• Desmond Latham

Water and the politics of Day Zero


Social media was abuzz for all of an hour on 26 March 2019 when Western Cape ANC leaders shared updates on Twitter and Facebook alleging that the Cape Town water crisis was actually a conspiracy engineered by the Democratic Alliance.

ANC supporters on social media called it the #DayZeroHoax and proceeded to share and like the story, as well as a poster created by the party promoting the court action against increased water tariffs.

Part of this campaign started more than a year ago on March 12, 2018, when Moody’s reported the Cape Town water crisis would have a direct impact on city's budget and economy for the rest of the year and beyond. The ratings agency also outlined the challenges faced by the Mother City - including the fact that it would be the first major city in the world to potentially run out of water.

What has happened since then is far more serious, as at least three other major cities in South Africa are beginning to run out of water. But the #DayZeroHoax campaigners said this was an exaggeration.

"Cape Town is facing an unprecedented situation for a major city: having a day in sight when the municipal water supply will have to be turned off," said Daniel Mazibuko, a Moody's Associate Lead Analyst and author of the report.

"The water supply crisis is expected to have a range of economic and financial impacts on the city in the 2018 fiscal year. One of the most direct impacts will be on the city's own operating revenues as 10% of them are from water charges."

The date was called “Day Zero”, and the City’s Budget was going to be further impacted by planning and investments to try and offset that catastrophic day.

Tourism and other sectors would be heavily impacted, and to avoid future crisis, Moody’s estimated that capital expenditure related to water and sanitation infrastructure could be between R8 billion and R12.7 billion over the next five years

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"The long-term solutions are likely to require significant capital and operating expenditure, and - importantly -- clarity on the governance of water supply in the city, the complexity of which has contributed to the slow response to the crisis," Mazibuko added.

Before the day was reached, which had been shifted a number of times through 2018, good rains fell in the city dam catchment areas, and “Day Zero” was averted. Moody’s followed up the 2018 report with their 2019 Analyst report into the City, which indicated that the while still facing a major water challenges going forward, a disaster had indeed been averted.

Moody’s also told investors that the city of Cape Town had forecast a budget R7 billion for services. The opposition ANC in the province immediately latched onto this figure and a slew of social media updates followed alleging that DA-led City officials had conspired to create a Day Zero in order to generate profits for some connected to city tenders.

There was some comment on social media, but it failed to trend in South Africa on the day under the hashtag #DayZeroHoax.

However, Moody’s had made it clear that the R7 billion cash generation for the 2017/18 year was for services, it was not profits. Moody’s also improved the Cape Town city’s rating.

“This is testament to the City’s sound management of cash flows, which ensured that we did not get into trouble. This, along with our good management of the water crisis, was among the reasons why Moody’s changed the City’s rating from negative to stable,” said Cape Town’s Executive Deputy Mayor, Ian Neilson.

The inexorable growth of Cape Town’s population has increased pressure on water resources and set off the usual round of rhetoric between both the ANC and the DA.

Cape Town’s population grew 20 percent between 2005 and 2018 and now numbers more than 3.8 million. Increasingly poverty-stricken Eastern Cape residents are flooding into the Western Cape where jobs are more plentiful. This has irked the ruling ANC which lost control of the City of Cape Town in 2006 and the Western Cape Province in 2009.

But what set off the ANC’s response to the Moody’s report?

Party leadership began communicating in early 2018 that the water shortages were partly artificial and caused by the Democratic Alliance. This communication became more strident on both social media and through formal channels in February 2018.

According to ANC Western Cape legislator Sharon Davids the entire threat to residents was fabricated in order to provide desalination contract kickbacks to what she referred to as the “Jewish mafia.”

“(Provincial) Premier Helen Zille is too much in love with the Jewish mafia,” Davids said as she stood in the Western Cape Legislature in February 2018. She later denied the slur.

At the root of the ANC criticism and apparent misinformation is a tender to deliver desalination treatment plants to the Western Cape.

The Cape Town council then announced higher water and sanitation tariffs for 2018/19 partly to pay for these new projects, which led the ANC to file a class action in the Western Cape High Court in 2018 on behalf of residents seeking to have the increases set aside.

Former CSIR natural resource and environment unit water expert, Professor Anthony Turton, the allegations made by the ANC are a dangerous fabrication.

He believes the overall management of water is seriously out of kilter with a growing population exacerbated by climate change.

“This data shows that current policy options (which are demand side management) are flawed because the key driver is a change in the supply side, so unless we invest into SWRO for all coastal cities then Day Zero is upon us with a vengeance,” he said.

“As we speak both East London and PE are at risk of an identical crisis.”

This he says is a much bigger problem and that cities around South Africa are indeed in real danger of running out of water. Cape Town was merely the first. And he blames the failure on government and policy makers and has said the national economy became water-constrained starting as long ago as 2002.

This he says has happened in the absence of evidence-based policy reform which is going to become a national security risk based on “systemic failure of the state at municipal level – the sewage crisis is probably our single biggest risk” he warned.

Moody's followed up their rating announcement with a report dated 10 March 2019 which included the conclusion that the credit profile of City of Cape Town of Baa3 "reflects its consistently strong operating performance, resulting in an above average liquidity profile and its moderate debt levels, albeit expected to marginally increase."

"Credit challenges include the rising pressure on capital expenditure as a result of the recent water crisis, population growth and infrastructure backlogs. Moody's also considers City of Cape Town to have a moderate likelihood of extraordinary support from the government of South Africa (Baa3) in the event that the issuer faced acute liquidity stress."

#DayZeroHoax #CapeTownWaterCrisis #Drought #DA #ANC #Moodys

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