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Municipal revenue enhancement and reduced non-revenue water loss in the uMgungundlovu District Municipality

DBSA provided the planning and preparation support needed for the uMDM to conduct infrastructure refurbishment to replace ageing pipelines and further provided a R230 million loan to fund the implementation of the Water Infrastructure Refurbishment Programme.

Introduction

uMgungundlovu District Municipality (uMDM) is a Water Service Authority (WSA) and Water Service Provider (WSP) to six of the seven local municipalities including Richmond, Impendle, Umngeni, Mkhambathini, Mpofana and Umshwathi. In 2013, the town of Hilton experienced significant intermittent water supplies with most consumers going for days without water. In higher-lying areas, including Winterskloof and Mount Michael, little or no water was available for more than 19 days. 

The poor condition of water infrastructure led to an unreliable water supply in the area, which in turn hampered economic growth and development. An inefficient and inequitable water tariff structure further hampered revenue generation. Inadequate consumer metering contributed to under-collection of revenue, which was compounded by the disconnection of the billing and payments systems, causing billing and debt collection issues. To address these challenges, the uMDM needed to reduce the amount of non-revenue water leakages in the system, replace consumer water meters and extend the water supply system to enable new developments to boost economic growth in the district. 
 

Project Financing
Public
E&S Risk category
Category 2
DBSA Involvement

The DBSA provided the planning and preparation support needed for the uMDM to conduct infrastructure refurbishment to replace ageing pipelines and further provided a R230 million balance sheet loan and R200 MIG frontloading to fund the implementation of the Water Infrastructure Refurbishment Programme which entailed the 

  • Replacement of 89.7km of ageing asbestos cement pipes and 1 500 consumer meters
  • Design and installation of 15 bulk zone water meters, 22 pressure control valves and nine break pressure tanks
  • Design and construction of 51 brick and reinforced concrete chambers
  • Upgrade of the elevated tanks to service the high lying low-pressure zones
     
Stats
100%

reduction in the purchase of bulk water from Umgeni Water.

48.7%

increase in the number of consumer accounts, up from 1 264 in 2018 to 1 880 in 2020

150 to 180

people were employed for trench excavation at the peak of construction.

80

students were recruited and trained in basic plumbing skills over a two-month period

40

trainees were employed on a full-time basis to remove the old underground consumer meters.

1 500

new above ground consumer meters were installed.

57% to 17%

Non-Revenue water loss was reduced from 57% to 17% in the post-infrastructure refurbishment period.

R230.00m
80%
Sustainability impact

Replacing aged pipelines led to an almost 100% reduction in the purchase of bulk water from Umgeni Water.   Following the infrastructure refurbishment, the volume of water purchased per day reduced from 4.12Ml/day to 2.16 Ml/day representing significant savings to uMDM. The replacement of the pipelines contributed to a 48.7% increase in the number of consumer accounts, up from 1 264 in 2018 to 1 880 in 2020. Several developments are now underway that were on hold due to unreliable water service delivery, further enhancing the revenue generation stream.

The Hilton Pipe replacement project employed a labour force of 150 to 180 persons for trench excavation at the peak of construction. During the project 80 students were recruited and trained in basic plumbing skills over a two-month period. In addition, the contractor employed 40 trainees on a full-time basis to remove the old underground consumer meters and install the 1 500 new above ground consumer meters.

Non-revenue water loss of an estimated 57% pre-infrastructure refurbishment in the 2012/13 financial year reduced to 17% in the post-infrastructure refurbishment period. The introduction of pressure managed district metered areas allows the uMDM to undertake leak identification and repairs much faster, resulting in a reduction in water loss. Newly installed consumer meters improved the revenue from consumer water sales and there is still scope to reduce this even further by replacing old consumer meters. This will improve the billing and cost recovery process.