'The cost of clean water to Gauteng will make Eskom's tariff hikes look like small change'
Jaco Schoeman, MD of Western Utilities Corporation (WUC), faces deadline pressure - to start construction on a project that is crucial to Johannesburg and the towns around it.
Gold mines that founded the country's wealth are closed or closing. They have stopped pumping and are filling with water (or AMD, acid mine drainage, to give it its technical term) that is acidic, saline and vitiated with metals from iron to uranium, as well as metal sulphates.
By 2002 the West Rand Basin's mines were all flooded and some 15 million litres of AMD started to overflow or decant each day. Since then, after treatment to remove acid, paid for temporarily by Harmony Gold, AMD has been escaping across the country to Hartbeespoort Dam and the Vaal River.
But the problems are just beginning. The West Rand Basin stretches from Randfontein to Krugersdorp. East, the Central Rand Basin stretches out to Benoni. Beyond that lies the East Rand Basin. All the old mines on those basins are flooding.
At the present rate of inflow, unless something is done by October 2011, between 55 million to 60 million litres of untreated Central Rand AMD is likely to start pouring out into the Johannesburg and Germiston areas and beyond.
A couple of months later, the East Rand will start decanting about 82 million litres a day.
AMD is poisonous to people and to plants. If it gets into Rand Water's supply, the cost of delivering clean water to Gauteng's 10 million-plus people will make small change of Eskom's tariff hikes.
The government would like the polluter to pay for the clean-up. But the mines are old and their corporate owners have long since vanished. If this problem is treated as a cost centre, taxpayers will have to dig deep.
But there is a cost-free solution: a private company treating the water, making it potable and selling it to Rand Water.
In 2005, the Department of Water and Environment Affairs (DWEA) called in mine operators and told them to come up with a long-term solution. The department would not foot the bill.
The miners set up the Western Basin Environmental Corporation and tasked WUC, a subsidiary of the UK's Watermark Global, with finding a solution.
Three years, two pilot plants and R65-million later, in October 2008, WUC had come up with a water treatment process.
It proposed a profitable R1.5-billion treatment plant south of Johannesburg - provided it could bring in and process all the AMD from the West, Central and East Rand basins to produce 88 million litres of potable drinking water and 67 million litres of industrial-quality water daily. It could also recover the contained metals and recycle the process chemicals.
AMD that had been a problem could become a valuable resource.
DWEA spokesman Linda Page said the department was drafting a report for the minister.
The department was kept in the loop throughout WUC's pilot work and given all technical plans. Its approval is needed before construction or water sales deals.
But, Page said, "What WUC has done really has nothing to do with us. Only after the minister has read the report can a decision be taken."
According to others involved, with the project now looking profitable, the department wants another look at WUC's proposed corporate structure to manage the project, which includes a 26% BEE partnership. DWEA director Lucky Musekene declined to comment.
WUC has tested, proven and proposed a plant based on the CSIR's alkali-barium-calcium technology to sell industrial and drinking water in volumes that could replace or defer the next stages of the Lesotho Highlands and Tugela schemes.
The R1.5-billion capital cost would be funded by 25% equity from WUC's UK parent and 75% debt (the IDC, DBSA and four commercial banks are on side). So, no cost to the taxpayer and foreign investment.
The first 10 years' revenues would be directed primarily at servicing and repaying debt and then at dividends and the retentions needed to replace the plant 25 years down the track. Rand Water is prepared to discuss long-term purchase agreements, but only after the government's green light.
The plant will take 18 months to build and three to ramp up to full production. It needs to be on stream by October 2011, when the Central Rand's mine water will reach critical level - weeks away from decanting and starting to create sinkholes.
Construction has to start by January 2010. But, because of rules about inputs from a swathe of government departments and other affected parties, approval is now several months behind schedule.
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