Mariswe: The newly appointed transaction advisor for the City of uMhlathuze Wastewater PPP Project

The City of uMhlathuze is a key economic hub in KwaZuluNatal with a population of about 400 000. Incorporating Richards Bay and Empangeni among others, it is home to numerous large heavy industries and the Port of Richards Bay which has been identified as “one of the world’s leading bulk ports, handling approximately 60% of South Africa’s seaborne cargo.”

Recognising the importance of water security, the City of uMhlathuze has prioritised the treatment and reuse of wastewater which is readily available in large volumes. In collaboration with National Treasury, a decision was made to conduct a feasibility study and appoint a Transaction Advisor to procure a Public-Private Partnership (PPP) Agreement, should this be selected as a viable solution. Mariswe was appointed to head a consortium which concluded the feasibility study In May 2019 and the procurement of a PPP Agreement was subsequently approved.

“Mariswe has continued its association with the project as the Transaction Advisor for the procurement of the PPP Agreement,” reports Mariswe Project Manager Annalize Visser.

Significant relief

“In essence the project entails the collection and treatment of domestic and industrial wastewater from the Richards Bay and Empangeni areas and distribution of the reuse water to industrial off-takers in and around Richards Bay. The plant capacity envisaged is 75 Mℓ/d, which will provide significant relief to the City of uMhlathuze and its industrial users, particularly during drought periods which appear to occur on a five-year cycle,” she explains. The project infrastructure will include wastewater collection pipelines, a regional treatment plant and distribution pipelines, and associated pumpstations.

Mariswe has appointed three subconsultants - Rudkor Consulting as financial specialist, Ledwaba Mazwai as legal specialist and Turner & Townsend as PPP specialist. Mariswe is the project manager and technical specialist.

The Development Bank of Southern Africa (DBSA) is managing the components relating to site readiness and enablement such as environmental studies, surveys and other required investigations.

The first stage of the procurement process involves issuing a Request for Qualification to the market, which will enable the City of uMhlathuze to shortlist suitably qualified and experienced bidders. In turn the shortlisted bidders will submit their proposals. Discussions with potential off-takers have commenced and will be concluded before the Request for Proposals is issued to the bidders.

Once the Request for Qualification has been issued to the market, it is estimated that the procurement process will be concluded within 30 months.The project is funded by the City of uMhlathuze, the Development Bank of South Africa (DBSA), and National Treasury.

More investment

“Besides reducing pollution into the sea, this wastewater re-use project is strategic in providing water security to industry during severe drought,” explains Zwe Msomi, KwaZulu-Natal Regional Head at Mariswe. “The five-year drought cycle recently experienced in KwaZulu-Natal was a clear indication of how vulnerable the Province is in terms of water to sustain its economic activities. This project will alleviate the severe impact of water restrictions on big industries in Richards Bay.”

Msomi adds that the project will also make 75ML available to the municipality for its development plans, which in turn will attract more investment to the region. “The project will create a major boost to the Richards Bay economy during construction and create more jobs during the PPP concession period as many downstream activities will arise from the project value chain. We therefore urge local industry and affected stakeholders to support this initiative as a contribution by the municipality to enhance the quality of life of its citizens.”