The Department of Water and Sanitation (DWS) has highlighted that, over the last decade, water infrastructure and water supply services have deteriorated to the extent that South Africa’s water sector is now in crisis. According to the DWS’s 2023 Blue Drop report, there has been an overall decline in the performance of water supply systems between 2014 and 2023. In terms of the 2022 Green Drop assessment, 64% of wastewater treatment works in the country are at high and critical risk, with negative implications on, amongst others, the environment and human health.

The urgency of the country's water services crisis is receiving the necessary state attention. Phase II of Operation Vulindlela was launched in May 2025. Among its core priorities is the water sector, with targeted reforms aiming to:

• address root causes of service delivery failures;
• protect the quality of drinking water;
• implement institutional reforms to improve the management of water resources;
• strengthen the regulation of water services provision; and
• support the introduction of private sector participation in the water sector through the Water Partnerships Office and the PPP Unit.

Promisingly, the government has made significant headway in institutional reform and strengthening water service provision regulations. This progress is represented by proposed changes to key legislation governing South Africa’s water sector, specifically the Draft National Water Amendment Bill and the Draft Water Services Amendment Bill, published in November 2023.

Below, we discuss the changes proposed in the Water Services Amendment Bill (Services Bill).

Proposed changes to the Water Services Act

The proposed changes contained in the Drafter Water Services Amendment Bill (Amendment Bill) include the following:

• adjusting the approval process for water services providers to operate;
• requiring a license as a precondition to operate as a water services provider;
• altering how water boards are established and function; and
• providing the Minister with enforcement and rectification powers in addition to monitoring and intervention powers if water services providers do not meet their obligations effectively.

Additional approvals to operate as a water services provider

The draft Services Bill proposes to amend Section 22 of the Water Services Act. The amendment lists additional criteria municipalities (as water services authorities) must apply before approving a water service provider’s right to operate. The added criterion appears to serve two primary purposes:

• provide for approvals to be granted to water services providers that hold operating licenses; and
• prevent approvals being granted to purported water services providers who neither have the requisite technical capacity nor the finances to operate sustainably.

The changes to Section 22 specifically task municipalities to do several things when faced with a request for approval to operate as a water service. These include:

• following the process of reviewing and deciding on the appropriate mechanism of providing a municipal service as required by Chapter 8 of the Local Government Municipal Systems Act, 2000;
• assessing a water service provider’s financial and environmental sustainability;
• considering all operating licence requirements;
• making water service providers accountable for provision of water services; and
• requiring financial disclosure and transparent reporting on all funding due to and from the water services provision.

License to operate as a water services provider

The Services Bill proposes to add a Section 22A to the Water Services Act, which prohibits any person from operating as a water service provider without an operating licence granted by DWS.  The licensing process and its conditions are not addressed in detail.  The Services Bill provides that the Minister of DWS must prescribe these in regulations within 12 months of the enactment of Section 22A. Existing water service providers are also expected to apply for an operating license within 12 months of the promulgation of the said regulations.

Section 22D of the Services Bill allows the DWS to intervene if a water services provider fails to meet the conditions of its operating licence. DWS will be able to direct failing providers to either:

• comply with set conditions; or
• rectify the failure within a reasonable time frame, taking into account the impact of the failure on water services provision.

If there is persistent failure on the part of the water services provider, the Services Bill gives DWS power to revoke the operating licence.

Afte revocation, Section 22D(3) of the Services Bill requires the municipality to, in compliance with Chapter 8 of the Municipal Systems Act, approve another licensed water services provider, provided that temporary service delivery arrangements are put in place by the municipality in its capacity as a water services authority.

Evolving the establishment and functions of water boards

Currently, Section 28 of the Water Services Act empowers the Minister of DWS to establish a water board, name it, determine or alter its service area, or disestablish it. The Services Bill enables the Minister to "establish one or as many water boards as considered necessary” to meet its function and purpose as assigned by the Minister from time to time. (own emphasis)

In addition, the Water Services Bill empowers the Minister to:

• determine or re-determine the area serviced by a water board
• merge a water board with another water board.

The required consultation by the Minister with the province concerned, the water board concerned, if in existence, and every water service authority having jurisdiction in the service area or proposed service area in the establishment of a water board is proposed to be removed by the Water Bill and be replaced by the requirement to publish a notice in the Gazette and three national newspapers with due regard to the Use of Official Languages Act, 2012.

The proposed amendments appear focused on streamlining the process for establishing and reconfiguring water boards across the country.  An example and perhaps a lesson learned in this regard is DWS's merger of Umgeni Water and Mhlathuze Water.  This is where the Minister of DWS extended the boundary of Umgeni Water to include Mhlathuze Water, changed its name to uMngeni-uThukela Water, disestablished Mhlathuze Water and transferred Mhlathuze Water staff, assets and liabilities to the new water board.  The merger of the two water boards was in an attempt to improve service delivery in the KwaZulu-Natal province and to streamline operations.

The Services Bill also clarifies and expands the functions of water boards, which the Water Services Act currently defines as providing water services to other water service institutions in their service area. Currently, the primary activity of a water board is to provide water services to other water service institutions within its area and within the parameters set out in section 34 of the Water Services Act. may supply untreated or non-potable water to end users who do not use the water for household purposes and, with municipal approval, supply water directly for industrial use, accept industrial effluent, and act as a water services provider to consumers.

The Services Bill proposes to insert Section 28A, which states that the main functions of water boards include:

• managing bulk water services infrastructure;
• providing bulk water to water services authorities, water service providers and bulk water consumers; and
• manage bulk sanitation infrastructure for wastewater treatment.

A water board’s mandate, as defined by the Services Bill, is to:

• efficiently plan, develop, manage, operate, maintain, and support bulk water services infrastructure and wastewater services infrastructure, including cross-boundaries infrastructure to meet the social, economic development and international obligation needs of current and future users so as to Schieve the objectives of integrated water services management; and
• support water services authorities (ie municipalities) by providing water services on their behalf to water users, or providing water services directly to a water services authority, as may be requested by the water services authorities, or as may be directed, from time to time by the Minister of DWS.

Ministerial intervention in a water services institution

Section 62A of the Services allows the Minister of DWS, or a person delegated by the Minister to issue a directive and require a water services institution, being a water services authority, water services provider, a water board or a water services committee, a water service intermediary, to rectify its conduct or omission if that water services institution has not effectively performed any function imposed on it under the Water Services Act.

Overall, taking into account the changes proposed to both the Water Services Act and the National Water Act, as well as initiatives under the auspices of Phase II of Operation Vulindlela, South Africa’s water sector will undergo significant change in the next few years.

National government’s ability to hold municipalities, water boards, and water services providers accountable for underperformance should foster improvements in the provision of adequate water services, in addition to other legislative changes. These other legislative changes include amendments to Treasury Regulation 16 and Municipal PPP Regulations, the establishment of the National Water Resources Infrastructure Agency as well as the Water Partnerships Office.

While concrete predictions are difficult to make, it is reasonable to suggest that this cocktail of greater oversight and proposed private sector involvement in the water sector should tackle underperformance at local government level, achieve reliable access to water,achieve financial sustainability of institutions and improve service delivery outcomes for South Africa’s citizens.

Written by Calvin Nchabeleng, Partner & Makgati Makgatho, Senior Associate at Webber Wentzel