The water mafias are taking over

As Coronation report identifies SA’s water crisis as one of the key risks for business. From Moneyweb.

It started with the construction mafia, but water seems to be the next big honey pot for organised crime.

Across the country, criminal gangs are destroying municipal infrastructure so they can sell water at extortionate rates. All it takes is an ice pick through a water mains pipe or a smashed pump, and entire communities are left with dry taps for days or weeks.

The water tank thieves are on hand to supply thirsty residents their basic needs at anything from six to 15 times the going municipal rate.

In many instances, they steal the municipal water paid for by residents and sell it back to them at huge mark-ups.

The government’s free basic water policy, allowing indigent households 6?000 litres a month without charge, is meaningless when municipal pipes run dry. Even the poor have to pay the mafias, leading to suspicions that local government workers are in cahoots with the criminals.

“There is clear evidence that the water tankered mafia has spread its tentacles across the country,” says Kasief Isaacs, head of private markets at Mergence Investment Managers.

“Reports from KwaZulu-Natal, East London, Mpumalanga and Tshwane all speak to the same theme. Groups are willing to damage and destroy existing infrastructure so they can supply tanked water at exorbitant fees. This scourge could quickly reach the same endemic proportions as other protection rackets hurting South African business and communities if government does not decisively?intervene.

“A local reticulation network typically serves anywhere between 100 to 1 000 customers. Deliberate damage or destruction of key components in the network could inconvenience the entire community for several hours to several days depending on the extent of the damage. These groups are willing to cause this level of inconvenience because the economics are very attractive.”

The typical fee for filling a 5 000 litre Jojo tank charged by the water mafias ranges from R600 to R800, estimates Isaacs.

The same water purchased from a municipality would cost R40-R120 depending on their local municipal water tariffs and total volume used for the month.

That’s huge money. A 28?000 litre tanker can generate more than R1 million in water sales in a day or two.

Municipal miasma

In 2020, residents of Kgetlengrivier in the North West were granted an order forcing the local municipality to hand over control of the area’s broken water and sewage systems to the residents association.

In just six weeks, the residents had clean water in abundance and a functioning sewage system. But that order was later reversed.

The matter is currently before the Supreme Court of Appeal, where residents argue that the local municipality has again allowed infrastructure and services to atrophy – leaving residents exactly where they started in 2020.

They want to regain control of their water and sewage services from the municipality as the only sure way to guarantee an acceptable level of service.

Carel van Heerden, chair of Kgetlengrivier Concerned Residents, which brought the case against the local municipality, tells Moneyweb that residents have now gone three weeks without water and sewage is being pumped into the nearby Koster River. It didn’t take long for the water mafia to exploit the situation.

It’s a business model that depends on broken or destroyed infrastructure.

“I’m on a farm and have a borehole, but I worry for the residents who don’t,” says Van Heerden. “This is why we as residents have to regain control of the local water supply and sewage works.”

Widespread water management issues

The same is happening across the North West, where private water suppliers have legitimate contracts with local municipalities to provide top-up water when needed. The problem here is that municipal water supplies are deliberately throttled, allowing the water mafias to fill the deficit by supplying communities from tankers, says one whistleblower who asked not to be named.

The Kgetlengrivier court case is being keenly watched by residents associations across the country, as it could result in the widespread removal of corrupt or inept municipalities in managing water systems.

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