Investment models for the water infrastructure value chain in South Africa: investment measures, needs and priorities

Abstract

South Africa has a serious backlog in investment for the development and management of water infrastructure. This study aimed to assess the investment measures, needs and priorities for water infrastructure (engineering realities) through the following objectives: (i) the measurement of water infrastructure investments which demonstrate the budgets required; (ii) understanding the current water infrastructure investment needs and priorities, including benefits and limitations; and (iii) the principles and characteristics for alternative and/or innovative measures, sources and/or models for water infrastructure investments and the envisaged effects. The range innovative of investment models for water infrastructure needs in South Africa are wide, i.e., 15 models were identified depending on the project type and overall transaction costs. The existing public provision model continues to characterise much of the water infrastructure investment in South Africa. The research determined investments in strategic water infrastructure systems over more than 20 years (1998/99–2019/20). The correlations between the three investment measures (as share of GDP) were generally negative and not significant, except for between GFCF(GG) + PPI and GFCFCE) + PPI, which was highly significant. Total water infrastructure investments constituted only 0.35–0.74% of GDP for the last ca. 20 years and 3.97–14.35% of total infrastructure investments. The results identified under-investment estimated at 54.023 billion ZAR for the medium-term expenditure framework (MTEF) period of 3 years.