Overview

In his weekly newsletter of 20 July 2026, President Cyril Ramaphosa confirmed that the National Water Resources Infrastructure Agency (Agency), a new state-owned entity, has been established to coordinate investment in bulk water infrastructure, and that fresh public hearings on the Water Services Amendment Bill (Bill) will shortly begin.

Our previous update considered the Bill’s proposed licensing, enforcement and governance reforms to the Water Services Act 108 of 1997 (Act). The establishment of the Agency now introduces a second, institutional layer to government’s regulatory response to the water crisis, and raises the question of whether, and how, the Bill requires further amendment to accommodate the Agency’s role.

Policy Context: A Two-Track Legal Response

Government’s response to the water crisis is proceeding on two parallel legal tracks. The first is institutional: the establishment of the Agency as a state-owned company to coordinate the planning, financing and delivery of bulk raw water infrastructure, including dams and bulk transfer schemes. The second is legislative: the Bill’s amendment of the Act to introduce mandatory licensing of municipal service delivery mechanisms, strengthened ministerial enforcement powers and personal liability for non-compliance.

The President confirmed that where municipalities or officials fail to comply with environmental and water services legislation, government will use directives, criminal proceedings and, where the law permits, personal liability as enforcement mechanisms. Read together with the Agency’s establishment, this signals an intention to pair stronger national coordination of infrastructure with materially increased compliance and enforcement exposure across the sector.

These two tracks were not designed in isolation, and their interaction has direct consequences for how the Bill should be finalised.

The Agency: Legal Status And Functions

The Agency is intended to operate as a state-owned company, established to coordinate investment in, and the operation of, bulk raw water infrastructure on a national basis. As a public entity performing this function, it will fall to be regulated under the Public Finance Management Act, in addition to the Companies Act, and will be funded principally through infrastructure charges recovered from bulk water users, including water boards, municipalities, and industrial, mining and agricultural users.

Government has allocated R156 billion to water and sanitation infrastructure over the next three years as part of its broader public infrastructure investment programme, a substantial portion of which is expected to be channelled through the Agency’s bulk infrastructure mandate.

Critically, the Agency’s establishment does not, on its own, amend the Act. Its bulk infrastructure functions sit alongside, but are not yet expressly reconciled with, the Bill’s licensing regime for municipal service delivery mechanisms, the enforcement powers of the Minister, and the governance reforms proposed for water boards.

Amendments Necessary To Align The Bill With The Agency

The Bill accordingly requires further amendment or, at minimum, clarification during the forthcoming public hearings, in the following respects –

• Definitional alignment – the Act should expressly define the Agency and distinguish its bulk infrastructure functions from those of water boards and licensed municipal service delivery mechanisms, to avoid regulatory overlap;
• Scope of the licensing regime – sections 22E and 22F should clarify whether bulk infrastructure operated by the Agency falls within, or outside, the licensing regime applicable to municipal service delivery mechanisms;
• Extension of enforcement and personal liability – sections 62A and 82A currently focus enforcement and personal liability on municipal managers and business entities. Consideration should be given to whether officials of the Agency ought to attract equivalent exposure, given the scale of public infrastructure and funds the Agency will hold;
• Cost recovery and tariff interaction – amendments are needed to clarify how Agency-levied bulk infrastructure charges interact with existing municipal water tariffs and the Act’s charge-raising provisions, to prevent duplicated or uncoordinated charges reaching the end user; and
• Transitional arrangements – provision should be made for the transfer of existing bulk infrastructure assets, liabilities and user agreements to the Agency, and for continuity of supply during the transition.

Absent these amendments, the Bill and the Agency’s founding framework risk operating as parallel, imperfectly coordinated regimes, which is precisely the fragmentation that the reforms are intended to correct.

Potential Impacts On Water Users And Licensing

The combined effect of the Agency’s establishment and the Bill’s reforms is likely to be felt by water users and licence holders in the following ways –

• Municipalities – as bulk customers of the Agency, municipalities are likely to face new or restructured bulk infrastructure charges, which will need to be factored into consumer tariffs. Municipal managers already face personal liability exposure under the Bill, and will now also need to manage compliance obligations flowing from their relationship with the Agency;
• Water boards – the Agency’s bulk infrastructure coordination role may overlap with functions currently performed by water boards, creating uncertainty pending legislative clarification. The governance reforms proposed for water boards under sections 35B to 35I may need to be mirrored in the Agency’s own founding governance framework;
• Industrial, mining and agricultural users – bulk users holding water use licences under section 21 of the National Water Act should anticipate new or adjusted infrastructure levies from the Agency, in addition to existing licence conditions and charges, increasing the overall cost of compliance;
• Licensed municipal service delivery mechanisms – where such mechanisms rely on infrastructure operated by the Agency, jurisdictional uncertainty may arise as to which entity is accountable for infrastructure failures, pending the definitional amendments proposed above; and
• All water users – the extension of enforcement mechanisms, including criminal proceedings and personal liability, to environmental and water services non-compliance materially raises the stakes of regulatory diligence across the sector, including in relation to reporting and payment obligations once the Agency becomes operational.

How Bishop Fraser Attorneys Can Assist

The establishment of the Agency, together with the Bill’s licensing, enforcement and personal liability reforms, signals a materially more complex regulatory environment for water users, municipalities and water boards alike.

Bishop Fraser Attorneys advises clients on regulatory compliance audits, water use licensing under the National Water Act, environmental authorisation processes, governance restructuring, and engagement with the forthcoming public hearings on the Bill. Early engagement with these reforms may reduce future regulatory and personal liability exposure as the sector moves into a more enforcement-driven phase.