Water Wheel Jan/Feb 2025: Non-Revenue Water

Abstract

Examining performance-based contracting for non-revenue water The non-revenue water (NRW) situation in South Africa is dire. The 2023 No Drop Report found that the national NRW figure is 47%, up from 41% in 2018 and 37% in 2012. This means that almost half of the water that is extracted, treated and distributed is never paid for, and the situation is getting worse. The negative financial implications for municipalities are obvious and some of this wasted expenditure could be repurposed to pay private contractors to help address the NRW issues. Performance-based contracts (PBCs), where the private sector takes risk in implementing NRW interventions in exchange for a portion of the savings, have been implemented successfully internationally and twice in South Africa. PBCs have multiple advantages and appear to be a win-win for both the municipalities and the private sector, but have not been applied at scale in South Africa, despite the growing NRW problem.

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