Owed to its sound financial health and an innovation-first ethos, Umgeni Water continues to invest in the critical solutions required to quench South Africa’s thirst.
THE HYDRO HERO
Water. Vital to the survival of flora, fauna and humanity alike, it is undoubtedly the world’s most precious resource.
Taken at face value it also appears to be the most abundant one, covering 70 percent of the earth’s surface. However, with 97 percent of the world’s water found in our oceans, and a further two percent locked in glaciers and ice at the poles, just one percent of it is fresh, clean and safe. And therein lies the problem.
One in nine (785 million) people currently lack access to safe drinking water, while one in three (over two billion) live in areas without proper sanitation.
Clearly, the challenge of treating, transporting and providing this most valuable commodity is a monumental undertaking. Yet those tasked with combatting the problem are taking great strides against the odds, and progress has been made.
Let’s look at South Africa as an example. Between 2002 and 2017, the percentage of households lacking sanitation decreased from 12.6 percent to 3.1 percent, while the number of people having to fetch water from rivers, streams, wells and springs dropped from 9.5 percent to 3.7 percent.
Indeed, a lot still needs to be done, but in the eyes of Thami Hlongwa, CEO of SA’s second largest water utility company Umgeni Water, things are headed in the right direction.
“It is a crucial, exciting time for utilities in this country,” he states.
“Because of the apartheid era, many communities in the past were marginalised in relation to getting government services and receiving adequate infrastructure investment. And as a result, we’re now faced with correcting these wrongs; with the challenge of delivering water and its associated services to the previously unserved.”
THE IMPORTANCE OF INFRASTRUCTURE
For Umgeni, this responsibility spans South Africa’s KwaZulu-Natal province – a 94,000 square kilometre region situated along the country’s east coast. From Durban to Ladysmith and each of the key corridors in between, it is an area home to well over 11 million people.
So, how is the organisation able to go about meeting the needs of this sizable population?
The answer, for Hlongwa, is largely down to the entity’s ability to operate in a sustainable manner.
“Yes, we work with local government, and together we work for the people,” he states, “but more importantly we operate in a profitable manner.
“In our latest annual report, we reported a yearly profit of R1.4 billion, raising our total financial reserves to R9.5 billion and cash investments to R2.4 billion. And what these profits and reserves allow us to do is invest larger sums into improving our services, in turn better reaching the communities that need water-related services most.”
Unsurprisingly, infrastructure has formed a focal point of many of these investments over the years.
Between 2013 and 2019, Umgeni has spent roughly R9 billion ($600 million) on pipeline developments, facilities expansions and maintenance upgrades, helping to bridge the gap to many rural and previously marginalised communities.
“This focus has also allowed us to maintain and raise our water services standards as the demands of those that we already serve continue to rise,” Hlongwa adds. “When I first joined in 2013, Umgeni was only spending R600 million per annum on infrastructure. Now, we’re spending well over double that.”
It seems that Umgeni is not done here, however.
Striking the balance between adequate investment and financial self-sufficiency, the organisation has committed to roll out an ambitious R17 billion ($1.15 billion) infrastructure programme over the next five years, the most notable project within this being the Greater Umkhomazi project.
Hlongwa explains: “The Greater Umkhomazi project is set to include an 84-metre vertical wall, 84 kilometres of tunnel and a new waterworks facility that combined will greatly enhance our capacity to source, treat and deliver water. We’re expecting it to add somewhere between 600 to 725 million litres of water per day on top of our current capacity of 1,300 million litres per day.
“It’s a multi-faceted, multinational project which includes a dam, 32-kilometre raw water tunnel, water treatment works, pipeline and reservoirs. The boring machines for the tunnel, for example, will have to be sourced from outside of SA as there is none available locally capable of delivering on such a sizeable undertaking.”
Currently, environmental approvals are being finalised, the CEO confident that the engineering and design process will begin in July 2020 and construction will start no later than 2022.
BUILDING FOR THE FUTURE AT UMGENI WATER
Crucial as it is, infrastructure is not the sole investment focus for Umgeni, however.
Staying abreast of current trends, technologies and industry best practices is viewed as equally critical, the organisation having adopted its Enabled and Innovative Growth strategy accordingly.
“We’re constantly looking at how we can innovate and deliver solutions that are acceptable and fit for human use while simultaneously limiting the use of water where possible,” Hlongwa explains. “To provide an example, the modern-day toilet was designed in the 1800s. Centuries have moved on, and we’re still using this same model that sometimes uses as much as 12 litres of water in a single flush.
“We want to see how we can change this; how we can develop more effective, efficient, hygienic solutions for our communities and sustainable water solution in general.”
In implementing the Enabled and Innovative Growth strategy, Umgeni Water has formed nine research teams of six or seven young professionals, guided by senior management, to collaborate with research institutions to develop new ideas and undertake research and development activities within specific streams deemed to be primed for innovation.
Meanwhile, October saw Umgeni Water in partnership with Water Institute of Southern Africa host South Africa’s first water conference dedicated to young professionals, encouraging them to help guide the future direction of the sector.
“We’re fully aware of the fact that the sustained improvement of SA’s water sector is reliant on bringing a new crop of leaders through,” Hlongwa affirms. “Preparing young people to become future leaders, to run institutions and support our government, is critical.
“Because of this, a major focus of ours for the next two to three years will be working to practically implement the new ideas of our youth that have the potential to change the face of water across the entirety of Africa.”
A MULTI-PRONGED APPROACH
Consistently casting an eye on brighter horizons throughout its various endeavours, Umgeni is well positioned to make a real difference to the lives of South African citizens in the coming years.
Looking at the coming 12 months specifically, the Chief Exec is able to outline three key ambitions.
“First is continuing to do what we do best – producing and delivering clean, safe, high quality water. Second is taking greater cognisance of the issues of climate change. And third is minimising demand without reducing customer service levels so that we can better preserve the finite resource that is fresh water,” he reveals.
In regard to the latter of these, ambitions to develop a sustainable, fully-fledged water-centric circular economy are quickly coming to the fore.
The United Nation’s Sustainable Development Goal on Water (SDG 6) specifically targets a substantial increase in recycling and safe reuse of water globally by 2030, and for good reason.
“It’s great that we can supply people with potable water. But once water has been used, where does the waste end up?” Hlongwa states, inciting this rhetoric. “Can we retreat it and take it back into the system? Often, the answer is yes.”
Indeed, looking at Umgeni’s healthy financial position and progressive attitudes, the organisation looks set to meet each of these individual priorities to the fully extent possible.
“We’re both excited and optimistic,” the CEO states as our conversation concludes.
“It’s busy times, but our teams are motivated and young professionals joining the sector are eager to be part of the future.”