The incoming board of directors at the Namibia Water Corporation (NamWater) has been urged to keep an eye on a potentially catastrophic water situation for the capital city. The warning was issued yesterday by agriculture, water and land reform minister, Calle Schlettwein who cautioned the incoming board that a lack of adequate rainfall during the just-ended season will most likely result in Windhoek’s feeder dams running dry within the next 12 months.
“Very soon Windhoek will be under pressure, specifically in 12-months’ time, then the dams will be dry and we will have to source water far away. We will get some water from Grootfontein in the Otjozondjupa region, and from your own boreholes here from the deep aquifers. So, you must keep your eyes on that because we cannot afford Windhoek to run dry,” said the minister at the inauguration of the new board in the capital.
Schlettwein also noted water is never an easy sector to manage. He told the new board that people who complain of not having water have a very good reason to do so, as with no water nothing can happen.
He continued that the inauguration marks a continuation of the rich culture of good corporate governance within the corporation. While this culture has been established since its inception, he said it will require further guidance to achieve its intended goals for NamWater to become a notable public enterprise.
“As our economy and governance functions grow, it is crucial for our institutions to evolve and strengthen both their mandates and governance practices. I can say with confidence that NamWater has so far had clean audited reports and had always submitted their annual reports on time and had not been found wanting on its responsibility to supply water,” said Schlettwein.
Given the importance of water to life and economic development, the minister urged the board to think of broader consequences if they fail to supply water.
He pointed out the bulk water supply board remains at the heartbeat of development and wellbeing of people, emphasising that NamWater plays a crucial role in the efficient supply of water to all Namibians.
Schlettwein stated government has committed to supporting the water sector through national water sector support programmes. During the last three years, progressive steps have been taken to adequately fund the sector, from addressing ageing water infrastructure and developing new schemes to providing water to underserved areas.
To the incoming board, the minister said one of the key responsibilities will be to ensure timely implementation of capital projects outlined in the national programme. These projects, he said, are crucial for providing much-needed water supply services to Namibians.
The new seven-member board consists of Luther Rukira (chairperson), Maenge Shipiki-Kali (vice-chairperson), Vivianne Kinyaga, Francis Heunis, Uda Nakamela, Fanuel Uugwanga, and Matty Hauuanga. The board is to serve for three years from 2023-2025.
Desalination plant
One of the projects that falls under the national programme is a desalination plant at the coast and Schlettwein made it clear that this project remains a high priority for government.
“Our projections in the near future are that of new and more mines opening at the coast, thus we will fall short in the next three years if we do not have an additional source. And the only source available is the new desalination plant. We have started with the process, the environment impact assessment is underway and all that is left is financial finality and then the implementation,” Schlettwein updated.
He further urged the board that when the envisioned desalination plant is eventually ready, government does not want to use an old piping system.
Moreover, the desalination plant will serve as a sustainable water supply for coastal users. NamWater is currently engaged in the implementation of this project, which aims to collaborate with mines that are the biggest consumers of desalinated water. The plant will gradually introduce desalinated water to local authorities, considering dwindling water resources and associated costs.
The entire desalination project, Schlettwein stated, will be constructed in three phases. The first phase, which is now ready for implementation, will supply about 20 million cubic meters to the coast, while the second phase will be an extension expected to also supply Windhoek with desalinated water. The final and third phase is a larger project aimed at linking Botswana with desalinated water.
The minister added that the government policy is not to make water a business but instead to supply water at the cheapest possible price.
“The justification of the policy is that we have large informal settlements in the country, the poor people, who have just as much right to water as the rich people do. You cannot deprive them of that right and there is no room for profit making. The second reason is if we want to be competitive in industrialisation, we must provide cheaper water. Currently, if we compare our prices with other nations in the Southern African Development Community (SADC), we are the most expensive,” said the minister.
In his maiden speech, incoming board chairperson Rukira said he remains confident the board will deliver and transform the bulk water supply corporation.
“We will focus on infrastructure maintenance, reduce water losses through engaging local authorities that lead water to be expensive and invest in water purification to make sure we deliver potable water,” said Rukira.
Financial performance
According to NamWater’s 2020/21 integrated annual report, its top customers continue to account for more than 60% of total revenue for the year under review. The City of Windhoek and Swakop Uranium accounted for 41%.
On cash flow, the report stated that during the reporting period, the corporation generated N$499 million from operations, compared with N$395 million during the previous financial year. This represented an increase of 26.4% as a result of the increase in revenue and improvement in collection from debtors. Cash that flowed out to investing activities stayed relatively on par with the previous financial year from N$190 million to N$198 million. As a result, the corporation was able to increase its overall free cash flow of the business from N$16 million in 2020 to N$45 million in the reporting year, representing a double-digit increase of 181%.
“The overall debtors’ book of the corporation continued to increase on the back of Covid-19 water supply interventions. The management of debt recovery from past due debtors remained a challenge for the corporation. The prepaid interventions continued to put strain on the systems,” reads the report.
It continued that the debtors increased from N$1.09 billion in the previous reporting year to N$1.3 billion in the last reporting year, averaging an increase of 25%. The increase in debtors was primarily informed by the deteriorating economic climate associated with specific events.