Inkomati Catchment Management Agency Annual Report 2006/7: briefing

Meeting report

WATER AFFAIRS AND FORESTRY: PORTFOLIO COMITTEE
14 November 2007
INKOMATI CATCHMENT MANAGEMENT AGENCY ANNUAL REPORT 2006/7: BRIEFING
 
Acting Chairperson:  Ms M Manana (ANC)

Documents handed out:
ICMA DWAF’s Oversight Role to Portfolio Committee: 14 November 2007 presentation
Presentation of 2006/7 Annual Report and Financial Statements:
ICMA Annual Report: Consolidation of the Foundation Phase 2006/7 Financial Year [Part 1][Part 2][Part 3][Part 4]
Executive Summary of Roll Out Plan

Audio recording of meeting

SUMMARY
The Department of Water Affairs and Forestry and the Inkomati Catchment Management Agency briefed the Committee on the recent establishment and workings of the Agency, which would help the Department to manage water resources within the Inkomati catchment; over a given time period it would take over most of the responsibilities with regard to the management of water resources in that catchment. It was noted that the indications were positive; the Agency had received a clean audit report, was in a sound financial position and was operating as a going concern. It received positive feedback from stakeholders, who saw it as an agent of change committed to service delivery. Challenges were the finalisation of delegation of functions, the decentralisation of systems, collection of water resource management charges so that the Agency could function independently of the Department, and the finalisation of the water allocation. The Board and its committees were described. It was noted that the vision of the Agency was “water for all in Inkomati” and it was aligned with government and municipal plans. It had thirteen staff members and secondment of another 21 staff. It was offering bursaries to boost its potential intake of staff.  It was noted that it was dealing also with Mozambique and Swaziland, in terms of the InkoMaputo Agreement, which aimed to establish a common approach to the Inkomati resource by all countries bordering on that river system. There was a need to ensure that people would soon see water available in their areas. Emerging farmers and municipalities’ needs must be balanced against also ensuring that historically disadvantaged people had access. 

Members raised questions on interaction, incentives for staff and staff vacancies, the bursary schemes and retention of bursary holders, and when the Agency would become financially independent of the Department. The workshops and conferences were noted but Members wondered how the information would filter down to the commercial farmers, and how they would be trained on water use and management. Several questions were asked around the reasons for the delay in signing the Memorandum of Understanding, when the transfer of staff and functions would take place, assistance to a school, and assistance to Lesotho and Mozambique. There was an extensive discussion around the Delmas area’s water pollution and the difficulties with the population accessing water in Driekoppies and Maguga Dams areas, and from the contested Klasserie Dam.  Several questions were also asked around staff vacancies, retention policies, implementation of policies, and consultation with and resolution of issues raised by communities. Delegation of powers was identified as a crucial point.

MINUTES
Inkomati Catchment Management Agency (ICMA): Briefing by Department of Water Affairs and Forestry (DWAF)
Ms Manana was elected as Acting Chairperson. She noted that this was the first time that the Inkomati Catchment Management Agency would be submitting their Annual Report, as it had recently fallen under the Department of Water Affairs and Forestry (DWAF).

Mr Silas Mbedzi, Chief Director, Institutional Oversight, DWAF, briefed the committee on DWAF’s oversight function of this very important new entity to the Department. He noted that Inkomati was the first Catchment Management Agency (CMA) to be established in the country and more would follow. It would be helping the Department to manage water resources within the Inkomati catchment area, which meant over a given time period it would take over most of the responsibilities with regard to the management of water resources in that area.
DWAF would monitor performance in service delivery, operational efficiency and financial viability. DWAF would also be exercising oversight over the Annual Report, review of the Business Plan, and the Memorandum of Understanding in relation to what ICMA and the Department would be doing. Mr Mbedzi noted that the signature process of Service Level Agreement took longer than expected and was only signed in August 2007.

At this stage ICMA was totally dependant on DWAF subsidies although it defined the ceiling for expenditure; ICMA should recover WRM (Water Resource Management) charges once delegated. The Annual Report reflected the establishment phase of the institution. The ICMA had achieved a clean audit.

The business Plan 2007/08 –2009/10 was briefly outlined, with challenges named as the finalisation of delegation of functions, the DWAF policy on systems for decentralisation to be finalised, collection of WRM charges, billing and debtors management must be transferred to ICMA and DWAF pilot project on water allocation plan should be aligned to ICMA’s vision.

ICMA 2006/7 Annual Report and Financial Statements
Mr Gary Robbertze, Finance Director, ICMA, noted that, despite the challenges, he was satisfied with the progress made by the ICMA and complimented the CEO and his administration, the Governing Board Members and DWAF for their integrity, commitment and responsibility. He summarised the functions of the CMA in terms of Section 80 of the National Water Act, as being to investigate and advise on all aspects of water resources in its management area, to develop a catchment management strategy, coordinate activities of water users and institutions, and promote coordination. There were four committees of the Board, including a finance committee and there was also an audit committee that met every two months.

ICMA’s vision matched that of government, being water for all in Inkomati. ICMA also responded to the Integrated Development Plans (IDPs) of all the municipalities in the water management area. It had representation from local and provincial government to comment on the planning process and targets. Thirteen staff members had been appointed, and DWAF had seconded 21 staff members. Bursaries were issued to nine students. There was a need to support more students in engineering, and ICMA also intended to identify and link with a high school to promote the learning of Maths and Science and ensure that those students who passed were guaranteed bursaries to university. Research work would be undertaken in collaboration with the university and Wits was very excited to work with ICMA in terms of ensuring the programme became successful.

The official ICMA launch was on 2 November 2006. The catchment area was providing water resources to South Africa but also to Mozambique and Swaziland, in terms of the InkoMaputo Agreement. There would be a common approach to the resource by the countries on the Inkomati River system.

Mr Robbertze noted that there was an issue around Irrigation Boards (institutions established in terms of the 1956 Water Act) being transformed into Water User Associations (WUAs). Although the ICMA would provide support this was not its main function. The whole transformation was a very complicated process.

Mr Robbertze briefly detailed the international links.

In terms of Catchment Management Strategy and Planning, he explained that towns like Malelane, White River and Hazyview consumed a greater percentage of the water than villages that constituted almost 60% of the area. This was why the villages always complained at the imbizos that they did not have water. A major challenge when working with local government was to ensure water service throughout the catchment. There was a further problem of capacity building to emerging farmers who knew little about water resource management. There was also a need to know much water was extracted from the systems, and to draw up a strategy as to how to assist black farmers with water as a driver. Four major projects in the catchment were identified. These were assessing the state of water availability in the area, developing a business plan in order to assist the new farmers to get into business, and linking them with the market, and cooperative efforts with DWAF through its Rainwater Project to introduce small gardens.

Mr Robbertze briefly summarised the annual financial statements. The total set-up funding received from DWAF was R7 million. Specific programmes and expenditure had to be matched to the revenue, and there had been spending of R4.8 million. R1,2 million was being rolled over to the 2007/08 financial year.

Mr Sizile Ndlovu, CEO, ICMA, outlined the challenges, which included the establishment of business processes for funding of the ICMA, delays n the signing of the Memorandum of Understanding, delegation of functions; and coherent support from DWAF. However, he concluded that ICMA received a clean audit report, was in a sound financial position and was operating as a going concern. Positive Stakeholder perceptions saw the ICMA as an agent of change committed to service delivery. There was a need to ensure in the shortest possible time period people would see water available in their areas. Emerging farmers and municipalities must have water, and balanced against this was also the need to ensure that those people disadvantaged in the past did get access. A target had been set for 14% of the water transferred to black farmers or black users in 2014. In addition to that the Land Reform Programme was closely linked. If a farm was transferred to a historically disadvantaged individual, the water would follow the land, not the user.

Discussion
Mr P Ditshetelo (UCDP) applauded the ICMA for its illuminating presentation .He asked how did the ICMA interact with the stakeholders such as the Department of Local Government and Housing, and how often.

Mr Ndlovu responded that the Water Sector Forum sat every two months, and this was a meeting between the ICMA’s Institution and Participation unit, with people who were dedicated to deal with issues of inter governmental relations, who sat in the meetings of the Water Sector Forum and at District Municipality Level.  Those people also had the responsibility to visit the municipalities as and when required to assist the municipalities with issues of water resource management. In between the Water Sector Forum meetings, there was direct interface with municipalities. These were allocated according to where they were sited on a particular river system. One person was dedicated to assist institutions such as Local Government, Provincial Government and National Government in terms of the respective river system. Below that level were Community Officers who interfaced directly with communities and gardens and women doing production at a garden level. Interaction was reliable and constant and was chaired by the district municipalities in the catchment area.

Mr Ditshetelo asked what incentives did they provide to keep their staff that they had trained to enhance capacity from being lured to greener pastures.

Mr Ndlovu said that incentives to staff were a big challenge in the South African economy. ICMA had a very good HR Manager but another company snatched her and they could not match the benefits. ICMA’s philosophy lay in encouraging staff to increase their knowledge in water resource management. It would award bursaries, but had not had a good response. They would ensure that when staff were absorbed from DWAF to the ICMA there would not be salary disparities as DWAF salaries were used as a benchmark. Their movement was towards better salaries in order to retain staff, but ICMA had not been able to arrive there as yet.

Competition was not only at the level of staff but also for those at university receiving bursaries. Another company took one of the students ICMA was sponsoring by offering better terms and conditions. The ICMA’s programme included internship. If they were not able to take everybody they supported in the institution there would be a very serious problem of skills shortage in the water sector generally. Employees were tending to stay in jobs at DWAF for shorter and shorter periods of time; this was then creating serious pressure. 

Mr Nandha Govender, Acting Chairperson, ICMA, stated that staff reduction was an enormous concern to the Board. The sooner they got the required delegation of functions the sooner they would be able to collect revenue and be able to re-examine their policies. In planning over the next three years the Board would have to improve remuneration and benefits, and one way would be around the delegation of functions

Mr Ditshitelo asked when ICMA would become independent of DWAF and its subsidies.

Mr Ndlovu responded that financial independence was discussed as a major issue at Board level and was more reliant on delegations. ICMA had to get the delegation to build the water reserves, to do monitoring and to take the systems and database of DWAF, which would assist them to understand how many water reserves there were in a water management area, how many farmers there were and how much they were paying. DWAF started a programme called Validation and Verification Study, verifying water users in the water management area and checking whether they used water legally. That would give a database that was more reliable and less likely to face legal challenge. When the study was completed they would be able to begin to quantify what was legally allowed for a particular water user to take from the system and apply. That study would assist in determining how ICMA could become independent.

Mr Ditshitelo asked how effective was the transformation programme.

Mr Ndlovu said that currently all the staff appointed were from the historically disadvantaged individual (HDIs), group and was a mix of young people with the required experience in the various fields. Women constituted almost fifty percent of the staff establishment. The problem was getting women at senior management level because it was still rare to have women who were qualified in water resource planning and engineering.

Mr Ditshitelo asked how, during the proposed annual forum with doctors and professors, would that information be conveyed to emerging farmers who may not be literate or well educated, so that they could understand the techniques involved in this process.

Mr Ndlovu said that the ICMA’s conference aimed to make all information available to HDIs as there could not be meaningful contribution from them unless training was provided. ICMA was moving towards getting a dedicated service provider specifically to train HDIs in order to raise their level of understanding of these complex matters so that when they interfaced with commercial farmers they should be able to have confidence to raise relevant issues. The CMA’s conference would have direct participation by HDIs. 

Mr K Moonsamy (ANC) asked for details on the demographics of the staff complement as to numbers of disabled, and gender representivity.

Mr Ndlovu said that the staff were all individuals from historically disadvantaged backgrounds.

Mr K Moonsamy asked where were the Water Users Associations in the main.

Mr Moonsamy noted that reference was made to water used by emerging farmers, and he asked how many such farmers were being assisted and where were they located

Mr Ndlovu explained the process of identifying the opportunities. ICMA convened meetings in the sub-catchment where the farmers were and requested the farmers, who were the water users, to give them the projects they thought would be viable, and then consulted with them. After receiving that information the ICMA would then embark on a study to validate the information and get a sense of the viability of projects. About twenty projects were identified that the ICMA would be able to support, which would create a number of jobs. These projects were in the Bushbuck Ridge and Allandale areas. Looking at the water management area, the Nelspruit, Malelane and Barberton areas, it was unlikely to find very strong emerging farmers, especially where there were white farmers already farming, as the land was not owned by HDIs. In the Inkomati area there were almost two thousand emerging farmers in the sugar cane area, whom ICMA was  going to support in the water reform programme.

Mr Moonsamy asked the reason for  the delay in signing of the MoU

Mr Mbedzi said that the delays arose because people had refused to let go their functions until they were assured they would not lose their jobs. The Hon Minister had convened a workshop last month and said she was able to understand the frustration the ICMA experienced and the reasons. They were hoping the Minister would address that because it affected the way business was run.

Mr Moonsamy asked what areas did the seventeen policies cover.

Mr Mbedzi noted that the seventeen policies in terms of focus areas were set to lay the foundation to create an environment for effective functioning.

Mr B Mosala (ANC) congratulated the Department for a successful launch and continuing to support this new entity. He noted the assistance to a particular high school and asked what sort of criteria was applied in selecting a specific school in a given area.

Mr Ndlovu explained that the ICMA developed a conceptual framework to identify a school, that it must be from an informal area where the 2000 farmers were concentrating on sugar cane. Unless they trained young people from the area where there were problems, there would not be a very strong bond with the water users experiencing problems. Training children would add value because there were problems in the area that could also be addressed, and this would further the bonding.

Mr Mosala asked if the initiative of assisting with bursaries would be sustainable.

Mr Mosala noted that the minister from Mozambique had been invited to the launch. He asked whether they were aware of the protocols to be observed when inviting ministers from other countries; he didn’t get the sense that our own Minister had been involved and would like clarification.

Mr Ndlovu referred to the protocol of inviting the Minister from Mozambique. Because the ICMA was part of DWAF it did not have direct interaction on its own with other countries. The countries with lands on the same river systems were invited. DWAF had surely followed the necessary protocol and the Mozambique Embassy also played an important role in that coordination.

Mr Govender added that the invitation was issued by the Department of Foreign Affairs who had followed all the necessary protocol, which was why it was so easy for the delegation, as that Department had told Immigration to escort them through. The South African Minister of Water Affairs and Forestry did attend the function.

Mr Trevor Balzer, Chief Director, DWAF, added that the work ICMA did in relation to the InkoMputo Treaty and KOBWA was not done under separate treaties but under the general treaties the Department had in place. 

Mr Mosala asked if there were any financial implications in assisting Lesotho with their plan to establish a CMA in that country.

Mr Ndlovu responded that Lesotho came to the ICMA seeking information and they communicated at a low level by way of telephones and electronic communications. No travel would be involved; or if there was the need then Lesotho would visit the ICMA.

Ms M Ngwenya (ANC) asked about their relationship with emerging farmers and how they were involved in trying to get water to them.

Ms Ngwenya asked who was the AWARD NGO and where were they based.

Mr Ndlovu said that the AWARD NGO was based in the nKla area in Klasserie. It was led by Dr Sharon Pollard and was independently operating in that facility area. Its special focus was on water resource management, and it was involved in the establishment of the CMA and laid the basis for the annual Catchment Management Conference.

Ms Ngwenya asked how did the ICMA assist Local Government, because she was concerned about the capacity Local Government had in assisting people with access to drinking water, let alone the funding and other issues. As a new entity ICMA was filled with enthusiasm and confidence but their priority should be for people to have purified, clean water to drink.

She asked for clarification of financial statements.

Ms Ngwenya noted the recent reports in the media that Delmas area had been affected by water pollution and the people suffered from dysentery from the contaminated water from boreholes. She asked whether ICMA was assisting.

Ms Ngwenya asked what were the allowances referred to as members’ remuneration in he Cash Flow statement.

Mr Robbertze explained the reimbursement allowances were solely reimbursement for travel and the use of personal motor vehicles. and used the rates specified by the Department of Transport.

Ms E Lishivha (ANC) asked what was KOBWA and what was its main purpose.

Mr Ndlovu responded that KOBWA was an acronym for Komati Basin Water Authority, and was established in terms of an agreement between South Africa and Swaziland in about 1985, and the main purpose was to develop and manage two dams and the water allocation that went into that. There had never been a change in the South African allocation in terms of the water available in those two dams, and this was one of the major challenges they would have to respond to.

Ms Lishivha asked what was the number of municipalities participating in the workshop in Mpumalanga.

Mr Ndlovu said that the water management area demarcation was based on the hydrological boundary and behaviour of run off after rainfall. The Inkomati water management area had eight local municipalities and three district municipalities. They had workshops and direct interaction with all of those. They had all the dates of when the workshops took place in each area.

Ms Lishivha noted that a critical position was not filled, and asked when would all the vacancies be filled.

Mr Ndlovu noted that the CFO position was advertised four times but there were difficulties in finding a suitable candidate because financial management had become a rare skill during the recent economic boom. The position was offered to a lady working in Environmental Affairs but when she submitted the letter of resignation from that Department she was given a counter offer that ICMA could not match. ICMA then went to recruitment agencies and were still awaiting their response and recommendations. The same thing was experienced in terms of the company secretary. The position of Marketing and Communication Officer has been filled. The HR Officer also declined, as he had a counter offer. The challenge was that ICMA were fighting for the few skilled people that were there in the marketplace.

The Acting Chairperson said that she was not convinced with the explanations on vacancies. She pointed out that surely there must have been a first, second and third choice of candidate.

Mr Ndlovu said that none of the other candidates except for the one who was offered the post were sufficiently qualified, so ICMA were considering the possibility of grooming a less qualified person. Mr Govender added that for those specific positions the governing Board made a positive decision to target females to fill the positions. The company secretary was actually a second or third choice candidate but she would be given the opportunity to develop. Unfortunately she also declined, so ICMA would have to review the way forward

Ms Lishivha asked what were the ICMA doing to cater for commercial farmers only.

Mr Ndlovu did not know the answer to that and noted that perhaps legal advice must be sought on the question of dam water being made available to black people, whether for household or production use. In Driekoppies Dam and Maguga Dam area there were black communities staying around the dam, but they did not have water because legally the water that was available in the dam was allocated to the agricultural sector, specifically commercial farmers. If water were to be removed from the dam, there would be a need to move to compulsory licensing or other initiatives, and be conscious of the fact that there would be legal challenges. This was a serious problem. In Catchment Management Strategies one of the questions still to be answered was what volumes of water were being used by black water users, and whether there would be changes when black people became involved more in agriculture.

Ms S Maine (ANC) asked whether a contract could be signed so that when the bursary holders had finished their education they would have to serve the ICMA or the Department before being employed elsewhere.

Mr Ndlovu said that no students had yet been given bursaries as these were only instituted in the last year. One student was guaranteed to start in the ICMA next year. The majority were first year students and still had a long way to go. ICMA did have signed contracts with them in place that obliged them to work with the ICMA or in government. However, experiences in the past had shown that a parent and the student would sometimes claim that they had financial problems which obliged the student to seek better paid work elsewhere, and would ask for release from that contract. It was a difficult situation when it came from historically disadvantaged individuals.

Mr Maine understood the issue of parents interviewing but said that the ICMA should not compromise. Someone would have to take an unpopular decision that at the end of the day would serve the country and the interests of the poorest of the poor. If this parent was helped today the next parent would expect the same.

Mr Ndlovu said the ICMA would take the advice of being firm when parents pleaded for the release of their children from bursaries.

Mr Maine asked how many of the policies adopted had actually been implemented.

Mr Ndlovu noted that the ICMA was implementing policies. The policies were generally fine and there were no problems pertaining to the policies themselves, except they needed to further improve because the main challenge was the competition between government and the private sector.

Mr Maine asked for clarity on the delay in signature of the Memorandum of Understanding.

Mr Ndlovu said that delays in terms of signing the MoU had been directed to the Department, but it had been signed now in August.

Ms P Bhengu (ANC) asked how the ICMA assisted in resolving issues raised by communities in their awareness meetings and whether, during interaction with local government, those issues were included in their IDPs.

Mr Ndlovu said that ICMA would consult with stakeholders. When ICMA did the allocation on the water allocation reform, the consultant that was assisting developed and issued it. Issues raised would be incorporated into a document. Over and above when they developed their business plan they made a draft incorporating all issues from stakeholders for their approval on issues they were facing. The Board would approve the business plan and that would be submitted to the Minister. ICMA wanted the business plan to respond directly to the issues raised and make sure the programme that staff followed would give an answer to stakeholders. They wanted in the future also to do quarterly assessments of operational plans and get feedback from stakeholders.

Mr M Sibuyana (IFP) said Mr Ndlovu had mentioned areas such as Allandale, he understood those projects were defunct because of lack of water. Dunfries hadn’t been mentioned, which he understood was also not fully operating. He asked about the viability of the projects as far as Wits University was concerned. He raised concern about services rendered by that facility because when it started in 1984/85 it required a lot of funding for sanitation and water supply, yet to date there was still no sanitation and water supply. He asked why ICMA did they not think of supplying the areas of BushbuckRidge with water from the Klasserie Dam that was nearby and used for sport by certain people.

Mr Ndlovu responded that ICMA would be happy to share more of the business plan developed for the project with the Member, as it was working. However, he must realise that at this stage the project was only one year and six months old, so this was still at the stage of conceptualising, identifying, and developing before the project started running on site, and a site visit would not in fact show anything as yet.

With regard to the Klasserie Dam he noted that this was a Water Services and not Water Resources problem. ICMA managed the water in the system, it could allocate water to local government, and local government could take the water through the Water Board or through a pipeline to the communities. The ICMA could not take the water through a pipe and purify it, as that function was dealt with under the National Water Services Act. A further critical issue was the fact that Klasserie was in the Olifants catchment area. Klasserie flowed into the Olifants River and into Mozambique, so that would become an issue when Olifants CMA was established. Until then DWAF had to be involved and see how could cooperate. It would also require Bushbuck Ridge municipality to come into play.

Mr Balzer, DWAF, added that this was one of the challenges the Committee was going to have in terms of dealing with reports from agencies like the ICMA. Their geographical area did not necessarily follow the areas of Members’ constituencies, and they could only report on their geographical area of responsibility. It would be seen on page 5 of the Report that the Klasserie Dam was outside on the one side and Delmas outside on the other side.

He noted that Mr Sibuyana had asked a question on the Klasserie Dam in National Assembly and a response was provided. There was no change in the response that the Department had given when it responded extensively to some of the challenges of the Klasserie Dam at the time.

With regard to Delmas, that was also a local government problem but the Department, through the agencies set up to monitor the situation and through provincial and local government, had been monitoring the situation. He reiterated it was not part of the ICMA’s responsibility. The latest information was that there were about  757 cases reported, but some of those were duplicated. From the monitoring carried out by the Department, and looking at the records of the Municipality, it appeared that the problem arose round about 11 September where there was under-chlorination and there was a problem with the barriers, which was where the contamination could have started. The Department’s monitoring over the past couple of weeks indicated that the tap water now showed no traces of contamination and the chlorine levels met the Bureau of Standards 241 standard. The teams were trying to establish why there had been no reduction in the number of cases. If the problem had started on 11 September, looking at the incubation period for that particular type of diarrhoea, there should already have been a downturn in the number of cases reported. There could be other problems that were not water related. He had also been advised that no typhoid related cases had been reported.

Mr Sibuyana referred to the reply from the Minister in the House, which was only that the Minister was aware of the fact that Bushbuck Ridge had no water for economic development, but would not get from the Klasserie Dam. He asked the Department to arrange an imbizo for the area to address the question of the Klasserie Dam with the people in the area. He was aware that certain dams would be supplying water as far as Bushbuck Ridge, but that was water for domestic use only. He was speaking of water for economic development because there had been mention of enough water for both. Klasserie Dam already was there and had water whereas setting up a new dam would take years.

Mr Sibuyana stated that an elderly lady had just died there because there was no water, as she had gone to fetch water from a well, and, due to low levels, had lost her balance, slipped and died.

The Acting Chairperson asked the Department about the delegation of functions and if there was a time frame as to when they would enrol those powers.

Mr Mbedzi responded that the delegation would be done during 2008. There were some human resource issues. Many staff believed that the establishment of the ICMA would change their job description completely and started not cooperating. A workshop had been held with all the Head Office personnel who were supposed to transfer certain functions to the ICMA. It was agreed that by a given time period people would have identified the functions that would be devolved to ICMA, and what would be done by those people when they moved back to their offices. There were also new people that came into the system and they should have done change management and communication constantly so that people understood that setting up a new institution would have an impact on the job descriptions and the way in which they did their work. DWAF had failed in that area. It needed to embark on that particular problem so that people were not surprised when told to move certain functions to other institutions. Since the staff dealing with water management had been transferred to the ICMA the situation had improved. Devolving functions would be finalised by 2008.

Mr Mosala commented that it was very critical that the delegation be given attention very urgently because he was under the impression the entity was finding it difficult to function. There was an element of sabotage that filled the department and impacted on ICMA. Individuals must not be allowed to intimidate a whole department.  He did not think the Department was giving ICMA the best chance of succeeding.

Mr Balzer said that the Minister was at the moment leading a process to look at the establishment of the CMAs. They commonly referred to their institutional realignment programme and out of that programme it was expected that early in January a statement should come out from the Minister about time frames, and the question of delegations had also been taken up into that process as well. The observations made by Hon Mosala were being taken very seriously so that institutions were not established as a shell but in such a way that the institution could start operating and executing its mandate.

The Acting Chairperson asked why the Department had taken so long to sign the service level agreement.

Mr Mbedzi clarified that at the time when started negotiating on the MoU the original office was managed by a Chief Director. When that person was moved he did not share the information with the new person, who had to apply his mind to matters contained in the MoU. One of the biggest issues was the transfer of staff.  At some stage the document was lost. Then he deliberated for a long time until in August he understood that  it needed to be signed but asked what would be the rule of the regional office. He suggested that the process be started earlier for the other CMAs.

The Acting Chairperson asked whether KPMG would be used long term as internal auditors, or whether the function was to be developed internally.

Mr Govender noted that the contract was under review. A decision was taken to outsource the internal audit function and KPMG were appointed until March 2008. However, the Board was currently of the view that although it did not have the resources and technology to perform the function at the moment, it would like to build capacity within ICMA. At the last Audit Committee meeting it was recommended that the ICMA review its structure to include an internal audit function, which meant looking at the appointment of a Chief Internal Auditor and Risk Compliance Officer, to start building capacity. This would go before the governing Board for approval and thereafter the relevant structures would be set up and the position advertised.

The Acting Chairperson asked how much would be spent on bursaries.

Mr Robbertze responded that since the first bursary applicants were for the tertiary year 2007, the only expenditure incurred up until 31 March 2007 was just under R30 000 and it comprised mainly of the actual registration fees the students were required to pay. The study fees would effectively be incurred in the 2007/2008 financial year. Payments were made as and when fees fell due.

Mr Ndlovu emphasised that ICMA only advertised for bursary intakes in November 2006, which was why the figure was not very high. Much of the money would be spent in December this year and the figure would increase because of the difference between the academic year and the financial year.

The Acting Chairperson asked when the Department would be establishing the other CMAs.

The Acting Chairperson said that when the committee visited Mpumalanga in 2005 they visited the area of Driekoppies and Malelane municipalities and were informed about unlawful connections. Those communities were complaining that there was a dam full of water, yet they were not allowed to use it, which was the reason for setting up the unlawful connections. The municipality said they did not have powers to report the matter to the police.

Mr Ndlovu agreed the situation of unlawful connection in the Driekoppies area was very serious. The reallocation of water from Driekoppies Dam and Maguga must be discussed with the Department because it related more to the InkoMaputo Agreement, and the Department would be leading to get the matter resolved. The municipality was finding it very difficult to provide water for household use.

The Acting Chairperson said that this report was a good one for the newly established ICMA.

The meeting was adjourned.