4. Strengthening water governance in Cape Town: Policy recommendations

Key water governance challenges identified for Cape Town and South Africa encompass issues related to policy and institutional fragmentation, scale mismatch, policy coherence, capacity, data and information, funding, regulation, integrity, transparency, stakeholder engagement, trade-off management and evaluation (see Chapter 3). Building upon these challenges, policy recommendations were formulated to bridge identified governance gaps (Table 4.1).

The National Water Act mandates the decentralisation of water resources management through CMAs. However, the rollout process of CMAs has been stalled for more than a decade, thus hampering decentralisation of water resource management at the catchment level. This situation has resulted in challenges with regard to co-ordination across levels of governments and sectors throughout the Western Cape territory. As such, resuming and completing the establishment of CMAs is crucial to overcome the current lack of co-ordination and further strengthen the integration of water resource management for the Western Cape.

Indeed, catchment organisations are important tools for co-ordinating water policy at the territorial level, as suggested by the Principle 2 of the OECD Principles on Water Governance (OECD, 2015[1]), which calls for “managing water at the appropriate scale(s) within integrated basin governance systems to reflect local conditions and foster co-ordination between the different scales”. They can be useful to manage water at the appropriate scale through integrated basin governance to reflect local conditions and foster multi-level co-operation for the management of water resources; to encourage sound hydrological cycle management and promote adaptive and mitigation strategies. Finally, they can help manage water risks, thus supporting and reinforcing water security.

In a study dated 2020, the Water Research Commission (WRC) published a report listing priority actions to pave the way for CMA rollout resumption and completion (Box 4.1).

Furthermore, to avoid potential territorial conflicts between catchments in the Western Cape, stakeholders have argued that a single CMA covering the entire Western Cape Water Supply System (WCWSS) territory could be favoured compared to two or three CMAs. This would provide a single and integrated co-ordination institution acting at the most relevant scale for water resource management in the Western Cape. In September and October 2020, the National DWS issued a Gazette Notice proposing to amend and expand the Breede-Gouritz Water Management Area (WMA) to include the Berg-Olifant WMA, thus creating a single CMA covering both catchments. This proposal marks a positive evolution after many delays and uncertainties with regard to CMAs rollout. For instance, the 2017 DWS review of institutional arrangements for water resource management culminated with the announcement of a proposal to establish a single national entity, the National Water Resource Management Agency (DWS, 2017[3]). The business case for this entity stated that the CMAs established or in the process of being established would be converted into regional units of the National Water Resource Management Agency. This proposal illustrated the reluctance from the national government to proceed with decentralisation and the attempt of “repurposing”1 over public institutions.

Along with the possible creation of the Breede-Olifant CMA, the progressive delegation of powers and functions (see below) should also be resumed and completed. Currently, the Breede-Gouritz CMA is endowed with initial functions focusing mainly on co-ordination missions at the catchment level, as stated in the National Water Act (NWA) (see Chapter 3). However, in addition to these initial functions, which limit CMAs’ reach and effectiveness, complementary powers and functions may be delegated by the National DWS, as stated in Schedule 3 of the NWA (see Chapter 3). Box 4.2 provides international examples of substantive functions carried out by basin organisations, including strong multi-level consultation mecanisms.

The priority action listed in the National Water and Sanitation Master Plan (DWS, 2019[5]) to “establish financially sustainable CMAs across the country, and transfer staff and budget and delegated functions, including licensing of water use and monitoring and evaluation of water resources” seems to point in the direction of delegating complementary functions to CMAs. However, this priority action was to be completed by 2020, which is still not the case. As a result, uncertainties remain with regard to the pace of the reform and its possible form and outcomes.

These uncertainties also exist with regard to the origin of the Breede-Olifant CMA staff. Currently, in the two established CMAs, a majority of the staff members worked previously for the National DWS. Incentivising and securing staff movement from the DWS to the CMA is an important step to ensure that skilled and experienced staff joins the Breede-Olifant CMA to come. In 2018, one-third of senior management posts remained unfilled and one-quarter of professionally qualified posts. In its 2018 annual report, the Breed-Gouritz CMA recognises that “the South African labour market is characterised by skills shortage which poses major challenges to many organisations and the water sector and the Breed-Gouritz CMA are no exceptions to this situation. These challenges manifest especially during the acquisition of skilled talent that require registration with professional bodies like Professional Engineers, Hydrologists, Geohydrologist, Freshwater Ecologist, Industrial Technicians among others. The skills shortage is a serious impediment to the entire recruitment value chain especially in the core functions of the business” (Breede-Gouritz Catchment Management Agency, 2019[6]).

Although water resource management charges and waste discharge charge exist in South Africa, the waste discharge charge is not implemented and the water resource management charge is set too low to serve as an incentive and effective economic instrument to manage water resources and to collect needed revenues for the financial sustainability of the sector, thus not delivering their economic nor financial function in the end.

Despite the provisions embedded into the Pricing Strategy for Water Use Charges (DWS, 2007[7]), stating that these charges should be set so as to fully recover costs associated with activities required “to protect, allocate, conserve, manage and control the water resources and manage water quality”, no detailed costing method is set forward. Furthermore, the recovery of environmental and opportunity costs are not clearly indicated. This absence of a sound method should be addressed to reap the benefits of these economic instruments. To design an effective charging scheme, some key elements should be considered such as the alignment of these economic instruments with other water policy objectives, the link between water charges and the licence system, the incentives it provides to improve water resources quantity and quality, or the flexibility and adaptability of this charging scheme (Box 4.3).

A review of international experience in setting and governing economic instruments for water resources management shows that water abstraction charges are commonly managed at the subnational level. In South Africa, they are differentiated for each WMA. The level of the water charge is usually differentiated by the type of user (domestic, industry, agriculture), like in South Africa, but also by water source (groundwater or surface water) with higher charges often imposed on groundwater than on surface water. Moreover, specific rates are sometimes applied to special zones, specific aquifers or rivers that are facing higher water stress or scarcity (Box 4.4).

Charges are volumetric in most cases – like in South Africa, with the user paying a unitary rate per cubic metre abstracted. Alternative structures include, for example, fixed charges per hectare for non-metered agricultural abstraction or a price per megawatt-hour for energy production. For groundwater abstraction, increasing block tariff structures are sometimes in place.

Pollution charges are usually calculated based on pollution volume and content, and differentiated according to the sector (e.g. industries or agriculture) (Box 4.5). More countries have adopted pollution charges compared with abstraction charges. However, examples of pollution charges for diffuse source pollution remain limited. The heterogeneous impacts and damage costs of diffuse water pollution make their management more difficult than point source pollution. Additional reasons for the slow uptake of pollution charges in the management of diffuse water pollution may include: political resistance from polluters; limited data on the costs of environmental degradation; difficulties in measuring diffuse sources of pollution and attributing them to landowners.

Pollution charges are typically collected at the local level and since charges are often earmarked for environmental funds and water protection (treatment, monitoring, enforcement, etc.), the money usually remains at the local level. There is a large variation in how and for which pollutants water pollution charges are implemented in different countries or regions.

During the water crisis, water use from the WCWSS exceeded the system yield. This situation calls for a review of water requirements among users, which is currently being done through the revision and update of the WCWSS Reconciliation Strategy. For the long-term planning of WCWSS water resources, the level of assurance of supply for the domestic and industrial sectors is set at 97%. This level is used to determine the yield of the dams. In the case of irrigation, the WCWSS long-term assurance of supply reaches 91% which is higher than in other catchments because of the type of crops. As stated in the updated Reconciliation Strategy, agriculture will be curtailed first and more frequently than domestic and industrial users and the current curtailment rules may, therefore, need to be reviewed. Many types of water balance review mechanisms are possible, allowing for temporary or regulated water allocation transfer among water users. In a context of increasing water scarcity and high marginal costs of new water production, these mechanisms can generate economic benefits while addressing equity and redress concerns (see next section on effectively redressing past inequities). Box 4.6 provides the example of the water resource management model implemented in the state of Ceará (Brazil) that includes negotiation mechanisms to review water balance among users to promote an efficient use of water.

In the 2019 WCWSS Reconciliation Strategy update, five water balance scenarios were developed to compare future water demand with current and future available yield depending on investment options (Figure 4.1). The water augmentation options include alien vegetation clearing, water conservation and demand management, groundwater development, desalination, water reuse and surface water augmentation.

These options include a mix of grey and green infrastructure2 with water conservation and demand management being the most effective solution to increase the system yield (Table 4.4).

At the city level, the 2019 Water Strategy (City of Cape Town, 2019[10]) also relies on a mix of grey and green solutions for its augmentation programme. Furthermore, it recognises that nature-based solutions are among the most cost-effective solutions to increase water yields (Box 4.7). As such, they have been prioritised along with water demand management and improvements of the management and effectiveness of the integrated surface water systems (Table 4.5). In addition, nature-based solutions such as IAPs clearing allow the creation of an important number of jobs which generates additional positive externalities in Cape Town and its surrounding areas where the unemployment rate reaches 29% (Statistics South Africa, 2020[11]).

An optimised portfolio of grey and green infrastructure appears critical to build and sustain water security and resilience. The population growth and urbanisation of African cities require increased investment in water resource management. So far investments have primarily targeted “grey” infrastructure, including reservoirs, distribution pipes and treatment plants. The connection between urban water security and upstream catchment, as shown by a study from The Nature Conservancy (The Nature Conservancy, 2016[18]), underlines the pressing need to expand and develop water source protection through “green” infrastructure and land management. The example of Nakivubo wetland in Kampala is also advocating for green infrastructure investment as being among the most cost-effective solutions for water resources management (Box 4.8).

Furthermore, a way forward could be to explore augmentation solutions that are designed according to circular economy principles, i.e. making efficient use of natural resources as primary materials and optimising their reuse; planning and carrying out activities in a way to close, slow and narrow loops across value chains; and designing and building infrastructure to avoid linear lock-in to avoid material waste. The circular economy is expected to generate positive impacts on the environment through reducing atmospheric emissions, increasing the share of renewable energy and recyclable resources, as well as reducing the use of raw materials, water, land and energy (Box 4.9).

Beyond the review of the water balance and requirements within the WCWSS, many water stakeholders recognise the need to revisit the water allocation regime to face growing pressures on water resources and redress inequities in water use distribution.

The National Water Act (NWA) in its Section 3 requires that water reserves be determined for water resources, i.e. the quantity, quality and reliability of water needed to sustain both human use and aquatic ecosystems, so as to meet the requirements for economic development without seriously impacting on the long-term integrity of ecosystems. The reserve is one of a range of measures aimed at the ecological protection of water resources and the provision of basic human needs. South Africa’s ambitious approach to the protection of the environment through the concept of a priority allocation to an environmental reserve, embedded within the Water Act of 1998, was heralded at the time as international best practice. However, although environmental flows should be included in the water regime, this is not always the case in practice. Box 4.10 provide specific examples of how certain countries are dealing with in-stream flows and concretely implementing an environmental reserve.

Failure to provide adequate environmental flows can lead to a wide range of negative and often unexpected impacts (Box 4.11). Freshwater systems provide a wide range of ecosystem services and those services depend on particular flow regimes. A study by Turpie et al. (2017[22]) valued ecosystem services in South Africa at an estimated ZAR 275 billion (USD 18.9 billion) per annum. This includes many services beyond traditional “conservation” objectives and can include services such as:

  • Increasing water yield.

  • Supporting food security.

  • Improving water quality.

  • Reducing flood damage.

  • Reducing fire risk from the growth of invasive alien vegetation.

  • Storing carbon and helping us to cope with climate change.

  • Providing jobs for semi-skilled and unskilled people.

  • Tourism and ecotourism.

  • Rural economies and SMME development.

Further, international experience shows it is extremely difficult to recover water for the environment once it has been allocated for consumptive use. This highlights the importance of reserving appropriate flows for environmental purposes from the outset (Box 4.12).

Replacing the previous Water Act 1956 that was racially discriminating for water allocation, the 1998 National Water Act abolished riparian rights, although pre-existing water use is recognised, provided it was legal in the two years prior to its promulgation. The NWA also removed the notion of private owner and declared water as a national resource owned by all South Africans. As such, the NWA provisions aimed to redress past inequities through redistribution of formal water use rights, primarily through the process of “compulsory licensing”, which allows the DWS to review all water uses in an area that is or is soon likely to be under water stress or where it is necessary to review prevailing water use to achieve equity of access to water. This is done by converting existing lawful water use into licences.

Although it provided a significant step forward, the NWA did not detail how redistribution should be carried out in practice, which is why the situation did not evolve much in the absence of a practice-oriented policy to guide allocation reform. As a result, in 2008, the DWS launched a Water Allocation Reform Strategy (WARS) aiming to redress persisting inequities through a number of mechanisms including the provision of financial support to resource-poor farmers or the processing of licences and/or general authorisations to support the uptake of water by historically disadvantaged people. The WARS set ambitious targets to reach:

  • 30% of allocable water allocated to previously disadvantaged individuals by 2014, at least 50% of which should be in the hands of women.

  • 60% of allocable water allocated to black people by 2024.

More recently, in 2013, the National Water Resources Strategy and National Water Policy Review prioritise equity criteria in (re)allocation decision-making. However, despite prioritising equity outcomes, once again, these have not been clearly defined, nor have the complex trade-offs of reallocation been considered in sufficient details to support decision-makers. As explained by Rawlins (2019[24]), “there is a clear disjuncture between legal and policy objectives defining priorities for both new allocations and reallocations. Initial allocations are assessed on a first-come, first-served basis. If a water use licence meets the required criteria, it cannot be declined in favour of an application not yet submitted, even though it may produce a more socially, economically or environmentally favourable outcome”. This partly explains the slow rollout of compulsory licensing, with only 3% of average water availability reallocated through this process (Kidd, 2016[25]). As a result, existing lawful uses which were intended to serve as a transitionary measure to enable the implementation of a new system to reallocate water rights, tend to be anything but transitional. This situation applies to both South Africa as a whole and the Western Cape region.

If the completion of the water resource management decentralisation is soon achieved, a way forward could be to delegate complementary powers and regulatory functions to CMAs so that they are legally entitled “to manage and monitor permitted water use within its water management area” and “to make rules and regulate water use” (DWS, 1998[26]). With these clear and coherent mandates, CMAs would have in their hands policy instruments as well as economic instruments (through the water resource development charge) to implement water (re)allocation at the catchment level. They would thus have the necessary tools to respond to water allocation long-term environmental, economic and social objectives while ensuring the involvement of water stakeholders.

Since 2015, the DWS contemplated a pricing strategy review and an economic regulator reform. However, both projects stalled and remain incomplete as of today. In the course of the Pricing and Economic Regulations Reforms (PERR) project, the DWS conducted extensive work and consultation regarding three possible economic regulation institutional arrangements: an internal branch within the DWS, a government component and a national public entity. “Based on the assessment criteria and external stakeholder preferences established during the consultation process, the preferred institutional option for the economic regulator is the establishment of an external regulator, as a national public entity. This option allows for the greatest separation of roles between DWS as a regulated body, and the economic regulator. It also allows for the necessary freedom in terms of the recruitment and appointment of the highly skilled technical staff that will be required to perform this function effectively. It builds on the relatively successful National Energy Regulator of South Africa model” (DWS, 2013[27]). However, in a contradictory PERR presentation (DWS, 2013[28]), the preferred option is stated to be a National Government Component, outside the DWS. More confusion is added when looking at the figure illustrating the five-pillar turnaround strategy as displayed in the National Water and Sanitation Master Plan (DWS, 2019[5]), where the economic regulator seems to sit under the DWS authority (Figure 4.2).

In the 2018/19 Budget Vote speech (DWS, 2018[29]) to the National Assembly, the minister reiterated the project of installing a National Water Resources and Services Regulator. The Annual Performance Plan 2019/20 to 2021/22 of the DWS also reiterates the objective of establishing an independent regulator endowed with regulatory functions including licensing, water pricing, regulatory performance management, consumer protection and infrastructure investment. However, the process still needs to be completed, and the National Water and Sanitation Master Plan does not set any timeframe nor a deadline for the completion of this long-lasting reform.

The OECD Principle 7 of Water Governance (OECD, 2015[1]) underlines the importance to ensure that sound water management regulatory frameworks are effectively implemented and enforced in pursuit of the public interest. In a fragmented and politicised sector such as water and sanitation services, improving the regulatory environment and limiting political interference requires establishing a regulatory authority that enjoys a certain degree of independence:

  • De jure independence, through explicit reference in the law.

  • De facto independence through a mix of governance features and operational modalities, involving independent decision-making, i.e. decisions that are taken without being subject to government assessment; staffing based on technical grounds rather than political criteria; protection of the board and top management from political interferences; and a budget which does not depend primarily on the government (Box 4.13 and Box 4.14).

In addition to preventing the abuse of monopolistic power, regulatory authorities can be created with the purpose to fulfil many other missions, which include, for instance, the protection of consumers’ rights, in particular, ensuring the provision of goods and services of proper quality and in sufficient amount at economically reasonable prices (Box 4.15). Regulatory authorities should pursue equity goals and pay special attention to poor households. To fulfil these goals, regulatory arrangements should promote water and sanitation access expansion, pro-poor tariff level and structure that foster service access, a flexible approach to service quality or mechanisms to address complaints from all customers including marginalised ones.

In Kenya, the water and sanitation regulator, WASREB, has developed a Pro-poor Water and Sanitation Services Guideline that supports utilities to expand service in the underserved low-income areas (WASREB, 2015[32]). In addition, each regulated utility reports yearly on a number of pro-poor performance indicators that include water coverage in low-income areas, level of services in low-income areas, or compliance to standards for water kiosks. Utilities are then ranked according to a weighted score based on those indicators and their yearly evolution is monitored and disclosed publicly.

In Zambia, 60% of the urban population live in low-income or peri-urban areas with the highest population growth and the lowest water and sanitation service coverage (NWASCO, n.d.[33]). Utilities lack the financial means to extend services to these areas where mostly underprivileged and poor people live. To address this situation, the Government of Zambia established a Devolution Trust Fund (DTF) through the water regulator, the National Water Supply and Sanitation Council (NWASCO), in 2001. The DTF is a basket financing instrument with the aim to assist the water supply and sewerage utilities to extend public water distribution systems and onsite sanitation in low-income areas. In comparison to the rehabilitation and construction of water systems with networks and household connections, projects funded by the DTF need relatively small amounts of funds but have a great impact on the living conditions of the urban poor.

Quality standards are a key determinant of service costs and hence, of tariff levels. Keeping tariffs affordable while ensuring an appropriate level of cost recovery can be achieved through the adaptation of service quality standards to local needs. Quality regulation, therefore, needs to be flexible and consider the trade-offs between quality and price, so that quality standards and requirements can be adapted to the circumstances in different service areas. Initiatives, such as flow limiters, the use of plastic-bodied water meters, ground tanks and semi-pressure water service levels, were first introduced to South Africa by the water service of eThekwini (Box 4.16).

Consumer representation and protection is a critical function of regulators particularly in a sector where access to services is vital to fulfilling basic human needs. In Zambia, NWASCO, which regulates the water and sanitation sector, has a very lean structure with offices in Lusaka only. However, in wanting to ensure that NWASCO is present on the ground for first-hand information and addressing consumer complaints, Water Watch Groups (WWGs) have been established, comprising customers from the service areas. The WWGs have delegated power and duties from NWASCO. Membership to the WWG is voluntary and does not attract any remuneration for the services provided. NWASCO, however, endeavours to provide WWGs with stationery, transport and other necessary logistics to enhance their smooth operations. Due to poor service delivery and the increasing number of unresolved complaints, many people were willing to serve as volunteers. The Lusaka WWG was the first to be established as a pilot project in 2002. The demand for WWGs has increased with more people appreciating the added value and impact on the ground. Consequently, in towns where there are no WWGs, people are requesting to be recognised as WWGs. However, due to the demand of monitoring as well as the cost involved, NWASCO has been cautious with the establishing rate of WWGs. Currently, there are 8 WWGs across the country.

The WWGs functions include the representation of consumers’ interests, the follow-up of unresolved consumer complaints, the improvement of the communication between consumers and providers, the arbitration in conflicts between consumers and service providers, the collection of information on providers’ performance, NWASCO information on regulations effectiveness and the proposition of possible adjustments, poor consumer information with regard to their rights and obligations, and consumer information with regards to the role and functions of NAWSCO. To fulfil these functions, WWGs hold public meetings with consumers and meetings to review/validate complaints. They engage in outreach and publicity programmes via awareness meetings, television and radio broadcasts. They submit periodic reports to NWASCO including feedback from consumers. They participate in workshops, conferences, etc. They assist in the recruitment and training of new WWGs.

In addition to the above-mentioned regulatory examples on equity goals, regulation ultimately ought to be effective to balance a range of economic, social and environmental interest and manage the associated trade-offs. In recognising the need for the development of such an effective WSS regulatory framework, six regulators from the Eastern and Southern African region established formal co-operation on water regulation issues (Table 4.7). The ESAWAS Regulators Association was thus created in 2007 as an informal gathering of regulators to share experiences and knowledge, and was later formalised in 2010.

Once South Africa has defined and implemented its regulatory arrangement in the water sector, a way forward could be to engage in communities of practice, be they regional or international, to take part in benchmarks, share and learn about good practices. Joining the ESAWAS Regulators Association, whose objectives include capacity building and information sharing at the international, national and regional levels and regional regulatory co-operation to identify and encourage the adoption of best practices to improve the effectiveness of WSS regulation, could serve that purpose.

As is the case in many countries, the revenues from water and sanitation tariffs do not cover the operation, maintenance and renewal costs of the water sector in South Africa. This is partly a consequence of the real costs not being reflected in the price of water. Nevertheless, the financial sustainability of water and sanitation services crucially depend on revenues raised through tariffs, in addition to subsidies (Box 4.17).

As explained in Chapter 3, in Cape Town, revenues from water and sanitation invoices effectively cashed in represent 66% of the water produced, which strongly reduces the financial base of the service. Overall, subsidies represent approximately 18% of the funding sources of the city of Cape Town water and sanitation service. However, in a context of pandemic crisis, fiscal constraints may reduce the amount of available subsidies both at the national and local levels, thus jeopardising further the financial situation of water and sanitation services across South Africa. As a result, Cape Town water services must improve their technical and economic efficiency and undertake utility turnaround efforts.

Indeed, service providers should not only approach cost recovery through increases in tariff levels but should also in priority seek efficiency gains, as there exist many areas for improvement (staff efficiency, collection ratio, metering level, energy costs, etc.). Moreover, thorough assessment and monitoring of all costs will help set up tariff calculations and levels that are sufficiently cost-reflective to drive long-term financial sustainability.

Over the past five years, a customer service turnaround project supported by the United States Agency for International Development (USAID) was implemented in the Cape Town water and sanitation service. During the drought crisis, Cape Town residents were made very aware of their water usage and reviewed more closely their bills and rates. This led to a significant increase in customer enquiries and a backlog of unresolved customer issues. In response to the customer problems and the loss of revenues (due to lower collection ratio) during the drought, the USAID project contributed to reform the Water and Sanitation Department customer service system, which improved public trust in the department as well as revenue collection (Box 4.18).

Furthermore, the French Development Agency (AFD) recently announced a transversal programme aiming at supporting the financial sustainability of the city of Cape Town water service. This 18-month programme, starting late 2020 and named Long-Term Technical Assistance to the City of Cape Town for the Financial Sustainability of Water and Sanitation Services will target:

  • The development of an investment plan with capital expenditure level meeting the city’s growing needs and sustaining the service by continually upgrading and/or replacing assets.

  • The cost-effective total spending, with incremental and ongoing improvements in service performance and efficiency.

  • The development of a sound and sustainable revenue model comprising a mix of tariffs, grants and other revenue. This objective includes effective data management, accurate billing, low levels of estimated readings, good meter management and up-to-date records. This is planned to be achieved through a comprehensive metering system upgrade (670 000 meters) to yield significant revenue increases and customer service improvements.

  • The implementation of a tariff model able to generate sufficient tariff revenues.

  • The improvement of cash collection.

  • The development of a sustainable, equitable and well-targeted subsidy scheme to promote affordability.

In addition to these ongoing programmes aiming to improve the efficiency and financial sustainability of Cape Town water service, complementary actions can be implemented to better assess and monitor the performance of the service. Key performance indicators (KPIs) are widely and commonly used in the water and sanitation sectors around the world as steering and managing tools to measure change and monitor improvement against specific goals (Box 4.19). The city of Cape Town Water and Sanitation Department has set up 36 KPIs to assess and monitor the service quality. They are part of a broader corporate monitoring and appraisal system at the city level. For each of these 36 KPIs a target value is defined each year and KPI monitoring is shared monthly with the Water and Waste Portfolio Committee, the Executive Mayor and the Mayoral Committee, and the City Council. However, the yearly result achieved for each KPI is not publicly available.

Many urban water utilities in Africa routinely use data and KPIs to guide their water and sanitation services management policies (Table 4.10). These data and information are also publicly communicated in their annual report available on the organisation’s website. These data encompass: water quality and quantity; water demand and supply; economic, environmental and social sustainability of the service; and human resources management. As such, KPIs are not only a powerful steering tool but also a successful exercise of transparency and accountability.

Furthermore, the ESAWAS started in 2013 a benchmarking exercise among large water and sanitation utilities located in Eastern and Southern African countries. To do so, a set of ten common KPIs was identified along with associated Minimum Service Level guidelines (Table 4.11). Adopting these ten KPIs and taking part in this regional benchmark could be an opportunity for Cape Town water service to be compared with peers and learn from good practices. Such an approach also allows to identify the service main strength and weakness areas, thus forming a basis for decision-making in order to craft measures to improve utility effectiveness (Table 4.12).

The capacity gap is another important challenge for the water sector in South Africa, especially since it often has a spill-over effect on the information gap which can, in turn, generate an accountability gap. Institutional strengthening and capacity building at all levels is crucial for effective governance of water policies in response to the challenges of the 21st century. For instance, such capacity building is a prerequisite for effective channelling of financial resources to make investment projects happen, or to prioritise investments according to their cost-benefit for the society, or to implement utility efficiency turnaround.

The National Water and Sanitation Master Plan acknowledges that “an effective water sector requires human resources capacity for different functions at different institutions – both in terms of numbers to meet the demand for specific skills; and competencies in terms of skills, qualifications and experience” (DWS, 2019[5]). It also refers to a skills gap analysis conducted by the Water Research Commission (WRC) in 20153 looking at numbers of staff and their skills relative to required skills. This analysis showed significant skills gaps in all water sector institutions, including DWS, CMAs, Water Boards and Water Services Authorities. This gap is further recalled by the Engineering Council of South Africa in a report dated 2015 stating that South Africa has 1 engineer per 2 600 people, compared with international standards of 1 engineer per 40 people.

Although there are robust but generic overarching principles and strategies in the field of capacity development (Skills Development Levies Act, National Qualifications Framework Act, National Skills Development Strategy III and National Development Plan), it seems that the operationalisation of skills development remains a vivid challenge in the South African water sector. The National Water and Sanitation Master Plan (DWS, 2019[5]) foresees a water and sanitation sector skills capacity needs analysis (including a mapping throughout the water value chain), and the elaboration of a skills and institutional capacity development strategy for the sector. However, these documents have not been produced yet.

Peer-learning and exchange of practices across water operators and practitioners could be supported and promoted, for instance, by the Energy and Water Sector Education and Training Authority (EWSETA) which is the responsible institution for co-ordinating and facilitating skills development and capacity building in the water sector. In order to fulfil its missions, this institution has developed a six-year plan (from 2015 to 2020) which includes detailed strategic objectives linked to four different programmes and associated with performance indicators. The evaluation and monitoring of the strategic plan are done yearly through a performance report. However, the data reported are not disaggregated enough to distinguish results and achievements between energy, renewable energy, gas and water services sectors.

A possible way to start addressing the capacity gap is to include within the updated National Water Strategy at the national level, and into an action plan at the city level, a section dedicated to capacity building and development operationalisation for the water sector. As stated in OECD Principle 4 of Water Governance (OECD, 2015[1]), the level of capacity of responsible water institutions should be adapted to the complexity of water challenges which have to be addressed. Countries and cities can identify, as part of their national and local development plans, training needs for water resources and management. They should also provide the required working conditions to retain trained personnel. Levels of governments must assess their own capacity to equip their water specialists so that they are enabled to implement the full range of activities for integrated water resources management. Information, education and communication support programmes must also be an integral part of the development process (Box 4.20).

Furthermore, the 2015 WRC study points out an interesting outcome regarding the characteristics of the capacity gap that the water sector is facing. This research work performs an assessment of whether the higher education system in South Africa was producing enough qualified people to fill the capacity gaps. Data from the Department of Higher Education and Training’s management information system showed that the number of civil engineering graduates had doubled from 2010 to 2014 from approximately 1 000 to 2 000 graduates per year. The graduation numbers of other relevant engineering and science qualifications that can apply to the water sector also increased dramatically over the same period. These findings tend to show that the capacity issue rather lies in the percentage of graduates that enter the water sector as opposed to other sectors and that enter the public sector as opposed to the private sector, as noticed by the report. Trying to answer these questions, the study underlines that, “while many institutions offer generic engineering, science and technology qualifications that could be applied in the sector, only two public universities (Venda and University of the North) have specific water-related courses and qualifications” (Vienings and Lima, 2015[40]).

A way forward, as highlighted by the Engineering Council of South Africa, could be to restore and expand mentoring programmes to attract and accompany graduates towards a professional level. These programmes used to foster a culture of training engineering graduates toward registration. They used to be performed by bodies that were adequately staffed with qualified professionals who could plan training programmes, supervise work experience and mentor candidates. This could be resumed through induction of graduates to observe the work of competent engineers and perform specific processes under close supervision. Such consolidating skills and learning programmes could help increase the conversion rate of candidates to registered professionals. Bearing in mind that 61% of registration candidates are black whereas 74% of registered professionals are white, the bridging capacity gap needs to be addressed through targeted transformation and equity measures. In addition, implementing such programmes poses multifaceted problems which include organisational commitment of water institutions to perform induction programmes, adequate supply of supervisors and mentors, and technical bursaries.

At the utility level, skills and capacity gaps can be addressed through a dedicated action plan. In Namibia, the national water utility has developed a human resources strategy. It is a long-term plan setting objectives to be achieved in the field of human resource development in the organisation. It encompasses the following three dimensions:

  • “Human resources development” that include training and development activities, as well as induction, internal and external bursaries, job attachments or internships.

  • “Talent management” that include graduate development programmes, understudy programmes, succession management programmes.

  • “Human resources development centre” that include internal and external vocational training courses, monitoring and evaluation, or student support.

In Uganda, the National Water and Sewerage Corporation develops a 5-year Strategic Direction which is regularly monitored in publicly available reports. This strategic document lists key deliverables in four Strategic Priority Areas. The 4th Strategic Priority Area is dedicated to productivity and capacity development and comprises the following “strategic focus areas”: skills development, R&D, business re-engineering and staff productivity. For each of these “strategic focus areas”, deliverables are defined along with a corresponding timeframe.

Transparency and integrity efforts have to be supported by a culture of consequences. When procurement rules are broken with impunity and illegal directives from political heads are not questioned, the absence of consequences gives an incentive to continue. Enforcement mechanisms that provide appropriate responses to all suspected violations of public integrity standards by public officials should be implemented. This is key for public infrastructure investment, especially large-scale projects that are particularly vulnerable to corruption and mismanagement. Budget overruns, delays and white elephants are common. Yet, public infrastructure also presents an opportunity for the government to showcase integrity and enhance citizens’ trust. Governments can capitalise on such major events and investments by applying the OECD Integrity Framework for Public Infrastructure (OECD, 2016[41]) and demonstrate that infrastructure projects can be productive, transparent and free from corruption.

The OECD Integrity Framework for Public Infrastructure aims to assist governments and private sector actors in mitigating corruption risks in public investment by identifying corruption entry points over the entire public investment cycle (Figure 4.8). The framework identifies tools and mechanisms to promote integrity in public investment, including measures for promoting ethical standards, managing conflict of interest, strengthening monitoring and controls, and increasing transparency. The instrument can be applied at the national and subnational levels and across sectors.

Municipal procurement is regulated by the Municipal Finance Management Act No. 56 of 2003 (MFMA) and its regulations, including the Municipal Supply Chain Management Regulations (2005). These regulations specify the minimum requirements but municipalities are allowed to apply stricter standards. Another recommendation would be to make greater use of open contracting models. Allowing free access, through an online portal, for all stakeholders, including potential domestic and foreign suppliers, civil society and the general public, to public procurement information notably related to the public procurement system (e.g. institutional frameworks, laws and regulations), specific procurements (e.g. procurement forecasts, calls for tender, award announcements) and the performance of the public procurement system (e.g. benchmarks, monitoring results) are key measures to enhance the transparency of public procurement systems. Monitoring and analysing public procurement information is also essential to foster greater accountability of the contracting authority. This can be done through various innovative tools (Box 4.21).

As suggested by Corruption Watch and the Water Integrity Network report Corruption in South Africa’s Water Sector (2020[42]), designating the water sector as “an island of integrity” could also be a way forward. This phrase refers to institutions that are successful at reducing corruption despite being in a context of endemic corruption. Although there is no formal definition of “islands of integrity”, it could take the form of “an anti-corruption forum” gathering “key stakeholders including law enforcement agencies, relevant government departments and agencies, representatives of the private sector, regulators and civil sector organisations active in water and in combating corruption. Reports of corruption and gross irregularities could be submitted to the forum and allocated to the agency best placed to address them. The involvement of the Auditor-General of South Africa and other Chapter 9 institutions4 would further strengthen the forum” (Corruption Watch/WIN, 2020[42]).

Engaging stakeholders and promoting accountability are also key aspects to prevent political interference and its adverse effects. In a rapidly changing and connected world where climate change, population growth, urban development, rising water need for energy and food, natural disasters and water shortage are likely to damage societies and the environment, stakeholders must be empowered to act together to shape water governance. Stakeholders that compose the water sector play a crucial role in determining the outcome of a given policy or project. They can initiate and support it but they can also oppose efforts, attempt to block them or divert them to serve their own aims. Stakeholder engagement provides opportunities to share objectives, experiences and responsibilities and to be more supportive of solutions that will be reached while voicing and addressing concerns and interests. As such, stakeholder engagement is a means for groups and individuals to share tasks and responsibilities in a sector where they often contribute to challenges as well as solutions (Box 4.22). In Lusaka, for instance, the Lusaka Water Security Initiative, a multi-stakeholder collaboration system comprising the public sector, the private sector, civil society and international actors, was set up through a memorandum of understanding (MoU) to foster dialogue, knowledge sharing and awareness-raising, planning and project development among stakeholders (Box 4.23).

Critical aspects of governance should guide stakeholder engagement frameworks. Fair and equitable access to engagement opportunities is key to ensure a balanced and representative process that takes into account diverse ideas and opinions. Being transparent and open about the ways to identify stakeholders, choose engagement mechanisms and define the objectives pursued can help to raise interest among stakeholders and to develop an understanding of and support for the final decisions. It is not sufficient to provide platforms for stakeholders to share their ideas as decision-makers must also clearly demonstrate how these ideas are taken into account. Procedural transparency and timely disclosure of information, including alternative solutions, are therefore critical to ensure the legitimacy of decision-making processes and their outcomes. Engagement processes may bring together groups with opposing views who fear that their views will not be taken into account. Showing participants what the intention of the process is and how their input will be considered is important to ensure productive discussions and exchange of opinions. It is also important that decision-makers be able to trust the quality and value of input from non-technical experts (Table 4.13).

Crises, change or emergency-driven situations also have an impact on stakeholder engagement. Crises shed light on the weaknesses of governments to properly assess the risks and call upon them to set up preventive measures to mitigate their impacts. As such, they are often windows of opportunity for new ideas to emerge and create a social and political environment with a potential for developing partnerships as was the case with the creation of the Water Resilience Advisory Committee (WRAC) in Cape Town.

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Notes

← 1. This concept refers to “the organised process of reconfiguring the way in which a given state institution is structured, governed, managed and funded so that it serves a purpose different to its formal mandate” (OECD, 2015[46]).

← 2. Green infrastructure (GI) is a nature-based solution that encompasses all actions that rely on ecosystems and the services they provide to respond to various societal challenges such as climate change, food security or disaster risk.

← 3. Integrated Water Sector Skills Intervention Map based on a sector skills gap analysis report to the Water Research Commission by A. Vienings (Water Concepts) and M. Lima (Onyxx Human Capital) (co-project leaders) (2015[40]).

← 4. Chapter 9 Institutions refer to a group of organisations established in the South African Constitution to guard democracy. The institutions are the Public Protector, the South African Human Rights Commission, the Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities, the Commission for Gender Equality, the Auditor-General, the Independent Electoral Commission, and an independent authority to regulate broadcasting.

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