Department of Water Affairs 2013 Annual Performance Plan, Strategic Plan & Budget continuation; Comprehensive Investment Programme for Water Infrastructure Development: Department briefing

Water and Sanitation

27 March 2013
Chairperson: Mr J de Lange (ANC)
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Meeting Summary

The Auditor-General of South Africa (AGSA) had given a qualified audit opinion on the Department of Water Affairs for inefficient billing and a lack of control over costs.  The situation on the quality of predetermined objectives was improving in the new financial year.  Better controls were being put in place at the Water Trading Entity, given the vast number of transactions it conducted.  The AGSA was unhappy with various aspects of record keeping at the Department.  There had been problems in supply chain management, contracts, overtime payments and invoices.  There were some old loans granted to municipalities before 1994, some of which no longer existed after changes to municipal boundaries in the meantime.  Members felt that these loans should be written off as they led to qualifications while there was no hope of them being repaid.

At present, with just a few hours left of the financial year, the Department had only spent 93% of its allocation.  In future, Treasury would take action early in the year where it was apparent that a provincial or municipal authority would fail to spend its allocation, and funds would revert back to the national department.  This would entail a need for better planning.

The Committee was irate that some long-standing disciplinary matters had still not been solved.  There was also a problem with that way that water was metered.  In most areas the calculation was based on the area of the owner's property rather than actual usage.  A meeting was to be held between the stakeholders shortly to resolve these issues.

Members were given an update on the spending figures, which were getting closer towards the 95% mark.  Some funds had been committed as pre-payments, and these could not be used to calculate current expenditure.  Measures had been put in place to curb misconduct.  The Water Trading Entity did not have plans for a compliance office although the Committee felt this was not needed as both entities fell under the same financial legislation.

Members questioned the financial figures.  There was concern over water losses.  Free basic water allowances were also seen as losses.  A major problem was that national and local government had different financial years, which led to uncoordinated planning.  The Committee requested that a workshop be held to address these issues.

Members were told that the suspended Director-General had been appointed on probation.  He had tried to get the Chairperson to allow him an audience with the Committee, but this could not be allowed.  The Department had to proceed with the disciplinary hearing according to the accepted procedure and Parliament could not interfere in the process.

The Committee was briefed on the status of several projects.  One of the problems was the availability of suitable pipes, and there was competition for resources with Botswana.
 

Meeting report

Auditor-General of South Africa (AGSA) findings 2011/12
Mr Wikus Jansen van Rensburg, Auditor-General of South Africa (AGSA) Senior Manager: National D,  briefed Members on the findings on the audit report on the Department of Water Affairs (DWA).  There had been a qualification on billing issues.   There had been discussion on alternative ways to bill for water use where no meters were available.  He said this would be in the near future, although not in the current financial year (FY).  There had been meetings with key customers. 

Mr Jansen van Rensburg said that there was still irregular expenditure.  There were preventative measures in place.  Some long-term contracts were regarded as wasteful.  The management report would be completed soon, but the amounts were less than in previous years.  There were preventative controls in place.

Mr Jansen van Rensburg said that the next qualification was on property, plant and equipment.  Research had been conducted to identify abnormal costs.  Best practice had to be identified.  Heavy rain and a certain amount of strike action were normal.

Mr Jansen van Rensburg moved on to the pre-determined objectives.  There had been no improvement in 2012/13, but there were significant improvements for the 2013/14-year.  There were still problems, mainly in a lack of clarity in the wording. 

Mr Jansen van Rensburg said that there were still a number of issues of non-compliance.  There was provision for a new post of compliance officer at the Water Trading Entity (WTE).


Discussion
The Chairperson felt that this should be a simple matter to control.  If everyone was responsible no one could be blamed.

Mr Jansen van Rensburg said that human resources (HR) would always be a concern, especially in terms of finance.  There was some continuity in the appointments.  Proper business processes were needed, otherwise it would be difficult to conduct an audit.  Key leadership positions were now being filled.   Information and Communications Technology (ICT) played a big role, given the volume of transactions.  Long-term plans were in place to convert old to new systems. 

The Chairperson would tie WTE down to time frames.

Mr Jansen van Rensburg was talking about one or two years. 

The Chairperson said this must be done in a shorter period.

Mr Jansen van Rensburg said that AGSA was still trying to fix historical problems.  This made it impossible to produce half-yearly statements.

The Chairperson said that WTE had at least moved from a 'no report' status to a qualified one.  There would still be a qualified report in the current FY.  He hoped to see some improvement.

Ms Neliswe Mhlongo, AGSA Manager, said that there had been two paragraphs on moveable assets and goods and services.  These had been problem areas in 2010/11 and had been qualified in 2011/12.  No problems were expected for 2012/13.  There were three qualified paragraphs.  These were on pre-payments, goods and services, and commitments and accruals.  There was a project to audit the financial statements.  Disclosures and balances were now being dealt with.  The different elements had to be identified from the original bulk infrastructure.  Records had been kept, but particularly in advance payments the elements not been placed in one of the three categories.  WTE had agreed to go back at least two years and update the records.  The AGSA was checking that this was now being done.  A report might be available for the next meeting with the Committee.

Ms Mhlongo said that the qualification on immovable assets came from 2010/11.  There had been a lack of supporting evidence.  Most documents had been obtained, and it was not a matter of looking at the evidence.  If it was satisfactory then progress could be reported.

Ms Mhlongo said that there were quite a few problems on irregular expenditure, particularly in the failure to obtain three quotations and extension of contracts.  Sometimes it was not possible to find three different quotes, but Treasury did have processes for this situation. 

The Chairperson said that this Department was always good at taking short cuts with tenders.  It had cost the whole top leadership their jobs.

Ms Mhlongo said that there were also problems with the policy of paying invoices within 30 days.  Some of the problems might arise from transfers and subsidies.  Another issue was around overtime payments, which exceeded the 30% mark set by Treasury in places.  Most of these problems were found at regional offices.

Ms Mhlongo had also looked at the issue of loans, which had resulted in a qualification in the previous year.  The only problem now was the payment of interest on the loans granted.  These were old loans.  The loan to Amajuba had been written of.

Mr Trevor Balzer, DWA Acting Director-General, said that some loans dated back to before 1994.  Government had had the right to make loans to municipalities at the time.  Amajuba was one of these.  As local government had been transformed, the ownership of the loan had fallen through the cracks and none of the succeeding municipalities was willing to take responsibility.

The Chairperson felt that it was perhaps time for the AGSA to let go on these old loans.  He had had the same experience in the Justice and Constitutional Development Committee, where there had been old bantustan loans.  The prescription period might also be an issue.  It was unfair to expect the current management to keep accounting for such old debt.

Ms Mhlongo said that the loans were still on the financial statements. 

The Chairperson said that punishment must be levied if a culprit could be identified, but it was ridiculous to keep qualifications on the books in such old cases.

Ms Mhlongo said that on the audit of predetermined objectives, there were issues with the usefulness of some of the information and the definition of indicators.  There had been an improvement, and WTE understood what was required.  There had been a big improvement in many areas.  In the past issues were expected in every aspect.

The Chairperson said the control of people falling under finance should now fall directly under the Chief Financial Officer (CFO), no longer their respective departments. 

Ms Mhlongo said that this had been implemented at the offices they had visited.  It was still too early to evaluate the effectiveness. 

The Chairperson could now hold the CFO directly responsible.  Before 16 April the Chief Executive Officer (CEO) would send the Committee an update.

National Treasury input
Ms Marissa Moore, National Treasury Chief Director: Urban Development and Infrastructure, said that the improvement on the performance indicators remained critical.  Targeted performance was needed for the different projects.  Reporting was needed on the original plans and target dates.  Total expenditure stood at 93%, although it was still a working day and could improve before the close of business.  The unspent portion was R590 million, while the expenditure at the end of the third quarter was only 47%.  She hoped this was how it had been planned.

Ms Moore said that these areas were mainly in Programme 4.  These included Harties and acid mine drainage (AMD) projects.  National Treasury wanted to see improvement in areas of ongoing work.  The reporting had been on completed bulk water schemes.  The number of completed schemes was down from 36 to twelve, but a lot of expansion work was being done on existing schemes.

Ms Moore said that National Treasury had agreed that a new way of transferring old schemes would be presented to Cabinet in June 2013.  Support would be given on the grant for municipal infrastructure.  They had met DWA on the criteria.  Signed contracts were now needed by 1 July 2013, failing which transfers would be stopped.  Interventions would be made where there were trends of under-expenditure.

The Chairperson liked this plan, but was concerned that a lot of money would then come back to national government if local authorities did not have the capacity.  The burden would then fall on the national department, and this might hamper delivery of projects.  He was concerned that spending might then only start in October after a replanning process.

Ms Moore said that more clarity was needed on the mandate of catchment management areas (CMAs).  There were many people at the DWA, and there was a lot of use of consultants.  The subsistence and travel bill alone in the Medium Term Expenditure Framework (MTEF) would be R200 million.

The Chairperson asked that the parties meet to find solutions, and report back to the Committee.  There should be pre-emptive action with municipalities.  He felt that planning meetings should be held at the end of April already to discuss specific allocations, and whether they were feasible.

Mr Jansen van Rensburg said that a proper change management process must be in place.

The Chairperson said that this should be put on the agenda for the proposed meeting. 

Mr Jansen van Rensburg said that the WTE Directors of Finance and of Revenue had been under suspension for two years.

DWA Expenditure report [See DWA Annual Performance Plan]
Introductory discussion
Mr Squire Mahlangu, DWA Acting DDG: Corporate Services, said that the hearings had been held and the findings would be communicated.  The DG and other officials had been dismissed.

The Chairperson was irate that the process was taking so long.  He felt that Mr Mahlangu was not being honest with the Committee.  His very first answer on meeting the Committee had been that the matter in question was confidential.  This did not apply in Parliament.  He would discuss Mr Mahlangu's competence with the Minister.  His attitude to Parliament was unacceptable.  He would ask the Minister to send another official to discuss HR issues, and that this incident should be placed on Mr Mahlangu's record.

Mr Balzer undertook to investigate the reason for the lengthy delays with the disciplinary hearings.  He would deal with Mr Mahlangu.  Some of the findings would be compounded.  Many municipalities were battling with their own audits.  Ms Moore had identified some of the issues.  There was ongoing communication with the municipalities.  Technical gaps had been identified at 24 district municipalities and assistance would be provided.  The Minister had given instructions to schedule a meeting with the executive mayors of the district municipalities and with the provincial departments.

Mr Balzer said that the problem with water metering could be fixed in a year.  A large number of account holders had their accounts based on area to be irrigated rather than actual consumption.  This stemmed from the old Act.  Regulations had been published for comment.

Mr Helgard Muller, DWA Acting DDG: Policy and Regulation, had sent a request to the office requesting an update.  The information had not yet been forwarded.

The Chairperson said that the new policy might be that a meter be installed as a condition of becoming a user.  The Vaal River was being used illegally.  Users in this area paid on a volumetric basis and there was no way of knowing how much water they actually used.

Mr Balzer said that the question would be on who paid for the meters.  In the consultation process users had already raised this question.  Some of the meters for bulk users were expensive.  This also impacted on the authorisations that were already in place.  These were also mainly based on an area calculation.

Mr Jansen van Rensburg said that the only issue resolved thus far was that of opening balances.  If this were found to be impractical there would not be a qualification on the previous year.  The accounting methodology had to be determined.

The Chairperson asked that he be forwarded a copy of the agenda for the meeting.  This meeting would be held in April 2013.  He congratulated the three organisations for the way they were working together.  They could not work in isolation. 
 

DWA Expenditure Report Presentation
Ms Nthabiseng Fundakubi, CFO, DWA, presented the expenditure report.  This had been updated on 27 March 2013. The spending had in fact increased to 95%, which was R8.5 billion for the FY to date.  There was still room for improvement before close of business.  DWA worked on a cash-based system.  There were sometimes problems with implementing agents and entities.  Some deposits had to be made on the books of the DWA as pre-payments for the AMD project.  If this was considered, total expenditure would be up to 98%.

The Chairperson was impressed.  The big under-spender was Mr Muller's branch.

Ms Fundakubi said that there had been under-spending in terms of accommodation.  Money had been claimed back from WTE.  This had amounted to R23 million, now reflected as under-spending on DWA's books.  It could not be used for other purposes.  DWA had asked National Treasury to authorise a shift so that R18 million could defray the over-spending in one programme.  This authority lay with the Minister.  There had been under-spending of R29 million on AMD.  DWA wanted to move this to implementation of AMD

Ms Fundakubi said that there had been under-spending in Programme 4.

The Chairperson requested a separate report on the three areas mentioned.

Ms Fundakubi said that rollovers would be requested on these areas, as delivery could only take place in the following FY.  The amounts were R16 million for Harties and R162 for the regional bulk infrastructure grant (RBIG) projects.  Pre-payments had already been made on these projects. 

Ms Fundakubi said that the comments on the financial control agreed with those of the AGSA.  DWA had gone to all regions to reconcile figures.  The documentation had generally been provided.  The figures had not been recorded correctly in the asset register in some cases.  Regarding goods and services, comparative figures from the previous FY had been provided.

Ms Fundakubi said that the register of irregular expenditure had been updated.  A misconduct board had been established to examine all cases, representing all divisions.  On commitment, there had been a reconciliation.  All requests had been captured in the system.  The commitment had been incomplete on RBIG projects.  The system would be complete by the end of the 2013/14 FY.

Ms Fundakubi said that of the R275 million qualification on immovable assets, support documentation had been provided on R224 million.  The balance was now accounted for and the assets had been added to the register.  On movable assets, the records regarding the old loans would be updated.  All efforts were being made to resolve this issue.  In terms of compliance, there had been a real improvement in terms of financial management.  Contract management was still an issue receiving attention.  No contracts would now be signed without proper authorisation.

Ms Fundakubi found it difficult to indicate what the audit outcome would be.  A different approach had been taken in the current FY.  The books were closed on 31 March, and information was provided to the AGSA on 31 May.  Interim financial statements were submitted with full disclosure.  The AGSA was auditing the disclosure notes.  The audit outcome was expected in April.  Communication had improved.  Apart from the normal meetings, there were now quarterly meetings with the Minister. 

Ms Fundakubi said that DWA was working towards a clear audit report.  Supply chain management compliance would be improved.

The Chairperson asked what the problem was.  The three quotation requirement was clear.

Ms Fundakubi said that while three or more quotes might be invited, fewer than three companies might respond.  There was a practice note to cover this situation.  The Department could continue based on the quotations received.  There had been meetings during the week to clear issues such as this, and she asked permission to report on this after the interim financial statements had been prepared.

The Chairperson said that it seemed like a recording issue.  There should be an explanation of why there was a deviation from the procedure, but it seemed that some of this recording might have gone missing.

Ms Fundakubi said that internal controls had been improved.  The compliance office had been established and there had been some improvement.

The Chairperson said that WTE did not have such an office, and DWA seemed to be performing better in terms of compliance.  All efforts were in place to work towards an unqualified report for 2013/14.

Mr Fazel Ismail, WTE Acting CFO, said that WTE did not have a compliance office.  In other industries this was a very senior position, more than just keeping the documents.  An office was being established to cover financial and other aspects.  The overall business model and structure had not been approved to the best of his knowledge.  The drafts had been submitted to a number of places.

Mr Balzer said that the final structure for DWA had not been signed off yet.

The Chairperson said that this part should be approved, as it was leading to qualified audits.  Important changes needed to be made to the DWA.

Mr Balzer said that until the structure was approved, he would appoint a person to fulfil the function in the meantime.

The Chairperson felt that one unit could cover both the DWA and WTE.

Mr Balzer said that the two CFOs felt that separate offices were needed due to the different manner in which the entities operated. 

The Chairperson said that it made sense to have two different CFOs, but the same law applied and a single office could service both entities.

Mr Ismail said that the issue was moving from a SAP [Systems, Applications and Products in Data Processing] based system to an ECS [Enterprise Commerce Systems] system.  The conversion had been under way for two months in different phases.  The current functionality had to be brought over to a new system.  The planned completion date was October 2013.  Operational functions would be addressed by the second phase, even allowing for access from smart phones.  The conversion should be completed by the end of 2013.  Parallel operation would still be needed.

The Chairperson said that people had been contracted to do this.  WTE should be setting the conditions.

Ms Fundakubi said that all requests from the Standing Committee on Public Accounts (SCOPA) had been met.

The Chairperson asked which positions were still vacant.

Mr Balzer said that posts at Deputy DG level had been advertised.  Four posts were now in the interview stage.  On conclusion of the disciplinary hearings those posts could also be advertised.

Discussion
Dr S Huang (ANC) was concerned that Amajuba had to take over the old loan.  He agreed that it could not now be reclaimed.  He asked how much was involved.  The amounts of under-spending in various categories seemed to be the same.  Some of the calculations seemed to be incorrect.  He asked why there were still sixty-day payments contrary to the call from the President to pay within 30 days.  He could not understand the delays.  There was under-spending on the water management programme.  The figures did not compare with the figures of the previous year.  The DWA was reporting challenges in the delivery of goods and services.  Amounts of less than R500 000 could be authorised without quotations.  This was still big money.

Ms M Wenger (DA) was concerned about the effect on municipalities.  They would not be able to afford to pay engineers.  On volumetric calculations, there were losses of up to 40% being reported.  She did not think these figures were realistic.  Water provided by municipalities as the free basic allocation were not metered and were reflected as losses.  The equitable share should cover this allocation.  She continued to argue that the alignment of the financial years for national and local government.  This led to the perception of fiscal dumping as a result of this misalignment.

The Chairperson said that this was leading to uncoordinated planning.  Planning should be centralised.  He hoped that these issues would be raised during the budget vote.  The Minister of Finance was not aware of this problem.  The funding and planning models were not working due to this fragmentation.  There was some movement.

Ms B Ferguson (COPE) also addressed the issue of municipalities.  There should be a progress report to the Chairperson in May, as the end of June might be too late.  On the pre-1994 debts, the Chairperson should highlight the problem at ministerial level.  She asked if the spending patterns had been planned in this way.  It seemed the system was not working with a rush towards the end of the FY.  She wanted more clarity on the problem with the payment of suppliers.  She asked for a short report on what had happened to the previous DG.

Mr J Skosana (ANC) expanded on conditional grants.  The issue had to be handled with care.  Some urban municipalities were surviving on this grant.

The Chairperson felt the need for a one-day workshop to look at the different resources.  A holistic picture of the spending pattern was needed.  He asked DWA and National Treasury to prepare an agenda for such a workshop.  An overall plan was needed. 

Mr Skosana agreed on this point.  The Deputy DG responsible for finance should consider the directors employed in the various regions.  Conditional grants should be handled correctly.

Ms Ferguson asked if the various agencies should be discussed. 

Mr Balzer said that the DG was currently on suspension and there was a disciplinary process.

The Chairperson understood that the DG had been appointed on probation.  Clearly he had not performed satisfactorily.

Mr Mahlangu confirmed that this was the case.

The Chairperson had received a text message from the DG, who wished to present his case.  The Committee was not a court of law.  The processes were already under way.  The suspended DG could not be allowed to present a case to the Committee.  The proper labour practice had to be followed.  The Committee would not adjudicate on labour disputes.  The best it could do was to urge DWA to deal with this matter expeditiously and correctly.  The Committee could not question the DWA on the detail of the work.  This could be seen as politicians meddling in an administrative process.  The Committee could not intervene, but could pass comment once the processes were complete.

Mr F Rodgers (DA) said that if one was on probation, that phase could be terminated.  He asked why disciplinary action was needed.

The Chairperson said that a person did have a right to answer accusations against him.  He had thought that the appointment of DGs was permanent, but now understood the concept applied in this case.

Mr Balzer could not comment further on the matter.  On Amajuba, there was disclosure in the Annual Report.  It was a loan of R21 million for the purchase of a regional water scheme by the municipality responsible for the area at the time.  The question was whether the loan was the responsibility of the new municipality.  In the annual financial statements, there were still some other old loans to the value of R91 million.  One was as low as R1 000, but would remain on the books until liquidated.

Mr Balzer noted the constraints on the Municipal Water Infrastructure Grant (MWIG) and the issue of losses.  Free basic water might be referred to as non-revenue water, and would actually constitute a loss.  The issue of conditional grants would be on the agenda for the proposed workshop.  There was a rural bias towards communities battling with limited service delivery.

Mr Muller said that the most detailed study on water had recently been released.  Data had been gathered from 132 municipalities, covering 75% of the population.  There should be a defined volume of free water.  The current level of non-revenue was at 38%, which compared to the world average of 36%.  This meant it was either not billed or the subject of physical losses.  It was a good figure compared to other developing countries.  He would forward a copy of the report.

Ms Thandeka Mbassa, DWA DDG: Regions, said that a number of factors led to late spending trends.  Demand plans now had to be submitted before the end of the FY so that they could be addressed at the start of the new FY.  Construction of projects was often only completed late in the FY.  It was difficult to understand why invoices were late.  It reflected on the programme management capacity of the DWA, and the Department was working to improve the situation.  There had been improvements due to the implementation of RBIG.  Currently, the Minister was helping with the recruitment of all senior management posts.  There should be some improvements.  She knew the dynamics in the regions.  Different people were needed in different areas, and this influenced the choice of candidate.  The environment did not allow for capacity building.  There were programmes in place to remedy this.  Assessments had been done on staff.

Mr Skosana understood the response. 

The Chairperson sympathised with Ms Mbassa, but some caution was needed.  The issue had to be approached sensitively, and apartheid-style stereotypes could be entrenched based on language and culture.  One must not pander to such sentiments.  Employment strategies needed to be reviewed.  Skills might outweigh ethnic considerations.

Ms Fundakubi said that the analyst's report would not be the same.  She had taken note of the remark on the incorrect calculation.  On the 30 day payment, the challenges were more on the big accounts.  An organisation like Pangisa did not submit accounts on time, and were a major customer.  There were weekly reports on the small, medium and micro-enterprises (SMME) hotline.  Municipalities were the implementing agents, and she admitted that the lack of alignment in FY dates was a drawback.

The Chairperson said that there were a number of employers in the sector.  He asked if there was a way to see the total number of people employed in the sector.

Mr Balzer had data for each entity, but not an overall picture.  He would investigate the possibility of creating one big HR plan.

Dr Huang did not think his question had been answered completely.  He asked which figures were complete.  Under-spending in Programme 2 was R314 million.  There was a problem with procurement. 

Ms Fundakubi said that with Programme 2, the report had been compiled before the figures on AMD and other sectors had been updated.
 

DWA Comprehensive Investment Programme for Water Infrastructure Development Briefing
 Ms Zandile Mathe, DWA Acting DDG: National Water Resources Infrastructure, outlined the budget allocations for a number of projects.  There had been some objections from the mining houses on the one project.  The review by a panel of experts revealed that the other planned phases on this project were not needed at present.  This was for the Olifants River Water Resources Development Project (ORWRDP) Bulk Distribution System (BDS) projects.  Phases 2b and 2c would go ahead with the support of the mining houses.  There were two phases to the Groot Letaba River Water Development Project (GLeWAP) project.  The first was the raising of the Tzaneen Dam, and the second the construction of a new dam.  R230 million would be spent on raising the Clanwilliam Dam.  R100 million had been allocated to the Mokolo project.    Raising the Hazelmere Dam had been investigated.  All the preparatory work had been done.  An [enterprise resource planning [ERP] system upgrade was planned.  The total budget was R2.2 billion.  One source of funding was the budget vote, but there was also revenue generated.  (See presentation document)

Ms Mathe said that with the De Hoop project, progress had been made.

The Chairperson concluded that three to five projects were fully under way and others were at different stages of development.

Ms Mathe said that there was a relationship with the developer that was up to speed.  Time lost due to strikes had been made up.  Inclement weather had also been a factor, but the whole application had been spent.  In Tzaneen there had also been delays, and money had been re-allocated to other projects.  Of the dam safety and rehabilitation allocation, 89% had been spent and the balance would be re-allocated.

The Chairperson was understanding on big projects.  He would not tolerate under-spending on smaller projects such as dam maintenance.  R26 million of this budget should never be rolled over.

Ms Mathe shared the sentiment and had taken it up with her colleagues at DWA.  A better design was needed with pre-qualified tenders.  In the Clanwilliam project, some R27 million had been re-directed to the South African National Roads Agency Limited (SANRAL) for road construction.  The road had to be moved.  On the Mokolo Crocodile Water Augmentation Project (MCWAP), the strikes at the Medupi power station had affected progress.  At Hazelmere there had been delays due to a change in design.  The allocation was R160 million, but a panel of experts had brought in a new design.  The revised design cost another R200 million.  The work had stalled, but DWA was now ready to go on site with a budget of R360 million.  At Magani there had been problems with the pipes.  The diameter requested was no longer used by DWA.  The design had to fit the existing structure.  Suitable pipes had since been sourced.  Only two or three companies dealt with this in the country, and there were competing projects in Botswana.

Ms Mathe said that the Ermelo emergency work had not yet been invoiced.  There had been delays with the appointment of the contractor for the SAP project of up to eight months.  She was confident in the ability of the company appointed to do the upgrade.

Ms Mathe was confident that DWA would spend 100% of its budget.  She reported on some major projects undertaken by WTE, where DWA was the contractor.  Delays had been experienced with the delivery of pipes at Nandoni.  The quality of the pipe was being evaluated to prevent further losses.  The picture might look beautiful, but there were still riots and marches in the area as the municipality was still not ready to receive water supply.  The Minister and the Premier of the province were trying to reach a solution.  There was a similar situation at Inyaka and Hluhluwe.  Most of these programmes should be commissioned on time and within budget.

Discussion
The Chairperson asked what had happened to the big infrastructure plan.

Mr Balzer replied that the plan was constantly modified.  It was a bit messy, and a lot of detail was lost.  It made more sense to look at the plans within each province.

The Chairperson wanted to see the big plan retained as an aid to National Treasury.

Mr Balzer said that some information had been provided in the documentation, which could be discussed at a later time.  There was a bar on the presentation indicating where DWA stood in the implementation, but time-frames still needed to be added. 

The Chairperson noted that the contributions of the different aspects, such as planning and construction, were indicated.

Mr Balzer advised that the figures presented were cumulative.  Underlying that would be detailed project plan.

The Chairperson was assured that DWA knew what it was doing.  Four or five projects would be rolled out shortly but the rest were in a less advanced stage.

Mr Rodgers asked how the quality and availability of pipes would affect projects.

The Chairperson added that the projects in Botswana would cause further limitations.

Dr Huang asked what was meant by R87 million in a suspense account.

Mr Balzer said that on some contracts, imported pipes were being used.  He was negotiating with his colleague at the Department of Trade and Industry (dti) on the issue.  A resourcing plan was needed to go with major projects, specifying which products were available locally and which had to be imported.

The Chairperson was happy that previous inputs on indicators had been incorporated into the current documents.  This showed that DWA was on the right track.  There were a number of outstanding issues.  Some of the entities had not arrived.  There were some important issues that still needed to be addressed such as the Presidential Infrastructure Coordinating Commission (PICC).  He wondered how DWA was dealing with the Promotion of Access to Information Act (No. 2 of 2000)  (PAIA) and the Promotion of Administrative Justice Act (No. 3 of 2000) (PAJA).  The AGSA's report on consultants had not been interrogated, and the management report was not yet available.  There were some areas that were not on the programme but should be discussed, such as water allocations.  On the regional front, there were a lot of bulk issues to be addressed.  This was the biggest part of the budget.  He asked Mr Balzer to compile a list so that meetings could be scheduled.  He reminded the DWA of the issues which needed to be discussed at the meeting with municipalities.  He summarised the main points discussed at the meeting.  He congratulated the DWA staff on the progress made.  He urged the DWA to move on the disciplinary issues.  Members were being pressured to intervene, especially regarding the hearing on the DG, and DWA needed to supply the information needed.  Matters must run their course before Members intervened.

The meeting was adjourned.

 

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