$38bn Water Gap Pits Vines against Mines - The New Age , October 16, 2012

October 16, 2012

Concrete patches on the canals snaking through Nico Greeff’s vineyards betray constant repairs to an outmoded irrigation system that’s the lifeblood of farming in South Africa’s arid west.

“The water infrastructure is about 60 years old and the lifespan of a surfaced canal is about 40 years,” Greeff, 55, said on his farm near Vredendal, north of Cape Town. “Sometimes there are breakages on the canal system, which interrupts supplies. We can have a lot of damage to our crops.”

Crumbling canals, dams and pipelines and a lack of funds to expand, replace and maintain them threatens to stymie economic growth and efforts to tackle a 25% unemployment rate in Africa’s biggest economy.

Water infrastructure requires investment of R670bn ($76 billion) over the next decade, the Department of Water Affairs said in an Aug. 17 study. That’s almost double the available funding, leaving a gap of R338bn. The report says businesses need to anticipate supply disruptions, higher bills and more regulation in a country that gets less rain than neighbors Namibia and Botswana, famed for their deserts.

South Africa’s platinum and coal industries, two of the country’s top four exporters, are already struggling to secure water supplies for new projects.

“Water is certainly one of the major risks that we look at,” said Paul Skivington, group executive for strategy and risk at Impala Platinum Holdings, the world’s second- largest producer of the precious metal. “It’s not something you can generate. It’s either there or it’s not.”