Cape Town - The water crisis in the Cape is benefiting big drilling and filtration firms in Gauteng and the Eastern Cape, which have won multimillion-rand tenders from the City of Cape Town as it scrambles to augment water supply in the face of a possible Day Zero in May.
Deputy mayor Ian Neilson said the city had reprioritised R2.6 billion of its existing budget to prevent 4 million people from having their municipal water supply cut off.
Of this, R363.4 million had gone to companies which won tenders for exploration and drilling for underground water, desalination and water filtration plants.
Of the 10 companies awarded tenders so far, three are based in Gauteng and three in the Eastern Cape.
Chief operations officer at Gauteng-based Master Drilling Exploration Eddie Dixon said, compared with most jobs, its part in the R105 million drilling contract was “small, hey”.
Dixon said the company used key technical staff on the job, and if it needed additional labour, it would be sourced locally, but total jobs on site would be only about 15 to 20.
Project manager Phil Naude at Echo Bau said most job opportunities would arise on the “infrastructure side”, connecting boreholes to the water reticulation system.
The city is still evaluating tenders for associated civil works.
Local drilling and filtration companies have been flooded with demand in Cape Town, with a number of companies contacted saying they were overwhelmed.
Many of the bottled water companies that had seen a massive uptick in sales are Gauteng based. Wayne Grove, a Western Cape distributor for Gauteng-based reverse osmosis filtration company RO Water, said he was struggling to keep up with the demand for filtration systems, which customers wanted to fit to boreholes and well points to make their water potable.
“I receive 30 to 40 calls a day now at least; we try to run through it and give people quotes based on an analysis of their water,” said Grove.
He said reverse osmosis filtration systems cost between R90 000 and R110 000 for a household supply, “but there are quite a few companies ripping people off”.
City Press knows of one household that was quoted R200 000 for a filtration system.
“There are fly-by-nights jumping on the bandwagon who are not even doing an analysis of the borehole or well point water to determine what filtration system is required,” said Grove. “I don’t know how many people’s mistakes I’ve fixed personally.”
He said demand was such that at present new customers would have to wait about eight weeks before RO Water could install a system for them.
“You cannot compare business with that of 18 months ago. It’s almost too good; I’m having to start turning people away.”
General manager of Tshwane-based bottled water company 62 Waters Franco Scheffer said it has also seen an increase in sales in the Cape, but did not have the latest figures.
However, Scheffer said its Cape operation was small, with only one truck and driver for deliveries, but the company had recently hired another driver to help meet increased demand.
He said he had received a lot of inquiries from people wanting water delivered so they could sell it on.
“It’s mostly entrepreneurs wanting a quick buck.”
Scheffer said its water was sourced from a private property in the Tshwane region.
Pretoria-based Oasis Water financial director Alet Di Polo said the company had budgeted for a year-on-year increase nationally, but this was exceeded by 11% in January because of increased sales in Cape Town.
Water shortages had knocked local building and restoration companies, but some business owners had pivoted to bulk water supply. Both Henk Meyer, who runs a restoration company, and a bulk water supplier advertising on Gumtree, who asked not to be named, said they started supplying bulk water after seeing the need for it in their own businesses.
Meyer, who supplies non-potable water for construction, car washes and other businesses, said he had hardly ever received requests for restoration work. Now 70% of his work was supplying recycled water.
The Gumtree advertiser, whose username on the site is Straz, said he’d closed the construction side of his business for now and supplied water from a borehole to people who wanted to keep their swimming pools full to prevent them deteriorating or cracking.
He said his clients ranged from rich to working class, from Constantia to Belhar in Cape Town.
The price of water for building projects was now a major cost. One building in Hout Bay had to pay R60 000 for water to mix mortar and other products.
Plumbing suppliers are doing a brisk trade in water-restriction devices.
Cape Plumbing and Bathroom Supplies director Brian Thomas said suppliers had run out of water-saving devices, such as restricted aerators to reduce the amount of water flowing through taps, water-efficient showerheads and fittings for water tanks.
“We can’t get enough of those kinds of things,” said Thomas, adding that homeowners, guest houses and hotels were all ordering them.
He said his company had seen a 10% to 12% increase in sales revenue, compared with January last year.
But, he said, this needed to be balanced against inflation.
“Everybody has woken up [to the water shortage] this month,” he said.
Head of Jojo Tanks national sales and marketing Sebasti Badenhorst said demand for water tanks had increased tenfold since October 2016.
Despite the massive uptick in demand, the company was not seeing a correlating increase in profit because of the costs of transporting tanks from Groblersdal in Limpopo, Pretoria and elsewhere to supplement output from its Worcester factory. The company had not raised prices in the Western Cape, but maintained a standard national price.
Badenhorst said this was despite capacity having been increased in Worcester and Uitenhage.* SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.