Is Water Delivery In Gauteng A Profitable Solution For Irrigating Crops?

Whilst producing a feasibility study for one of our recent agri start-up projects – we arrived at the question:

“Is water delivery in Gauteng a profitable solution for irrigating crops?”

This is the scenario…

Our client is renting approximately 1 hectare of land that he is now intending to use for small scale commercial farming in Gauteng, South Africa.

He has no access to a borehole (…his landlord has permitted our client to have one installed – an initial contractor site visit resulted in a price quote of R. 49,000 for installation…not to mention, additional funds for a tank for pressurising the water), neither has he access to a municipality water supply…

Hence our thoughts of water delivery, as a solution.

According to studies which provide benchmark estimates for optimal irrigation requirement (water volume) for a plot of similar dimension, growing broad leaf vegetables…

We expect our clients weekly water input requirement to be in the region of about 120,000 litres per week.

(Any comments regarding this quota – are we close? Way off? Your experience is most welcome…feel free to post an answer below).

We’ve always thought of water delivery in the context of pool maintenance.

Portable agricultural water supply was breaking the mold for us as agri-business consultants.

Tasked with analysing the cost/benefit and feasibility of large scale water delivery for our client’s agricultural project…

We got to calling around for advice from Gauteng’s local bulk water delivery companies.

Here’s what we discovered:

Our request for proposals (RFPs) from water deliver companies in Gauteng, South Africa

Our method of choice for broadcasting our request for proposal concerning water delivery in Gauteng was Gumtree, the online classified advertisement platform.

Write Your Poultry Business Plan -
in Just 90 Mins!

Poultry Project Reporter 2.0 - fastest way to write your project report online.

Get Poultry Project Reporter 2.0

Our steps?

We simply posted on Gumtree a request for proposal inviting water delivery contractors in the area to submit their professional advice re: our client’s agri scenario.

Having drafted a communication, we posted the advert and waited for the response.

The result?

Of the say 6 or so water delivery firms we contacted, the response was unanimous – 100% response rate.

However, only one contractor responded offering ‘upfront disclosure’ on:

• an estimation for the weekly water demand of our client’s 1 hectare farming operation
• delivery lead times
• on-site storage recommendations
• price quote
• payment policy
• advice on irrigation methods etc.

…yet all very promptly established contact via email, same day.

Professional advice received from a Gauteng water delivery contractor on our client’s small scale farming irrigation project…

• Water delivery contractor’s name: Mr. Shelton Mlambo of Umelusi Builders
• Area served: Eastern Pretoria, Pretoria / Tshwane
• How we found them: On Gumtree via their posted ad – ‘...water deliveries 31 cents per litre – Eastern Pretoria‘
• Response time to our ad: 38 mins from our ad being posted

Our original RFP sent via Gumtree re: agricultural water deliver in Gauteng:

“I am seeking a quote for pricing and availability of water delivery to an agricultural plot in Gauteng Province due to be sown in the coming months which has no on-site water supply.

Please could you provide the following information:
– Are you able to deliver water suitable for crop irrigation to rural Gauteng?
– Does the water have to be portable?
– The plot is 1 acre in size are you able to advise on the volume of water needed and frequency of delivery?
– Please could you provide pricing by volume of water delivered?
– How is an account opened/order raised and how is payment received?
– How quickly is water delivered after ordering?
– What water storage equipment should be arranged on site? Do you provide?

I would appreciate any additional guidance or advice regarding this matter.

Please reply in the first instance to this email address…”

The 1st response in detail from Shelton Mlambo (water delivery contractor Eastern Pretoria):

“Yes we can deliver…

Normally within 48hrs after order: –

For irrigation purpose, maybe you can phone me on 0823448063 for clarification

e.g. 

Confirm the location and type of crops to be under irrigation

e.g.

broad leaf and wheat needs lots of water say twice a week, while trees and fruits are fine with little water esp. under drip irrigation.

Yes storage tank is required.”

After filling in our water delivery expert with a few more practical details, he was able to recommend the following:

“Around 125,000 litre  storage tank 2.5x the average size of a swimming pool will do to water a hectare of  spinach twice per week to achieve around 2.5cm to 3cm of rain fall – which is the depth of the roots of the plant.

It follows therefore that 125,000 litres of water per week will cost around around R.37,500 the least…(30 cents per litre)

• Cash on Delivery unless by arrangement.
•  we can install cement/ mobile  storage and a pump with a mobile sprinkler system – on a separate quote after site visit
• mobile sprinkler.
• additional surface mobile  pipes to reach out- to be moved over the field over 8 hours – pipes moved /changed area  after every two hours.
• we have sufficient tankers to meet demand of water through out the year.  

“

[NOTE: we greatly appreciate the assistance of Mr. Shelton Mlambo in providing us with upfront pricing on his services…this enabled us to support our client promptly with the input needed to provide him with timely business analysis for decision making.]

So…what is the business feasibility of using a local water delivery service for agricultural crop irrigation over 1 hectare in Gauteng?

Loaded with the useful professional input of Mr. Mlambo on behalf of his water delivery services company…

We were able to swiftly produce the cost benefit of this method of irrigation, in our client’s case:

• Given the average yield of such broad leaved crop in South Africa to be:
  • …between 10-12 tons in weight…
• And the average price achieved per ton of crop traded wholesale according to Western Cape Government as of December 2017:
  • …is R.8414.

Without any further deliberation, we can clearly see the ongoing service cost of water delivery for our client’s 1 hectare farm…

Would be prohibitive – even at the rate of 30 cents per litre…

• …which for the pool water delivery market might indeed be reasonable…

But for small scale agricultural purposes…

At least in our client’s case…

This just wouldn’t be a profitable solution.

What next?

The next move would be to return to our quote for drilling a borehole and trial the BCR (benefit cost ratio), to see if drilling such an installation would be worth our client’s while.

Also, perhaps regrettably from our client’s point of view…

Looking for other available farm land in Gauteng which comes with water supply inclusive within rent.

Either way, the overall profitable return will need to be analysed to guide his decision making.

More on this in another post/article.

Are you looking for water delivery services in Gauteng for an agri project or other purpose?

Submit an enquiry below and ask away – we welcome local water delivery contractors to respond to you.

Are you a water delivery company representative serving: Gauteng, Pretoria (Tshwane) or Johannesburg?

Join the conversation – feel free to comment, answer the queries, suggest alternative solutions or simply post an ad!