New frontiers in wastewater Ranking with the world’s best, Ekurhuleni Water Care Company (ERWAT) is among the leaders in South Africa, Africa and the globe in the field of wastewater process engineering. IMIESA speaks to Tumelo Gopane, managing director, ERWAT, about new developments that include par ticipation in a Covid-19 research project and potential publicprivate par tnership projects. Tumelo Gopane, managing director, ERWAT
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urrently, ERWAT has 19 operating wastewater treatment plants, serving major industries that include agriculture, aviation, logistics, manufacturing and mining. In turn, these industries make a major contribution to the region’s economy, helping to fund essential infrastructure and create jobs for the more than 3.5 million people who call the City of Ekurhuleni home. It’s a symbiotic relationship. Given ERWAT’s strategic role, the company has developed a series of comprehensive programmes to keep pace with intensified urbanisation. These are included in the ‘ERWAT Plants & Conveyancing Regionalisation and 50 Year Masterplan’. A central theme is the need to reduce the number of treatment plants from 19 to 10, along with a reconfiguration of the existing pump and pipeline system and conveyancing network, respectively. Tying in with this plant rationalisation study, ERWAT has also recently completed a pricing analysis that enables detailed financial modelling of present and future operational scenarios. This will prove invaluable for potential investors, in addition to providing a clearer understanding of
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where present-day cost efficiencies can be improved in a typical wastewater utility. The financial model is zero-based, from each and every plant. Based on this analysis, the break-even cost to operate and maintain the current plants and network optimally is around R3.84/kℓ. Adding the capex cost for upgrades brings this to approximately R5.34/kℓ. Compared to the double-digit figures charged by some South African potable water utilities, ERWAT’s pricing is still very competitive, considering that treating wastewater is far more complex than treating potable water. “This has been a very rewarding exercise when it comes to benchmarking opex and capex costs in line with local and global best practice. We are excited about sharing this model with our industry stakeholders,” says Gopane. ERWAT employees will be presenting papers on this initiative at various industry forums in the coming months. “We understand that costs will vary slightly from one utility to another, based on factors such as the age of their plants, the technologies employed, staff complement, etc. However, we need some form of standardisation that we can
agree to as a country and the broader industry, especially when it comes to PPPs (public-private partnerships),” he continues. ERWAT’s financial model also highlights the funding gap. Currently, the City of Ekurhuleni pays ERWAT around R2.99/kℓ. Going forward, this figure is not likely to increase significantly given the current economic downturn pre and post Covid-19. This results in huge operational and capital investment backlogs, which compels entities like ERWAT to continually assess its strategic risks. Tariff revenue shortfalls from private and commercial residents have so far contributed to a city deficit in excess of R2 billion. Funding shortfalls, in a small part, are being offset by ERWAT’s ongoing diversification strategy, albeit still miniscule looking at the maintenance and expansion backlog. This includes the conclusion of a series of outsourced operations and maintenance agreements with key blue-chip industrial clients to manage their wastewater process requirements. However, new revenue streams need to be urgently added.
Expansion plans Allied to this are three key ERWAT initiatives, namely: - T he ERWAT Beneficiation Programme - The ERWAT Plant & Conveyancing Regionalisation Programme - The ERWAT Technology & Self-funded Programme. The first hinges on a PPP-funded programme, the second on both grants and loans, and the third on loans for self-sustainable loan funds, looking at the customer base. “The ERWAT Beneficiation Programme explores fresh opportunities to commercialise wastewater by-products, taking into account what other industry leaders are doing globally,” Gopane explains, adding that these by-products include biogas, sludge beneficiation and wastewater reuse. In addition to waste-to-energy, other opportunities could include the local refining of biogas fuels for the taxi, truck and bus industries. This cheaper, cleaner and greener solution is already being applied in developed markets, spearheaded by engine technology innovations from leading OEMs. The way ERWAT manages faecal sludge is also being revisited. Like most wastewater utilities nationally, ERWAT currently pays farmers to collect it; however, that could soon change, with plans in place to produce Class A1a graded product – the highest and safest standard.
