The Sunday Mail
Africa Moyo
INDUSTRIALISTS are in panic mode after several urban councils announced crippling water rationing regimes of up to five days per week, amid indications that a number of firms – especially in beverages and bread-making – are already feeling the pinch of the supply disruptions.Local authorities running Harare, Chitungwiza, Masvingo and Bulawayo are all rationing water. This has seen companies buying bulk water from private sector suppliers. However, given that the water table is falling, bulk suppliers are increasing prices as they find it harder to access water.
The bread-making sector has witnessed the demise of 20 small to medium-sized bakeries between January and June this year, mainly due to water shortages and the cost of other utilities like electricity.
Lobels and Bakers Inn reportedly use about 300 000 litres of water daily. National Bakers Association of Zimbabwe president Mr Givemore Mesoemvura said getting water from private firms drove up production costs, but the price of bread had remained at USc90 for a standard loaf.
“We are buying water from bulk water suppliers . . . and it has to be purified before use because the water we get would be raw, so we have put up treatment plants and that is a huge cost being carried by bakers.
“The big operations such as Lobels and Bakers Inn, they buy water every day, up to 10 to 15 trucks. The water comes as 30 000-litre bowsers and the standard price is US$50 per 5 000 litres,” said Mr Mesoemvura. In April, NBAZ raised the red flag on water challenges when it was dragged before the Parliamentary Portfolio Committee on Industry and Commerce.
However, the City of Harare accused Mr Mesoemvura of “making unsubstantiated claims”.
At that time, water rationing had not started in Harare apart from announced water cuts during weekends “to allow for renovations at Morton Jaffray”. Bakers have so far absorbed the extra production costs, but this cannot continue for long.
Said Mr Mesoemvura: “The baking industry, because of its nature and competition, you can’t afford to increase the bread price but to just brave the challenges until you get over them.
“This is why you find out that over 20 small and medium bakeries have closed down between January and June this year. High operating costs, especially for utilities, have resulted in the closure of bakeries. In-store bakeries have not been affected as much as stand-alone bakers because they do not have distribution and packaging costs.
Falling water table
Some companies told the Zimbabwe National Chamber of Commerce during the 2017 National Budget consultations they were struggling to cope with the water shortages.
Last week, beverages manufacturer Delta Corporation announced in its trading update for the quarter ended September 30, 2016 that: “There is an emerging risk on water supply due to depleted dam and ground water sources. This is causing production disruptions.”
Delta is one of the biggest consumers of water, guzzling 320 million litres (3,2 million hectolitres) last year. Hippo Valley reported a five percent decline in sugar production to 228 000 tonnes for the year ended December 31, 2015, due to lack of cane deliveries from the independent ethanol plant estate at Chisumbanje and “the negative impact of low dam levels for irrigation at the end of 2013”.
ZNCC president Mr Davison Norupiri told The Sunday Mail Business that the water situation was dire and some companies were relocating from hard-hit areas like Bulawayo, to Harare which, until recently, had a steady water supply.
“Quite a number of companies are facing water shortages. During our budget consultations countrywide, we established that the impact of water shortages is actually resulting in some companies mainly in Bulawayo, closing and relocating to Harare because they have very low water levels in Matabeleland.
“At the same time, the companies supplying bulk water are also facing problems as most of the boreholes where they were getting water have dried up and they have increased the price because they are getting it far away from where they used to get it,” said Mr Norupiri.
Bulk water suppliers have been accessing water from boreholes in Highlands, Harare, and other nearby areas but are now getting it in Hatcliffe and Ruwa as the water table continues to go down.
In an interview at the Zimbabwe Economic Review and National Competitiveness conference in Harare last week, Industry and Commerce Deputy Minister Chiratidzo Mabuwa said the water challenges would not hurt companies and hospitals because they were on a “priority list”.
“It is true that the country has water shortages due to low rains last season but it is not true that companies are being affected by water rationing.
“Water rationing is for domestic consumers not industries; industry is a priority and there are some sectors like hospitals, which are also on the priority list, and we don’t ration water (and) we don’t ration electricity for them,” she said.
Investment in water
Industrialists said they expected central Government, the Zimbabwe National Water Authority and local authorities to invest in the relevant infrastructure. Mr Norupiri said the current water shortages are partly caused by dilapidated infrastructure.
“Since water is a natural resource, it is difficult to say what could be done by the companies to get a steady supply but in future, Government can invest some money in the construction of dams and boreholes in strategic areas to mitigate such problems.
“Currently, we are failing to get water in some places because of infrastructure that is dilapidated and can no longer cope with the number of people, which in some cases has gone up more than 10 times.
“There is also need to speed up the completion of water bodies that are at different stages of completion such as Tokwe Mukosi, Kunzvi Dam and so forth,” said Mr Norupiri.
Similarly, Mr Mesoemvura urged Zinwa and local authorities to not “just get money from consumers” but to “put up water infrastructure” to avert shortages in future.
Water continues to be an expensive cost driver in Zimbabwe, with the fixed charges being the least competitive in Southern Africa.
Critics say the pricing models are insensitive to water intensive industries such as beverages. The first draft 2016 National Competitiveness Report says Harare’s fixed water charge of US$80 for industrial users per 1 000 litres is the highest in the region.
In Lusaka, Zambia, the fixed charge is US$2 for 1 000 litres. It is argued that the charge is occasioned by high water purification costs arising mainly from polluted raw water from the main sources.
Deputy Minister Mabuwa admitted that the cost of water was high, adding that the issue was being addressed as part of ease of doing business reforms. She urged local authorities to buy water treatment chemicals collectively to enjoy economies of scale.
“It’s correct that water is expensive. We are seeing that our issue is about the high cost of chemicals for treating the water. But is the methodology being done by the cities that each one buys their own chemicals economic, or we should use economies of scale where we are saying there is bulk buying so that the cost comes down?
“Some of our neighbours are getting subsidies and ourselves; we cannot get subsidies because our water levels are low but we hope there would be a good rainy season this year and our water levels will rise,” said Deputy Minister Mabuwa.
