City of Joburg loses nearly half its water, costing billions

The City of Johannesburg loses nearly half of the water it provides on a daily basis.

Johannesburg Water’s so-called “non-revenue water” (NRW), a bland term municipalities use to measure the portion of water lost due to leaks or non-billing, is now at 44.8%. This is up from an already staggering 39.4% in 2020/21.

In the 2021/22 financial year, non-revenue water totalled R3 billion – this is equal to a full third of revenue reported in the year (R8.9 billion).

Basically, it paid its bulk supplier Rand Water for this resource, and just never received any revenue for it.

Its target? An impossible 32%, according to the city’s 2021/22 annual report, the most recent data available.

Currently, out of every 1 000 kilolitres (kl) supplied by the city, it does not get revenue for 448 kilolitres. This is among the highest losses across the country’s major metros that has “significantly increased” in recent years, according to the utility.

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Water losses spring up

Burst or leaking pipes, meters and reservoirs (physical losses) equate to 22.9%. That means more than a fifth of its daily supply of water is lost due to leaks. These physical losses cost the city R1.5 billion in the year to June 2022.

Commercial losses are 8.9% (nearly R600 million in 2021/22). This includes illegal connections and metering and “associated data transfer errors”.

Losses due to “unbilled authorised consumption” is 13%, which the city says is unique to how it bills for water. The lost revenue here was close to R900 million last year.

The contributors to this category are “deemed customers” in Soweto, Orange Farm, and Alexandra who are billed at flat rates of 20kl, 10kl or 6kl per month.

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The city has established that the actual consumption of these lower income households “ranges between 50kl and 60kl”.

The difference between the billed rate and amount used is allocated to this NRW category. It says “the contribution of these deemed customers to the CoJ’s NRW is 4% of the total system input volume”.

The city wants physical losses at 16% and total commercial losses, including the ‘special case’ category, to be 14%.

The South African Water Research Commission (WRC) report classifies various benchmarks for the country:

• <15% – low level of NRW, very good performance
• 15%-30% – low level of NRW, good performance
• 30%-40% – average level of NRW, average performance
• 40%-50% – high level of NRW, poor performance
• 50% – very high level of NRW, very poor performance
  

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The point is not to get non-revenue water to 0%. The cost to reduce wastage needs to remain less than the savings realised. Municipalities ought to balance these two priorities, with anything below 30% considered good performance in the country.

Average losses in SA are estimated to be 41%, but in recent years this number has been creeping higher. A decade ago, the WRC estimated NRW losses for the country at 36.8%. Also, it must be noted that municipal sewerage charges are based on the amount of water consumed per household. If this is not billed accurately, there is a direct impact on revenue raised for sanitation.

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Shortages in the city

The situation in Joburg is increasingly worrying. Water usage in the metro has increased by 11% over the last five years, and issues at bulk supplier Rand Water have meant that various areas in Joburg have suffered water shortages, especially in the past year.

An excellent analysis on The Outlier highlights that if this rate of increase continues, by 2032 Joburg will use nearly half (47%) of Rand Water’s total bulk water allocation of 1.6 billion kilolitres a year.

This amount is capped, which means that this additional usage by Joburg has to be offset by cuts to other municipalities, Eskom and Sasol – who all share the allocation. This is completely unsustainable.

The easiest way of slowing this growth in consumption – or even reducing it – is for the city to get non-revenue water back to appropriate levels (under 40%).

This could also mean a positive impact on tariffs. A five-percentage-point improvement in the amount of water lost (44.8% to 39.8%) would result in a corresponding decrease in tariffs.

Already, Joburg Water makes a profit, even with these sky-high water losses. Because of this, the benefit to tariffs – effectively the absorption of any increase in the following year – could be even greater than just five percentage points.

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Advance and prepaid meter plan

Johannesburg Water says “a team has been established to investigate the increase in non-revenue water which includes a detailed review of the reduction in the billing volumes and enhancing the current meter reading system to enable a zonal tracking of the revenue water and non-revenue water”. It plans to install advance metering for large water users and STS prepaid meters for households.

The situation in Joburg is not quite as bad as eThekwini, which is losing a shocking 56.2% of the water it provides. This is a record for the city, and only includes some impact from the floods in April and May last year. A staggering 44% is lost due to leaks alone – practically the total amount not recovered by the City of Joburg.

The City of Cape Town has a target of 30% for non-revenue water for the current fiscal, which ends in June (it was 32% last year). So far this year, this figure has hovered above 33%. This is one of the best figures in the country and is certainly the top among the metros – it is a full 11% below Joburg.

This article originally appeared on Moneyweb and was republished with permission.
Read the original article here.