Minister on Business Processing Re-engineering Committee; National Environmental Management Laws Second Amendment Bill [B13-2012]: proposed amendments by Department of Environmental Affairs

Water and Sanitation

16 April 2013
Chairperson: Mr J De Lange (ANC)
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Meeting Summary

The Department of Environmental Affairs (DEA) interacted with the Committee on the most recent draft of the National Environmental Management Laws Second Amendment Bill) [B-2013B] (NEMLA). Various substantial amendments were made for uniformity of wording. The Chairperson noted that the amendments were well covered and asked for a final draft of the amendments to be concluded to enable the caucuses to discuss the Bill.

The first presentation was made by Ms Edna Molewa, Minister of Water and Environmental Affairs. She gave an update on the activities of the Business Processing Re-engineering Committee (BPRC). She spoke to development of water democracy, the water tribunal, and water boards. Her presentation was well received and it prompted active discussion on how much time remained for the BPR Committee to work, the functions of the Department of Human Settlements and how they were coping with sanitation and human resources issues within the Department of Water Affairs. The Minister said that the issue of human settlements and sanitation was deemed necessary considering that several people still lacked adequate sanitation; it was a prerogative of the President and was being given priority in implementation. The reduction of water boards was a decision made on her Committee’s recommendation and that there was research undertaken to make the decision. The decision was backed by facts and statistics. She spoke to the issue of human resource reorganisation in the Department and observed that recruitment of a Chief Financial Officer (CFO) was still pending, whilst there was robust engagement on the disciplining and possible dismissal of the Director-General (DG).

The second presentation was made by Mr Steve Kenyon, Senior Economist, National Treasury. It was on sources of funding of water infrastructure.  It was applauded by members as very informative, but it was also very provocative. The core of the presentation was local government’s role in delivering water services and water infrastructure funding. It was observed that under the Constitution local government was granted extensive powers to raise revenue in that a municipality should charge cost-reflective tariffs for the supply of water. This was because high levels of poverty meant that funds from national revenues were required to fund the delivery of services to poor households.

A summary of the transfers available for water and sanitation was given. The Urban Settlement Development Grant (USDG) had R9 billion which was mainly for providing serviced land, including water and sanitation, MIG had R14.4 billion with over R7 billion for water and sanitation, Municipal Water Infrastructure Grant (MWIG) of R603 million, Rural Households Infrastructure Grant (RHIG) of R107 million, an indirect grant called Regional Bulk Infrastructure Grant (RBIG) of R3.2 billion and R16.1 billion in operations and maintenance funding for water and sanitation in the Local Government Equitable Share.

It was also observed that rural areas were leading in backlogs but were making the fastest reductions, while urban areas extended access to the largest number of households. That there were substantial increases in infrastructure transfers, especially since 2007 while funding for water and sanitation was a major part of this.

The presentation elicited the most active debate and discussion. The Chairperson and members were compelled to ask Treasury representatives present about the equitable share of funding to water boards; they held that currently municipalities could use funds allocated for water to meet their recurrent needs because there was no system of accountability back to Treasury once such allocations had been made. However, there was consideration for a Bill to seek greater transparency and accountability of such funds to municipalities. Given the practice of funding water boards through municipalities there should be a vibrant law to address the ill-treatment and inequity between those municipalities which spend money to fund water boards and those which, opt to spend their funds on other areas. It was also recommended that a political and executive decision be reached to redress the inefficiency of water funding infrastructure delivery with immediate effect.

There was also a presentation on Strategic Integrated Projects (SIPS) which for purposes of water covered SIP 18 National Water and Sanitation Infrastructure Master Plan. It was observed that the objective was to ensure a sustainable supply of water to meet social needs and support economic growth as well as a comprehensive sanitation service that enhances community wellbeing, reduced health care costs and improved productivity; electricity generation, mining, and agriculture all depend on are supply of large volumes of water. The presentation also covered all the other SIPs (SIP 1-17) majority of which touched on water use and water resources.

There were three other important briefings which related to the days deliberations namely: a briefing on the comprehensive investment programme for water infrastructure development, and a briefing on Actions Taken in “water hotspots”.

Both briefings discussed the normal scarcities of national freshwater resources and service delivery. The Department said such inefficiencies had contributed to diminishing availability of water and increasing competition between the various users. As a result, urgent reforms of water policy and water justice were an essential aspect of the government’s policy of reconstruction and development and actually remained very relevant issues to date.

Meeting report

Chairperson’s Opening Remarks

The Chairperson read the day’s agenda noting that there was a comprehensive record of all amendments and technical matters amongst others to be considered. He reiterated the need to deliberate the amendments so that Members could finally meet with their party caucuses to obtain their mandates. The Department of Environmental Affairs DEA presented the pending technical amendments from the previous meeting as agreed.

National Environmental Management Laws Amendment Bill (NEMLA) draft: Deliberations with the Department of Environmental Affairs (DEA)
The Department of Environmental Affairs (DEA) presented to the Committee the updated draft of the National Environmental Management Laws Amendment Bill (NEMLA).

The amendments marked in yellow were those processed but not agreed after the previous discussion and those in blue were not discussed. Pink denoted amendments processed.

It was noted that Mr Alfred Wills, Deputy Director-General: Environmental Advisory Services, DEA, had requested to be exempted from the day’s proceedings.

Long Title
• Section 1 – Chairperson said the words “removing the conduct” were not removed in the previous draft
• “Environmental” had been replaced with “environment” in the entire bill. The Chairperson asked if this was the style to be adopted for the entire Bill. It was agreed that this would be the term used to replace environmental.
• Section 3 – no changes except for a word which had been omitted was added and published “environment outlook report”
• Section 4 – a heading was added which was not there previously
• Section 5 – Adv Lindy Garlipp, Chief Director: Law Reform and Appeals, DEA, said that in concurrence with the Minister of Environmental Affairs, the Minister of Mineral Resources would implement the Act.
• Section 6 – subsection 2 to 1
• Section 6 (a) should have read “by the substitution in subsection 2 for the words preceding paragraph a for the following”

Clause 1, 2 and 3 – the Chairperson noted that there were no changes to be made.

Clause 4 – Section 23 was amended, giving the Minister power to develop regulations for norms and standards for sensitive environmental areas.

Clause 5 – nothing was raised in relation to this clause.

Clause 6 – the Chairperson noted that all amendments had been made and they were well done.

The Chairperson noted that the approach of the lawyers should be emulated as a means of dealing with the predicament of Section 27 of the Constitution of the Republic of South Africa which protects the right to access to water.

Clause 7 – only technical amendments were noted.

Clause 8 – Dr S Huang (ANC) requested that the change of arrangement of the words referring to Minister of Mineral Resources be made, it was agreed. The chairperson responded that the wording was a stylistic and drafting convention which should be left to the lawyers to advise and revert to the Committee at the next sitting.

Clause 9 – no change.

Clause 10 – no changes were noted.

Clause 11 – changes were noted.

Clauses 12, 13 – with respect to emergency situations there was a small change made so that emergencies were combined with disaster. The Chairperson was concerned with the imprecise manner of the clause because it could be construed to mean that terrorist attacks also fell within this clause.

He further asked why the use of style of dividing issues in Sections (a) and (b). State advisers responded that this was done to avoid the use of long sentences.

At this point in time the Minister for Department of Water, Ms Edna Molewa, arrived accompanied by a delegation. The Chairperson welcomed the Minister and continued with the deliberation.

Clause 14 – it was noted that this clause would provide the Minister with powers to develop regulations to control products which may have a harmful effect on the environment.

Clauses 15 – 29 there were no significant changes discussed for amendments.

The Chairperson asked that the final draft of amendment Bill be finalised so that members were enabled to accelerate the discussion of the Bill with their caucuses.

Recommendations on the Business Process Review: Briefing by the Minister
Opening remarks by the Minister

Ms Edna Molewa, Minister, Department of Water and Environmental Affairs, welcomed the opportunity to speak to the Committee. She was accompanied by a team of two from the Business Process Reengineering Committee. Since its inception the committee had grown stronger as it had learned what the role of each of the members was.

Business Process Review Committee (BPRC)
Ms Bridgette Mabandla, Chairperson, Business Process Review Committee (BPRC), said her team was established in July 2011 to prepare a report on the operations of the Department of Water, based on terms of reference which were sub-divided into ten work streams, namely: human resources and organisational development, finance, infrastructure, water trading entities, institutional realignment, mandate and strategy, communications, management, ICT, and finally, policy and legislation. The approach taken was that the terms of reference (TOR) were drafted and decoded to manage the project through project management.

She expressed gratitude to the Committee on the hearings on the National Water Resource Strategy (NWRS). The issues identified were a result of a consultative process between BPRC and the Department's branches and offices. Some of the implementation lines would be carried over a two year period, most of which had been covered. Implementation undertaken so far was given in the form of feedback around the agreed performance indicators and the explanation of the strategic plan and how it fit into government.

The function of delivery of sanitation had been moved to the Department of Human Settlements (from Water Affairs).

Developing Water democracy
Even though the framework of the legislation and policy facilitated better water and management, there were still imbalances in water management institutions which had to be democratized so that access to water would be redressed. To this end the BPRC would study the White Paper on a National Water Policy for South Africa, adopted in 1998 – 1999, so that all the gaps were closed. A team of five policy makers were already on board to work on this aspect of water democracy and legislation.
Water tribunal
Ms Mabandla noted with concern the issue of a tribunal (the tribunal was a statutory body that had jurisdiction over water disputes in South Africa) it had mediated disputes between the Department of Water and water users. She defended the process of mediation but reiterated that since the court ruling on the matter the Department's hands were tied.

Water boards
Ms Mabandla noted that the number of water boards had reduced form twelve to nine.

The Chairperson asked what the implementation timeline was. Since the former Minister had taken over, the Department was ably led and along with its staff was steered in the same way a competent Captain steered a tanker into a difficult harbour.

Ms Mabandla replied that she expected that their team would not exceed their term unreasonably. A gradual process of handing over as the performance indicators were achieved would ensure that there was a phase-out over the coming six months. This would occur from January to June during which project charters would be undertaken with provision for small extension on a project basis.

Mr J Skosana (ANC) said the Department was on the right track, however the main national concern was how to link the strategy with the mechanisms at municipality level.

Mrs M Wenger (DA) said the function of water and sanitation rests in the Department and asked the minister to get the function back to the Department since monitoring and regulatory function had fallen by the wayside.

Dr Huang asked why water boards had been reduced from twelve to nine. How would this effect efficiency?

Mrs B Ferguson (COPE) thanked the Department for its excellent work and commended the presentation. She asked why sanitation was part of the mandate of the Department of Human Settlements and recommended it be moved to DWE. She asked why water boards were reduced from twelve to nine. While commending the Department's approach on integration of functions, she noted that there was a need to link with municipalities on service delivery. She asked about filling the financial management posts and how long it would take. The AG had said it would want continuation.

Mr F Rodgers (DA) said he was covered by Dr Huang when he addressed the issue of human resources and meeting time frames, although the previous Director-General (DG) was still on probation and was still suspended, he was glad to see a turnaround. It appeared there was a problem with HR and asked for some clarity on how they had resolved HR issues following a display of anger and intolerance towards the Committee. It was necessary to have some conclusion.

The Chairperson added that it appeared that the DG was not consultative enough, especially when the Committee had sought to inquire about administrative and oversight matters regarding the two directors of finance and Water Trading Entities (WTEs)

A member of the Committee noted with concern the allocation of funds to water boards in the municipalities, especially the extent to which poor and marginalised people were exempted from supply of water. She said it was a right enshrined in the Constitution and therefore it was paramount that such people were able to get water.

Ms Mabandla said that after the report writing there was a need to fill in the gaps left in the BPRC process from July 2012 – December 2012 because during this period very important tasks were undertaken. For instance, an information and communications technology (ICT) contract upgrading was coming to the end and the Department was working towards an award and concluding the ICT contract matter. At the same time organisational and design work was going on, so was the audit, Annual Performance Plan (APP) timelines.

Ms Mabandla said that the Acting DG could speak to issues of rainfall.

The Acting DG said that the Department relied on sister organisations on some aspects of their work and that rainfall figures were under the obligation of Southern Ocean Observing System (SOOS) and Agricultural Research Council (ARC) where data was collected for purposes of planning, to this end a water resources report was due at end of year.

The Minister responded that there was a need to ensure that delivery of water was not undertaken inadequately but that it flowed down to municipalities. It was unfortunate to find that this was an area where the human and financial resources were restricted. While emphasis was laid on the importance of major reform the Department recognised the need to balance equity with productivity and profitability. Other than steps external to operations in the Department, efforts were being made to establish an agreement with the Department of Cooperative Government (DoCG) and the initiatives were bearing fruit. If payment was not made then services could not be delivered. There were joint teams addressing debt levels in municipalities and monies owed to water boards. Hotspots (where there was occasional delivery of water) observations were being made.  COGTA would help to enforce better functionality for municipalities. There were Memorandums of Understanding (MOUs) with some provinces such as Limpopo and Mpumalanga. These were signed to strengthen service delivery at the municipal level to restore infrastructure. There were also Rapid Response Units (RRUs) to respond to emergencies.

Regarding sanitation, the Minister said that a department's mandate was a Presidential prerogative. The President determined the Minister's mandate in line with what was considered in the greatest interest of service delivery.  Ministers then worked within that mandate and thus far that mandate had integrated better service delivery. Members should continue to assert the confidence the President had in fulfilling their responsibilities.  She justified the integration of water and sanitation in human settlement and likened it to Siamese twins which could not be split. It was a complex issue which required a process of consultation and reorganisation of government functions.

Reduction of water boards
The Minister said the Department had learned through research that certain water boards were not feasible while others were technically insolvent. After this examination it was therefore agreed and decided by the Institutional Reform and Realignment (IRR) team on which areas were viable for operations of water boards. Water boards were present in several provinces and had footprints in provinces where there was better income. An analysis of local government budgets and local economic development indicated that certain municipalities had a better management system. Botsilo in Mafikeng, Motsilo, Sidbeng and Mahelis were examples given. The decisions to reduce water boards were informed around this.

DGs issue
Dr Huang mentioned the inconsistent service delivery of DGs appointed. However, most DGs were professionally recruited and performed well. The careful reference to this issue was appreciated because it was a delicate matter, indeed there was a suspension in contradiction of the DG and charges were made. The Department was in the process of serving the summons at the time of the meeting and were working with the Department of Public Service and Administration (DPSA) to resolve the matter promptly. Nevertheless, certain processes such as evaluation before charges among others had to be carried out before dismissal.

Financial management
It was noted that this was milestone that had not be addressed comprehensively but was within the performance indicators in the BPRC process. There was room for improvement.

Ms Ferguson said that there were two aspects of the Department's infrastructure branch, one with subordinate workers or servants, who were not within the purview of public service; and those within WTEs. There was a financial management area within every WTE. To redress the issue measures were being undertaken, gradually working from the lowermost levels to integrate the functions and overlaps.

She appreciated the proactive communication compliment.

Human Resources
The Minister responded that it was not the practice of Committees to have Members ask question which members of the public attending Committees were not prepared to answer. Similarly, those who appeared before Committees attempted to answer any queries or questions before them to this end, an apology was offered and a report of suspended workers would be availed. There were areas where they were setbacks including HR functions, and consequently serious improvements were needed. for example, support WTE managers should have been charged and prosecuted. The Department fell short in this regard but there were actions and processes to redress this, for instance a meeting of pre dismissal held on 9 April 2012.

Water allocation to municipalities
Water allocation to municipalities was a matter referred to earlier as a pro-poor approach. There were no forums. There were boards, and then there were water associations at lower levels, and there was a gap betweent the two which the Department was trying to fill. They had identified a better hierarchy of water distribution. Previously water was distributed according to agricultural needs. This had changed and there were also housing needs, amongst others. Validation and verifications have to be done, in the process some people were allowed to trade with water and the law had allowed hoarding. The Department was looking for fair and equitable trading and allocation.

The Chairperson thanked the Minister for her commitment and the productive discussion which members found useful. He also thanked the BPR team.

The Chairperson invited Steve Kenyon, National Treasury to make his presentation.

Presentation on sources of funding of water infrastructure
Mr Steve Kenyon, Senior Economist, National Treasury, gave a presentation on Municipal Transfers for Water Services. He was accompanied by Sarah McFael, National Treasury. He said funding was delivered in accordance with the provisions of the Division of Revenue Act and as envisioned in the Constitution which provides under Section 227 of the Constitution that: “Local government and each province is entitled to an equitable share of revenue raised nationally to enable it to provide basic services and perform the functions allocated to it.”

There was a tendency to create multiple entities every time there was a problem. Very often the replacement agency or entity performed worse than the original entity. As such he recommended that the current entities should be made functional to deliver on their mandates.

Responsibility for delivery of water services
The delivery of water services was provided for in Schedule 4B of the Constitution, as such water reticulation was the function of local government. Section 154 obligated national and provincial governments to help build capacity of municipalities to perform their functions.

Funding water services at local government level
Under the Constitution, local government was granted extensive powers to raise revenue. A municipality should charge cost-reflective tariffs for the supply of water because high levels of poverty meant that funds from national revenues were required to fund the delivery of services to poor households, through a combination of equitable sharing and conditional grant funds.

Summary of the transfers available for water and sanitation
A summary of funds to municipalities for water and sanitation in 2013/14 was given.
• The Urban Settlement Development Grant (USDG) had R9 billion which was mainly for providing serviced land including water and sanitation
• The Municipal Infrastructure Grant (MIG) had R14.4 billion with over R7 billion for water and sanitation
• Municipal Water Infrastructure Grant (MWIG) of R603 million
• Rural Households Infrastructure Grant (RHIG) of R107 million
• An indirect grant called Regional Bulk Infrastructure Grant (RBIG) of R3.2 billion
• R16.1 billion in operations and maintenance funding for water and sanitation in the Local Government Equitable Share

Overview of funding for infrastructure
Rural areas were leading in backlogs but were making the fastest reductions, while urban areas extended access to the largest number of households. There were substantial increases in infrastructure transfers, especially since 2007, and funding for water and sanitation was a major part of this.

Because of the backlogs shown by the 2011 Census it was proposed that R4.3 billion be allocated as a grant in the 2013 Medium Term Expenditure Framework (MTEF). The Municipal Water Infrastructure Grant (MWIG) was introduced in 2013/14 as a way of fast-tracking the delivery of water infrastructure to households which did not have access to clean water.

DWA allocated funds to areas where there was need and to projects which could be implemented swiftly. The water boards then agreed to partner with municipalities in implementing these projects giving responsibility of expertise to water boards during the construction and operations phase.

In the past many water projects were built, but this had since come to an end as such municipalities should be responsible for ensuring sustainability and continued operation of such water schemes. The MWIG framework compelled water service authorities to “ensure on-going effective and efficient operations and maintenance of the projects once completed.” The business plan for each project should therefore address sustainability within their respective municipal Integrated Development Planning (IDP) and Water Services Development Plans (WSDPs).

A new local government equitable share (LGES) formula, providing a subsidy of R275 per household per month for free basic services (for households with an income below R2300 per month) was revealed which included R86 for water (including 10 % for maintenance).

In 2011, using these formulae, free funds were provided for every household using an income threshold of R2300 and below per household income per month. Based on the value of two state old age pensions (as proposed by municipalities) during the consultation process 59 % of all households in SA fell below this threshold. Accordingly the cost of services and number of households would be updated annually. Implementing MWIG as a direct grant ensured municipalities would operate and water projects schemes were also part of design and construction.

Chairperson remarks

The Chairperson remarked that the presentation was outstanding and very informative. Water allocation and delivery was such a basic thing, yet the majority of the electorate were not able to access it because of ineptitude and inadequate governance regime. He assured the National Treasury of the Committee's full support to explain the problem of governments’ decisions. In contradiction, he said there was a bully and that when a bully in school was subdued people behaved differently. He likened the bully to the devil's child, who had to be evenly tackled. To this end he urged members to make strong speeches in Parliament.

Ms Manganyes’ constituents in Limpopo were concerned because 52 villages had no water. Members were not prepared to deal with this situation for much longer, they would address the water boards' ability to deliver. However, because they were owed money he was afraid they would in turn respond defensively about money owed. He urged the National Treasury to change policies.

There was a disjointed legal and institutional water regime. As long as national government policies were not adequately harmonised and sensibly implemented, administration would reach the local or municipality level. The existing problems would develop and get rooted. Moreover processes were prone to breakdown if lack of human and financial resources were not addressed. Poor people did not look at the dysfunctional water management, instead they got violent, or if they are part of a workforce, they slowed down when these problems became abundant. The problems ranged from incompetency, to non-responsive decision-makers, to corrupt bureaucracy. Members were not advocating revolution in constitutional debate (it was a non-debate) but there was a need to look at the funding model reality because in its current form the fragmentation was a problem and it would be difficult to intervene.

It was on these grounds that the Committee suggested that the funding models be changed. People were still hesitating on addressing ineptitude in weak municipalities. A process of motion should begin to ensure quick decision making. If at a certain date a municipality had not forwarded plans to the Treasury, the Treasury should reallocate such funds to other municipalities that were more competent.

The engagement with the Treasury was aimed at addressing the sourcing and decentralised nature of the planning model to ensure municipalities maintained their powers, but at the same time entire plans had to be realised before funds were approved. In this way, water allocation could be ameliorated without taking powers way from municipalities. Modern governments created multiple agencies which spent abundant amounts money and they remained dysfunctional. He urged members to deliberate firmly on the issue. He was opposed to the principle of equitable sharing and allocation of funds to municipalities because it was the leading scam in South Africa. It was similar to the “devils invention” it undermined the work of the Treasury carried out in good faith, as the money was not spent on water.

It was frustrating and disturbing to note that not all of money reached the actual people it was intended for. Treasury set out the chain clearly and fairly in the delivery chain; ultimately municipalities had to ensure the impact was followed through. It would not be quick but through persistent effort it could be successfully done.

A subsidy of R275 per household was allocated to the municipality for the supply and maintenance of services and there was another R14 billion for infrastructure. The Committee was right to close the gap of implementation and delivery.

Mr Kenyon agreed that there should be better accountability for money allocated to municipalities particularly because statistics had shown that 59 % of pensioners and low income households did not have access to water. These households could not access water, yet the threshold for those eligible to get free services was lowered.

He suggested that where there was money available and water boards owed money, such monies should be transferred directly to water boards.

The Chairperson responded that it was idealistic to say that when there were no mechanisms for implementing any acts this would essentially mean bypassing municipalities. Giving more money to municipalities who were instead using the money for unplanned issues was like self-defeating. He urged the Treasury to intervene using executive and political means.

Mr Kenyon said there were other legal mechanisms which could be used to redress the water funding infrastructure drawbacks, such as giving municipalities conditional grants, reallocation of the funds through Sections 16, 17, and 18 of the Division of Allocating Act.

Ms Bolewa thanked the Treasury for the outstanding presentation. She made the following comments:
• She asked if the Treasury had powers to follow up and persuade those who were entrusted with funds to spend sensibly and rightfully.
• She gave examples of Free State, Gauteng, KwaZulu Natal, and Northwest which were beneficiaries of Limpopo’s weak spending patterns.
• Powers to reallocate or budget were not the major problem; the problem was that of capacity and resolving the existing arrangements.
• She argued for the adoption of a flexible approach. The RBIG was the best way of allocating funds.
• Whilst the support of weaker municipalities was good; the use of MWIG should be questioned as a direct grant she urged caution and that the older schemes should not be removed.
• In essence what the people wanted was infrastructure and implementation. In Polokwane, for example, where the Mayor pressed the government to build infrastructure and deliver services.

Ms J Manganye (ANC) was frustrated with the presentation because it failed to address problems in the municipalities. People were impatient, they were keener on delivery of services and particularly water rather than high talk of governance structures, efficiency and a hands off approach. She decried the idea of “one size fits all” and urged the government officials to reconsider its approach. She also urged them to visit the provinces and municipalities instead of making fancy presentations which translated to naught. The reality was that constituents would get very annoyed if they heard that there was money allocated to the category of low income households and old age pensioners which did not reach them. She cautioned governments’ attitude and asked for restraint in communicating policy when results were unnoticed.

The Chairperson said that in light of this there was a pressing need to find legal and political means which rendered to reality to real and satisfactory service delivery. He reiterated the 52 villages in Ms Manganye’s constituency which had no water and argued that those present should not “perpetuate myth to get to an ideal”. Although there was red-tape in reporting to superiors in Treasury there was a need to proffer political and legal interventions promptly. Investing billions of Rands in municipalities which were inept was sending good money after bad money. He suggested simple and practical solutions from Treasury and proffering funding models which took the reality of the municipalities on the ground.

Mr Skosana expressed disbelief at the Treasury’s justification of their funding model in light of reality on the ground. He questioned the application of the models and said that he had many years of experience and understood the realism of equitable sharing. Rural areas were usual hotspots for overall service delivery because historically they had a lower catchment area for taxes and rates. In many places municipal infrastructure was worsening. Bulk water facilities, mostly in small towns and rural areas, sanitation in numerous municipalities and provincial and rural areas were particular areas of concern. Funds should be paid directly to water boards or organs responsible for delivery of water. Cooperative governance did not necessitate going to the grassroots, as was the case with the existing requirement that municipalities pay water boards for water services. Instead he suggested municipality or local governments were weak and the critical link. Councillors were ill equipped to address these issues. Provincial governments should be used to reach out to Councillors to get to the root of the matter. To this end he urged the Treasury to assist the Department and the Minister. 

Dr Huang made the following remarks:
• The issue of service delivery was a sensitive issue that should not be taken lightly
• It was disturbing to note that equitable subsidy was not reaching the ordinary man, if the people really knew that there were services they should have received, but which they have not received they could be an uproar and civil disorder
• There was no cooperation in governance and the efficiency of a partnership between the water boards and municipalities was doubtful
• Many households earned very little money and many had old age pensioners who needed the states’ help
• He asked for the benchmark and or the eligibility for the R275 subsidy so that as a Member he could go and talk to his constituents about it.

Strategic Integrated Projects (SIPS): Briefing by the Acting Director-General
Mr Trevor Balzer, Acting DG, DWE, noted that the larger document was confidential but he availed an electronic copy on power point which he spoke to during the presentation. He assured members that he would avail the entire document once it was available for public circulation.

Strategic Infrastructure Projects
Mr Balzer gave an analysis of Strategic Infrastructure Project 18 (SIP 18) on the National Water and Sanitation Infrastructure Master Plan. He said it would be launched by April 2013 by Ms Edna Molewa, Minister of Water and Environmental Affairs, Mr Tokyo Sexwale, Minister of Human Settlements, and Mr Richard Baloyi, Minister of Cooperative Governance and Traditional Affairs, and the Presidential Infrastructure Coordinating Commission's (PICC) Secretariat.

The objective of this SIP was to ensure a sustainable supply of water to meet social needs and support economic growth as well as a comprehensive sanitation service that enhances community wellbeing, reduce health care costs and improve productivity. Electricity generation, mining, and agriculture all depended on supply of large volumes of water.

There were 17 other SIPs which were interrelated to water. Each of the SIPs and how they were managed was described.

SIP 1: The focus was unlocking the northern mineral belt with Waterberg as the catalyst. This included the Mokolo pipeline Phade II and the Dworp dam, with a focus on the water project.
Some of the highlights of water and sanitation delivery in 2012 included:
• The construction of dams. The first phase of the Mokolo and Crocodile River (West) Water Augmentation projects were started. The R2.1 billion project would provide part of the water required for the Matimba and the Medupi power stations.
•The partial impoundment for the De Hoop Dam was initiated. The dam would supply water for domestic and mining use in the Greater Sekhukhune, Waterberg and Capricorn district municipalities. A total of 2.3 million people in the domestic sector would benefit from this project.
• The Dwarsloop-Acornhoek steel pipeline was completed. It would supply water to nine rural communities in the Bushbuckridge Local Municipality.

The key to dealing with the water issue was addressing water pricing. Water was locked up in sectors that did not use water at the moment, such as agriculture. To this end the process for unlocking that water for the mining sector and other economic development was being pursued.

SIP 2: The Durban-Free State industrial corridor development could not take place without augmenting suppliers within that area. The Moyengeni scheme was under construction at the time off budget funded by the Trans-Caledon Tunnel Authority (TCTA).

SIP 3: The South Eastern node and corridor development, covering the N2 highway Nzuvugu Dam, planning was well advanced. The Minister was engaged with political leadership and was yet to address the traditional leadership. A new dam and irrigation systems were to be developed on the Umzimvubu River in the Eastern Cape, which may potentially also incorporate hydropower, as alluded to by Minister Molewa in her budget vote address to the National Council of Provinces.

SIP 4: In the Northwest Province there were a number of bulk water supplies projects funded by Madibeng, Rustenburg PPS. Plans were underway, looking at the upgrading of infrastructure to create opportunities where farmers who have previously been denied access to water for farming would now be allowed.


SIP 5: The Saldanha Northern Corridor was aimed at integrating the Northern Cape and beneficiation in iron ore mining. There was a scheme which was dedicated to the Sedibeng water board. Here expansion needed to be done to get water to some of the mines in the area.

SIP 6: The Integrated Municipal Infrastructure Project.

SIP 7: The Integrated and Urban Space and Public Transport Programme was being discussed in meetings with the Mayor and follow up meetings.

SIP 8: The green economy supported the South African economy and was related to the Integrated Resource Plan 2010. It focussed on renewable, concentrated photovoltaic. This required water and current plans were considering speeding up licensing. There were also biofuels projects in the Somerset east area.

SIP 9: Electricity Generation to support socio-economic development.

SIP 10: Electricity Transmission and Distribution for all. There were no direct water implications here except impending watercourses which required licenses.

SIP 11: Agri-logistics and rural infrastructure. Rural development and land reform involved extensive irrigation infrastructure in need of repair.

SIP 12: Revitalisation of public hospitals and other health facilities. Water could be involved if any blockages existed at such facilities.

SIP 13: National school build programme. There was a bill to ensure water was supplied to schools to ensure source development.

SIP 14: Higher Education Infrastructure. There was no direct impact on water, except in Rhodes University campus, which was being hampered because the municipality did not have enough bulk water supplies to that area.

SIP 14: Expanding access to communication technology. There was no direct impact except for licensing for cables at river crossing.

SIP 15: Regional integration for Africa Cooperation development, involving Lesotho and Polihlae Dam.

SIP 16: Square Kilometre Array and MeerKAT.

SIP 17: National Water and Sanitation Infrastructure Master Plan

SIP 18: Regional Integration for African cooperation and development, which covered the whole country.

Presidential Infrastructure Coordinating Committee (PICC)
Bulk sanitation was handled by the Department. This was handled by Minister Molewa and supported by the PICC secretariat to be launched at the end of April. There was a 10 year plan to address the backlog and inequality on green drop water supply systems. The Department would look at improved arrangements of EITTCs, onsite sanitation, waste water treatment, water boards, water wastage and inefficiencies’, water wastages, water demand measures, and others, which were essential as South Africa was a water scarce country.

The Chairperson asked what time frame was in place for the master plan.

The acting Director-General responded that important infrastructure projects could take more than a decade to implement. Gathering the complex challenges of a varied and geographically dispersed set of capital projects needed long-term planning, thorough analysis, and frequent learning and adaptation. The water sector framework was not different; it required a 10 year framework. This had underpinned the development of this SIP but the investment plan had not been implemented, it had conflicted as well with the National Water Resources Classification System (NWRCS) 2. Hopefully within six months of 2013 the development plan on water and sanitation would be ready, once the sector departments had given input. Each of the SIPs had had a formal launch and each had a project management. The Department was yet to identify the SOE to take care of SIP 18. The water infrastructure grant may be launched as well on that day.

Comprehensive Investment Programme for Water Infrastructure Development
• Part 1 of the presentation covered water resources (i.e. augmentation) infrastructure investment programme
• Part 2 was an overview of water services (i.e. regional bulk infrastructure)

The salient features of the presentation were:
• Typical phases for the development of water infrastructure
• Medium term investment on water resources infrastructure
• Phases for the De Hoop Dam
• Phases for the Olifants River Water Resources development (BDS)
• Phases for the Vaal River Eastern Sub-systems augmentation
• Phases for the Miokol River augmentation (phase I)
• Phases for the Komati water supply augmentation
• Phases for the Hazelmere dam raising
• Phases for the Clanwilliam dam raising

Water resources infrastructures were listed, as well as bulk water schemes with indicative budget lines. The impact included job creation and regional integration. We were at different stages, with some working on design, while others were going out to tender. The Implementation plan and investment plan were being consolidated on reform and realignment. The Ministerial Committee was to establish collaborative partnerships between Ministers. The Water Research Commission had reported that losses due to water leaks were about 35 %, though it could be more than that.

The Chairperson welcomed questions and noted that the previous presentation was essentially made to enable members convert what they had received at previous sittings into a master plan.

The Chairperson suggested that the Committee moved to the presentation on hotspots and action to be taken, finance and deficit. He requested that the presenters be brief and to the point. He requested that the presenters consider only the substantive elements of the reports.

Actions taken in “water hotspots”

The constitutional responsibility of ensuring service delivery and Water Services Authorities (WSAs) rested with local government. Under this obligation WSAs were required to plan, ensure access to, and regulate the provision of water services (water supply and sanitation) within their area of jurisdiction.

DWAs were responsible to support this effort. Local government was also a water resource user whose actions had significant impacts on water resources and their management.

Others who are held responsible were the Minister for Water Affairs who was expected to resolve all challenges related to water and water resources at local government level. To this end the clarity on leadership and, collaboration are required to address water sector issues and the entire value chain that are handled by other authorities

Why there are service delivery disruptions
• 28 % of all towns and community clusters’ water resources were inadequate and required urgent intervention
• 83 % of all towns did not have effective water demand management in place
• 34 % of all schemes experienced water resource challenges
• 48 % required urgent refurbishment
• There were operational challenges experienced by the majority of communities as well

Hotspots were described as communities where high risks prevailed. In such areas there was considerable dissatisfaction due to prolonged poor service delivery. Health environment risks were rampant due to poor water quality including waste water discharged. There was no formal water infrastructure or no water at all.

DWA categorised its interventions in such areas as reactive (where service delivery protests took place)
or proactive (aimed at averting a crisis or near crises). Tracking was done frequently (on a monthly basis).

Strategic actions
Various strategic actions were taken to avert crisis in hotspots. Decentralised Rapid Response Units (RRU) was established within each regional office with water boards acting as RRU. Partnerships between DWAs and DCoG were strengthened. The latter revived structures at the national and provincial levels in order to motivate implementation of local government turnaround strategy (LGTAS) other initiatives were taken at the provincial and district levels

Examples were given of how various areas addressed issues arising in hotspots
• Ermelo and Wesselton (MP)
• Gauteng
• Easter Cape
• Eshowe area (KZN)
• Free State
• Limpopo
• Moses Kotane (NW)
• Ratlou LM area (NW)

Ms Mabasa said that to a great extent the issues highlighted were the service delivery issues. She asked why there were frequent disruptions.

The presenter answered that as noted in the presentation
• 28 % of all the towns have challenges with water as a resource
• 83 % of towns do not implement water management and do not have water demand management hence the study by Water Research Council WRC
• 80 % of the time there are interruptions
• Water services were dilapidated and there were operational and maintenance issues because of the funding model.
• Water supply in the provinces was managed by several water authorities such as the Magalies Water Board, Botshelo Water, Midvaal Water Company Sedibeng Water among others.

Water quality and water management had been identified as a priority by national, provincial and local governments to ensure adequate water supply. Hotspots were hit twice because of poor infrastructure and lack of water supply. The investment plan was meant to address this

The Chairperson invited the Department to report to the Committee every two months on the hotspots. He said such issues as what had been done by MWIG and what amounts were received as well as the corresponding plans should be included in the report. He urged the Department to continue collating the reports and to ensure that there were no more disruptions.

The acting Director-General suggested that the reports be given quarterly because of the substance and load of work. He said it was expected that the results from meeting with municipalities would be included after 25 April 2013.

Ms Mabasa said that the RRU preliminary investigation articulated the need to provide 450 000 tanks per month in areas where there was water scarcity as a temporary solution.

The Chairperson said that in the next 15 months R22 million would be required for interventions and there was an RBIG project. Money was needed for such interventions as MWIG and others, and that those funds must be accessed. MWIG must prioritise those water issues. It was difficult to obtain a blank cheque to the municipality because finance must be backed by plans and a resolution of interim and longer term solutions.

Ms Mabasa observed that hotspots restrained the Department from performing other important functions and that indeed the Department had to get the municipal managers to take responsibility. The hotspots continued to be a threat to proper supply of water services, and until sustainability was dealt with it would continue to be so. Communities were sharing water with animals. People had infrastructure but services were not reaching them. 

Mrs Skosana appreciated the presentation and expressed satisfaction with the proposals made on reporting. He urged a determined follow up. He said the process was both an enabler as well as problem on the ground. People on the ground had to be conversant with the problems.

Mr Rogers said he had 17 years of experience. People in his constituency did not have access to water in many villages. History had taught him that municipalities had a poor history of service delivery particularly water supply. People faced a big problem in water delivery because when Sesonke took over the function of water service to municipalities Sesonke had taken people back, it lacked capacity and several times this year interim measures were not able to reach and resolve the crisis. Ugu District Municipality, on the KwaZulu Natal coast, was also a prime example of challenges. This was not an easy undertaking as it goes with issues of tariffs collection which previously was enjoyed by local municipalities. It was a Water Services Authority (WSA) and similarly a Water Services Provider (WSP) which is the main function of the municipality. In 2003 it assumed these responsibilities after taking over from local municipalities and water committees.

Dr Huang emphasised that the municipality should take responsibility, saying that the MIG did not have a presence in some provinces. Funding was being wasted. Why did the municipality not allocate funding to the water board? Reports would be produced on this every two months and he hoped to see them highlighted. Where was the service delivery? Action was needed from the Water Affairs Committee.

Ms Manganye asked how effective the idea was in addressing high level of water scarcity in the country.

Ms Mabasa responded that the Department would indeed provide reports. On 1 July it would share a report on baseline spending.

She recognised Mr Skosana’s concerns, particularly regarding vandalism and said in some cases shortages were wholly due to the lawless means vandals used to damage public utilities. It was difficult to prevent vandalism through the MWIG because the Department could not make its presence felt everywhere. However, there was a need for a holistic approach.

Mr Rogers’s suggestion of using collaborative methods of funding models was good, but fundamentally better ways of providing service delivery were being sought. This was needed because of the nature of the powers and functions. Leadership issues and other capacities were restricting municipalities. Ultimately a political decision was desirable. In Northwest a collaborative action had to be taken and had through an initiative with various stakeholders to work together, but there was more infighting and pettiness than cooperation.

The Ugu municipality case had been evaluated and it was found that dilapidated infrastructure affected business, ecology and development. A huge reinvestment was required to address infrastructure issues. An assessment was done by the RRU. RRU was investigative or diagnostic and it depended on cooperation.

Dr Huang said a protocol where municipal managers took responsibility at that level should be considered. Certainly, MWIG did not cover all municipalities but it was expected that it could be revaluated and efforts were being made to report the potential conditions that related to other problems. Areas which were considered for allocation, renovation and in which early intervention had utmost effect were being prioritised. Some municipalities were opposed to water boards. Such authorities usually had a poor track record and had been requested to engage the Department in a fine-tuning of their delivery model.

The Minister said that the Department could only ensure delivery through cooperation. Improvements could be made using better oversight and interventions because they impacted on service delivery. Sometimes CFOs were fired because the tenders were not going the right way.

Mr Trevor Balzer, Acting Director-General, Department of Water Affairs, asked one his staff to speak to the outstanding issues. The Department representatives said the following:

Water reserves the South African National Water Act (NWA, 1998) provides for the protection of water resources done by apportioning an agreed amount of the water available in a system to maintain the natural environment in some pre-agreed condition. To fulfil its purpose, this water needs to be of an appropriate volume and quality, and be available at the appropriate time of the year, and is known as the ecological reserve.
The notion of basic supply had been determined in regulations issued by the DWAF. These provided that the minimum standard for basic water supply services included: a minimum quantity of potable water of 25 litres per person per day or six kilolitres per household per month, available within 200 metres of a household and with a value such that no consumer is without a supply for more than seven full days in any year.
Allocation looked at the international benchmarks. For instance how much water was being used and for what purposes? Free basic water was allocated on a household basis and not an individual one. As the average poor household was usually comprised of more than eight individuals, large, poor households were penalised.
• Another representative noted that during the apartheid-era the homelands had little control over South Africa’s water resources. The Water Act of 1956 recognised private rights to water by giving those who owned the land the right to the water. This meant that whites controlled the bulk of water available in the country in the form of riparian rights granted mainly to high-volume agriculture, mining and industrial users. Conversely, in the homelands, the primary responsibility for management of water schemes was under the communal authorities of tribal chiefs and village headmen who managed water supply, irrigation and home use arbitrarily.

The Chairperson said that the involvement of municipalities in rural areas in the management and administration of water services was not working because the municipalities did not have the capacity and moreover were not accountable to the public. However, he noted that the inclusion was done in good faith. There was plenty of goodwill and the rationale behind allocating the responsibility of funds to municipalities was logical. What was required was a more flexible method of allocating funds to water boards and this could be achieved by broadening the base of organisations able to do it.

The same thinking applied to the rationale of including water and sanitation to the Department of Human Settlements. Firstly the sanitation portfolio was under water affairs, therefore its regime dealt mainly with water. Then it was moved to human settlements. Human settlements were developing a paper to enact appropriate laws, yet there are old laws under the water portfolio which were being used previously. Since the sanitation portfolio had been moved several times there was at present a commitment for the development of Water and Sanitation Master Plan which was initiated by the DHS. Government had to think of the consequences even if when they seemed to be making the right decisions.

The Chairperson called the meeting to an end and said that there were several items on the agenda which would be completed over the next day and half of Thursday.

The meeting was subsequently adjourned.

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