South African Water Value Chain – Water Governance: Ignorance or Diversion?

South Africa’s constitutional commitment to guaranteeing access to potable water and decent sanitation stands at odds with lived reality. Despite an advanced legal framework anchored by the National Water Act (NWA) and the Water Services Act (WSA) millions of South Africans still face daily water insecurity, service interruptions, or degraded infrastructure.

This opinion paper, issued by AWSISA, interrogates the governance value chain and asks: Are failures in water governance the result of genuine ignorance, or a strategic diversion to avoid confronting municipal dysfunctionality? More importantly, AWSISA posits a new paradigm for delivery one endorsed by national executive and aligned with global best practice.

The Legal Framework vs Operational Reality

The NWA confirms the national government, via the Minister of Water and Sanitation, as custodian and trustee of the country’s water resources. It establishes Catchment Management Agencies (CMAs) to manage water resources at the basin level.

The WSA identifies municipalities as Water Services Authorities (WSAs) responsible for ensuring affordable, efficient, and sustainable provision of water and sanitation services to all residents in their jurisdiction. Water Boards, on the other hand, provide bulk water supply and other services as per WSA, they often technical support to municipalities, and related services. This assistance is done directly to municipalities through a bilateral agreement and or as per Ministerial Directive in terms of Section 63 of the WSA.

However, legal clarity has not translated into effective governance.
The gap between authority and capability is stark: while municipalities are entrusted with delivery, they increasingly lack technical, managerial, and financial capacity. Water Boards, while operationally competent, are often scapegoated for systemic municipal failures, including infrastructure neglect, ballooning non-revenue water, and financial collapse.

Governance structure and value chain in the water sector.

1. National government, via the Minister of Water and Sanitation (DWS), as custodian and trustee of the country’s water resources.
2. Catchment Management Agencies (CMAs) manage water resources at the basin level.
3. Water Boards provide bulk water and other services. Water Boards are involved in water trading. They buy raw water from the DWS, purify it and sell it to municipalities. This is transported through a network of pipes, booster stations, stored in large reservoirs (dams) and pumped to municipal reservoirs.
4. Water Service Authorities (Municipalities) responsible for ensuring affordable, efficient, and sustainable provision of water and sanitation services to all residents in their jurisdiction. Municipalities buy portable water from Water Boards and reticulate it to households and businesses. They then must bill and collect revenue from residents and businesses then pay water boards. Many municipalities fail to perform their responsibilities.

Presidential Indaba: Diagnosis and Consensus

The Presidential Water and Sanitation Indaba (March 2025) surfaced sector-wide consensus: most municipalities cannot deliver potable water independently.
Key resolutions included:

• Urgent professionalisation of municipalities
• Establishment of a National Water Resource Infrastructure Agency
• Enforcement of minimum competency regulations
• Use of public-private models and alternative delivery mechanisms
• Ring-fencing of water and sanitation revenue. Johannesburg Water (JW) is implementing that as of August 2025 as directed by National Treasury.

Crucially, AWSISA’s proposed paradigm shift a Special-Purpose Vehicle (SPV) model was endorsed by the Indaba, both the Minister of Water and Sanitation and the Minister of Finance have approved the establishment of the SPV between Rand Water and Emfuleni Local Municipality. This will usher in a different, efficient, and effective water delivery model that will pave the way for the development of utilities of the future.

The SPV Delivery Model: A Game-Changer

AWSISA’s proposed joint venture model, implemented as a Special-Purpose Vehicle between Water Boards and WSAs, is not a theoretical construct it is underway. The Rand Water–Emfuleni Local Municipality SPV has been approved as a pilot.

Key Features of the Model:

• Joint ownership and operation of water services infrastructure by the municipality and water board
• Ring-fenced revenue streams: including consumer billing, equitable share, and infrastructure grants
• Performance-based contracting for service delivery, asset management, and infrastructure upgrades
• Dedicated governance and oversight mechanisms to ensure transparency and accountability

Expected Benefits:

• Ends the “blame game” between WSAs and Water Boards
• Improves infrastructure management and investment via Water Boards’ proven capacity
• Stabilises municipal finances by ring-fencing water revenues
• Creates a scalable, replicable model for other dysfunctional municipalities
• Delivers constitutional water rights more reliably to citizens

Global Learning: Precedents for Success

South Africa’s SPV model reflects global best practice in structural reform of urban water governance:

• France and Germany have long used inter-municipal partnerships for water service delivery—combining local accountability with regional technical capacity.
• Manila (Philippines) and Jakarta (Indonesia) have pursued joint venture models between utilities and public authorities to improve water access.
• The UK is currently undergoing major regulatory reform to create integrated regional authorities, with clear separation between infrastructure owners, operators, and regulators.
• In India, cities like Nagpur and Pune are piloting municipal-utility hybrid models to de-risk operations while retaining public ownership.

These cases reveal a common trend: fragmented governance fails. Integrated delivery, professional operations, and financial ring-fencing are prerequisites for sustainable water services.

Ignorance or Diversion? A Sector Must Decide

Given all the above, AWSISA returns to its central question:
Is the persistent misattribution of water service failures to Water Boards a product of ignorance or is it an intentional diversion?

It is difficult to believe that repeated misdiagnoses are coincidental.

• When a Water Board is blamed for failures outside its jurisdiction, as occurred in Parliament’s COGTA Committee and Water and Sanitation Portfolio Committee, this signals a governance crisis.
• When municipalities fail to invest in infrastructure, yet redirect criticism to Water Boards, this suggests diversionary tactics.

And when national plans speak of abolishing, repurposing, or merging Water Boards (as per the Presidential SOE Council), while leaving unfit and collapsed WSAs that are municipalities, untouched, one must ask: Who benefits from protecting municipal failure?

Need for Bold Political Leadership

Political parties and leaders frequently demonstrate an unwillingness to address the inherent challenges faced by failing municipalities, thereby exacerbating the dysfunctionality of these essential institutions. The Minister of Finance has formally communicated with eighteen municipalities, indicating that their equitable share of funding will be withheld until they exhibit both a commitment to and proof of payment to Water Boards. The strategic leadership role of the Minister of Water and Sanitation should be hailed. This decisive leadership is precisely what the country requires at this critical juncture.

Members of the Executive of the Department of Cooperative Governance and Traditional Affairs (COGTA) were also included in this communication. Rather than confronting the failures of the municipalities, certain Members of the Executive Councils (MECs), Mayors, and Councillors accountable for Water and Sanitation have shifted the responsibility onto the Water Boards. They have attributed the ramifications of the Minister of Finance’s directives to these entities. Furthermore, some officials have attempted to divert public scrutiny away from their own shortcomings by disseminating misleading information through media statements. The failure of leadership to accept accountability for their actions, coupled with a propensity to assign blame, resembles an ostrich-like approach. Such behavior has proven ineffective in resolving the existing challenges and has, instead, intensified the ongoing crises, leading to the continued collapse of municipalities.

The tendency to engage in blame-shifting will likely escalate as the country approaches local government elections. Certain individuals may even advocate against the implementation of the credit management policies of Water Boards, which involve the curtailment of water supply and the attachment of accounts, as outlined in the Minister of Finance’s correspondence.

Call to Action: Reform with Courage, Not Convenience

The water sector stands at a crossroads. As the institutional fragmentation, funding misalignment, and service delivery failures accumulate, the need for leadership that is bold, principled, and solutions-driven has never been greater. AWSISA believes the time has come to shift away from blame narratives whether directed at municipalities, Water Boards, or the Department of Water and Sanitation and toward a future built on clarified mandates, shared accountability, and strengthened intergovernmental collaboration.

To this end, AWSISA proposes the following action points to advance a coherent and capable water governance system to ascertain water security and climate resilient infrastructure:

1. Clarify Institutional Roles and Responsibilities Across the Water Value Chain
   Clearly define and codify the respective mandates of Water Service Authorities (municipalities), Water Boards, and the Department of Water and Sanitation to eliminate overlaps, duplication, and accountability gaps. A single, nationally accepted framework must govern infrastructure development, service operations, and revenue management.
2. Codify the SPV Model as a Strategic Reform Tool
   The Special Purpose Vehicle (SPV) model—pioneered in the Rand Water–Emfuleni partnership—must be scaled through national policy and legislation. This model provides a realistic mechanism to address capacity constraints in municipalities without undermining their constitutional authority.
3. Promote a Culture of Shared Accountability, Not Finger-Pointing
   The ongoing service delivery crisis demands collaboration, not deflection. Sector leaders—political and technical—must foster a problem-solving ethos that encourages co-responsibility rather than casting blame on Water Boards, the Department, or Ministers who are themselves operating within complex systemic constraints.
4. Ring-Fence Water Revenue for Water Services—Backed by Treasury Enforcement and Reinvest in Water Infrastructure
   Water revenue must be protected from diversion for unrelated municipal expenses. National Treasury and DWS should deploy enforcement mechanisms and transparent monitoring tools to ensure that water-related income supports water-related outcomes.
5. Empower Capable Water Boards and Private Sector to Support Struggling Municipalities
   Enable and formalise structured technical and operational partnerships between Water Boards and municipalities that lack capacity. These partnerships should be performance-based, time-bound, and guided by service-level agreements. The process must be managed by the DWS.
6. Educate Political and Administrative Leaders on the Water Governance Chain
   Build understanding across all spheres of government—particularly among councillors, MPs, provincial officials, and SALGA—of the legal, financial, and operational mechanics of water services. Informed decision-making begins with shared knowledge of roles, risks, and realities.
7. Demonstrate Bold Leadership in Depoliticising Service Delivery
   Infrastructure investment, operations, and maintenance must be shielded from undue political interference. The sector needs courageous leaders who prioritise water security, sustainability, and public health above political convenience.
8. Reconsider the WSA Designation Due to Persistent Failure of Municipalities: Municipalities have persistently failed to deliver on their constitutional obligation to provide water and sanitation, and financial and governance capacity is irreparably compromised, the right to act as Water Services Authorities must therefore be revoked. This function should be transferred to an Independent Water and Sanitation Regulator. One that will operate with professional autonomy, national oversight, and technical competence. Municipalities would still play a developmental role, but service delivery would be secured through a professionally governed entity with a singular focus on water security, sustainability, and service equity.

Toward a Professional, Integrated, and Fair Water Sector

South Africa is at a crossroads. Either the sector continues tiptoeing around politically protected municipal dysfunction, or it embraces a bold new governance model that reflects reality and empowers delivery. The time for an Independent Regulator in the water and sanitation sector is ripe. This in our view will contribute to the stability and sustainability of the sector.

It’s time for the truth. It’s time for courage. And it’s time for change not convenience.

To deepen this dialogue and forge actionable pathways, AWSISA will convene leading global voices, institutions, and innovators at the AWSISA Africa and Global South Water and Sanitation Dialogue, scheduled for 9–12 November 2025 at Emperors Palace, Kempton Park. This high-level forum will interrogate the structural, political, and technical dynamics of the water governance crisis and showcase scalable, evidence-based solutions such as the SPV delivery model.