[COVER STORY] Proudly South African with an international flair

In 2018, institutional investment manager – Mergence – acquired a majority stake in Siza Water and Silulumanzi from Sembcorp, a Singapore-based company. The management of these entities has since been entrusted to the South African Water Works (SAWW).

“SAWW is a 100% owned South African water utility that has a Level 2 BBBEE rating. The change in ownership has ensured that all revenue generated from Siza Water and Silulumanzi remains within South Africa. The majority of those funds will benefit South African pensioners via Mergence, our majority shareholder,” says Shyam Misra, the Group MD of SAWW.

Both Siza Water and Silulumanzi commenced business in 1999 as the first pilots of water Public Private Partnerships (PPPs) in South Africa. Initially competitors, SAUR (a French utilities company) was the majority shareholder of Siza Water and Biwater (a British utilities company) was the majority shareholder of Silulumanzi. In 2007, both entities fell under the ownership of Biwater. Three years later in 2010, Sembcorp (a Singapore Utilities company) acquired the shareholding of Biwater’s concession assets and both companies fell under their umbrella. In 2018, Sembcorp were looking to concentrate more on energy and wanted to dispose of their water assets. Siza Water and Silulumanzi was sold to the consortium put together by Mergence that included the Rex TrueForm and the senior management teams of both companies. “We have learned a lot from our former international shareholders, especially regarding governance, technology, risk management, business continuity, organisational culture and accountability. While SAWW is five years old, the management team heading both Siza Water and Silulumanzi have been involved with the water concession contracts for many years, with most serving the companies more than 10 years. For example, I joined Siza Water in 2002 as a financial manager, in 2008 I was promoted to the MD and in 2019 as the Group MD of SAWW and there are many other managers that have similar journeys,” states Misra.

A water business

Both Siza Water and Silulumanzi have contributed towards growth in Ballito and Mbombela respectively by providing reliable, high quality water utility services.

The concessions are run as a business and must operate profitably and efficiently. The focus is to deliver efficient services and responsibly manage infrastructure through having competent and efficient staff. “We do not have the luxury of relying on government grants,  subsidies and bail outs.  Our operations are funded by the revenue we receive for our services. Siza Water and Silulumanzi are proof that that provision of water services can be reliable and profitable, provided there is a focus on efficiencies and the utilities are managed properly,” adds Misra.