Department of Water & Sanitation, Water Research Commission, Trans Caledon Tunnel Authority on their 2015 Strategic and Annual Performance Plans

Meeting report

Department of Water and Sanitation Strategic and Annual Performance Plan 2015
Ms Margaret-Ann Diedricks, Director-General, Department of Water and Sanitation, focused her presentation on the strategic issues of the five programmes of the Department (or DWS) – administration, water planning and information management, water infrastructure management, water and sanitation services, and water sector regulation.

Programme 1: Administration
She noted that the Department intends to reduce the vacancy rate for engineers and scientists by 10% and to develop skills through the graduate trainee programme. In relation to communication, the Department aimed to engage in stakeholder management and community participation programmes, media relations, marketing and advertising campaigns. In respect of legislative and policy development, it wanted to develop the National Water and Sanitation Bill. To further its international cooperation, it planned to establish strategic partnerships with African and global countries. With regard to mine water management, the Department intended to implement short-term and long-term solution projects and to develop a proposal for an environmental levy for the mining sector.

For this Medium Term Expenditure Framework (MTEF) period, this programme had been allocated an amount of R1 526 167 billion. This translated to 9% of the total budget.

Programme 2: Water Planning and Information Management
The Department would determine the needs for Water Resources and Infrastructure Development through reconciliation strategies, feasibility and all-town studies. Water Information Management would be done through data capturing, monitoring, information systems and information analyses. With regard to the protection of water resources, the Department would be doing reserves determination, resources classification and quality objectives. For Water Services and Local Water Management, it planned to develop Water Services Bulk Master Plans and Water Services developmental plans and water conservation and water demand management programmes.

For this MTEF period, this programme had been allocated an amount of R808 655 million. This translated to 5% of the total budget.

Programme 3: Water Infrastructure Management
Ms Diedricks noted that the Department would implement new augmentation projects and betterment of existing dams. For regional bulk infrastructure, it planned to develop bulk infrastructure, community infrastructure and to refurbish infrastructure schemes. In relation to operations and maintenance, it intended to implement dam safety rehabilitation, rehabilitate conveyance projects and develop asset management plans.

For this MTEF period, this programme had been allocated an amount of R 12 435 787 billion. This translates to 76% of the total budget.

Programme 4: Water and Sanitation Services
Water sector support would encompass financial support to resource poor farmers, and rainwater harvesting tanks would be installed for household productive use. The Department intended to eradicate the sanitation backlog in rural households and replace bucket sanitation.

For this MTEF period, this programme had been allocated an amount of R1 444 582 billion. This translated to 9% of the total budget.

Programme 5: Water Sector Regulation
In order to enhance sustainability in water provision, the Department planned to establish institutions such as the catchment management agencies, regional water utilities and infrastructure agency. For the authorisation of water use, applications for water use would be processed and finalised. In relation to economic and social regulation, it would develop the raw water pricing strategy and establish economic regulations. Dam safety evaluations and monitoring compliance of water users would be conducted to ensure compliance.

On water supply services and sanitation regulation, the Department was going to assess the compliance of water supply systems with drinking water standards and also assess the compliance of waste water treatment collector systems with effluent standards. Cases of non-compliance would be investigated. The Department intended to validate and verify water users within respective catchment areas, and would monitor eco-status of rivers, to determine where interventions were required.

For this MTEF period, this programme had been allocated an amount of R231 339 million. This translated to 1% of the total budget.

Speaking to the financial management of the Department, it was noted that the Department aimed to reduce the number of days of outstanding debt, and planned to increase expenditure on refurbishment and betterment.

(Tables and graphs were shown to illustrate earmarked and non-earmarked funds, budget per economic classification and programme, regional allocations, revenue projects, and flow of funds - see attached presentations

Discussion
The Chairperson wanted clarity on direct transfers to municipalities, money spent so far and infrastructure maintenance.

Ms Nthabiseng Fundakubi, Chief Financial Officer, DWS, spoke firstly to the direct transfers to municipalities, and indicated that the money was split into two. A portion of it was transferred to the municipalities directly and the Department kept the other remaining portion. The split was between Schedule 5 and 6B activities. In relation to money spent so far, she said the figure was currently standing at 84% compared to the 94% of previous years. The Department had spent R73 million of the R1 billion allocated so far.

In relation to infrastructure maintenance, she explained the Department was not doing well on the maintenance plan, which had never really been put into place. Year on year the Department had under-spent by 50%. Currently, it was working on a roll-out of the maintenance plan which it was hoped would be completed within a month. The new plan was not going to be as reactive as the way in which the Department had been operating in the past. It was instead going to be predetermined and would indicate scheduling for maintenance.

Ms T Baker (DA) wanted to know how far the Department had gone towards completing the Umzimvubu Project, and what its impact is going to be on the community.

Ms Diedricks explained that the Umzimvubu Project was in the design phase. The estimate for Umzimvubu is in excess of R20 billion. The feasibility and design determined the costs to be recovered for such infrastructure projects. Umzimvubu was in a precarious situation. There was no commercial activity around where the dam is built, nor were there any farms, so the water would be used for domestic purposes.  Umzimvubu had got a smaller dam already, on hydro-power and that is where it was believed costs could be recovered. The fiscus at the moment would have to bear the costs for Umzimvubu. That was why Umzimvubu was regarded as a social project.

Mr T Makondo (ANC) commented that the presentation lacked details and this made it difficult for the Committee to oversee the work of the Department fully. The presentation did not indicate quarterly targets, unlike the Annual Performance Plans (APPs) of other government departments. He asked how the Department was going to address the issue of underspending, pointing out that when this happened it meant that jobs were not being created. He also asked specifically on the status of the Nandoni Dam Project.

Ms Diedricks, in relation to the under-spending, stated that whether or not this happened depended on the nature of the projects and whether the targets were not met. Details on how the underspending was affecting the Department's ability to create jobs, and areas where it was managing to do so, were currently being compiled in a report, and this would be documented also in the Annual Report.

Ms Diedricks noted that in respect of the Nandoni Dam, there were various phases that were mentioned in the APP. The Department would respond in writing to the Committee about the various phases, and on the investigation into dereliction of duties by the service provider.

Mr L Basson (DA) wanted to know the status of the Mokolo Crocodile River Project.

Ms Diedricks said the project was now starting with Phase 2.

The Chairperson wanted to find out about the programme of the Department towards the promotion of black businesses and industrialists.

Mr Mpho Mofokeng, Chief Financial Officer: Water Trading Account, DWS, explained that the Department had a task team that worked closely with the Department of Trade and Industry (dti)to determine the demand on dam pipes so that a manufacturing company could be established. However, firstly, the Department needed to know the demand and the status of the infrastructure in the whole country. Currently, it had started to involve black engineers in the industry. Already there were a number of black owned companies that had benefited. It was work in progress, and much had been done to promote black companies. He also added that the Department was negotiating with the dti and National Treasury on procurement issues with regard to tenders, so that there could be joint ventures between small players.

Ms N Bilankulu (ANC) wanted to establish what the Department was doing in relation to areas around the Nandoni which had been without water for a long time. She asked for clarity on the statement around reducing the vacancy rate for engineers by 10%. She further asked why the bucket eradication programme happened in only four provinces.

Ms Diedricks commented on the issue of villages without water, and indicated that there had been lapses in the maintenance. The Department was currently working on a plan to deal with the backlogs.

Ms Bilankulu interjected that she did not find this answer convincing, and the Department could not simply continue, each year, to tell the Committee that it had plans. If the plan was not working, then the Department must change it.

Ms Diedricks noted that the Department was attempting to reduce the vacancy rate, and stated that advertisements had been placed in newspapers. The Department was targeting South Africans, but if people with those scarce skills were not available locally, they would be sourced from outside the country. The Department was working closely with universities, in order to deal with trying to provide bursaries, so as to attract interested students into the water sector.

Ms Diedricks noted that the bucket eradication project was happening only in KwaZulu-Natal, Gauteng, Western Cape and Eastern Cape. She also emphasised that this project was running in formal settlements. There was still the need to do more work in the informal settlements, because they were particularly difficult to deal with, and there was the added problem that informal settlements continued to spring up every day. 490 000 households were to be helped, but she conceded that this was just a drop in the ocean.

Ms H Kekana (ANC) commented that water was one of the issues raised during the North West service delivery protests, and asked the Department to comment specifically on this.

Ms Diedricks elaborated that the Executive of the North West had approached the Minister to look into all issues related to water and sanitation. The Minister had made interventions in the area with affected municipalities and water catchment agencies. The National Treasury and Department of Cooperative Governance (DCOG) had been briefed about the issue so that municipalities could indicate if they lacked money for the delivery of services related to water and sanitation. Some of the problems were the result of dereliction of duties by the local government, not the Department itself.

Water Research Commission (WRC) 2015 Annual Performance Plan Presentation
Dr Stanley Liphadzi, Executive Manager: Water Research Commission, centred his presentation on performance indicators and targets set for the 2015/16 financial year. In order to enhance new knowledge through research, the target set for the number of new research projects for 2015/16 was at 81. The entity intended to complete and finalise 85 research projects for this financial year.  The minimum number of students supported on WRC funded research projects had risen from 400 to 500.

The number of community-based research projects initiated for the current financial year had decreased from 20 to 9. 19 SMMEs were targeted to be lead organisations in the research projects initiated for this year, compared to the 26 for 2014/15 period. The targeted number of project leaders from the designated group in research projects to be done for this period was 45.

There were 18projects targeted for initiation in the 2015/16 financial year with Historically Disadvantaged Institutions (HDIs) as participating organisations in WRC projects. In order to increase the number of new innovations or products and services produced from the WRC research, the target set for the current financial year was 19. The number of dialogues to be held during this financial period was standing at 15.

The number of manuals and guidelines to be published and the number of issues of the "Water Wheel" to be published during this period were targeted as 26 and 6 respectively. The number of policy briefs to be produced and distributed to relevant government departments and other entities was said to be 12, and this was compared to the 10 for 2014/15 financial-year. The number of ministerial briefs that would be produced by the WRC and received by the Office of the Minister had moved from 10 to 12 for the current year. The number of WIN-SA publications to be produced and distributed to relevant institutions and municipalities for the 2015/16 financial year was 30.

In relation to jobs created, Dr Liphadzi indicated that for this current year, 14 new positions had been created, but only one had been filled. During 2014/15 period there were 11 vacant positions of which only 9 were filled, and 5 new ones were created.

(Tables and graphs were shown to illustrate baseline budget for 2014/15 and budget allocation for 2015/16)

Discussion
Mr D Mnguni (ANC) suggested that when projects are completed, the Committee should be invited to witness some of the occasions to avoid asking the same questions every year and also to keep Members better informed. He wanted to know if the bursary increases were based on the number of students taking up the bursaries, and asked for clarity on the number of jobs created and skills development

Mr Liphadzi responded that the bursary increases were determined by the number of MSc and PhD students that were involved in the research project commissioned. With regard to jobs, he said the jobs were usually temporary and the length of jobs and numbers would depend on the length of the project. Only very few jobs were permanent. In relation to the skills development, he stated that consultancy firms absorbed some of the students, on completion of their studies, while others joined the government.

The Chairperson intervened and stated that was unacceptable for the WRC to train people for the commercial markets because they were being financed by public funds,and there were many municipalities and entities that were struggling to secure scarce skills.

Mr Liphadzi stated it was difficult for the WRC to retain these students if the WRC had no work to keep them occupied, and he pointed out that the WRC was dependent, for its work, on successfully securing a research contract.

Mr M Mpontshane (IFP) wanted to find out if the WRC was in control when it commissioned research, because many times it had been found that some research projects led to indignities.

Mr Liphadzi reported the WRC was aware of such issues, but it was developing technologies that could be tested and used because the WRC was accountable to the Department of Water and Sanitation and the public. The WRC sometimes played an advisory role when it came to other technologies. A contract was signed with researchers when developing a new technology, so that it could be tested.

Trans Caledonian Tunnel Authority (TCTA) Annual Performance Plan 2015 Presentation
Mr James Ndlovu, Chief Executive Officer, TCTA, confined his presentation to the five water projects the entity was currently handling. These were the Lesotho Highlands Water Project, Berg Water Project, Olifants River Water Resources Development Project, and Mokolo and Crocodile Water Augmentation Project. His brief presentation focused on planned milestones for the 2015/16 financial year.

Regarding the Lesotho Highlands Water Project, a debt increase of R1.27 million was projected and that was resulting from an outstanding debt of R20.830 million. On the Berg Water Project, the entity intended to reduce the debt of R52 million, resulting in an outstanding gross debt of R949 million. In relation to the Olifants River Resources Development Project, he noted that the TCTA planned to deliver water for full Phase 2C around November 2015. For the Komati Water Scheme Augmentation Project, TCTA planned to reduce the debt of R58 million, which would then result in an outstanding gross debt of R1.125 million. With regard to the Mokolo and Crocodile River Water Augmentation Project, a debt increase of R263 million, resulting in an outstanding gross debt of R1 303 million, was foreseen.

(Tables and graphs were shown to illustrate baseline budget for 2014/15 and budget allocation for 2015/16)

Discussion
The Chairperson asked for a description of the mandate of the TCTA.

Mr Ndlovu said the duty of the entity was to build dams and distribute water. The TCTA did not purify water.

Mr Mnguni wanted to know about the number and nature of jobs created.

Mr Ndlovu indicated that the jobs were short term in nature. They were created when the project started, but when the project ended, so would the jobs. The TCTA had, however, discovered that skills that were created through one project could then be used in others happening in areas close by. There were a number of projects still to be completed. The Mokolo Phase 1 project would be completed around November 2015, and Oliphants Phase 2 was expected to be finished during 2015. Other projects were then also due for completion in 2016.

Ms J Maluleke (ANC) commented that the issue of skills development had to be taken seriously. The Sector Education and Training Authorities (SETAs) were taking people from local municipalities and training them. Municipalities should be serious when planning to use money for bursaries and should focus on developing critical scarce skills.

Ms T Baker (DA) remarked that polluters of water often seemed to go unpunished. She said she had spoken to the Department on her concerns, but had not received any response, although the Water Act did speak to the issue of sanctions for pollution. The main problem was that she did not know who, in the Department, was accountable on such issues.

No response appeared to have been addressed to this comment.

The meeting was adjourned.