Rand Water Group Chief Executive Sipho Mosai sat down with Ralph Staniforth for a chat about all things water; from the importance of working together as one society to his work in securing the financial future of the bulk water utility.
When you look at the sheer size of the Rand Water network, you start to understand the task at hand. The water utility operates a sophisticated network of pumping and purification stations with an extensive regional pipeline network that stretches approximately 3 660km. In addition, the entity has major facilities in Zuikerbosch and Vereeniging.
Over 18 million people across four provinces (Gauteng, some parts of North-West, Mpumalanga, and Free State) are served by Rand Water, spanning an area of over 37 000km².
The man charged with ensuring the smooth running of this mammoth undertaking is Group Chief Executive Sipho Mosai, who has been in the position since 2019 after previously occupying the Chief Operations Officer seat at the water utility for the decade prior.
Mosai, a scientist by training turned strategist and business leader in the water sector, boasts over 20 years executive management and technical experience in bulk and distribution water operations; water infrastructure planning, maintenance, refurbishment, and upgrade; project management, scientific services, strategic asset management; and sector growth and development.
Since taking over the hotseat, Mosai has enhanced operational efficiency, all while nurturing strategic partnerships and spearheading sustainability initiatives. This has positioned Rand Water as an influential thought leader in the industry.
“Water is more than a resource; it is the lifeblood of humanity, underpinning health, sanitation, and economic vitality. Rand Water’s efforts are to address the broader needs of the expanding population,” Mosai tells BBQ.
The establishment of the Rand Water Board in 1903 marked a transformative moment in the Witwatersrand water supply history. Prior to this, many of the earlier initiatives by small private companies failed to quench the growing thirst for potable water and meet the wide-ranging needs of the expanding population.
To this day, that expanding population has brought with it struggles and challenges, particularly when it comes to keeping up with the demand.
“It is vital that society as a whole acknowledges that despite great effort, severe water challenges persist, posing a threat not only to humankind, but to all species in the environment,” Mosai avers.
“By strategically investing in the maintenance of infrastructure, the development of new facilities, and embracing innovation, the organisation is well-equipped to tackle the challenges of a changing environment, while ensuring millions have access to clean water.”
Ensuring there is water in the taps
It is important that the public’s attitude and behaviour towards water usage is reshaped for the sake of their livelihoods and that of future generations.
Therefore, engaging communities in water conservation encourages responsible practices and promotes awareness, fostering a culture of sustainability that benefits everyone.
To help in this regard, Rand Water has launched a number of campaigns, such as Water Wise, that aim to ignite awareness about the importance of valuing and conserving our water.
“The Rand Water Communications Division chairs the Communicators Forum between the utility and municipalities within Rand Water’s areas of operation. Amongst others, the Forum discusses communication strategies that are aimed at changing people’s attitudes towards water usage to ensure equitable provision,” Mosai explains.
“To realise our vision, Rand Water has established strategic objectives that propel its mission forward.
The organisation aims to achieve growth by expanding its reach and enhancing service delivery.
“This includes maintaining operational integrity, which is essential as Rand Water seeks to implement the best-fit technology to optimise its processes, as well as cultivating a high-performance culture within the utility that is crucial for fostering innovation and efficiency.
“Rand Water is committed to positively engaging its stakeholder base, ensuring open communication and collaboration.”
A leader committed to upholding values and financial security
Under Mosai’s command, Rand Water has become globally recognised for delivering water of the highest quality, consistently meeting and surpassing national and international standards.
This high standard is amplified by Mosai’s dedication to attracting and developing top-tier talent in water services. This aligns seamlessly with Rand Water’s mission of cultivating a high-performance culture.
The utility plays a pivotal role in ensuring that municipalities, local authorities, mines, and large industries can access the essential water they require—something which Mosai has led from the front to ensure happens; all while adhering to the values of the organisation.
“It must also be noted that I have remained an advocate for corporate social responsibility and community engagement, spearheading initiatives that go beyond water supply and tackling broader socio-economic challenges, aligning Rand Water’s goals with national development priorities,” he says.
“Equity stands at the forefront, ensuring fair and just treatment for all stakeholders. The organisation upholds integrity, fostering trust through transparency and ethical practices. A spirit of partnership drives collaboration with various stakeholders, recognising that collective efforts lead to greater success.
“Rand Water is dedicated to excellence, striving for the highest standards in all its operations. Additionally, the company embodies a caring approach, prioritising the well-being of the communities it serves.”
Mosai’s focus on maintaining financial health while investing in state-of-the-art technologies and infrastructure has yielded significant projects such as the construction of the biggest post tension reservoir in Vlakfontein, Ekurhuleni at 210 million litres storage and the biggest purification plant since the dawn of democracy at 600 million litres a day: Station 5A at Zuikerbosch Water Purification Pant.
This can also be witnessed in the revenue growth of 11.4% to R21.8 billion, driven by cost-reflective tariffs and volume growth. Furthermore, there has been a gross income growth of 15.3% to R7 billion while maintaining a gross income margin above 30% year on year through a dedicated focus on cost efficiencies.
“This translates to a solid bottom line with net income growth of 29% to R4 562 million (2023: R3 536 million) and a net income margin of 20.9%, further boosted by returns on strategic investments,” Mosai states.
“Immense effort has been made to ensure the maintenance of a strong financial profile amidst the economic challenges and tough operating environment. Liquidity and financial risk management remain the cornerstones towards Rand Water’s financial sustainability.”
This stance was underpinned by the organisation’s ability to successfully redeem the RW21 bond with a total nominal amount of R1.6 billion in April 2021 and the RW23 bond in December 2023 at a nominal amount of R1.2 billion. “The successful settlement of these bonds has demonstrated Rand Water’s financial strength and financial stability,” he adds.
Rand Water’s financial sustainability was further attested by the issuance of three new bonds on 30 June 2021, in senior and sustainability-linked notes amounting to R1.7 billion. The issuance of the bonds attracted over R4.5 billion in capital market bids—a solid indication of confidence in Rand Water’s financial status by the investor community.
“It is significant to mention that the organisation was the first state-owned entity to issue sustainability-linked bonds in Africa and was the single largest ZAR-denominated sustainability-linked bonds to be issued then. In March 2022, Rand Water won the Bonds & Loans Africa Awards in relation to the sustainability-linked bonds,” he says with a sense of pride.
“However, our efforts do not end there. To further ensure that we preserve water for future generations, treatment plants have become the solution. These initiatives are designed to bolster water supply and ensure reliability for communities in need.”
There’s no escaping challenges in the water world
A major concern for Mosai and the public alike is non-revenue water, at municipal levels, which has resulted in a significant number of litres of water lost through leaks. It is estimated that 1.6 billion litres a day is lost. This challenge drastically increases water usage across Gauteng and municipalities that are supplied by Rand Water.
The No Drop certification measures water use efficiency in municipal drinking water distribution systems. It uses non-revenue water as a key performance indicator to gauge water wastage. The evaluation examines physical water losses—leaks, daily per capita water usage, strategies to reduce water losses, and the effectiveness of metering, billing, and revenue collection systems.
According to the No Drop report independently produced by the Department of Water and Sanitation, only four Water Services Authorities achieved the certification by scoring 90%, a significant drop from 44 municipalities in 2014. The report also noted an increase in non-revenue water from 37% in 2014 to 47% in 2023 in South Africa.
Due to these high physical losses through water leaks in municipal distribution systems, South Africa’s average per capita water consumption is approximately 218 litres per day, compared to the international average of 173 litres per day. Gauteng’s consumption is particularly high at 279 litres per day.
The report emphasised that Gauteng’s water interruptions are not due to a lack of bulk water provision, but rather high-water consumption driven by significant physical water losses in the municipal distribution system.
“These challenges can be addressed through better operations, maintenance of water infrastructure, and effective implementation of water conservation, including demand management measures. It is crucial that these interventions include education and awareness, pressure management, reduction of night flows, repairing leaks, revenue collection, and debt supervision,” Mosai insists.
“Moreover, Rand Water has collaborated with municipalities that are facing significant financial strain and impacted by non-revenue water. This spirit of collaboration was evident when the Emfuleni Local Municipality (ELM) agreed to pilot an innovative water services delivery model known as the Special Purpose Vehicle (SPV) to lead the provision of water and sanitation services in the area.
“The SPV will include shareholders such as Rand Water, the affected municipality, and other third parties willing to invest in upgrading, refurbishing, operating, and maintaining water services infrastructure. Profits generated by the SPV will be distributed to investors as dividends, according to the SPV’s dividend policy.
“Municipalities will contribute to the SPV by transferring their water services assets, which will be assessed, valued, and migrated, to the SPV. The Rand Water stake will be determined by its capital injection. This entity will then manage its own assets, liabilities, rights, and resources, effectively ring-fencing water services under its umbrella.”
For day-to-day operations, shareholders will appoint non-executive directors, who will then select the Chief Executive Officer or Managing Director of the SPV. The SPV will be equipped with a Chief Operations Officer, Chief Financial Officer, and a full management team and staff. To ensure proper oversight, governance structures such as Audit, Risk, and Investment Subcommittees, composed of professional experts, will be established.
“Consumers will pay their water bills directly to the SPV, ensuring that funds are exclusively used for water and sanitation services. Additionally, water and sanitation grants typically directed to municipal accounts will be redirected by the municipality into the SPV to maintain liquidity,” Mosai continues.
“From a regulatory standpoint, compliance with various acts such as the Public Finance Management Act, Municipal Finance Management Act, Water Services Act, National Water Act, Companies Act, and Municipal Systems Act will be ensured. Permissions for transferring municipal assets to the SPV, which is partially owned by municipalities, will be sought from relevant government departments, including National Treasury, the Department of Water and Sanitation, and the Department of Cooperative Governance. Extensive stakeholders’ consultations and a change management process will be undertaken before implementation.”
The SPV will generate revenue to cover all water provision costs, supported by a robust balance sheet and cash flows. It will be responsible for planning, operating, maintaining, refurbishing, and upgrading water and sanitation infrastructure, ensuring reliable, high-quality water supply for consumers.
“This reimagined model promises a more sustainable and efficient approach to managing water services, ensuring better infrastructure and service delivery for municipalities,” Mosai, who holds a Master of Business Administration from the University of KwaZulu-Natal, adds.
Leading Rand Water towards a bright future for all
Under the leadership of Mosai, Rand Water is not only committed to securing a reliable water supply, but also to promoting the delivery of water-related services to communities both within and outside its designated supply area.
The organisation effectively coordinates, administers, and manages its Corporate Social Investment (CSI) resources through the Rand Water Foundation, to support community development projects in collaboration with various donors and relevant stakeholders.
The bulk water utility is crucial to strategic growth, which often necessitates making decisions that prioritise socio-economic benefits rather than immediate commercial gains.
“We at Rand Water promote prosperity and development not only in South Africa, but also across the African continent by supporting the broader objectives of the national government.
Our commitment to social impact embodies the organisation’s core values of equity and caring, which are crucial in a nation where access to clean water is a fundamental matter of social justice.
The future of South Africa looks like one of hope, preservation, and effort. Rand Water’s vision is to be the cornerstone of sustainable, competitive water and sanitation solutions for Africa.
Our mission is clear: to meet the expectations of customers, partners, and government by attracting and developing cutting-edge skills in water services, maintaining robust financial health, and nurturing productive partnerships,” Mosai concludes.
Getting to know Sipho Mosai
Sipho Mosai has been the Group Chief Executive of Rand Water since 2019. Before that, Mosai was Rand Water Chief Operations Officer for 10 years. Mosai, a scientist by training turned strategist and business leader in the water sector, boasts over 20 years executive management and technical experience in bulk and distribution water operations; water infrastructure planning, maintenance, refurbishment, and upgrade; project management, scientific services, strategic asset management; and sector growth and development.
Mosai has served as a non-executive and board member in various institutions. This includes serving on the Construction Industry Development Board (CIDB), where he chaired the Human Resources Subcommittee of the board in his first term and the chairperson of the Audit and Risk Committee in his second term. He currently serves on the boards of the Rand Water Foundation and Rand Water Services as a non-executive director.
