WISA • CHAIR'S COMMENT
The recent reconfiguration of water service providers (WSPs) aims to increase water access to unserviced areas, enhance market capitalisation for infrastructure projects, and reduce skewed supply of water. However, is there an enabling environment for these WSPs to operate? By Dan Naidoo, chairman, WISA
Let’s talk about WSAs and WSPs
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he Water Services Act (No. 108 of 1997) makes a clear distinction between water services authorities (WSAs) and WSPs. WSAs are responsible for ensuring access to water services and as such have a governance function. They are accountable for deciding on appropriate water services development approaches, delivery strategies, and resource allocations. On the other hand, WSPs have a delivery function. They are entities that provide water services to consumers or to other water services institutions. As part of their governance function, WSAs decide which WSP arrangement is most appropriate for their circumstances. The sustainability of WSPs is brought into question since their very existence relies on a signed agreement with WSAs. Currently, WSAs have the full mandate to provide bulk services themselves. Regulatory strategies and frameworks and their implementation are unevenly developed between water services and water resources. Municipalities face several challenges in meeting statutory requirements for the provision of water services. This raises
the question as to whether the current level of decentralisation in water services provision and in local levels of regulation is appropriate, especially given the enduring municipal capacity constraints. Many WSAs are keeping the provision of bulk water services in-house, even when the capacity to do so adequately is lacking. Dual governance structure A further complexity is added by the fact WSAs and WSPs report to two different ministries – WSAs report to the Department of Cooperative Governance and Traditional Affairs (CoGTA), while water boards (regional water utilities) are classified as WSPs and report to the Department of Water and Sanitation (DWS). They further compete in the space with private water companies. This has made it difficult for the DWS to develop a holistic approach to regulating the entire value chain of water. We need a regulatory framework that integrates water resources and water services, and mitigates some of the current risks the sector is exposed to. Going forward, WSPs should be given authority over the primary function of building and
maintaining bulk infrastructure like dams and larger water treatment plants, with WSAs responsible for water reticulation and the retail function. Currently, WSPs can only build bulk infrastructure if they are given a mandate by the DWS or have an agreement with a WSA. The current dual governance poses significant risks in terms of accountability and ensuring compliance with all current legislation and service levels. An example would be when a municipality fails to comply to provide water services. At present, the DWS does not have the authority to remove the powers and functions of a non-compliant municipality, but must defer to the provincial department of local government to intervene or CoGTA. N OV E M BE R/ DE C EMB E R 2023
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