Water woes

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South Africa is heading for a water deficit of between 17% and 30% by 2030 – and needs to invest $365-million (about R2.8 billion) a year to prevent shortages, according to a global water report released in Washington yesterday.

The Water Resources Group study, a collaboration between the International Finance Corporation, McKinsey consultants and private companies such as SABMiller, says South Africa faces “tough trade-offs” between water use for agriculture, industrial activities such as mining and power generation and domestic consumption in expanding urban centres, Business Report and the Engineering News report this morning.

“Its best-case scenario projects a water shortfall in two decades of 2.9 billion cubic metres, rising to 3.8 billion cubic metres if moderate climate effects are taken into account and 5.4 billion cubic metres with accelerated economic growth. Currently water supply is about 15 billion cubic metres,” Business Report notes.

The study says SA can close the gap provided it adopts a mix of solutions, chiefly infrastructure investment in water transfer schemes.

Of the required capital outlay, 70% is needed for additional water supply measures, 13% for interventions in agriculture, another 13% for those in industry and 4% for domestic and municipal uses.

“We’re definitely not doomsdayers at this stage,” said Marc van Olst, a partner at McKinsey South Africa. “But it will turn into a crisis later if we don’t act on these things very quickly.”

The big question facing South Africa is the sourcing of funding for large infrastructural projects, Business Report adds.

State-owned water utility Rand Water said last month that it faced a R5 billion funding shortfall between 2010 and 2015, when it would invest R8.6 billion to augment infrastructure.

The global water report notes there is wide agreement that water has suffered from chronic underinvestment. “There is good reason to believe that water will be an important investment theme for public, multilateral and private financial institutions in the coming decades,” it says.

By far the cheapest and most effective solution to SA’s pending water shortages is a blend of infrastructural investment and efficiencies in agriculture (the country’s biggest water user), industry and the domestic sector.

This solution would result in net annual savings of $150 million in 2030 as about half of the measures involve significant savings of other input costs, such as fertiliser.

Desalination, the removal of salt from sea water, is listed among South Africa’s most expensive options. Van Olst said many people regarded desalination as a “silver bullet” but its carbon footprint was very high and transport costs restricted its use to coastal areas.

The report calls for strong co-ordination and co-operation between water users.

Van Olst believed water would be “high up” the agenda of National Planning Minister Trevor Manuel’s commission.

Manuel earlier this month noted that while alternatives existed to generate energy, there were none for water.

Africa should resist a course of “water for profit” in favour of water “as a right”, but he cautioned: “We’re living on earth in 2009 with the same amount of water that was available in 1900, meanwhile the global population has quadrupled”.

Engineering News added that the authors were “confident that the demand and supply gap would be closed”, but noted that the question remained how this would be done.

A 1% a year efficiency improvement has been seen in both the water use of the agricultural and industrial sectors had been recorded between 1990 and 2004. If this level was sustained in each of these sectors up to 2030, only 20% of the water supply shortfall could be met, the engineering publication said.

A business-as-usual approach to the water scarcity challenges was no longer an option for most countries, with the financial implications of water scarcity becoming clearer, it added.
 

“Although affordable solutions are in principle available to close the projected water supply-demand gaps for most countries and regions, institutional barriers, lack of awareness, and misaligned incentives may stand in the way of implementation, across both the private and public sectors,” the authors noted.
 



Overcoming these barriers would require persistent action and, in many cases, an integrated agenda of water sector transformation, it added.