en.Wedoany.com Reported - On August 13, the Trans-Caledon Tunnel Authority disclosed at the 2027/28 Raw Water Tariff Consultation Meeting held by the Department of Water and Sanitation that the first phase of the Umkhomazi Water Project is planned to commence construction tendering in January 2027, enter the construction phase in January 2028, and is expected to begin water supply in July 2022. The project is currently in the detailed design and pre-construction preparation stage.
The contracts for professional service providers and consultants for the project's dam and water conveyance tunnel were awarded in 2024. Currently, the design team is conducting ground geophysical surveys, on-site inspections of affected land, and assessments of tunnel boring machine advance rates under different rock conditions. Drilling work in the dam area has been completed, and the construction team is rehabilitating sites involved in the exploration operations. The revised design standards documents for the dam and tunnel will be submitted to the South African Department of Water and Sanitation for review.
The first phase of the Umkhomazi Water Project is located in KwaZulu-Natal Province, with core works including the construction of a dam in the Smithfield area of the Umkhomazi River, an approximately 33 km raw water conveyance tunnel, and a connecting pipeline of approximately 5.1 km linking the tunnel to the Baynesfield Water Treatment Works. Upon completion, the project will increase the annual supply capacity of the Umgeni Water Supply System from 394 million cubic meters to 608 million cubic meters, providing water security for approximately 6 million people in areas such as Durban and Pietermaritzburg, as well as local industrial users.
The project implementation framework has been progressively completed. The South African Department of Water and Sanitation, the Trans-Caledon Tunnel Authority, Umgeni-Uthukela Water, and the user municipalities signed a framework agreement in April 2024, with the relevant municipalities simultaneously signing water use agreements. The Trans-Caledon Tunnel Authority and the Department of Water and Sanitation signed a project implementation agreement in January 2025, and the Department of Water and Sanitation has also finalized raw water supply agreement arrangements with Umgeni-Uthukela Water.
The estimated investment for the project is R27.5 billion, with the final amount to be further determined upon completion of the detailed design. The South African Infrastructure Budget Mechanism has approved R12 billion in support funding, of which R6 billion is a non-repayable government grant and the remaining R6 billion is an interest-free loan. The project has also secured a R22.9 billion government guarantee, and the Trans-Caledon Tunnel Authority is arranging the remaining off-balance-sheet financing, with related debt to be repaid through project water use charges.
During the project construction period, a tariff mechanism linked to the Consumer Price Index is proposed, with a proposed tariff increase of 4.75% for 2027/28, including a financing margin of 0.25 percentage points above the Consumer Price Index to cover part of the capital expenditure and construction period interest. Following the completion of the detailed design and tender documentation, the project's construction procurement is scheduled to enter the market in January 2027.
