South African Water Value Chain

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

Opinion piece by Ramateu Monyokolo – Chairperson for Rand Water and AWSISA

South Africa’s (SA) 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.

In this opinion piece, written by Ramateu Monyokolo, Chairperson for Rand Water and AWSISA, he discusses the value chain and unpacks the legal framework as opposed to the operational reality.

“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, endorsed by national executive and aligned with global best practice.” – Ramateu Monyokolo,

The Legal Framework vs Operational Reality

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

The WSA identifies municipalities as Water Services Authorities (WSA’s) responsible for ensuring affordable, efficient and sustainable water provision and sanitation services to all residents across all jurisdictions. Water Boards, on the other hand, provide bulk water supply and other services as per WSA, offer technical support to municipalities, as well as other related services. This assistance is provided directly to municipalities by 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 wide. While municipalities are entrusted with delivery, they lack technical, managerial and financial knowledge. 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:

National government, via the Minister of Water and Sanitation (DWS) as custodian and trustee of the country’s water resources.
Catchment Management Agencies (CMA’s) manage water resources at basin level.
Water Boards provide bulk water and other related services and are also 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.
Water Service Authorities (Municipalities) are responsible for ensuring affordable, efficient and sustainable provision of water and sanitation services to all residents across their various jurisdictions. 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 to pay water boards. Many municipalities fail to perform their responsibilities.

Presidential Indaba: Diagnosis and Consensus

The Presidential Water and Sanitation Indaba on March 2025 came to the conclusion that most municipalities cannot independently deliver potable water.
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) has already implemented it in August 2025 as directed by National Treasury.

Crucially, AWSISA’s proposed paradigm shifts towards 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 new, more efficient and effective water delivery model to pave the way for the development of future utilities.

The SPV Delivery Model: A Game-Changer

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

Key Features of the New Model:

Joint ownership and operation of water services infrastructure by municipalities and Water Board;
Ring-fenced revenue streams which would include consumer billing, equitable share and infrastructure grants;
Performance-based contracting for service delivery, asset management and infrastructure upgrades and
Dedicated governance and oversight mechanisms to ensure transparency and accountability.

Expected Benefits:

The end of the “blame game” between WSA’s and Water Boards;
Improved infrastructure management and investment via Water Boards’ proven capacity;
Stabilisation of municipal finances by ring-fencing water revenues;
Creating a scalable, replicable model for other dysfunctional municipalities and
Delivering more reliable constitutional water rights to citizens.

Global Learning: Precedents for Success

The country’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 such as 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 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 prefers criticising Water Boards. This suggests diversionary tactics.

When national plans talk of abolishing, repurposing or merging Water Boards, (as per the Presidential SOE Council), while leaving unfit and collapsed WSA’s i.e. 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. This exacerbates the dysfunctionality of these essential institutions. The Minister of Finance has formally communicated with eighteen municipalities, indicating that their equitable share of funding would be withheld until they show 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 (MEC’s), mayors, and councillors, accountable for Water and Sanitation, shifted the responsibility onto the Water Boards, blaming these entities for the negative effects of the Minister of Finance’s directives.

Furthermore, some officials have attempted to divert public scrutiny away from their own shortcomings by spreading 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 bold, principled and solutions-driven leadership 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 rather towards a future built on clear 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 in ascertaining water security and climate resilient infrastructure:

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.
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 municipal capacity constraints without undermining their constitutional authority.
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 encouraging co-responsibility rather than casting blame on Water Boards, the Department or Ministers who are themselves operating within complex systemic constraints.
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 water-related income supports water-related outcomes.
Empower Capable Water Boards and Private Sector to Support Struggling Municipalities:
Enable and formalise structured technical and operational partnerships between Water Boards and municipalities lacking capacity. These partnerships should be performance-based, time-bound and guided by service-level agreements. The process should be managed by the DWS.
Educate Political and Administrative Leaders on the Water Governance Chain:
Build understanding across all spheres of government—particularly among councillors, MP’s, 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.
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.
Reconsider the WSA Designation Due to Persistent Failure of Municipalities: Municipalities have persistently failed to deliver on their constitutional obligation to provide proper water supply and sanitation. Financial and governance capacity had been irreparably compromised, calling for the right to act as Water Services Authorities to be revoked. This function should be transferred to an Independent Water and Sanitation Regulator –one that would 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 singular focus on water security, sustainability and service equity.

Conclusion: Toward a Professional, Integrated and Fair Water Sector

SA is at a crossroads. Either the sector continues tiptoeing around politically protected municipal dysfunction or it embraces a bold new governance model reflecting reality and empowering delivery. The time for an Independent Regulator in the water and sanitation sector is ripe. This, in our view, would 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 in Kempton Park. This high-level forum will address the structural, political and technical dynamics of the water governance crisis to find scalable, evidence-based solutions such as the SPV delivery model.