Department of Water Affairs Annual Report and Financial Statements briefing

Meeting report

Department of Water Affairs (DWA or the Department) 2998/09 Annual Report presentation
Mr Trevor Balzer, Programme Manager: Special Programmes, Department of Water Affairs (previously Department of Water Affairs and Forestry) said that his presentation would focus on three key areas, which were highlights, challenges and options available. He provided a thumbnail sketch of the Department’s overall performance, and said that more detailed presentations would follow. Among the highlights of the year were the 29 dams that were rehabilitated and refurbished, Cabinet approval of the Water for Growth and Development Programme, the initiation of the Blue and Green Certification Programme, the finalization of the Forest Sector Charter, and the transformation that the Department was embarking on.

He highlighted five major challenges, mainly relating to investment and funding. These included problems with water resource infrastructure, water conservation and demand management, and the deterioration of transferred infrastructure. He explained that since 2001 the Department had been transferring infrastructure to municipalities. Although funding had been allocated for the refurbishment of this infrastructure, it had been deteriorating. In executing its regulatory role, the Department was working to curb unlawful water use, and was enforcing raw and drinking water quality. It was also monitoring compliance with standards, and working towards increasing its own capacity to monitor. Among the challenges was the act balancing the Department's support to municipalities and its regulatory role. He mentioned that there were schemes that were dependant on Parliamentary approval. These had been submitted to Cabinet, but there were areas of concern, which necessitated a re-think on the capacity of the municipalities to take over the infrastructure. The available options included the implementation of the Water for Growth and Development Framework, and the Learning Academy, which aimed at training graduates and providing them with skills that would enable them to make a difference when placed within the Department. Other options were the reviewing of the current funding model, and the realigning institutions in a way that would enable them to relate to the Department.

Forestry Presentation
Dr Shibu Rampedi, Director General for Forestry, presented performance information and actual achievements against the targets set. She explained that forestry was concentrated in particular areas but limited in others. The main areas were Limpopo, Mpumalanga, Kwazulu Natal, Western Cape and Eastern Cape. She said that the Department had not been able to achieve all that was to be done according to the business plan. Among the highlights was the Cabinet’s approval to formalise the In Situ human settlement in Dukuku Forest, Durban. There had been challenges for government in allowing people to settle in forests, which were conservational areas, but the Department had managed to convince Cabinet that it was possible for people to settle in the area without compromising the conservational aspect of the forest or the people's needs. The Department was successful in developing the National Forest Programme, together with the Food and Agricultural Organisation. Forestry, as an industry, contributed to economic growth, and a target had been set to involve communities in order to create jobs, although the target set for this had not been reached. She outlined the planting of trees, in conjunction with national initiatives, and the target reached for conservation of forests and certain species of trees in line with the National Forest Act. The Department also had to ensure compliance with the two pieces of legislation governing forestry and forest related activities. A study had been done in order to recommend a model to ensure enforcement.

With regard to the sale of timber, Dr Rampedi said that tariffs were set by the Minister on an annual basis in consultation with National Treasury. This year's tariffs, however, had not been implemented due to an intervention by the Minister, who was of the view that the tariffs were too high and did not allow small saw millers to participate in the value chain of forestry as an industry. The sale of timber was an important area as it contributed to government revenue. The Forest Sector Charter was finalised, and was in the process of being implemented. Government would provide 60% of the funds needed for its implementation, and the remaining 40% would be covered by industry. The Charter made it clear that 10 000 trees had to be planted each year to secure forestry as an industry. However, only 413 trees were planted. The Department had not been able to achieve this target due to certain regulatory processes.

With regard to forest fires, she mentioned the Department was expected to have an early warning system, and that it worked together with other institutions such as the South African Weather Services in order to achieve this. For fire management, the Department relied on the assistance of land owners in combating fires. Fire Protocol Associations were established to work together with municipalities. These associations only worked where the land owners were resourced and had money, and this was difficult to implement in disadvantaged areas.

The strategic priorities highlighted for future performance included sustainable resource management and use, strengthening skills and the human resource base, and the speeding up of growth and transformation of the economy to create decent work and sustainable livelihood.
 
Water Services Presentation
Ms Thandeka Mbassa, Deputy Director General: Regions, Department of Water Affairs, said that her presentation would focus on the highlights, challenges and future performance. Among the key highlights of the year was the Municipal Indaba, which addressed various issues. Compliance monitoring was also strengthened to address the problem of pollution by industries, and the unlawful use of water. There was still a lot to be done. The Department provided regulatory support to local government in terms of improving and maintaining drinking water quality. Maintaining good water quality at the local level was a priority, and there were still some problems in this area. In comparing actual performance against targets, she mentioned that over 50% percent of the population had access to water, but that lack of bulk infrastructure was still a problem. Only 22 out of the targeted 32 projects were implemented with regard to economic growth, social development and poverty alleviation. Although the Department had not met the target, she mentioned that these were large projects that took about three years to implement, and were making a huge difference to the lives of people.

Other targets, including the provision of water and sanitation to schools, were not met. With regard to access to water, one million people had been served with water, which exceeded the 494 000 target. Although this was impressive, there was still a lot to be done. The bucket system had not been eradicated in the Free State. One of the challenges cited was the difficulty in balancing between regulating and providing support to the local government. Funding was provided to local government directly, but their success was dependant on the support of the Department. Whatever had already been achieved could not have been done without sector collaboration. There were two schemes that had not been approved by Cabinet. These schemes had not yet been transferred, and were still being worked on. There was some concern with regards to meeting the schools sanitation target, and the reasons for this included the lack of water for construction, and the shortage and rising cost of construction materials. She reiterated that the bucket system was still a problem in some areas.
 
Policy and Regulation
Dr Sizwe Mkhize, Deputy Director General, Department of Water Affairs, went through the sector's performance throughout the year. He said that four feasibility studies had been done. These were done to enable the Department to deal with the changes in demand for water. A discussion paper on climate change had been produced to n the country to respond to climate change. In respect of water allocation, the period for evaluation of water use licences was reduced to twelve months. In terms of water use efficiency, he explained that South Africa was a dry country, and that every drop of water had to be conserved. The Water Wise Campaign and similar projects were aimed at encouraging South Africans to conserve water. The Department also worked with South African National Parks, and engaged with 27 schools and municipalities. The quality of water was being monitored on a regular basis, and there was a need to maintain good international relations, as most of South Africa’s large rivers originated from outside the country.
 
Corporate Services Presentation
Mr Bubele Vakalisa, Acting Deputy Director General, Department of Water Affairs, said that the Department aimed to create a positive media profile. Among the highlighted achievements was the launching of an organisation for Women in Water, sanitation and forestry.

There had been 100% graduate intake from the learning academy. However, this was linked to the budget, and that the availability of funds had an impact on the intake of graduates. It was important to determine whether the learning academy was making a difference, but as yet the Department had not managed to implement the post-training Impact Assessments. The National Youth Development Strategy was also not implemented, because the key figure had been moved to another important project. The six transformation achievements were also mentioned among the achievements. A grievance protocol was developed, but the resolution of grievances was still a challenge. A Turn Around Strategy was also developed to improve the functioning of the Human Resources Department, but as yet the recruitment and selection were not moving at a desired pace. Among the future plans, he highlighted the need to improve on measuring standards and indicators, as had been indicated by the Auditor-General.
 
Infrastructure Presentation
Dr Sizwe Mkhize went through the performance for the year. The achievements included the Inyaka Project, which had been aimed at providing water to areas like Mpumalanga. The Vaal river initiative, which involved Sasol and Eskom, was to unlock mining potential and energy generation in Mpumalanga. The Berg River Project was implemented to provide water to the Western Cape in order to meet the demand. The Nandoni Bulk Distribution, which aimed at providing water to the community, was under way and was going according to plan. There were also other projects aimed at rehabilitation and refurbishment of dams. Twenty dams were under construction, and nine were at the design stage. About R5 billion had been spent on these projects. He compared the actual performance against the targets that had been set.

Dr Mkhize noted that the Bill to establish an Infrastructure Agency had not been tabled. The feeling was that not enough consultation had been done between the stakeholders and the Department. The Nandoni dam was at 95% completion. The Dam Safety initiative had been implemented and twelve dams had been refurbished.

Financial Statements Presentation
Mr Onesmus Ayaya, Chief Financial Officer, Department of Water Affairs, said that his presentation would show the expenditure trends, provide an explanation for the under spending and go through previous audit outcomes as this was important in understanding the progress being made. He provided an overview of the spending trends and year on year comparisons.

Under spending in both years was related to the development of infrastructure. The under spending for the year under review was 7.2%, and this was due to the De Hoop project. He explained that mining houses were key players and that the implementation of the project was reliant on miners signing the agreements. Due to the recession, and the plummeting of commodities, miners were reluctant to sign the agreements, and this had caused a delay in the finalisation of the project.

Mr Ayaya highlighted the achievements and challenges with regard to the transfer of operating subsidies. Subsidies included loans incurred in the past, such as the R1.8 million to Komati Basin Water Authority (KOBWA), a joint venture between South Africa and Swaziland. KOBWA was the legal owner of Droppies dam and Maguga dam. When these dams were being built, funds had been raised by way of a loan, and as a party to that agreement, South Africa had to service that loan. The allocated budget was not sufficient. He explained that the money obtained from donor funds was not used for infrastructure, but instead went to technical assistance in formulating plans and strategies.

Mr Ayaya went through the history of Audit outcomes, and highlighted the concerns raised by the Auditor-General for the year 2008/2009. There was an improvement in the Department’s performance, and this was due to the policies that the Department undertook to rectify identified problem areas. He highlighted the functions of the internal audit committee. The audit committee agreed with the findings of the Auditor-General, and, following a debriefing session with the Auditor-General, an action plan had been developed.

Discussion
Mr G Mokgoro (ANC, Northern Cape) said that too many documents had been presented and suggested that the Committee should send their questions in writing to the Department, so that the Department could also respond in writing.

Mr O De Beer (COPE, Western Cape) extended an open invitation for Ms Thandeka Mbassa to visit the areas like Aberdeen and Graff-Reinet and to inspect the quality of water that people in those areas were drinking. The water was white in colour, and drinking one glass of water was enough to make a person sick.

The Chairperson said that the 32 completed projects that were mentioned in Ms Mbassa's report had to be seen. She said that there were children in the rural areas who were drinking water from dams. She mentioned Lubisi dam in particular, and encouraged the Department to accompany the Committee in visiting this area. She suggested that the money that had been rolled over, from the De Hoop project for instance, should be used in other areas where there was need. Oversight would be done with the Department, and the provinces had to be monitored with regards to the projects.

The meeting was adjourned.