Department of Water and sanitation on 1st Quarter Performance, with Deputy Minister

Water and Sanitation

17 September 2014
Chairperson: Mr M Johnson (ANC)
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Meeting Summary

The Department of Water and Sanitation (DWS), with the attendance of the Deputy Minister, briefed the Committee on its first quarter review. The comprehensive presentation was divided between looking at a summary of the Departments performance, main account performance per programme and performance per programme for the Water Trading Entity (WTE). This covered both financial and non-financial information. The review related to the Department discussed expenditure for specific programmes of the Department, expenditure of augmented funded projects and a detailed analysis of the main account. On the non-financial performance, targets for sub-programmes under each of the six programmes were explained with areas where targets were not achieved highlighted. With the WTE, a detailed analysis of the performance per programme was provided along with the financial management performance against targets, non-financial performance of each sub-programme under the three programmes looking at performance indicators against pre-determined targets.

Members were concerned about job creation and targets related to employment opportunities lagging behind what was expected to be achieved by the first quarter. There were also questions around why jobs were not created in certain provinces with certain projects. There were concerns around the lack of expenditure, which currently was at 11% for the first quarter, given that there were so many projects to complete. Members wanted to know why there were delays in achieving a number of targets and if this was because the Department was planning poorly. More information was sought on criminal cases, the status and progress made with certain projects, main vs. trading accounts and the effects of illegal land invasion and accompanying pollution on water supply services. Some Members did not see the point of engagement with fancy terms when people on the ground did not have water.
 

Meeting report

Apologies

The Chairperson noted the apology of the Minister of Water and Sanitation, Ms Nomvula Mokonyane, who was in a Cabinet meeting.

First Quarter Performance Information Report for the 2014/15 Financial Year
Mr Trevor Balzer, Acting DG, DWS, began the briefing noting the presentation was divided into three parts covering a summary of the Department’s performance, the main account performance per programme and performance per programme for the Water Trading Entities (WTEs). All three parts would provide an analysis of financial and non-financial. The presentation would focus on areas where the Department was not achieved its intended targets under certain indicators.

Beginning with the Department’s performance and the analysis of the first quarter non-financial performance, on the main account, the Department had achieved 35% of its target, overachieved 21%, had not achieved 16% and had partially achieved 28%. The latter two performance points were potential areas for risk. For the water trading entities, 19% of targets had been achieved, 12% were not achieved, 27% not achieved and 42% partially achieved. The latter two points were potential areas for risk. The three main programmes were the WTEs were administration, infrastructure and regions.

Ms Nthabiseng Fundakubi, CFO: Main Account, DWS, explained the analysis of financial performance of the Department for the first quarter with the Department spending 11% of its budget thus far. This amounted to R1 380 524 billion.

Mr Balzer outlined the specific expenditure for each programme in percentage terms. These were as follows:

-       Administration (16%)
-       Water Sector Management (15%)
-       Water Infrastructure (16%)
-       Regional Implementation and Support (8%)
-       Water Sector Regulation (15%)
-       International Water Cooperation (19%)

Mr Mpho Mofokeng, CFO, WTE, looked at the expenditure for augmentation funded projects noting the under-spending thus far for the dam safety rehabilitation programme due to the delay in appointing Professional Service Providers (PSPs) and under spending on the development of raising of the Hazelmere Dam because the tender for Civil Works being cancelled due to tender prices exceeding the allocated funds. The was overspending on Phase 2A of the De Hoop Dam due to the attempts made by the contractor to complete the outstanding mechanical work and site rehabilitation before the end of the 2014/15 financial year. The Department did have action plans for the remainder of the financial year for all the areas in which there was over or under spending.

Turning to the detailed analysis of the main account performance per programme, Mr Squire Mahlangu, DDG: Corporate Services, DWS, looked at the administration programme were under the corporate services sub-programme, the goal was for an efficient, effective and development-orientated sector leader. The strategic objective was to improve and increase the skills pool and build competencies in the Department and within the sector. With the specific indicator and target for filling vacancy rate for engineers and scientists, the Department was not achieving the target. The target was to fill the vacancies beyond 50% but only 17% of this target had been achieved.

Mr Balzer discussed the second programme, water sector management, and the sub-programme called institutional oversight. Under the indicator which targeted 50% completion in establishing the national water infrastructure agency.

Ms Debra Mochotlhi, DDG: Planning, DWS, looked at the sub-programme called water ecosystems under the second programme noting the Department did not achieve the 50% + target of completing the integrated water quality management with only 37% achieved. The Department also did not achieve the target of four rivers systems with determined resource quality objectives. Public meetings and workshops had been held in this regard.

Under programme four, regional implementation and support, Mr Anil Singh, DDG: Regulations, DWS, looked at the water sector support sub-programme, noting the Department did not achieve the 100%  target for interventions made to prevent water supply, water quality and effluent quality incidents.

Mr Balzer explained the mine water management sub-programme, and said that the Department only achieved 10% of the 100% target completion of the short-term mitigating measures in the Eastern basin. No progress had been made in achieving the 75% targeted completion of the Environmental Impact Assessment (EIA) for the implementation of the Acid Mine Drainage (AMD) long term solution in the Witwatersrand. No achievement had been made on the 50% targeted completion of the proposal of an environmental levy for the mining sector.

Mr Singh looked at the compliance monitoring sub-programme under the water sector regulation programme, noting the Department did not achieve the 12 water users monitored for compliance within Stream Flow Reduction Activities (SFRA) target with only 3 users successful targeted. The Department had intensified interaction with water users and plantation inspections will be conducted in the second quarter of the financial year.

Ms Lindiwe Lusenga, DDG: International Relations, DWS, discussed sub-programme, Africa cooperation, under the international water cooperation programme, stating the Department did not achieve the targets of two new strategic partnerships established with countries in Africa and ten existing strategic partnerships implemented with countries in Africa. These countries were Botswana, the Democratic Republic of Congo (DRC), Rwanda, Uganda, Ethiopia, Tanzania, Lesotho, Swaziland and Zimbabwe.

Mr Balzer then took the Committee through the detailed analysis of the WTEs performance per programme. The number of indicators not achieved (beyond 50%) per programme was as follows:

-       Administration (2)
-       Water Infrastructure (4)
-       Regional Implementation and Support (1)

Mr Mofokeng said that with financial management 37% of the 100% target in reduction in irregular expenditure had been achieved.  The WTE had adopted a policy that was formulated by the establishment of the Financial Misconduct Advisory Committee (FMAC) and guided by National Treasury Regulations. The establishment of the FMAC should assist SCM to reduce the irregular expenditure within the WTE as strict disciplinary action and punitive measures will be taken against officials found guilty of incurring irregular expenditure. Cases were already reported to the FMAC on a monthly basis and this will deter the occurrence of irregular and fruitless and wasteful expenditure, as required by section 45(c) of the Public Finance Management Act (PFMA). In addition workshops and training sessions will be held with all WTE staff in order to not only prevent but also educate officials.

Ms Zandile Mathe, DDG: National Water Research Institute (NWRI) looked at the infrastructure development and rehabilitation sub programme under the water infrastructure management programme, and noted that the entity had achieved the first quarter target for the annual average number of job opportunities created through augmentation projects. Under the operation of water resources sub programme, the WTE did not achieve the target of 12 sections for water conveyance projects (i.e. sections) installed. No achievement had been made on the 50% target of metering of agricultural users in line with entitlements. This indicator would be revised based on the measurement strategy.  

Mr Singh explored the regional implementation and support programme, specifically the integrated catchment management sub programme, where only 5.2% of the 100% target for the inspections conducted in mines with reported incidents.

Mr Mofokeng took the Committee through the financial performance of the WTE for the first quarter looking at expenditure and income, aged analysis, as of 30 June 2014 and cash collection report.

Discussion

Ms Pam Tshwete, Deputy Minister of Water and Sanitation, noted the serious problem of municipalities especially in terms of billing although there were improvements as shown in the presentation. Members would be able to see this for themselves when conducting their oversight visits. The Department was still slow with the filling of vacancies although there was some improvement. She, along with the Minister, would be looking at graduates and trainees in improving the problem of vacancies. There was also a problem of shortage of engineers in the Department. She reemphasised the problem of municipalities but said there would be improvement.  

The Chairperson noted this was the first financial review briefing/presentation the Committee had had. He had attempted to interact with the AG’s office but they unfortunately had not even started with the first quarter review of departments as they had just finished looking at the financial year-end reports. He highlighted that this was a new Department with a new Minister and Deputy Minister. The DG, DDGs and other officials had years of experience in the Department, in comparison. 

Mr Balzer replied he had 37 years experience in the Department.

The Chairperson said these officials were effectively part of the furniture. He questioned the role of industry in problems experienced by the Department like Acid Mine Drainage (AMD) and the distinction between the main and trading accounts.  

Mr Balzer replied that the Department operated as one Department but had two accounts which were audited separately. There were two CFOs to look after each account. These accounts operated off different platforms – the main account operated on a transversal system which all government departments operated on which was a modified cash basis while the trading account was operated on an accrual basis. The latter account was specifically set up for the Department but there was still one single accounting officer for the Department. The intention was to set up an infrastructure agency but this had been put onto the back burner by the Minister and an alternative delivery model would be explored with these two accounts. The Department did not have any Public-Private Partnership (PPP) arrangements to fund projects but this was a mater to be investigated in the future.

Ms Mathe added that, up until today, National Treasury was not doing well in finalising PPPs and the process of finalisation took very long given the capacity challenges of Treasury around the packaging of PPPs. The reality was there were projects which required alternative funding models. Infrastructure projects were funded by the Department through debt and the fiscus especially where there were commercial users.

Mr D Mnguni (ANC) welcomed the report but felt the Committee needed to ask about job creation. In his view, there was still work to be done in creating employment especially where the Department was falling behind in achieving what they had targeted. For example, one target was to create 5916 jobs under PPI number 31 but the Department had created 1054 job opportunities thus far. Would the Department achieve this target? When breaking the target down into how many jobs should be created per quarter to achieve the annual target, the Department was falling behind. When looking at PPI number 30 and the break-down of job creation per province, no jobs were created in Gauteng and Mpumalanga – why was this?  He noted there were many delays with the achievement of targets which gave the impression the Department’s planning was not synergised or timed correctly. He questioned what kinds of criminal cases were involved under PI number 58.

Ms Mathe explained the number of jobs created was dependant on the number of projects on the ground. The jobs reported on were primarily around infrastructure development driven by local labour. She sensed the achievement of the target around job creation would grow as the budget had increased. She too was concerned with the delays in rolling out of projects but there were measures in place to speed the process up and rotate projects among provinces.  

Ms M Khawula (EFF) was grateful for the presentation. She asked Mr Singh, based on PPI number 42, if he knew that there were people without water in ward seven (Vulamehlo Municipality in KZN). Taps were installed but no water was coming out from them and there was no visit from the councillor. People were fighting with animals over water. People from rural areas were ignored and they needed water to take medication. Children aged eight or nine years old were carrying water for themselves. Last time she was home she had to use her vehicle to help people get water and ended up using a lot of petrol. She pleaded for these people to get water because they were ecstatic when the ANC councillor won the election as they thought there would be changes. It was no use to talk of finances, fancy terms and engage in discussion if the people on the ground were not getting water.

Ms Lusenga said the Department would engage the Member on the particular issues raised in the specific ward mentioned.

The Chairperson noted these concerns were being raised by Ms Khawula for the third time and he expected a response talking to the progress made not on plans for the future. Members could not raise issues continuously and if this was the case, the Department would not be listened to.  

Deputy Minister Tshwete said she had asked Mr Balzer to get information on ward seven immediately and would receive answers as to why there was no water there. Ms Khawula would get a report on the matter no later than today. She and the Minister did not want to be friends with the officials but wanted work to be done. 

Ms H Kekana (ANC) wanted to know the state of affairs, under PPI number 58, of the process made in conviction with the criminal cases. Was there any engagement with the Department of Justice as to the state of the reported cases?

Mr Balzer noted information pertaining to the criminal cases had been provided to the Chairperson at the last Committee meeting.

Mr Singh explained the criminal cases pertained to the contraventions of the National Water Act and the National Environmental Management Act. These were basically instances of pollution where the Department laid charges and liaised with the National Prosecuting Authority to constantly find out the status of the cases. The Department had a case management system to monitor cases and report to the Minister or the Committee on the progress made. This information could be provided to the Committee. Typical fines ranged from R1 – 3 million or suspended sentences with a fine. The main aspect was to curb pollution with all water users and the Department worked with the Department of Environmental Affairs and Mineral Resources on matters of pollution. This information had been alluded to in a previous meeting with the Committee where a written response was also provided but if needed, the Department could provide further information on specific cases.    

Mr M Mpontshane (IFP) admitted the more briefing sessions he attended the more desperate he felt as Members were fooled constantly. Yesterday elderly members of his community had complained of having to fetch water in containers but now the Department was saying there was water in this area. This made him feel really empty inside. He sought more information as to the location and status of the projects under PPI number 44 of prioritised (transferred) schemes refurbished. This information was needed to inform Members when on constituency leave to inform constituents of what the Department was planning.  

Ms Mathe responded that the President had highlighted the same areas which the Member did where the Department needed to accelerate water service delivery. DWS had asked the water board in the area to be the implementing agent and they had been given a month to provide a status quo report on where there was infrastructure and where there was existing infrastructure but it was not working. The Department would then look at budgeting with the Minister, the KZN province and the Department of Cooperative Governance and Traditional Affairs (CoGTA) to accelerate water service delivery in the area. The scope for this project would be complete by the end of September. This included the Shemula Scheme. An interim water supply strategy, like package plans, was being investigated as complete reticulation may take up to three years.

The Chairperson asked if the Department could respond to pipes which had been in the area for the past five years.

Ms Mathe could not respond on the details of the pipes as she understood they had been procured by the municipality and not through DWS.

Mr Balzer added there were currently 18 tankers being used in wards across the Jozini area and recently a bore hole had been drilled to augment supply. The business plan to construct the 20 litre water treatment works and extending the Shemula scheme (Mandela project) was approved in March 2014 with a budget allocation of R86.8 million for the first phase. This phase was currently being implemented and would be completed in March 2015. Phases two – five of the project would be completed in June 2018.

Mr L Basson (DA) knew that it had nothing do with this Department but a certain dam in the municipality of Madibeng there was invasion of land which started in 2012. There was concern expressed in a letter by the previous DG about the impact of the land invasion on water services. The letter had said there was no water available as all the water in the dam had been allocated. This had placed the municipality under even more pressure to deliver water.  He would forward the letter to the Minister as it was a serious matter. There was also concern about pollution by the illegal immigrants living next to the dam on water supply.  

Mr Balzer would wait for the letter the Member referred to.

Ms Z Balindlela (DA) had received an invitation to attend a cooperative forum next week and she appreciated this invitation. Such a forum would help to tease out some of the inter-related problems in the water sector. She would ask some of her questions at this forum instead of here at the meeting. She asked if the Committee would receive a separate briefing on the first quarter performance of sanitation or not. 

Mr Balzer said sanitation would be included in the 3rd and 4th quarter reviews of the Department. For the 1st and 2nd quarter, sanitation was still with the Department of Human Settlements.   

Ms Fundekabi added that the reflection of the sanitation function went according to the budget. Sanitation would only be included in DWS’s budget after the adjustment appropriation had been made.

Mr T Makondo (ANC) thought there was an alignment between what the Department was conveying in its first quarterly review and what was practically seen on the ground. When the Department indicated that a certain amount of its budget had been spent, he could see this in reality. This suggested the Department was being more honest and practical about the situation on the ground. He hoped, however, there was a form of commitment to improve the budget spend thus far. During Members statements in the National Assembly yesterday, he heard of an old lady who fell in a hole at the De Hoop dam looking for water – was the Department committed to ensuring this did not happen again?. He wanted to understand the issue with the De Hoop Dam. He questioned the transfer of funds to municipalities, failure by the Department to plan to implement certain projects and under spending by the Department of its budget thus far.  Could the Department give an indication that work not achieved in this quarter would be achieved by the next?

Ms Mathe replied that De Hoop was meant for both industrial and domestic users. The funding model was based on a 50/50 split. The state had already contributed almost R2 billion for Phase 2C and some money for 2B and 2D. It had been indicated there were serious water challenges in this area. 

Ms Khawula had an issue with matters pertaining to a number of specific wards. The mere fact that one of the Department officials had to phone to find out the status in ward seven gave her no hope. After 20 years of democracy, she appealed to the Deputy Minister to ensure that people received water.

Ms J Maluleke (ANC) thought this Committee was a critical one which dealt with the lives of people. She thought there needed to be performance agreements with those officials working on the ground as by sometimes phoning them, one would be impressed by what work was said to be going on while in reality there was no work being done. People needed to visit the problem areas to know exactly what the problem was and people should be held accountable if the wrong information was given. There were challenges of water all over SA and not just in KZN and there was a balance of issues between paying for water and receiving water services. Government needed to be assisted in the regard – Members needed to visit the problem areas themselves instead of always urging the Minister or Deputy Minister. As part of the Portfolio Committee on Environmental Affairs, provincial public hearings were held and most people raised the issue of water – this showed water was life.

Mr Mnguni was concerned about under-spending by the Department this financial quarter seeing as there were so many projects to complete.

Ms Fundekabi noted that when compared with the Department’s expenditure at this time last year, the Department was under-spending. The Department did have a straight-line projection and expenditure projection trends for the year, however, it was driven by projects on the ground. Most of the factors impeding on the Department’s work were external in nature. She committed that there would be improvement in the upcoming quarters. 

Deputy Minister Tshwete emphasised that she did not want to fight with officials unfairly because sometimes delays in achieving targets were caused by communities themselves. An example was the building of houses where the community wanted their own design. There were also delays in other Departments, like Public Works, which then delayed DWS. At times the problem lied with elected politicians in local government misusing MIG funding – this was the fault of Department officials. Such matters needed to be addressed. There was also deliberate vandalism by communities and this needed to be addressed by Portfolio Committees. Members were right that the 11% spend of the Department’s budget thus far was not enough but she had learnt that job opportunities for each project needed to be identified. She promised there would be improvement in the next quarter and Members would not be fighting with the Department then as there was a lot of work to be done in local government and Members would see this for themselves on the oversight visits. DWS could not solve the local government issues alone – there needed to be an integrated approach between all the relevant departments, namely, Human Settlements, DWS and CoGTA. The local government summit, to be held this weekend, would assist in this regard and resolutions to deal with some of the issues would be developed.   

The Chairperson said SA was the only country in the whole world which built houses for free-whether this could be sustained in the future was a looming question. The issues raised by the Deputy Minister showed that the country needed to continue its developmental model.   

Coming back to Ms Khawula’s question on ward seven, a Department official had noted the area was affected by a drought. There was a temporary solution in place.

The Chairperson asked when this solution would happen.

The Department official explained it was currently in place. There needed to be better communication to inform communities of when such occurrences happened.

Ms Khawula did not want to be patronised by the Department because before the meeting she had made a call and she was informed the pipes were broken because a road was being constructed. It seemed as if people from the rural areas were being taken for a ride, misled, lied to and having their rights violated. She appreciated the explanation given by the Department but it was not true.

Ms Maluleke said the reason for no water in that specific ward was not because of the competencies of the Department. She should report the municipality so that people received water. The Committee should not be abused for issues which could be raised through a different way.

The Chairperson suggested the issues be raised outside the meeting. He added that a dialogue on who was telling the truth or not would not be reached in the meeting.

Mr Mpontshane agreed as he had asked the Department for contact numbers and would be raising his issues with these relevant contacts.

Mr M Galo (AIC) advised that Members not use statements like “Members were abusing Committee meetings”. He did not think such a statement was in order.

The Chairperson highlighted the matters raised could not be concluded in the meeting – it needed to be followed up like Mr Mpontshane would. The details on or “nitty-gritty” of certain matters could only be obtained outside the meeting. The Committee would be having a joint meeting in Johannesburg next Thursday and Friday with Rural Development and Land Reform and Agriculture, Forestry and Fisheries. The Committee would conduct its oversight visit on Tuesday after arriving in Pretoria Monday night.

Closing Comments

Deputy Minister Tshwete thanked the Chairperson for understanding issues of water and sanitation. She also thanked Members for raising issues as this assisted the Department to know what was happening on the ground. Most of the time municipalities lacked capacity and this was not the fault of the Department. However, the Department could not shift the blame so it took the responsibility as government. She and the Minister were only three months in the Department but they would look at the issues raised today by Members as they were all-important. It was very painful when officials were called liars because at times they were not lying. Officials got information from municipalities and these were the officials who lied most of the time. The Department needed the assistance of the Committee to conduct oversight over municipalities to get the answers. Water was life and she wanted everyone to have water. To hear that people were not getting water was very painful.    

The Chairperson, going forward, was keen to think outside of the box when it came to dealing with issues and planning. An innovative engagement should be had where the Department targeted three achievements for the coming year. To reach this point as some stage was important. Overall, all matters were work in progress.

The meeting was adjourned.  

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