Monthly Archives: May 2015

What are the Stakes in the Domino’s Pizza War?

ZA Confidential reported earlier this week that the Financial Services Board has been asked to investigate suspicions of insider trading around the agreement that Taste Holdings reached with Domino’s Pizza to bring the US fast food brand to SA.
So what is the fuss all about? Why does Taste want a slice of the pizza pie?
It was quite a coincidence that in the same week as I attended a Taste presentation, at which we were updated on Domino’s arrival in SA, a flyer came through the letter box suggesting there was a new pizza outlet near my home. I had to give it a go.
In fact, it gave prices but no locations, so I had to look up the number online.
After five phone calls, I finally managed to get a sales lady who could hear me, and with a further two calls back to me from her, I managed to place my order.
However, she was not aware of price of the promotion I was ordering, and it later emerged that she had failed to spell my street name right. A far more efficient supervisor took over, I had to place the order yet again from the start, but it got better after that. The pizza was delivered in good time, was still warm, and tasted OK.
I assume that once this new outlet has settled down, it will get better phone connection and put people on the phone who are properly trained.

Conclusion
Of course, this was just one transaction, with dozens of Domino’s outlets being rolled out. At the end of this month, there will be 32 stores; at the end of August this will have almost doubled to 62. This business will be highly profitable. They don’t sell steaks, but the stakes are high.

Another Fun Tweet:
Sarcasm (@TheFunnyTeens): you’re as relevant as the letter “K” in knife

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Real Books Have a Real Future. Deloitte

Deloitte has today shared its latest Technology, Media and Telecommunications Predictions at a briefing in Jo’burg.

Perhaps the most startling prediction for me was the suggestion that the printed book still has a robust future.

Just one book in five these days is sold as an e-book. And while there has been a decline in the number of bookshops thanks to the Kindle and other e-readers, niche bookshops are on the rise again. People seem to like the look and feel, the touch and smell, of a real book.

Newspapers and magazines do not seem to have such a rosy future in their printed form, but when we arrived for the presentation, we were handed a printed guide to the predictions – on real paper.

The Deloitte presentation looked at the big trends, using rather too much geek-speak and jargon, some of which went way above my head. A few other highlights, from what I could grasp…..

• They are expecting 1 million drones in non-military use by the end of the year.
• A drone is being launched to use pepper spray for crowd control.
• 3D printing is mainly used in businesses, but it hasn’t worked in the consumer mass-market. 90 percent of enterprise use is about prototype development, with less than 10% for the final product.
• People who order online and then collect their purchase – the click and collect trend – is booming in Europe. Makro is planning this in ZA.
• Smartphone batteries will get better, but with no big breakthrough. A 5% to 15% improvement in battery life is expected. Battery age often triggers upgrades – good for the industry.
• There will be a big increase in small satellites – Nanosats.
• Enterprises are again driving IT development, after a decade if this being driven by the consumer.
• More innovation in industry for using wearable devices than among the consumer.
• Short videos (under 20 minutes) will grow but never dominate media consumption around the world.
• More people watch TV drama online than music videos.
• The millennia generation is spending a lot of money – 62bn US dollars a year in the US. More on Pay TV than in music. However, they do three things at the same time while watching TV – a multitasking challenge for the advertisers.
• Print is still alive and well, as I noted earlier. The future is “exclusively” in books. 80% of books worldwide are still print rather than digital. Still a very important part of our world. The passion of millennials is still about books.
• In the US, independent book stores have picked up.
• Smartphone upgrades will amount to 1bn during the course of 2015. Tapering off had been predicted. Most are people upgrading from one version of a smartphone to the next one.
• The growing gap in broadband speeds is growing. Those with access to the top range have far faster access than the others.
• The use of contactless mobile payments is gaining momentum. At least 30m people using phones for payment this year.

Conclusion:

I am a great purchaser of e-books, but still prefer the printed version. This is especially so for cookbooks and cartoon collections. Long may they continue to be printed.

Tweet of the Day:
Famous-Quote.net (@famousquotenet): Redistribution has the same relationship to market economics as rape has to consensual sex. – Will Spencer

ZA Confidential is a subscription newsletter. For subscription details, to invite us to events with edible food and drinkable wine, or any other communication, please contact: zaconfidential@gmail.com
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Die Vine Intervention: Appleton 12 year old Rum

Guru of the grape Michael Olivier has had a rummage and come up with a brilliant aged rum – the 12 year old Appleton Estate from Jamaica.

John Fraser throws back his dreadlocks and hosts a studio tasting with Prosopa Restaurant’s Dino Fagas, Jeff Osborne from Gumtree, IT guru Michael MacDonald and cask-strength brander Jeremy Sampson.

Check out the podcast:


Time to Smash the Nanny State Over the Head With a Beer Bottle

The South African government should grow up. And treat the rest of us like grown-ups.
I am, of course, back on my non-temperance crusade, but also have a nagging concern about the overpaid nannies who populate the ministerial gravy train.
So what has given me this booze-free hangover?
It is, of course, the nonsensical and stupid idea which has been reported this week that the prats in Pretoria want to raise the legal age for drinking grown-up stuff to 21.
There is, quite rightly, a concern that young people do abuse alcohol. But suicides gobble too many aspirin. Must we ban all pain killers for our teens?
There comes a time when adults must become responsible for their actions, and let’s face it, life would be very dull if there wasn’t the occasional dose of irresponsibility.
Were this poisonous plan to be implemented, beer, wine, whisky and other alcoholic drinks would be off-limits at the off-licence for those who are 20 and younger.
OK. They can’t have a drink. But what can they do? Well, they can marry someone of the opposite sex, or of their own, and become parents. They can drive – arguably something far more dangerous to society than having a beer. They can vote. They can join the armed forces and die for their country, which is arguably more hazardous than sipping a class of Cape Red. They can have bank accounts, real jobs, own and care for animals. And yet not a drop of rum is allowed in their coke.
Of course, all this is assuming that such a draconian and brain-dead law could ever be effectively enforced. Assuming that I am now immune from prosecution, I freely confess that my teens were polluted by the grape and the grain. I got horribly ill on cider and vodka, and I learned my lesson.
I cannot imagine my student days without beer. In my first week at University I took part in a three-legged pub crawl, and later the same evening won a Yard of Ale contest. I slept well that night.
Alcohol was probably behind the raid on my room in the Residence, when all the furniture was removed and neatly stacked in the ladies’.
And would the celebration of my win with my dear friend Jim White of the university debating trophy have been crowned as well if we had drunk tap water at the celebration, instead of port? We were young adults, not yet 21, and deserved to be treated as such.
These days I know when I have had enough, and I rarely stray too many units on the wrong side of that. Not before breakfast, anyway.
No doubt most young people will also wish to experiment a bit, and would defy this daft law were it ever to be passed, and I think that is fine. There will be tragedies and disasters, but this is the real world, not the Chamber of Parliament.
Eat, drink and be merry, say I. And I am proud to have always led by example.

Conclusion:
Other bonkers bans by South African government which will hit the wine, hospitality and tourism industries include the planned tightening up of visa rules, a total ban on drink-driving, and measures which might prevent foreign investors from acquiring wine estates. Ban all booze for the under 21s and government will lose massive support. Don’t forget they can all vote from 18.

Tweets of the Day:
Exploding Unicorn (@XplodingUnicorn): My 5-year-old told me a 20-minute story about a pair of shoes she wore for one day two years ago. She’s already a woman.

ZA Confidential is a subscription newsletter. For subscription details, to invite us to events with edible food and drinkable wine, or any other communication, please contact: zaconfidential@gmail.com
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Exclusive: Taste Holdings and Domino’s Face Insider Trading Probe as Pizza War Heats Up

A special ZA Confidential Investigation has uncovered allegations of insider trading around the arrival of one of the globe’s premier food brands in South Africa.
A complaint against Taste Holdings, which last year won the franchise for Domino’s pizza in South Africa, was lodged this week with the Financial Services Board (FSB) by a group of rival bidders, who believe they were cheated out of the pizza prize. The investigation may go wider, as Domino’s executives were also aware of the discussions during the period of the suspected insider trading, and Domino’s is also named in the complaint.
Domino’s is a highly successful food brand, and the South African business could be worth billions of rand.
At the heart of the complaint is an allegation of an unusual leap in shares traded in Taste Holdings just before news was made public that it had secured a deal with the American Domino’s Pizza Corporation.
The rival bidders have been engaged in legal action against Taste Holdings and Domino’s since they received the shock news that their own offer to secure the SA and regional franchise for the pizza brand had been rejected – even though they say they had paid a deposit to the American fast food chain, and had a verbal agreement with them. The court action centres on an attempt to halt the rollout by taste of Domino’s stores in South Africa, with Domino’s being sued for breach of contract. There is also an attempt to secure accurate information on the timing of each stage of Taste’s deal with Domino’s, as well as to have sight of Taste’s share register.
Taste executives, including CEO Carlo Gonzaga, are believed to have signed their agreement to bring the brand to SA with Domino’s at the US company’s global HQ in Ann Arbor, Michigan, in the week of March the 13th last year – although the exact time and date of the sealing of the deal has yet to been disclosed.
If, as the unsuccessful bidders claim, the deal was signed around the time there were large trades in Taste Holdings’ shares, then there are serious questions over whether these share transactions amounted to insider trading.
The South African team which is taking on Taste Holdings and Domino’s operate as Mauritius-based International Foodservice Concepts (IFSC). They include Rutger-Jan van Spaandonk, who is the head of the Core Group, which is the official SA and Nigerian importer of Apple technology products. The team also includes Keith Warren, who is the former local head of the Yum Group, which holds the KFC franchise.
Said van Spaandonk, after he was contacted for comment by ZA Confidential: “We have gone to court already to seek full details of the share dealings, but have been thwarted at every turn.
“Meanwhile, we have obtained an incomplete copy of the Master Franchise Agreement Term Sheet between Taste Holdings and Domino’s – which fails to include the crucial section with the date that this was signed.
“We are left with no choice but to ask the Financial Services Board to investigate this matter.”
In a related development, he said he is still investigating how Taste Holdings managed to speedily tie up its deal with Domino’s just as he was concluding his own negotiations, as he is convinced that the information and data required should have taken months to collate.
“I have every right to raise these issues as a citizen and as a shareholder of Taste Holdings,” he said.
The letter to the FSB says that IFSC “have come across information that gives the strong impression that insider trading may have taken place in relation to certain Taste Holdings shares.
“Further, it appears that very sensitive and material information may have been disclosed by individuals for the unfair benefit of themselves or others.”
The letter asserts that on 13th of March last year, in the same week that the agreement on Taste’s Domino’s deal was being signed, “a total of 800,000 shares in Taste Holdings were traded, which was the second largest volume traded in the period between 1 January and 8 September 2014.
“The day with the largest volume traded was 10 April 2014 when Taste Holdings formally announced the conclusion of the Master Franchise Agreement with Domino’s Pizza publicly via a press announcement and a SENS release.
“We trust you will agree that a single occurrence of a volume of 800,000 shares traded is a highly improbable statistical event…..
“Given that acquiring the Domino’s Pizza Master Franchisee had such a material impact on the fortunes of Taste Holdings upon formal announcement as evidenced by the volume of shares traded (1.65m on 10 April 2014) and appreciation in market capitalisation (R130m based on 9 April 2014 closing of R3.60 and intra-day high of R4.25 on 10 April 2014) the suspicion arose that insiders that had access to information about the conclusion of this term sheet may have used it to their own advantage (or given it to others) in anticipation of a favourable move in the share price upon the official announcement of the conclusion of the actual Master Franchise Agreement.”
It is also alleged that Taste Directors offloaded shares between the 30th of June and July the 10th, and that this “in actual fact coincided with material dates in our legal dispute.”
IFSC is still involved in court proceedings to secure information about the exact timing of Taste’s signing of the Master Franchise Agreement Term Sheet with Domino’s. However, as van Spaandonk has complained, the document which has been handed over has a missing section – which is believed to contain signatures and a crucial date.
ZA Confidential has seen a number of court documents and the letter which IFSC has sent to the FSB. The Court action is continuing.
Taste Holdings bosses held an analyst presentation today in Johannesburg on their annual financial results.
Gonzaga told ZA Confidential that he was not yet aware of the letter to the FSB.
And he was dismissive of efforts by IFSC to halt Taste Holding’s rollout of Domino’s outlets in SA.
He said there is “no way they will get an interdict” and Taste would not have gone ahead with its Domino’s rollout if it was worried this could be halted.
He said that IFSC has admitted that it did not have a franchise agreement with Domino’s and “it is all rubbish.”
He said he was expecting a court judgement on the matter “quite soon.”
He later expressed frustration to ZA Confidential that the matter had been raised in a public forum, and offered to tell his side of the story.
Watch this space.

Hospitality
The Taste Holdings results were presented at the JSE, and afterwards there was ample wine on offer to guests. There were samples of Domino’s pizza, which were delicious when hot, but less so when they had cooled down. The other food was not of a standard one would have expected to receive from a company which is in the food business.

ZA Confidential is a subscription newsletter. For subscription details, to invite us to events with edible food and drinkable wine, or any other communication, please contact: zaconfidential@gmail.com
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The True Costs of free Wi-Fi may be Enormous

Many travellers communicate with the office, with friends and family, using wi-fi. This cuts the costs of communication – but at what real cost? We all hear that all sorts of people are spying on us, but do we register this? Are we careful? Who is monitoring our communication, seeking business secrets, bank log-in details, and all sorts of other info? PwC issued a warning this week that we may be especially at risk in hotels, although the same may apply to coffee shops, the Wi-Fi at the gym, the access offered at conference centres, and so on.

The focus of the PwC warning was that hotels may be at special risk from wi-fi intrusion and other hacking.

“Each charge made at a spa, gift shop, bar or restaurant during the course of a guest’s stay is another opportunity for cyber theft,” said Nikki Forster, Hospitality Industry Leader for PwC, Southern Africa, in a news release we were sent this week.

“For business travellers, access to fast and low-cost internet is a must-have. But these Wi- Fi connections are not always secure. And that is a security gap that cyber criminals are making use of,” adds Forster.

PwC’s Hospitality Outlook 2015-2019 warns that the security of guest information and operational technology has emerged as an enterprise-wide business risk for the hotel industry. These cyber risks are influenced by the growing strategic importance of technology and increased value of intangible assets, such as guest information, created and managed on hotel technology platforms.

“Over the years hackers have been infiltrating hotel networks and have infected hotel-owned computers and guest computers with the aim of stealing personal and confidential information. Warned PwC.

“Hotel networks have been attacked using mathematical techniques and crypto-analytical offensive capabilities.

“This is usually done by hackers waiting for guests to check in and log on to the hotel Wi-Fi, usually by submitting their room number and surname.

“Thereafter the hotel guest gets tricked into downloading and installing a so-called backdoor file, which pretends to be an update for legitimate software, such as the Google Toolbar or Adobe Flash.”

“The unsuspecting guest downloads this hotel ‘welcome package’ only to infect his or her machine with spying software. Once on a network, the backdoor may be used further to download more advanced tools such as an advanced key logger. Downloaded software may also look for Twitter, Facebook and Google login credentials, as well as other private information.”

PwC claims that South Africa was hit by a massive cyber fraud attack during 2012 and 2013 -in which the payment card systems of thousands of shops, restaurants and hotels were compromised. The attackers used malware known as Dexter and were linked to a series of attacks on point-of-sale systems worldwide.

The malware skimmed and transmitted credit cards’ magnetic-strip information, allowing clone cards to be made that were then used for fraud.

Suggested precautions include keeping up to date with antivirus software before leaving home; avoiding updating software or clicking files when not on trusted networks; and using a virtual private network (VPN) to establish an encrypted communication channel when accessing public or semi-public Wi-Fi.

“The impact of a cyberattack can be far-reaching and devastating,” said Veneta Eftychis, Senior Manager, PwC Hospitality and Gaming Industry.

“Costs can include forensic computer investigations to confirm the breach and identify whose information has been put at risk. Other costs include credit or identity protection services for affected individuals, and crisis management and PR specialists to help mitigate the potential fallout from breach event.”

A breach of cyber security can also affect a company’s performance. Recent breaches have been seen to have an impact on customer loyalty and store traffic.

“Unfortunately cybercriminals are getting faster and more sophisticated. To stem the tide hotels also need to stay proactive and put a strategy and incident response plan in place. As part of the plan hotels should be aware of policies and processes relating to data breach, and educate staff on protocols,” Eftychis suggested.

Conclusion:

I have some good friends in the IT world, who have warned me never to enter a password or do any online banking while connected to Wi-Fi. They even warn that your cellphone can become a listening device, if someone has managed to breach its security features, and to download software which can be used to listen in to private conversations, and to transmit these. So while Wi-Fi may seem free, it can be immensely costly if some smart crooks use it to spy on you.

Tweet of the Day:
Famous-Quote.net (@famousquotenet): A great many people think they are thinking when they are merely rearranging their prejudices. – William James

ZA Confidential is a subscription newsletter. For subscription details, to invite us to events with edible food and drinkable wine, or any other communication, please contact: zaconfidential@gmail.com
Follow us on twitter: @zaconfidential @dievinein @clasfras1


Die Vine Intervention: Groot Constantia 2012 Shiraz

Chef and wine guru Michael Olivier uncorks a glorious Cape red,  the 2012 Shiraz from Groot Constantia.

The Johannesburg tasting panel are IT genius Malcolm MacDonald, wine writer and branding consultant Jeremy Sampson, wine list award winner and Prosopa proprietor Dino Fagas, and Gumtree Auto’s Jeff Osborne.

John Fraser also hosted another chat about the merits of decanting wines, if only so you can collect the decanters….
Check out the podcast….


Experts Warn of Looming Water Crisis in ZA

South Africa have been suffering for months now from unpredictable and irritating power cuts. But worse could come, as there are growing fears that there will be a recurrence of the consequences of poor maintenance and irresponsible lack of planning which have plagued the electricity supply – this time with water supply. ZA Confidential picked some top brains on the subject, and this is what they had to say……

Dr Anthony Turton. Environmental Advisor, Speaker and Author
The simple facts of the matter are that we are facing three significant challenges in the water sector. I call these three drivers of a vicious circle that make the outcome more-or-less inevitable if left unmanaged. The first is rapidly deteriorating water quality, driven mostly by the process known as eutrophication (enrichment of water in dams and rivers from effluent, mostly phosphate and nitrate). In fact 1/3 of our currently available national water stored in dams is already contaminated, mostly by a single-celled organism known as cyanobacteria (blue-green algae), known as Microcystis aureginosa. Our levels of contamination are orders of magnitude higher than in places like the USA or Scandinavia. This organism produces a toxin chemically similar to cobra venom, known technically as microcystin or hepatotoxin, which it releases when it is distressed.
The second is deteriorating infrastructure, most of which is well beyond its design life, and all of which uses technology that is inappropriate for recycling water back to potable use. This infrastructure includes pumped storage schemes, dams, raw water pipelines, bulk water treatment plants, pumping stations, potable water reservoirs, municipal reticulation pipe systems and waste water treatment works. All are in varying degrees of dilapidation, some having already failed. Sewage works, for example, are almost all under enormous pressure, and none are discharging treated water to the desired standard. This is what is driving the eutrophication noted above. In some provinces 100% of the sewage works have failed. The (Water Affairs) Minister recently announced the recruitment of Cuban engineers to repair these systems, because evidently Cuba is used to working with old and broken machinery, which leads to the third driver.
The third driver is dysfunctional water management institutions. The Nation Water Act breaks the country down into so-called Water Management Areas (WMAs). These are supposed to be managed by Catchment Management Agencies (CMAs) that include Water User Associations (WUAs). None are functional to the degree required, and in most CMAs they simply don’t exist at all. Where they do exist they are paralysed by conflict over water allocation, because the NWA nationalised the resource with the intention of stripping agricultural land from water rights as an element of land reform. Farmers have argued that water rights, no longer recognized in law, have stripped them of the one asset that makes their farms financially viable, and they are fighting back. The NWA also calls for a thing called the National Water Resource Strategy (NWRS) that is designed to balance locally available water resources with political and economic demands for that water. This is supposed to be the single master plan that embraces all data and all political and economic development aspirations, to be used as input to the decision-making process of the CMAs and WUAs, updated every five years. Only one NWRS was successfully done in 2000 using 1998 data. Subsequent to that the data bases have been either privatized by commercial consulting companies, or have fallen into disuse because of the lack of technically competent people within the various government departments. NWRS 2 was a dismal failure, allegedly because the consultant commissioned to do the work absconded with the cash and failed to deliver. This was covered up by the Department of Water Affairs when a few of the last remaining technically competent officials rehashed NWRS 1 – literally within a week or so. The recent appointment of Cuban engineers is a strong signal of Government’s intention to side-line technically-competent water resource managers who do not carry the required political pedigree. This neutralizes the many technically-competent water management specialists that we have because of political imperatives of radical social and economic restructuring.
The implications of these three drivers are a vicious cycle of systemic collapse within the water sector. When I say systemic collapse I mean literally the catastrophic failure of entire systems. We see precursors to this in the recent Rand Water pump station failure that plunged large parts of Gauteng into a water crisis similar to load shedding. We see this in smaller municipalities where service delivery failures have resulted in the death of infants through water-borne disease. Madibeng is an example of systemic failure. Hartebeestpoort dam and Brits is another example.
The presence of these three drivers is being exacerbated by the following:
1) El Nino that is now becoming manifest in the Pacific will probably trigger a regional drought that could last for a decade. This will reduce the availability of water at SADC level and will have severe economic implications, specifically when we have lost the institutional capacity to manage drought.
2) Global warming is seeing an increase in ambient temperatures. Some climate and water scientists at UKZN (Prof Roland Schulze) have shown that it is likely that we will see a 4 degree increase in ambient temperature over the next century. This will fundamentally alter water supply at regional level.
3) The implications of increased ambient temperatures, in the presence of increased nutrient loads into rivers and dams (from dysfunctional sewage works), will be a rapid increase in the eutrophication processes. To give an example, microcystin levels become a concern in the USA when they reach values of 60 microgramms per litre. In SA they are currently 10,000 micogramms per litre, peaking at 18,000 microgramms, and nobody is concerned – because officially this is not recognized as a problem. It is silenced by political commissars who sanction the discourse over water.
4) Because of the failure of institutions, we lack the technical capacity to generate design specifications for the next generation water treatment technologies. This means that, in effect, the recycling of sewage-impacted water back into the potable water stream is more-or-less inevitable.
5) The implications of recycling partially treated sewage back into the potable water stream is the probable increase in exposure to partially metabolized medication (in addition to the normal pathogens like E Coli).
The most likely medication to be recycled is Oestrogen, which will result in an increased manifestation of androgyny in the overall population. This is well documented scientifically under the heading of Endocrine Disruptive Chemicals (EDC’s) or estrogenicity that have trans-generational manifestations (i.e exposure today will manifest in the progeny of those under exposure). Other types of medication that will increasingly be recycled in partially metabolized form are anti-retrovirals (ARV), codeine and other analgesics, and of course recreational drugs like cocaine. The recycling of partially metabolized antibiotics will result in the emergence of antibiotic-resistant bacteria.
The solution is to break the vicious cycle and replace it with a virtuous cycle. To do this we need to first recognize the need for functioning institutions, because it is only from those places that we will start to see the emergence of viable strategies, based on next generation water treatment technologies. It is only from this that we can invest masses of money into upgrading our filtering infrastructure by means of appropriate technology capable of removing endocrine disruptive chemicals and microcystin from the potable water system. Once we have appropriate infrastructure upgrade, we will start to see an improvement in national water quality. Functioning institutions lead to infrastructure upgrades using appropriate technology, which leads to improvement in water quality, which leads to economic growth and national health.
In the interim we will see the growth in end-of-pipe solutions such as filtration devices installed in the homes of the better-off part of the population, that combine activated carbon (to neutralize toxins) with microfiltration to remove bacteria, viruses and water-borne debris associated with deteriorating infrastructure. We will also see the emergence of water treatment plants at the unit of production (farm, factory) to replace the bulk treatment provided by the state. Microcystin, like AMD, will increasingly become a household word and technologies to manage this will start to enter the marketplace in visible forms.

Professor Raymond Parsons, North West University Business School
The difference between water and other resources is that there is no substitute for water. Hence it should be a matter of deep concern that a growing consensus of expert opinion is that, unless SA takes more effective action soon to augment its water supplies, a water crisis could be upon us by, say, 2020. This will be mainly the result of the increased demand for water, of resource depletion, and because of an inefficient and ageing infrastructure, especially at municipal level. Both the National Development Plan and the current National Water Resource Strategy have recognized the challenge – but experts have seriously questioned whether the proposed interventions go far enough, or are being implemented sufficiently quickly, to stave off the looming crisis.
The first casualty would be agriculture, but a widespread water shortage remains a big threat to people, business and jobs in SA as a whole. Future water availability therefore now takes its place alongside the energy crisis as a serious hazard to successful economic development. Unlike in the case of electricity, when early warnings of a worsening situation were ignored, the red flags now visible about water security in SA must be taken seriously. In the short-term water needs to be used sparingly and less wastefully. SA also needs to become a leader in water transfer from good rainfall areas over to where rivers are weak, as is already the case in Gauteng. This network of water transfer requires to be strengthened, particularly as SA is drought-prone.
Good solutions are available to SA, provided they are effectively implemented and if enough money is raised. Official estimates suggest that to avoid a large scale water crisis by 2020, it will require about R300 billion, which is several times more than is currently budgeted for. SA may have to approach the World Bank. The challenge must be tackled collectively and public-private sector partnerships should form an important part of the funding. These solutions need to be developed in a timely manner to expedite the several new water schemes needed which, combined with a national water conservation programme to improve water use and efficiency, are urgently required if SA to avert a ‘worst case’ scenario.

 
Fred Platt. CEO Accentuate
A serious water crisis is imminent and will ultimately dwarf the current energy crisis. In order to contextualise the problem it is important to take note of the following:
1. South Africa is ranked the 30th driest country in the world
2. Rainfall ranges from 100mm per annum in the west to 1500mm per annum in the East. At 450mm average, this is well below the global average of 860mm per annum
It is also important to understand who the users are of this incredibly scarce resource:
1. Agriculture and irrigation 60%
2. Municipal and Domestic 27%
(24% urban & 3% rural)
3. Industrial 3%
4. Power generation 4.2%
5. Mining 3.3%
6. Livestock watering and Nature Conservation 2.5%

There is however a disproportionate relationship between the users of the resource and the impact of that use on the resource. The most obvious example is where mining only accounts for 3.3% of the use of the resource, but the impact of the mining operation has an incredibly negative effect on the groundwater contamination – as is evidenced by the Acid Mine Drainage (AMD) problem that we face in Gauteng. Historically, this impact has been largely ignored, with dire consequences.

The looming water crisis is evidenced in a number of areas:
– Infrastructure is under severe pressure due to a lack of effective maintenance resulting in the following:
– Non-revenue water accounts for 36.8% of the water supplied. Leaking pipes account for a loss of on average 30% of the treated water distributed. In Johannesburg this is as high as 37%. Lost revenue accounts for R11bn a year in the municipal sector alone
– Municipal services are severely affected, due to a lack of maintenance and a lack of skills. Currently only 3% of water services authorities have indicated that they are operating at a satisfactory level, 18% are at risk, 33% at high risk and 46% are in crisis.
– 90% of municipal sewage plants are non-compliant, resulting in further contamination of ground water reserves.
Government has developed an elaborate plan to address these challenges, while at the same time looking at expanding the services offered in terms of the millennium developmental goals. Although this is critical, and access to water is a basic human right protected by the constitution, this will obviously place further stress on an already stressed system.
There are several challenges to sustainable service delivery:
1. There is no surplus water, and climate change will further impact the availability of this scarce resource
2. Effluent will have to be treated to increasingly higher standards before being discharged
3. Of the 905 towns in South Africa 254 (28%) have inadequate water resources
4. Distribution remains a problem.
5. Per capita consumption of water in urban areas remains high relative to international norms
Problems:
– Lack of water demand management and poor efficiency
– Lack of technical capacity and skills
– Infrastructure asset management
In a nutshell, we have major challenges facing us – ranging from maintaining an ageing infrastructure, to dealing with the consequences of pollution, and of the absence of recycling and re-use.

Tweets of the Day:
Famous-Quote.net (@famousquotenet): I have often thought that morality may perhaps consist solely in the courage of making a choice. – Leon Blum

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Die Vine Intervention: Lanzerac 2012 Pioneers Pinotage

Food and drink pioneer and evangelist Michael Olivier presents another stunning Cape Red for our latest wine tasting podcast.

It is the 2012 Lanzerac Pioneers Pinotage.

John Fraser is joined in the Joburg studio by guest tasters: branding rock star Jeremy Sampson, restaurateur Dino Fagas of Pretoria’s Prosopa, Jeff Osborne from Gumtree Auto SA, and IT genius Malcolm MacDonald.

The podcast also includes a chat on how best to market ZA wines, and the role Pinotage may play in this.

Check it out….


Die Vine Intervention:   Two Muratie Classics

Man met die pan Michael Olivier joins man met die pun John Fraser for a tasting of two treasures from Muratie, with names reflecting the Estate’s historic background.  

They are the 2013 Laurens Campher white blend and the 2011 Ansela Van de Caab red blend.

Restaurateur Dino Fagas from Prosopa, IT superstar Malcolm MacDonald, Jeff Osborne from Gumtree and wine fanatic  Jeremy Sampson join John in the Johannesburg studio.

As well as the tasting, this podcast features a chat about corked wine.

Check it out….


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