Sitka’s surplus water may help Cape Town crisis
Sitka’s water source at Blue Lake is said to be so pure it doesn’t need to be filtered.
And now, if logistics pan out, thousands of tons of it will be loaded on a ship bound for Cape Town, South Africa, before the city of 3.7 million people runs out of water.
Cape Town’s drought, coupled with population growth, is sparking one of the world’s worst urban water crises as South African leaders warn reservoirs are running so low they will have to turn off the taps.
Previously predicted for mid-April, now leaders are saying “Day Zero” — the day the water runs dry — is more likely to strike by July.
Either way, there’s not a moment to lose and a ton of logistics to figure out in order to get water to the other end of the earth, said Garry White, the executive director of the Sitka Economic Development Association, or SEDA.
White helped write a proposed contract between the City and Borough of Sitka and an entity called Green Gold Distributors of Cape Town operated by global entrepreneur Anna Marie Gericke.
If the deal happens, it will be the first time Sitka has successfully sold its water in bulk after 20 years of attempts that didn’t pencil out, White said.
“In the past, we’ve dealt with a distributor who says ‘I’m going to get a contract and then find a market.’ Whereas the woman with Green Gold Distributors, Anna Marie, has an identified need when you have 3.7 million people who are soon going to be out of water,” White said. “She’s still trying to figure out the economics of it: Leasing the ship. How to load it. Where she’s going to offload a significant quantity of water. What do you do when you show up to the port if there aren’t enough storage tanks? Very hard venture to figure out economically.”
In order to start contracting with a shipping vessel and getting other logistics tacked down, Gericke needed the local government’s contract in-hand, White said.
The contract was approved by the City and Borough of Sitka Assembly on March 13.
The critical impetus is on Green Gold Distributors to figure it out due to the pending crisis. Gericke’s isn’t the only company working on getting water to South Africa.
Other towns with surplus water, meanwhile, were also in the running against Sitka, local officials warned as the town debated pros and cons of the deal on its local radio station, KWAC.
Gericke has accomplished a number of difficult source-trading ventures, according to her website. The company exports fruits, grains and other commodities between South Africa, Egypt, Italy and Argentina.
“They had a chicken crisis in South Africa, that apparently killed off a lot of birds,” White said. “She was able to get eggs shipped in.”
Gericke has said she would like the deal to be finalized in March, to begin shipping by May. She met with the Gary Paxton Industrial Park Board via teleconference in February.
“People on the streets of Cape Town are going to be paying for this water, and we have to keep it cost-effective as possible” Gericke said, as reported by the local radio station, KWAC.
During the teleconference, Gericke gave information about her business plan, which involves shipping water in containers to private clients. She plans on using Panamax freighters: ships within the size requirements to go through the Panama Canal.
She will pay Sitka the going rate of 1 cent per gallon and a $5,000 non-refundable administrative fee. According to her contract, the Gericke will have to move 50 million gallons in the first six months of the contract. The price after that will be $0.005 per gallon.
In the past, during California’s drought, companies sought unsuccessfully to transport tons of Sitka’s water only to find that even “5 or 6 cents was just too expensive,” White said.
That’s because water is an incredibly heavy commodity to move on ships and through pipes. Transportation costs ended up sinking every deal, he said.
In 1993, when Sitka Mill and Pulp closed down, the city found itself with excess water that would be available for sale, White said. The Blue Lake Dam and Reservoir stores 18 square miles of water behind the dam. And since it had previously sold its water as a commercial entity, the mill's closure meant the city and borough gained water rights.
The city and borough appointed the Gary Paxton Industrial Park Board in 1998 to market water. So far, $1.5 million in water has been sold, but none of it bulk.
Currently, an estimated 7.4 billion gallons of water is annually available for export from Sitka’s reservoirs.
“If the assembly approves Green Gold’s request, the CBS will still have over 20,027 acre-feet or 6.4 billion gallons of raw allocation annually available to enter into other contracts,” the resolution before the Assembly stated.
“Green Gold has stated it wishes to establish a tideline-loading facility that would be similar to one already installed by the Alaska Bulk Water, Inc.,” (which sells bottled water) according to the Assembly’s resolution.
The Gary Paxton Industrial Board of Directors recommended the project after analyzing, among other questions, whether it would drain or diminish Sitka’s own water supply. Likely it would not, their report concluded. At the end of its work, the board drafted a contract to be signed between the city and Green Gold.
Now with the local government’s stamp of approval, the hope is to move quickly over the next few weeks, White said.
“This is going to be a tough project. We are on the opposite side of the world,” he said. “That’s a long haul. And it will be expensive.”
Naomi Klouda can be reached at [email protected].