Water institutions and governance models for the funding, financing and management of water infrastructure in South Africa

Abstract

The standard water institutions, governance and infrastructure reform and policy prescription package of the 1990s and early 2000s, i.e., restructuring, private-public partnerships (PPP), establishment of an independent regulator, have not yielded positive results for South Africa. These water institutions and governance challenges are resulting in inadequate investments, and millions in South Africa not having access to basic water and sanitation services. The framework for water sector infrastructure funding models was designed to meet the challenges presented by the current and growing imbalances that exist between the supply of and demand for water in South Africa. The research results identified 7 overarching governance models for the funding, financing and development of water infrastructure projects in South Africa, i.e. Model 1: direct fiscal (NRF) funding, Model 2: ring-fenced special purpose vehicle (SPV), Model 3: SPV housing dedicated water infrastructure cash-flows, Model 4: stand-alone water institution with strong balance sheet, Model 5: public-private partnership (PPP) with equity, Model 6: private concession, and Model 7: private development. Various institutional options for consideration for the future  management and development of water  infrastructure were investigated and considered. The emerging model is considered to be a hybrid model consolidating the national water resources and regional bulk infrastructure functions and capabilities, with regional bulk infrastructure primarily being a water board (water services provider) function.

Keywords: Funding and financing, water governance, water infrastructure, water institutions