Access to clean water and adequate sanitation is a fundamental human right enshrined in South Africa’s Constitution. Yet, despite this legal guarantee, many municipalities struggle to provide reliable, safe water services. Ageing infrastructure, financial mismanagement, operational inefficiencies, and inadequate sources and storage facilities have created serious water supply challenges, leaving millions without access to this essential resource. Public-private partnerships (PPPs) have emerged as a viable solution, bringing expertise, investment, and innovative technologies to improve water service delivery.
Municipal challenges
Under our legislation, South African municipalities bear the legal responsibility to provide potable water and sanitation services to every household. Further underscoring the importance of water, President Ramaphosa declared it a national priority in this year’s State of the Nation address, emphasising its critical role in economic growth and public health.
Unfortunately, many communities face prolonged interruptions in water supply due to frequent outages and ageing infrastructure—issues visible in urban centres like Johannesburg, where burst pipes are common. In Gauteng alone, 30 to 40 percent of water supplied is lost to leaks, reflecting deep systemic issues.
Decades of underinvestment, mismanagement, corruption, incompetence and lack of maintenance have left treatment plants, pipelines, and reservoirs in disrepair. Coupled with climate change impacts stressing water resources, these challenges urgently demand better management, strategic investment, and considerable conservation efforts.
The Department of Water and Sanitation’s 2023/24 Annual Report highlights worsening trends. Minister Pemmy Majodina reported that key performance indicators like microbiological compliance have deteriorated—from 5% non-compliance in 2014 to 46% in 2023—raising the risk of waterborne diseases. Deputy Minister David Mahlobo noted the 2022 Green Drop Report revealed deteriorating wastewater treatment, with 66% of municipal wastewater infrastructure ranked as poor or critically poor. Alarmingly, 62.5% of water services authorities have at least one critical wastewater system. These findings underscore the sector’s lack of optimal treatment plants, technical know-how, and operational capacity to address the day-to-day water needs of the population – a sobering perspective. Additionally, escalating municipal debts to water boards, projected to reach R21.3 billion by fiscal year-end, call for immediate intervention.
Partnering with the private sector
Collaboration with private companies offers a promising solution. Public-private partnerships (PPPs) involve government agencies partnering with private firms that perform roles traditionally held by the public sector—often assuming significant financial, technical, and operational risks in project design, construction, and operations.
Leveraging private sector expertise and capital can bring many benefits: accelerated infrastructure development, improved maintenance, enhanced service delivery, capacity building, financial risk sharing, and operational innovation. Private companies, on the whole, tend to operate efficiently, driven by performance targets and long-term sustainability mandates. Their involvement can introduce technologies like smart meters and leak detection systems, innovative wastewater treatments, and advanced water conservation practices.
Moreover, PPPs can facilitate specialised training for public sector staff, strengthening local skills and ensuring the sustainability of water projects. Implementing performance-based contracts further guarantees that service standards are met, delivering more reliable water and sanitation services to communities.
Showcasing successful water PPPs
South Africa has notable examples of successful water PPPs. The Mbombela Concession, established in 1999, is a 30-year agreement between the Nelspruit Transitional Local Council and the Greater Nelspruit Utility Company (renamed Silulumanzi). This partnership (which Alchemy lawyers helped create and set up) successfully managed and expanded water and sewerage systems for half of Mbombela’s 406 square kilometre area, overseeing five water treatment plants, three wastewater treatment works, 92 reservoirs, and 42 pumping stations crucial to service delivery.
Another example is Umgeni Water in KwaZulu-Natal, which leads the uMngeni Ecological Infrastructure Partnership (UEIP). This alliance of 36 organisations focuses on enhancing ecological infrastructure and water security in the province, addressing challenges related to water availability, demand management, drought preparedness, and climate change impacts to safeguard sustainable water supplies.
Both of these PPPs have demonstrably improved bulk water supply and sanitation services in their regions, providing effective models of private sector engagement to overcome municipal water challenges.
Harnessing the benefits of PPPs
To unlock the full potential of water PPPs, clear policies and legal frameworks must support private participation while safeguarding public interests. Transparent tendering and contract management systems are essential for fairness and accountability. Meaningful stakeholder engagement—including affected communities—is crucial, as is financial sustainability from a combination of private investment, public funds, and international support targeted at water infrastructure projects.
Alchemy partner Wildu du Plessis emphasises, “To realise the value of PPPs in water and sanitation, these elements must be in place to foster effective partnerships that deliver enduring benefits.”
The way forward
South Africa’s water and sanitation sector confronts significant challenges, but PPPs offer a powerful tool for change. By integrating private sector investment, expertise, and efficiency, municipalities can enhance infrastructure development, improve service delivery, and fulfill the constitutional mandate to provide safe, clean water to all citizens.
“It is imperative for government and private stakeholders to collaborate in creating a conducive environment for transparent and successful PPPs,” concludes Wildu. “Together, they can secure water as a basic human right for every South African.”
For expert legal advice on PPP contracts, including in the water and sanitation sector, please get in touch.