement processes, and revenue
Key drivers in these markets are: collection. Barriers specific to the uptake of water
technologies in the agri-processing sector include
■ water security: both private companies poor business cases in municipalities where water
and municipalities are motivated to invest tariffs are low, regulatory challenges related to
in water projects to secure sufficient water management of brine, and complex and lengthy
supply for their operations; licensing and authorisation for water projects.
© Bruce Sutherland
(City of Cape Town)
x Water: Market Intelligence Report 2020 Water: Market Intelligence Report 2020 1
Summary of market opportunities
Opportunity Drivers Barriers Key market segments
Industrial market: agri-processing sector
■ Water security ■ Currently poor business
■ Increasing water & case in some municipalities
sanitation tariffs ■ Public perception & ■ Total realisable investment
Water efficiency ■ Policies, regulations & health risks of ~R6 bn in water
& strategies ■ Access to information on technologies in key
wastewater reuse ■ Corporate social best practice & locally agri-processing
(Section 4.1) responsibility validated technologies sub-sectors over the next
■ Water resource pollution ■ Access to capital four to six years in SA
What’s new?
■ Local availability of water ■ Licensing & permitting
efficient technology ■ Operational complexity
Municipal market: wastewater treatment works
■ Increasing water demand ■ Policies & regulations ■ Projects currently in
& decreasing surface ■ Public perception & development in SA amount
water supply health risks to ~ R5.8 bn
Wastewater reuse ■ National & provincial water ■ Financing (not all ■ R2.6 bn projects planned in
(Section 4.2) strategies off-takers are bankable) WC in next 10 years
■ Availability of technology ■ Poor quality of source ■ Total of R50 bn worth of
■ Cost competitiveness water (also potential projects at WWTWs larger
Readers of last year’s MIR are encouraged to
read this year’s report in full, as the market
driver) than 1 MLD in SA The report focuses on
intelligence has been updated substantially.
■ Energy intensive ■ Lack of technical capacity ■ Three large-scale biogas / opportunities for water efficiency,
wastewater treatment ■ Financing (not all CHP projects currently in
The 2019 report focused on the various water reuse and resource recovery
services/processes off-takers bankable) planning in Cape Town
■ High electricity bills ■ Poor business case for (over the next 10 years) investment opportunities for water-saving in these key urban water markets
Biogas ■ Energy intensive some projects ■ Total of R1.1 bn in viable technologies in different markets, and emerging by applying sustainable
& wastewater treatment Operational complexity CHP projects at WWTWs long-term investment opportunities linked to development and circular economy
■
energy efficiency processes/operations & the in SA1
water scarcity in South Africa. This year’s report
(Section 4.2) related high electricity bills ■ Total of R1.1 bn in energy principles to the water sector.
efficiency and optimisation
emphasises the need for long-term water
retrofits at waterworks in security and its associated investment
the eight metropolitan opportunities by providing a more detailed
municipalities analysis of two key urban markets: industrial
companies and municipalities. The report key urban water markets by applying sustainable
focuses on opportunities for water efficiency, development and circular economy principles
water reuse and resource recovery in these to the water sector.
1
Only includes costing of CHPs at WWWTs with existing ADs that require minor refurbishment.
2 Water: Market Intelligence Report 2020 Water: Market Intelligence Report 2020 3
1
Introduction and purpose
This market intelligence report (MIR) has been compiled by GreenCape’s Water
Sector Desk. It is aimed at investors interested in the South African urban water
sector, with particular emphasis on opportunities in metropolitan areas.
The key drivers of growth and long-term (Section 5), gives an overview of the Western
investment in the water sector in the Western Cape Cape as Africa’s growing greentech hub
and more broadly in South Africa are two-fold: (Section 6), and explain GreenCape’s work
increasing resilience to extreme climate events, within the green economy (Section 7).
and ensuring that water is not a constraint to
economic growth and development. This year’s While this report focuses on urban water markets,
report focuses on investment opportunities within there are inherent links between agricultural
key markets: the agri-processing sector in the and urban water use. Similarly, there are links
industrial market and bulk water and wastewater between organic waste valorisation and energy
infrastructure in municipalities. production related to treating wastewater,
as well as energy efficiency opportunities
The report provides a sector overview (Section 2), throughout the water value chain. We have
which outlines water scarcity in both the South included these opportunities where they fall within
African and Western Cape context. This is followed the water value chain, however please consult the
by an overview of policies and regulations 2020 Sustainable Agriculture Market Intelligence
(Section 3) that are relevant to water technology Report, Waste Market Intelligence Report and two
investment opportunities and barriers (Section 4). Energy Market Intelligence Reports2 for
The final sections focus on finance and incentives opportunities specific to those sectors.
© Bruce Sutherland
(City of Cape Town)
2
© GreenCape www.greencape.co.za/market-intelligence/
4 Water: Market Intelligence Report 2020 Water: Market Intelligence Report 2020 5
2
Sector overview
Water scarcity is a major challenge in South Africa. Water conservation
and demand management measures represent a substantial opportunity
for investors and businesses in the water sector.
2.1. South African context (at 98% assurance of supply – or 2% annual
South Africa (SA) is ranked as the 30th driest probability of supply failure), of which the majority
country in the world. In 2019, behind unemployment is from surface water (68%) and return flows that
which is currently at a rate of 29% (WEF 2019), the support surface water (13%), as shown in Figure 1
country’s water crisis was ranked as the second (DWS 2017a). Agriculture is the largest water-use
highest risk for doing business in SA. SA is a sector (62%), followed by municipalities (27%),
water-scarce country characterised by uneven which include residential, commercial and
rainfall distribution, and extreme climate and industrial water users (DWS 2017a). The relative
evaporation rates that often exceed precipitation. proportion of municipal and agricultural use differs
The country has a reliable yield (i.e. supply from between provinces and municipalities, depending
current infrastructure) of around 15 billion kl/year on settlement patterns and local economy.
68+13+6 62+27+32
68% SURFACE WATER 62% AGRICULTURE
13% RETURN FLOWS 27% MUNICIPAL
13% GROUNDWATER (3% rural,
6% OTHERS 24% urban)
(seawater/ 3% MINING
brackish water 3% INDUSTRY
desalination) 3% AFFORESTATION
2% ENERGY
Figure 1: Water sources in South Africa Figure 2: Water use in South Africa
Despite being a water-scarce country, expected to be the greatest, which is partly
consumption is around 237 litres/capita/day driven by urbanisation but also by increased
(l/c/d), much higher than the international industrial production and growth. The Industrial
benchmark of 173 l/c/d (NWRS2)3. Forecasts Policy Action Plan (IPAP) sets out the intentions of
indicate that water demand will exceed supply by expanding the manufacturing sector, with
17% by 2030 (McKinsey and Company 2010), and agri-processing earmarked for national growth
that this will be driven by increased water and development (DWS 2017a; NWSMP 2019). Thus
demand in the municipal, industrial and agri-processing is expected to be a significant
agricultural sectors (Donnenfeld et al. 2018). The contributor to economic growth and
growth in demand by the municipal sector is opportunities for water technologies.
3
These figures are based on the system input volume divided by the population served. The system input volume includes commercial and
© GreenCape industrial demand, and water losses through infrastructure leaks.
6 Water: Market Intelligence Report 2020 Water: Market Intelligence Report 2020 7
A more recent model of future water balance for
South Africa indicates that if planned additional Groundwater, wastewater reuse
water supply is taken into account, and if realistic
and desalination should
water efficiency is achieved (constrained
scenario4), the gap between supply and demand increasingly contribute to the
can be narrowed significantly by 2035 (Figure 3; national water supply mix.
Donnenfeld et al. 2018). These new supply sources
are mainly groundwater, desalinated seawater in
coastal areas and wastewater reuse (see Figure 10
for distribution of new supply between regions). Towards the end of 2019, the Eastern Cape and
Northern Cape were declared disaster areas
While total demand is projected to increase by the national government due to the ongoing
despite higher efficiency, and planned droughts in these provinces. These events
augmentation schemes can narrow the supply highlight the need to reduce reliance on rainfall.
gap, it is important to note that the augmentation The National Water and Sanitation Masterplan:
sources are diversified. Climate change models Vol 2 (2018) specifies that groundwater,
predict that SA will receive less rainfall, but also wastewater reuse and desalination should
that the incidence of extreme climate events increasingly contribute to the national water
will increase. The ongoing drought in the supply mix.
Western Cape has been well documented (see
2019 Water MIR), and this was preceded in 2015 The supply risks based on changing rainfall
by the lowest total rainfall in recorded history patterns and population growth will vary
(since 1904) for the whole country. by region. Figure 4: Predicted water supply vulnerability in 2050, under medium population growth and
climate change exposure scenarios (Green Book 2019)5
19.5 By 2050, many parts of South Africa (including It is estimated that ~R90 billion per year of
major industrial zones) are expected to be investment is needed in water and sanitation
Water supply and demand (1 000 million m3)
19.0 vulnerable to water supply risks (Figure 4). infrastructure over the next 10 years (DWS 2017a;
NWSMP 2019) in order to ensure reliable water
18.5 An estimated 40% of South Africa’s wastewater is supply and wastewater treatment. This includes
untreated (Donnenfeld et al. 2018). Furthermore, of refurbishing and upgrading existing
18.0 the 824 wastewater treatment works (WWTWs) in infrastructure, and new infrastructure to support
South Africa, ~30% are in a ‘critical’ state, and a population and economic growth. Budgeted
17.5
further ~20% were in a ‘poor’ state (Toxopeüs 5 funding of R50.1 billion in 2018/19 falls well short of
2019), according to the 2013 GreenDrop reports.6 what is required, but estimated medium-term
The resulting raw water pollution presents a budgets indicate that the national government
17.0
significant environmental challenge, as well has plans in place to reduce the shortfall (Table 1).
as a health and socio-economic risk to poor Public funding gaps provide an opportunity for
16.5
communities that access water directly from rivers. private sector financing of water and sanitation
projects, as outlined in Section 4.
16.0
15.5
30
17
20
20
23
24
25
26
28
29
32
33
34
35
18
19
22
27
31
20
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20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Total supply Constrained Scenario Unconstrained Scenario
Figure 3: The gap between water supply and projected water demand under two scenarios by
2035 in South Africa (Donnenfeld et al. 2018)
5
Cullis, J. & Phillips, M. 2019. Green Book. Surface Water Supply. Water supply climate risk narrative for South Africa. Pretoria: Aurecon &
4
The constrained scenario assumes that per capita water consumption decreases by 7.5% from 2015 to 2035. During the drought, the City CSIR. Available at: https://pta-gis-2-web1.csir.co.za/portal/apps/GBCascade/index.html?appid=74fc5a7337f34460b7a09242d0770229.
of Cape Town achieved a far greater (~50%) per capita reduction in water consumption over a period of 4 years, which suggests that the 6
The last time GreenDrop reports were made public. Anecdotal evidence indicates that the condition of WWTWs may since have
constrained scenario is highly achievable.
deteriorated further.
8 Water: Market Intelligence Report 2020 Water: Market Intelligence Report 2020 9Table 1: Required, budgeted and projected public sector funding for water & sanitation 2.2.1 Western Cape Water The total water allocation for the system is 590
services & infrastructure
Supply System million m3 per year, which is allocated to various
The Western Cape water supply system (WCWSS), end users (Figure 6). Approximately two-thirds of
Funding (R bn) Required7 Budgeted Budgeted Medium- Medium- Medium-
which supplies water to several municipalities the allocation is for urban use (including
2017/188 2018/199 term term term
within the Berg-Olifants WMA, is one of the most residential, commercial, and industrial use), and
estimates estimates estimates
important supply systems in the country. It the remainder is allocated for agriculture, which is
2019/20 2020/21 2021/22
supplies water to a region that produces 84% of predominantly used in the summer months (DWS
Municipal infrastructure – – 15.3 14.8 15.6 16.8 the province’s gross domestic product (GDP) and 2015). Even without making provision for the
grant approximately 14% of national GDP (Quantec ecological reserve, the total allocations exceed the
2017). The WCWSS is a complex, interlinked revised system yield of 545 million m3 per year
Regional & local water & – – 10.7 10.6 11.2 12.1
system of dams, pipelines, and distribution (DWS 2018). There are no further opportunities to
sanitation services
networks that supplies water to the City of Cape build additional large dams to augment the supply
Water resource & bulk – – 24.1 27.1 29.7 33.6 Town (CCT), West Coast District Municipality (DWS 2015). Consequently, even prior to the
infrastructure (which supplies water to Swartland, Saldanha drought, the system was already constrained. The
Bay, and Bergrivier local municipalities), estimated average combined urban and
Total water & sanitation Stellenbosch, Drakenstein, and Witzenberg local agricultural water demand for 2009/10 to 2015/6
89.9 56.6 50.1 52.5 56.6 62.5
services & infrastructure municipality, and certain agricultural users (see was 556 million m3 (DWS 2018). However, in 2016/1710
2019 Water MIR for map with details). the demand was 16% lower at 469 million m3 due
Funding shortfall – 33.3 38.9 36.4 32.4 26.5
to the drought and associated water restrictions.
789
2.2. Western Cape context
The Western Cape Province in the south-west corner of South Africa falls predominantly within two
water management areas (WMAs), the Breede-Gouritz and the Berg-Olifants (Figure 5). Irrigation to
support agriculture constitutes the main water use in these two WMAs, followed by urban water use.
59.4% URBAN: CITY OF CAPE TOWN
Western Cape Province 32.0% AGRICULTURAL (CAPPED)
Limpopo 5.3% URBAN: WEST COAST DISTRICT
Olifants 1.8% URBAN: STELLENBOSCH
0.7% URBAN: OVERBERG WATER
Inkomathi
Usuthu 0.4% URBAN: DRAKENSTEIN
Johannesburg ! 0.1% URBAN: PIKETBERG
0.1% URBAN: OTHER
Vaal
Pongolo
Mzimkulu
Figure 6: Overview of WCWSS allocations by type (DWS 2018)
eThekwini !
Orange
(Durban)
Mzimvubu-
Berg Tsitsikamma
Olifants
Breede N
0 30 60 120 180 240
Cape Town Gouritz ! Kilometers
Figure 5: Water Management Areas in South Africa (Western Cape outlined in black)
7
According to DWS 2017 planning document.
8
Due to changes in line items from 2017/18 to subsequent years, only the total is given. See previous MIR for details of this year.
9 10
Budget Review 2019 (http://www.treasury.gov.za/documents/national%20budget/2019/review/FullBR.pdf) This is the most recent data for total water use in the WCWSS.
10 Water: Market Intelligence Report 2020 Water: Market Intelligence Report 2020 111400
The drought, which is linked to below-average to ~75% and ~84% (Figure 7), respectively. Water
rainfall, particularly in 2016 and 2017, placed restrictions for the CCT were raised to 650 MLD
additional strain on the WCWSS. In March 2017 at the end of the 2018 hydrological year
1200
and April 2018 respectively (Figure 7), the WCWSS (previously 500 MLD), and demand has remained Long-term
Average
dams reached their lowest levels in recorded well below this level for most of the year.
history (~20% of capacity), and narrowly avoided Restriction levels are usually adjusted at the end
1000
the need for extreme water rationing. By the end of the hydrological year, but at the time of
Annual Inflows (Million m3/year)
of the 2018 and 2019 hydrological years (31 publishing, new restriction levels had not been
1920/30s 1970s Current
October), the WCWSS dam levels had recovered announced yet. drought drought
drought
800
1 000
“maximum storage” (100%)
600
Dam storage (million m3)
750
400
500
200
250 0
1928
1930
1932
1934
1936
1938
1940
1942
1944
1946
1948
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
“unavailable storage” (10% of total) Hydrological Year
0
2008 2010 2012 2014 2016 2018 2020 Figure 8: WCWSS annual runoff from 1928 to 2018 hydrological years (updated end of October
Year 2019; City of Cape Town 2019)
Most recent value on: 31 Oct 2019 Data: City of Cape Town, Figure: © Climate System
Analysis Group, University of Cape Town 2.2.2. Long-term planning To address future water constraints, reconciliation
The climate projections for the Western Cape studies are conducted to reconcile the gap
Figure 7: Historical water stored (thin line) and projected future storage (thick line) in the six indicate a warming trend as well as projected between future demand and supply. The WCWSS
largest dams in the WCWSS, assuming pre-2015 demand and 2016/17 rainfall (CSAG11) drying in many areas, with longer periods reconciliation strategy study was completed in
11 between increasingly intense rainfall events 2007, and annual status updates are produced by
(DEADP 2014). It also remains to be seen whether the Department of Human Settlements, Water
The ongoing effective demand-side management the drought represents a ‘step-change’ in the and Sanitation (DHSWS, formerly the Department
and resultant lower water use has been the key rainfall patterns (such as was experienced by of Water Affairs and Forestry, DWAF and later the
driver in the recovery of dam levels. While the
While the total rainfall has Perth in the 1970s), or whether the decrease in Department of Water and Sanitation, DWS). The
total rainfall has increased somewhat in the last increased somewhat in the last two average annual rainfall will occur gradually. annual update for 2018 compares several future
two years, it is still well below the historical years, it is still well below the Additionally, population and economic growth will water balance assessment scenarios. Figure 9
long-term average, and indications are that the historical long-term average, and place an additional burden on water supply presents the scenario considered to be the most
drought is not over (Figure 8). This highlights the indications are that the drought is systems. In turn it will have a negative impact on realistic base scenario without additional water
importance and effectiveness of effective the province and consequently the country’s conservation and demand management
not over (Figure 8). This highlights
demand-side management and water efficiency economy, and particularly the contribution of the interventions. It assumes a projected 2% p.a.
interventions, and the key role it plays in the importance and effectiveness agri-processing sector12. Water security will growth rate in water demand (DWS 2018). Dashed
managing water resources. Projections using pre- of effective demand-side continue to be a focus for the Western Cape. It lines show water demand projections under
2015 demand and long-term average rainfall management and water efficiency presents a platform on which government, different scenarios (scenario 1 being applicable to
indicate that dam levels will recover to 100% in interventions, and the key role it business, investors and citizens can collectively the graph). Solid fills show the planned water
the next rainfall season, but the lower than implement water efficiency and resource supply interventions, along with their height (or
plays in managing water resources.
average rainfall will necessitate ongoing recovery (water, energy and/or materials) stacked thickness) indicating the estimated
demand-side reduction to avoid dam levels initiatives, particularly in agri-processing, to yields for the different interventions. These
approaching the 10% level (Figure 7). increase resilience. interventions include potable water reuse (from
12
The gross value add (GVA) of agriculture in the Western Cape is ~R19 billion (22% of South Africa’s agricultural GVA) and export revenues
11
Historical dam storage levels up to 31 October 2019. To model various future scenarios, visit the Climate System Analysis Group (CSAG) exceed R40 billion per year. Around 216 000 people are employed in primary agriculture and 250 000 in agri-processing in the province
website: http://cip.csag.uct.ac.za/monitoring/bigsix.html (Jacobs 2017).
12 Water: Market Intelligence Report 2020 Water: Market Intelligence Report 2020 13WWTWs), groundwater development (new Similar reconciliation strategies for other
resources and artificial recharge), and large- catchments in South Africa indicate the plans
Water Requirements (million m3/year)
scale permanent seawater desalination. In for additional supply sources to meet increasing
this regard, long-term plans have been in place demand. A summary of the large-scale
for several years, and many of the planned reconciliation strategies indicates that existing
projects were brought forward and re-assessed water sources will decline, and that future
considering the drought and need of economic additional water supply sources are spread
water resilience. Section 4.2.2 outlines in throughout the country, and between different
more detail some of the planned projects for catchments (Figure 10). The largest new water
the WCWSS. sources are planned in the Orange River and Vaal
River catchments, followed by the Western Cape
and Richard’s Bay (Donnenfeld et al. 2018).
Figure 9: WCWSS planning scenario reconciliation of supply and demand (DWS 2018)
(A larger version of this figure is available on request)
18.5
18.0
17.5
Yield (1000 million m3)
17.0
16.5
16.0
15.5
15.0
14.5
24
10
12
13
14
15
16
17
18
19
20
22
23
26
27
28
29
31
32
33
34
35
06
08
09
30
11
21
07
25
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Year
Algoa Amatole KZN coastal metropolitan Luvuvhu and Letaba Manguang Mbombela
Oliphants Orange Richards Bay Vaal Western Cape Existing yield
© Bruce Sutherland
Figure 10: Planned increases in yield extracted from all published large-scale
(City of Cape Town)
reconciliation strategies
14 Water: Market Intelligence Report 2020 Water: Market Intelligence Report 2020 152.2.3 State of Municipalities access finance. WASH-FIN14 has recently assessed
in South Africa the credit-rating of 21 select intermediary
Municipalities play an important role in providing (secondary) municipalities, with 18 of them
water and sanitation services, and as such they resulting in an investment grading. This indicates
constitute a key market in the water sector. that there is greater potential for external
However, there are a number of barriers within financing for intermediate municipalities than is
the market, one of which can generally be currently realised. There may be several reasons
described as capacity. An analysis of for this, which could vary among municipalities,
municipalities in South Africa that captures but could include low appetite for debt, the
various aspects of ‘capacity’ as they relate to long-term nature of infrastructure financing vs
water projects, indicates that only about 23% of shorter term political cycles, or technical and
municipalities have a ‘good’ score related to managerial staff turnover.
capacity13 to implement water projects (Figure 11).
The municipalities with ‘intermediate scores’ on
Similarly, the National Business Initiative the Municipal Grading Index in most cases need
(NBI) found that only ~20% of municipalities in select interventions to assist them in accessing
South Africa were suitable for public-private credit for infrastructure projects. In addition, they
partnerships (PPPs) (NBI 2019). One further are well suited to projects that do not necessarily
barrier is that smaller municipalities do not have require debts, such as bulk water and wastewater B
credit ratings to compete in credit markets to treatment efficiency and optimisation retrofits. 140
Number of municipalities
57%
120
100
80
60 23%
20%
40
20
0
A Poor Intermediate Good
Figure 11: Geographical distribution (A) and number of municipalities (B) in South Africa
according to the Municipal Grading Index (UNIDO 2019, GreenCape analysis), indicating Good
(green), Intermediate (yellow) and Poor (red) scores based on capacity criteria (see text and
footnotes for details)15
© GreenCape
13
The criteria used included skills / capacity of senior/executive municipal staff to manage municipal finances effectively and manage
infrastructure projects; financial standing of the municipality to access commercial or development finance institution (DFI) finance; skills
/ capacity among water department staff to successfully motivate for and implement water infrastructure projects.
14 15
https://www.globalwaters.org/WASH-FIN An interactive version of this map can be found at https://www.greencape.co.za/content/map-mg/.
16 Water: Market Intelligence Report 2020 Water: Market Intelligence Report 2020 173
Policies and regulations
This section provides an overview of the regulatory environment
in the urban water sector.16
3.1. National legislation Schedule 1: Generally applies to low volume
(reasonable) water use with low impact activities,
3.1.1. The National Water Act16 consistent with domestic use (non-commercial
The National Water Act (36 of 1998) (NWA) uses), recreational use, livestock watering, and
provides the legal framework for the effective for emergencies. This water use is permissible
and sustainable management of water resources and does not require licensing or registration.17
(including surface water and groundwater) by the Residents may use groundwater on their
Department of Human Settlement, Water and properties for reasonable domestic use without a
Sanitation (DHSWS) on behalf of the national licence.18 However, water use entitlement under
government. The NWA gives DHSWS the overall Schedule 1 does not supersede, and is subject to,
responsibility and authority to manage the use of any limitation by any other law, ordinance, by-law,
water; protect water quality; allocate water; and or regulation set by the responsible authority in
promote inclusive water management. that area.
The NWA, under Section 21, describes 11 different Existing lawful use: Legal water use obtained
‘water use’ activities, which include taking and under the Water Act (54 of 1956) two years prior
storing water, reduction of stream flow, waste to the commencement of NWA is considered as
discharges and disposals, altering of existing lawful use (ELU), and is subject to terms
watercourses, abstraction of groundwater, and registration under the NWA. However, such
recreation, and any controlled activities that users must prove with relevant records that their
detrimentally affect water resources. Section 26 water use existed before 1998. This must be
regulates water use activities, design, construction verified and validated by the DHSWS.
and operation of any waterworks, including the
registration of respective personnel. This is General authorisation: GA replaces the need for
particularly relevant to alternative water supply a licence in terms of Section 21 of the NWA as
projects, including water reuse. Generally, a water outlined in Government Notice (GN), and is site
use must be licensed, unless it is listed in Schedule specific. There is a GN for each water use activity
I, is an existing lawful use (ELU), is permissible that sets the limits and circumstances suitable
under a general authorisation (GA), or if the need for the issuance of a GA19. Businesses involved in
for a water use licence (WUL) is waived. water use activities that are neither registrable
under Schedule 1, nor under ELU, must register
3.1.2. Categories of legal water use the use(s) under a GA or apply for a WUL. The free
The NWA classifies any lawful water use under registration of a GA through DHSWS typically
four categories: takes a few weeks.
16
The section does not comprehensively cover all relevant legislation; it highlights key information that may be useful to potential investors.
17
Although in some cases the local municipality may require registration.
18
© Bruce Sutherland Municipalities may still require registration of boreholes or well points – see Section 3.2.3.
19
(City of Cape Town) https://cer.org.za/virtual-library/legislation/national/water/national-water-act-1998
18 Water: Market Intelligence Report 2020 Water: Market Intelligence Report 2020 193.1.5. Other key national legislation It should be noted that during emergency
and standards situations (e.g. disasters due to drought) certain
Other key national laws and regulations that may authorisations can be fast-tracked or are no
be relevant to projects in the water sector include longer required.
the following:
Further information can be obtained from the
■ The National Water and Sanitation responsible authorities.
Masterplan (2019), while it is not an act or
legislation, is an important guiding document 3.2. Municipal by-laws and tariffs
to inform the development of the water sector Municipalities have the constitutional
according to national priorities. competence to enact laws (known as by-laws) in
■ The Water Services Act (108 of 1997), is respect of water and sanitation services. The
relevant to the regulation of water and Department of Water Affairs and Forestry
sanitation services provided by municipalities. (DWAF), as it was known at the time, developed
■ The National Environmental Management model water services by-laws for municipalities in
Act (107 of 1998) is relevant to environmental the early 2000s. The model by-laws included
authorisations. provisions to empower municipalities to prevent
■ The National Environmental Management: wasteful use of water, impose water restrictions,
Integrated Coastal Management Act (24 require large users to submit annual water audits,
of 2008) regulates the discharge of brine and specify standards relating to the quality of
to the ocean. fittings. The by-laws contained general clauses
■ The National Environmental Management: relating to water efficiency, but left the specifics
Air Quality Act (39 of 2004). to the municipality to decide. Several
■ The Industrial Policy Action Plan (IPAP) municipalities have developed water by-laws
highlights water and sanitation as a key based on these model by-laws.
sectoral focus area.
© GreenCape
■ The South African National Standard for Municipal by-laws also include provisions
Drinking Water (SANS 241: 2015). relating to the discharge of wastewater and
■ The Preferential Procurement Policy industrial effluent to sewer. Such provisions
Water use licence: Applies if the water use the Department of Trade and Industry (dti) has Framework Act (.5 of 2000) provides for may include the maximum discharge limits for
activities cannot be covered under Schedule 1, initiated the process to include these aspects. It is the Department of Trade, Industry and various water quality parameters, and the
ELU or GA in accordance with Section 21 of the unclear how long this process will take, but draft Competition (dtic) to designate certain requirement for an industrial discharge permit.
NWA. A WUL application may take up to 300 water efficiency standards are being written. areas for local production and content. Local Wastewater that exceeds the water quality limits
working days. The government has committed to content designation is assessed according to may incur surcharges, or denial of a permit to
ensuring that for the following sectors, a WUL is 3.1.4. National Environmental the South African Bureau of Standards (SABS) discharge to sewer.
issued within a shorter timeframe: 60 days for Management: Waste Act (59 of 2008) through the technical specification numbers
agriculture, 80 to 95 days for infrastructure The national norms and standards under the Act SATS 1286:2011 and SANS 1286:2017.
projects from state-owned enterprises and prohibit landfill disposal of:
municipalities, and 120 days for mining. ■ liquid waste with a moisture content >40%,
angle of repose 5%)
In terms of design and construction, water and a leachable concentration for total
systems must be consistent with the National dissolved solids of >100 000 mg/l, (ban
Building Regulations (NBRs) under the National effective from 2021).
Building Regulations and Building Standards Act,
Act 103 of 1977, which governs all building and The Act targets organic waste20 diversion from
construction work in South Africa. At present, the landfill of 50% by 2022, and 100% by 2027 (only
NBRs do not include provisions relating to water applicable to Western Cape Province)21.
efficiency or alternative water supply; however,
20
Relevant to sludge produced at agri-processing and municipal WWTWs.
21
For more details, please refer to the Waste Market Intelligence Report 2020.
20 Water: Market Intelligence Report 2020 Water: Market Intelligence Report 2020 213.2.1. Water restrictions the higher the restriction level, the greater the 3.2.2. Water tariffs operating revenue (DWS 2017a). Each municipality
The national Department of Human Settlements, limitations imposed. At the time of writing, water Municipalities either purchase untreated raw is responsible for setting its own tariffs, which may
Water and Sanitation (DHSWS) is responsible for restrictions were still in place in most of the water from DWS, taken directly from dams, differentiate between users. Most municipalities
imposing restrictions on different user categories municipalities in the Western Cape. The CCT has springs, rivers and boreholes, or purchase bulk have separate tariffs for residential, commercial,
in catchments facing water supply constraints. recently simplified its restriction levels (and water from bulk water providers, e.g. Water and industrial water users, and provide a free basic
Municipalities then pass these restrictions on to associated water tariffs), so that it effectively has Boards, which is then treated to a potable allowance of water (6kl/month) to indigent
their water users. Restriction levels impose four restriction levels (previously nine levels). The standard. The CCT owns some dams, and households. In South Africa, around 56% of
volume limits, time limitations, and bans on levels will be pre-determined based on the dam together with other municipalities in the WCWSS households do not pay for water and sanitation
certain types of water use in order to decrease levels in the WCWSS at the end of the also purchase raw water from DHSWS-owned services (in 2015), because they are either unable
demand during periods of water insecurity. hydrological year (see Figure 12), and adjusted dams. The water is then treated in municipal- (indigent) or unwilling to do so (StatsSA 2016a).
Restriction levels and their requirements vary annually at that time. Previously this was done on owned facilities. The 2019/20 consumptive raw
from municipality to municipality. Most an ad hoc basis. Refer to the CCT website22 for an water charges (which include water management Municipalities generally use a rising block
municipalities have up to five restriction levels – overview of new water restrictions in the CCT. and infrastructure charges, and a water research (stepped) tariff structure, where R/kl tariffs
fund levy) ranged between R0.05/kl and R21.04/kl increase as usage increases (see Figure 13).
nationally (DWS 2019). The 2018/19 bulk water However, in some cases a fixed volumetric rate
100% tariffs averaged R9.27/kl, varying from R5.04/kl to (R/kl) applies, e.g. CCT and eThekwini’s water and
R17.52/kl. The tariff would depend on various sanitation tariffs for commercial and industrial
90% factors, such as the availability of water, water water users. In addition, the tariffs are linked to
Waterwise
80%
quality, distance of distribution, and cost of restriction levels, with tariffs increasing as
Level 1 infrastructure finance (DWS 2017a). restrictions increase. Water (Table 2) and
70% sanitation (Table 3) tariffs (excluding fixed
Level 2
Municipalities distribute potable water to their charges and surcharges), and tariff structures
Dam Level
60%
consumers and charge a retail tariff. Revenue from vary between metros23, which have an impact on
50% Level 3 water sales accounts for around 13% of municipal the business case for water technologies.
40%
30%
Emergency
20% Response
10%
0%
r
r
y
ry
ch
ril
ay
ne
ly
st
r
er
r
be
be
be
be
ar
Ju
gu
Ap
ua
ob
ar
M
Ju
nu
em
em
em
em
Au
ct
br
M
Ja
ov
pt
ov
ec
O
Fe
Se
N
N
D
Month
Figure 12: Determination of water restriction levels based on dam levels at end of hydrological year
for the City of Cape Town
© Bruce Sutherland
(City of Cape Town)
23
Minimum restriction level tariffs. Residential tariffs are for non-indigent, single dwelling houses (post-paid) at minimum (synonymous
22 with no restriction level; we have used this convention since the exact terminology varies between municipalities). The sanitation charges
https://www.capetown.gov.za/Family%20and%20home/residential-utility-services/residential-water-and-sanitation-services/Residen- exclude any industrial effluent surcharges if effluent exceeds discharge limits. Sanitation charges apply to an assumed sewage discharge
tial-water-restrictions-explained volume that is linked to water consumption, as shown in Table 3 of the 2019 Water MIR.
22 Water: Market Intelligence Report 2020 Water: Market Intelligence Report 2020 231400
Table 2: Water tariffs for selected metros (minimum restriction levels in place) for FY 2019/20
Cost of water per month (R; ex VAT)
1200
Cape Town eThekwini Tshwane Ekurhuleni Johannesburg
Monthly R/kl Monthly R/kl Monthly R/kl Monthly R/kl Monthly R/kl 1000
use (kl) use (kl) use (kl) use (kl) use (kl)
Step 1 0-6 14.45 0-6 21.39 0-6 11.61 0-6 11.74 0-6 9.10 800
Step 2 6-10.5 19.86 6-25 25.30 7-12 16.56 7-15 19.34 6-10 9.66
Step 3 10.5-35 26.99 25-30 33.70 13-18 21.75 16-30 23.69 10-15 16.49 600
Residential
Step 4 >35 49.80 30-45 51.98 19-24 25.16 31-45 29.47 15-20 23.99
Step 5 – – >45 57.15 25-30 28.76 >45 36.35 20-30 32.96 400
Step 6 – – – – 31-42 31.08 – – 30-40 36.51
Step 7 – – – – 43-72 33.26 – – 40-50 46.62 200
Step 8 – – – – >72 35.61 – – >50 49.66
0- 0
Step 1 24.51 0-5 000 25.37 0-200 42.19
Commercial &
100 000 Cape Town L1 eThekwini Tshwane Ekurhuleni Johannesburg
Industrial
Not Not
25.88 33.35 10 001- 5 001
Step 2 stepped stepped 23.26 25.77 >200 44.50
100 000 -25 000
6 kl 12 kl 25 kl 40 kl
Step 3 >100 000 21.68 >25 000 26.89 – –
Figure 13: Comparison of water tariffs for commercial and industrial businesses
across various metros24
The National Water and Sanitation Masterplan supply will lead to increased tariffs. Tariffs have
Table 3: Sanitation tariffs for selected metros (minimum restriction levels in place) FY 2019/20 developed by the then Department of Water and been increasing across selected metros at an
Sanitation (now DHSWS), states that water and annual average of approximately 7% (Figure 14),
Cape Town L1 eThekwini Tshwane Ekurhuleni Johannesburg
sanitation tariffs should be determined on the although future tariff increases are expected to
Monthly R/kl of Monthly R/kl of Monthly R/kl of Monthly R/kl of Property R (Res)
water sewage water sewage water sewage water sewage size (m2) or R/kl principle of cost recovery, although historically be higher. The DHSWS has proposed raw-water
use (kl) use (kl) use (kl) use (kl) (C&I) this has not been the case. As the raw water price increases of at least 16.5%, effective from
Step 1 0-6 12.7 0-6 3.57 0-6 8.21 0-6 16.29 0-300 213.94
quality and quantities decline, the cost of more March 2020 (SAGNA 2019).
Step 2 6-10.5 17.45 6-25 5.95 7-12 11.08 7-15 13.03 301-1000 416.47
expensive alternative water sources to increase
1 001
Residential
Step 3 10.5-35 24.51 25-30 11.37 13-18 14.27 16-30 5.54 630.05
-2 000
Step 4 >35 38.55 30-45 17.67 19-24 14.27 31-45 5.09 >2 000 907.80
Step 5 – – >45 19.72 25-30 14.27 >45 3.47 – – 45
Step 6 – – – – 31-42 14.27 – – – –
Consumptive water tariffs (R/kl; ex VAT)
Step 7 – – – – >42 14.27 – – – – 40
Step 1 0-5 000 10.22
Commercial
& Industrial
5 001- 35
Step 2 Not Not Not 5.45 Not
23.25 9.02 9.14 25 000 31.54
stepped stepped stepped stepped
30
Step 3 >25 000 3.54
25
20
15
10
Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 Jul-20
Cape Town eThekwini Tshwane
Ekurhuleni Johannesburg
Figure 14: Commercial and industrial water tariffs when minimum restrictions (no restrictions)
are in place, for selected metros 2012-2020 (GreenCape analysis)25
24
The figure reflects the consumptive water charges only (excluding any fixed charges or sanitation charges) at minimum or no
restrictions..
25
The figure reflects the consumptive water tariffs only (excluding any fixed charges or sanitation charges) at minimum or no restrictions.
The tariffs are for the first tariff step only.
24 Water: Market Intelligence Report 2020 Water: Market Intelligence Report 2020 253.2.3. Alternative water use 3.3. Municipal procurement 3.3.1. City of Cape Town procurement For more information on the procurement
The CCT Water Amendment By-law (2018) Municipal procurement is regulated by the Companies wishing to do business with CCT must processes, please visit the CCT website36. The list
requires that all new developments (C&I or Municipal Finance Management Act (56 of 2003) first register with the City’s supplier database31, of tenders received by the City, and their prices,
residential) install water-saving measures or and its regulations, including the Municipal Supply the national Central Supplier Database (CSD)32, can be viewed here37.
alternative water systems, as well as sub- Chain Management Regulations (2005). These and then register on the procurement portal33
metering of multi-unit properties (by October regulations specify the minimum requirements, and/or tender portal34. New Technology Platform
2020 for existing properties). The By-law stipulates but municipalities are allowed to apply stricter The CCT has set up a New Technology Platform
that only municipal potable water can be used for standards. The Municipal Finance Management The CCT publishes Requests for Quotations to gain an understanding of innovative water
domestic purposes (drinking, ablution and culinary, Act (MFMA) outlines the competitive procurement (RFQs) on its portal for goods and services technologies in the market. It gives companies
excluding toilets and urinals). However, businesses processes, and unsolicited bids are not worth less than R200 000, while those exceeding the opportunity to present their products and
and residential developments can use alternative encouraged. National Treasury also sets further R200 000 (VAT included) require a formal bidding services to government in a fair manner.
water for domestic purposes if they enter into a requirements such as local content under (tender) process. Tenders are also advertised in For information on how to submit information
contract with CCT to become a Water Services designated sectors through the Preferential local newspapers and on the national tender to the committee, please contact
Intermediary (WSI)26. The contract outlines various Procurement Framework Act (5 of 2000). portal35. The bidding process for tenders valued Water.NewTechnology@capetown.gov.za.
conditions that must be adhered to, including at more than R10 million is more extensive and
water quality monitoring and compliance. As stipulated by National Treasury (2017), for requires additional documentation.
projects worth more than R30 000 but less than
R50 million (incl. VAT), the price contributes 80
points of the total score, and the Broad-based
The CCT Water Amendment By-law Black Economic Empowerment (B-BBEE)28 status
requires that all new developments contributes 20 points. For projects above R50
install water-saving measures or million, the price contributes 90 points and
alternative water systems mainly for B-BBEE status 10 points.
non-domestic purposes. However,
Municipalities can also specify prequalification
businesses and residential criteria to limit the competition to certain groups.
developments may use alternative These groups include companies with higher
water for domestic purposes if they B-BBEE scores, exempted micro enterprises
enter into a contract with CCT to (EMEs)29 and qualifying small business
become a Water Services enterprises (QSEs)30. Municipalities are also
allowed to issue directives on emergency
Intermediary (WSI).
procurement procedures when a state of disaster
has been declared under Section 55(2) of the
Disaster Management Act (2002).
To address the absence of national standards for
the installation of alternative water systems (such
as greywater, rainwater, groundwater, and treated
effluent), CCT has developed summary installation
guidelines27. The guidelines outline the required
measures to protect the municipal supply and the
water users within the property, in line with the
CCT’s Water Amendment By-law 2018. Approvals
are required from the CCT for all plumbing
installations for alternative water systems, and a
Certificate of Compliance is required once the
installation has been completed. © GreenCape
31
https://www.capetown.gov.za/City-Connect/Register/Business-and-trade/Register-as-a-supplier
32
26
http://cct.gov.za/bC2nV https://secure.csd.gov.za/
33
27
http://resource.capetown.gov.za/documentcentre/Documents/Procedures,%20guidelines%20and%20regulations/Guidelines%20for%20 http://web1.capetown.gov.za/web1/procurementportal
Alternative%20Water%20Installations.pdf 34
http://web1.capetown.gov.za/web1/TenderPortal
28 35
More information can be found here: www.greencape.co.za/assets/Uploads/Wesgro-B-BBEE-Info-Sheet-2018.pdf https://etenders.treasury.gov.za/
29 36
Enterprises with an annual turnover of less than R10 million, or recently formed or incorporated entities that have been in operation for http://www.capetown.gov.za/Work%20and%20business/Doing-business-in-the-City
less than one year. 37
http://www.capetown.gov.za/Work%20and%20business/Doing-business-with-the-city/Tenders-RFQs-and-supply/Tenders-received
30
A business with an annual turnover of more than R10 million but less than R50 million.
26 Water: Market Intelligence Report 2020 Water: Market Intelligence Report 2020 27You can also read
