South Africa needs greater private-sector participation in water infrastructure as traditional funding and management approaches struggle to address deteriorating infrastructure and water losses, says law firm Bowmans partner Mongezi Dladla.

He notes that the National Water Action Plan (NWAP), released by President Cyril Ramaphosa in July 2026, recognises these challenges and sets out interventions to support sustainable water service delivery.

The NWAP reports that 74% of water service authorities were rated ‘poor’ or ‘critical’ in quality assessments, while 81% of wastewater infrastructure is in poor or critical condition. Nearly half of the country’s water supply systems failed basic safety tests in 2023.

The report also states that on average, 47% of water pumped by municipalities is lost through leaks, theft or broken meters before reaching a paying customer.

Dladla says the challenges are structural, with municipal water revenues routinely absorbed into general budgets instead of being ring-fenced for water services. Accountability, he says, is spread across departments, while skilled staff are in short supply.

Corruption and criminality further compound the situation, with criminal syndicates allegedly sabotaging infrastructure to secure tanker contracts, while theft and vandalism disrupt services, Dladla adds.

The NWAP states that measures are being implemented to unlock private-sector investment, drawing on the crisis-management approach used in the energy sector.

At local government level, Dladla notes, the Water Partnership Office (WPO), an initiative between the Development Bank of Southern Africa, the Department of Water and Sanitation (DWS) and the South African Local Government Association, is developing a pipeline of bankable municipal projects.

“These include water reuse, wastewater treatment, desalination and non-revenue water reduction projects, as well as management contracts.”

He adds that appropriate funding models depend on the asset, municipal capacity and applicable procurement and regulatory requirements.

PPPs

Public–private partnerships (PPPs) are a mechanism for supporting water infrastructure investment.

Dladla says PPPs can provide long-term solutions because they are typically structured to incentivise asset performance. Traditional procurement has focused on capital expenditure, with insufficient investment in operations and maintenance contributing to the current rates of deterioration.

However, PPP procurement generally takes longer, owing to feasibility studies and tender processes potentially taking years, which has contributed to their slow adoption in South Africa.

Nonetheless, PPPs ensure private capital upfront, reducing the need for municipalities to fund the full initial cost – a key concern for South Africa’s struggling municipalities. 

Dladla points out that South Africa already has operational municipal water PPPs.

The WPO is also designing management contracts for up to five metropolitan municipalities and structuring non-revenue water and desalination PPPs for coastal cities.