Trillion rand Water 'Master Plan' : South Africa does not need another SOE

29 November 2019

The Democratic Alliance (DA) is deeply concerned by the Minister of Human Settlements, Water, and Sanitation, Lindiwe Sisulu’s plans to establish a new State Owned Enterprise (SOE), in a bid to deal with the effect of drought on water security. She revealed this during the delivery of the “R898 billion water master plan” on Thursday.

The Minister revealed that the Department, working together with National Treasury, plans to establish a National Water Resources and Services Authority that would finance, develop, manage and operate the national water resource infrastructure. Essentially creating another SOE to outsource the work her Department is already mandated to do.

One thing is clear, the establishment of another SOE will in all probability lend itself to corruption, maladministration and be used as an ANC patronage network as has been the case with all other SEOs before it.

The Department currently has over a dozen water boards operating dams and bulk water supply infrastructure reporting to it. However, various allegations and resultant investigations have revealed that serious maladministration and malpractice have been endemic within the Department, especially as it pertains to some water boards. The recent raid by the Special Investigative Unit (SIU) on the offices of the Lepelle Northern Water Board in Polokwane is yet another example.

Thus, the last thing South Africa needs is another SOE – that is ostensibly created to deal with the water and drought crisis when in reality, it will deal with the unquenchable thirst of the political elite.

State-owned companies in South Africa have been marked by rating agencies as one of the biggest risks to the country’s ailing economy. Yesterday, Treasury released the Financial Stability Review in which it said SOEs were posing a grave danger on the country’s financial health and any default would hurt South Africa’s financial sector. How then is it taking part in a process to establish another SOE in the Department of Water and Sanitation?

The DA calls on Minister Sisulu to stop any plans that she may have for the establishment of another SOE, and instead:

Focus on producing a turnaround strategy to fix the department’s deplorable finances;

Accelerate her efforts in addressing the challenges they are facing Water Boards and what she plans to do to stabilize water boards.

An inter-departmental effort should be set up between the National Treasury, Department of Water and Sanitation, Department of Cooperative Governance and Traditional Affairs and the Department of Agriculture, Land Reform and Rural Development to develop a strategy for the completion of big-budget water infrastructure projects.

Government’s chronic inability to manage big-budget capital projects has largely contributed to the ongoing water crisis. This does not, however, mean that an SOE has to be set up to manage these projects. What is needed is accountability, transparency, and political will.

Droughts across the country have reached disaster levels and are fast becoming one of the biggest challenges facing our country. The DA will continue to hold national government accountable and to do its utmost best, in very difficult circumstances, to deliver services to the residents living in areas where it governs.

Issued by Leon Basson, DA Shadow Minister of Human Settlements, Water and Sanitation, 29 November 2019