THREE years ago, large-scale poultry producer, Sovereign Foods faced the real risk of not being able to operate its Kariega plant due to an inadequate supply of water.
On 7 May, the company officially unveiled its R84 million on-site wastewater treatment plant which recovers at least 70% of the 1,300 kl used each day back to potable quality. This drastically reduces the facility’s reliance on municipal water for business continuity.
Sovereign Foods group commercial manager, Blaine Nell, said that he was immensely proud to unveil the completed project which is one of the largest contributors to water sustainability in the Eastern Cape. Nell said Sovereign went through a fairly onerous selection process to decide on a partner in its journey and that it is “non-contestable that we chose the right partner in Talbot”.
For water treatment specialists, Talbot Water, the solution was a customised technical and financial package. Talbot’s director of project finance and consulting Mike Smith, an economist who does financial modelling and acts as a transaction advisor, explains that Sovereign Foods’ Kariega project is a hybrid solution. “The water recovery plant is based on a Build, Own, Operate and Transfer (BOOT) model and the client buys the water from us based on an agreed R/kl fee.”
Talbot’s business unit lead for implementation, Jutta Dedekind who was responsible for the project build says this model incentivises optimisation. “As the implementation agency, I hand over a functioning plant to the operations and management (O&M) team which runs it as efficiently as possible. The O&M team can lean back on the engineers who designed and built the plant at any time. There’s a ‘golden thread’ running from design to the end of the plant’s operating life.”
Smith explains that there is a parallel ‘golden thread’ of responsibility and, ultimately, incentive to perform. “No matter what performance guarantee mechanisms a client puts in place, there is a point at which whoever built the plant’s responsibility is severed and they walk away. However, if it’s a finance project, the client is guaranteed the vested interest from the owner of the plant who built it and operates it. To reduce the client’s risk in the transaction, we build it, own it, operate it and finally hand it back to the client. The plant’s working life could be 20-25 years and we typically transfer ownership after 15 years but can reduce it to eight years, as we’ve done on this project.”
Dedekind says that Talbot has a local O&M team responsible for the daily operation of the plant., “The engineers dial in to the plant from anywhere and monitor that it is running as anticipated,” adds Smith. If the plant performs more efficiently than projected, it impacts Talbot’s bottom line. Dedekind says it’s a self-regulating mechanism where both asset management and operations align for long- and short-term benefits.
Smith says that private water investment is a few steps behind the investment floodgates that opened for private energy. “The financial institutions still have questions, but the time is coming. In terms of technology, although there have been improvements, the processes are tried and tested and water-scarce countries like Israel and Namibia have been successfully operating large-scale water recovery plants since the 1950s.”
Nell thanked the Nelson Mandela Bay Department of Water and Sanitation for its guidance throughout the process. “There were certain areas that both ourselves and Talbot were unsure of and the municipality provided the necessary guidance. We sincerely hope that this project will also have a positive impact on the operations of the department,” Nells said. Water use licences are required for the extraction from and discharge into water sources and only licenced water service providers can legally sell bulk water. There are no legal restrictions on the recovery of wastewater.
A growing option
Smith and Dedekind stress that Talbot’s solutions are always customised and even two similar processing plants, for poultry, for example, could be different.
The volume of wastewater, cost of the alternative water supply, client’s processes and water quality required as well as the space available on-site are variable factors influencing the viability of investing in a private plant.
The scale of the project needs to make sense. “Smaller projects can’t carry the big costs associated with procurement, engineering and construction, so there’s a scale at which these become more viable. As a guideline, I’d estimate the minimum to be 1,000 kl of water a day.
“The next big driver is what you’re saving on the other side of the transaction – the cost of the existing water supply and its projected increase. In eThekwini, for example, the rate is over R50/kl and in Ekurhuleni it’s in the region of R40/kl and promulgated to increase by 16% for the next three years,” says Smith.
Dedekind says it also depends on what the client requires. “In this case, Sovereign needed SANS 241 quality potable water to use in food preparation. Other clients might require treatment to a standard that meets their discharge permits for the municipality. In that case, the effluent would require fewer processes.”
Dedekind says, “Materials used in the plant must be able to withstand the chemical residue and by-products of the treatment process which can be highly concentrated acids. This will require stainless steel or specialist piping for example. That’s where we model the plant to the client. It is a live model with numerous variables.”
The Sovereign Foods plant includes four tanks, the largest of which is 23m in diameter, and an abundance of space gave Talbot design flexibility. “Smaller spaces can work but they add complexity and therefore cost,” says Dedekind. “Building tanks underground requires earthworks and piping across distances also adds cost. But it can be done, we work with the space we’re given.”
Stressing the bespoke approach to water recovery, Dedekind says the company is up for a challenge and Smith says that most wastewater is treatable.
