Appropriation Bill [B6-2015]: Department of Water briefing, with Minister present

Standing Committee on Appropriations

22 May 2015
Chairperson: Mr N Gcwabaza (ANC) (Acting)
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Meeting Summary

The presentation of the Department of Water and Sanitation (DWS) to the Committee focused on an overview of its performance plan, the budget Vote 36, and the Water Trading Entity budget, with the Minister in attendance.

The Minister described the new approach that the DWS would pursue for improving service delivery. Ordinarily, the responsibility of the DWS was based on compliance with the legal mechanisms and on the development of innovative infrastructure. Its ultimate responsibility was to ensure that every citizen had water in their homes.

Notwithstanding its responsibility to manage and distribute water equitably and sustainably, South Africa had no national water master plan, and that had been a challenge to the DWS. Even though 88% of the population had formal access to water, some water taps were dry and the bulk of the country’s water (68%) was allocated to agricultural activities. A policy was needed to rectify anomalies in the distribution of water. Other challenges that were hindering the DWS to deliver had been inherited from its previous management.

Members felt that the Minister was on track, but a lot remained to be done. They sought clarity on a wide range of issues, including measures to be taken to expedite water delivery, performance accounting officers, the payment of contractors and the submitting of invoices, the lack of progress reports on long-standing projects, eradication of the bucket system, the monitoring and evaluation of the Department’s activities, the criteria for bursary allocations, and the DWS’s contribution to job creation and skills development.

Meeting report

Minister’s opening remarks
Ms Nomvula Mokonyane, Minister of Water and Sanitation (DWS), said the Department’s presentation would introduce the new approach that the DWS wanted to pursue for improved delivery of services to the people. Ordinarily, the responsibility of the DWS was based on compliance with the legal mechanisms and on the development of innovative infrastructure. Its ultimate responsibility was to ensure that every citizen had water in their homes. What had become a reality, however, was that the DWS was responsible for managing the whole country’s water. In the presentation, the DWS would underscore the municipal authorities that were meeting the DWS’s constitutional mandate.

The DWS’s intervention had gone beyond merely the allocation of money, but to re-emphasising the significance of what the conditions attached to offering grants should be. There ought to be conditions attached to grants. Second, the presentation would highlight enabling opportunities that the DWS had created to mobilise additional resources, and how to use funds in a much more effective and efficient way. It would also speak about the DWS’s work with the Department of Cooperative Governance and Traditional Affairs (CoGTA).

The DWS’s contribution was directed to ensuring that local authorities had a 10-year master water plan. Fewer than 30% of local authorities had such a plan, and this posed a challenge. It gave the DWS the opportunity to create a capable state that would render services to its people. Other issues that would be presented to the Committee related to experience on the ground, as the main concern had been that the Department might have had a huge budget, but nothing was happening at grassroots level.

To ensure that people benefited from the budget and that money was spent on what it was asked for, monitoring and evaluating the work that the DWS had done was of paramount importance. Of significance was also putting the people at the centre of the DWS’s work. An absence of monitoring and evaluation for ensuring compliance was indeed a challenge. However, the Minister had decided to sort out the incapacity within the DWS in the areas of supply chain management, the financial unit, and the management of water and sanitation.

The pertinent question that the Minister was expecting was whether the resources were sufficient, and the response was that the DWS had resolved to plan its activities first and to request money in accordance with the planned and strategised activities. The request would depend on whether it transpired that more money was needed. The DWS did not want to make the budget a big problem. The Committee should particularly note that South Africa had no national water master plan. The DWS was not dealing with only water, but also with sanitation. The Annual Performance Plan should reflect on those two aspects, because that was where the resources went.

The Chairperson thanked the Minister for her opening remarks and remarked that these issues would be thoroughly discussed at the meeting. The Committee had gone to the Eastern Cape to conduct an oversight visit and would go to other provinces for the same reason. Certain challenges had been noticed for which clarification would be sought. Was the DWS challenged by the provision of bulk water? What plans did the DWS have with regard to an improvement of the water infrastructure?

Department of Water and Sanitation: presentation
Ms Margaret-Ann Diedricks, Director General (DG), DWS, introduced the team and then took the Committee through the presentation. It focused on an overview of performance information, the budget Vote 36, and the Water Trading Entity budget.

Ms Diedricks said that the planning, budgeting and monitoring was constituted on four strategies -- the pre-planning position, strategy formulation, strategy implementation and strategy evaluation. What informed the planning process mandate was drawn from the Constitution, statutes, and international agreements. The Departmental mandate was aligned to the government priorities, including the National Development Plan, the Medium Term Strategic Framework (14 Outcomes) and the New Growth Path. The Departmental priorities had also been framed to achieve the Millennium Development Goals (MDG), which were productive employment and decent work for all (MDG 1B), halving the proportion of population without sustainable access to safe drinking water and basic sanitation (MDG 7C), and reducing biodiversity loss (MDG7B).

The goals of the DWS were threefold: An efficient, effective, and development sector leader; Equitable and sustainable water and sanitation services; and protection of water across the value chain. There were four programmes per budget structure. These were administration; water planning and information management; water infrastructure development; water and sanitation services; and water sector regulation. Strategic objectives established under each programme were highlighted.
With regard to the Water Trading Entity, the aim was to ensure the efficient management of daily financial operations processes and systems for the infrastructure and proto-Catchment Management Agency (CMA) components.

Approved budget had been allocated in terms of programmes and economic classification. The overall budget was R13.6 billion and R16.4 billion for the 2014/15 and 2015/16 financial years respectively. The budget reflected an increase of 21%. It was expected to decrease in the 2016/17 financial year to R16.3 billion, and to increase to R18.2 billion in 2017/18 financial year. For the 2014/15 financial year, the budget had been analysed per programme in terms of medium term allocation, with a particular focus on earmarked versus un-earmarked funds, conditional grants, and specifically/exclusively appropriated funds. Regional allocations of funds for of infrastructure programmes were highlighted.

The Director General said the Department was ready to implement infrastructure projects, because all of the implementing agencies for the Regional Bulk Infrastructure Grant (RBIG) projects had been appointed. The budget had been loaded on to the systems for payments to be authorised. Business plans for the Accelerated Community Infrastructure Programme (ACIP) and Municipal Water Infrastructure Grant (MWIG) had been approved and implementation plans were in place.

Ms Diedricks described challenges faced by the DWS. Implementing agents did not submit invoices on time, or submitted invoices without proper supporting documents. This slowed down implementation of infrastructure programmes. There was political instability within certain municipalities, which affected the appointment of services providers and also payments to service providers. On top of this, construction work had actually been stopped due to community unrest during the course of financial year, which had had an impact on the performance of the projects. Another challenge was related to the late appointment of contractors by municipalities.

The Director General talked about the measures developed to implement more cost effectiveness, which included the following:

  • The DWS to pay invoices on work done.
  • Advances to be paid for ordered material.
  • To develop an effective system of verifying work done.
  • To improve on project management.
  • To strengthen the contract management unit.
  • To develop electronic document management systems, including contract management and invoice tracking.
  • To improve communication with the implementing agencies and contractors.

The Director General concluded her briefing by providing an overview of the trading entity’s MTEF budget for 2015/16 to 2017/18. She talked about development of new infrastructure and revenue projects in terms of refurbishment and rehabilitation.

Dr C Madlopa (ANC) sought clarity on how the DWS intended to respond the inherited challenges related to its financial performance, which went back to the 2010/11 financial year. Since then, there had been a slow pace of performance. The DWS had performed at 60% in the 2010/11 financial year, and a continuous decline in performance was obvious. The report illustrated that the DWS faced challenges in delivering water. What measures had been taken to expedite water delivery? Did the DWS have a performance accounting officer? Was the issue of payment to contractors not a challenge?

Mr M Figg (DA) remarked that, judging by the dynamic and vibrant opening remarks, it seemed the DWS was on the right track. He sought clarity on why it was claimed that there was not enough budget when the balance sheet showed there were huge amounts of money that had not been spent. How could the issue of submitting invoices be a challenge? He further sought clarity on two projects about which the Committee had not received progress reports. On the eradication of the bucket system issue, he asked how many townships were still using the system, how much had been allocated to deal with the matter in the previous financial year, and what was replacing the bucket system?

Ms R Nyalungu (ANC) sought clarity on monitoring and evaluating, on issues of political instability, and about service providers.

Mr A Shaik Emam (NFP) said that what people wanted was to see services being delivered. He also asked about the eradication of the bucket system and how the DWS went about it. In which provinces the DWS was facing the most challenges? He remarked that when the Committee had visited the Eastern Cape, it had noticed that wonderful work was being done but that there was still a lot to be done in the area of creation of jobs. Most of the DWS depended on imported equipment from India and China to deliver water and sanitation. Had the DWS ever thought about working together with the Department of Trade and Industry on the possibility of using locally manufactured products? Corruption was the most serious challenge hindering the work of the DWS. What was the DWS’s approach in its fight against corruption within the Department and entities? Every department that had briefed the Committee had complained about skills shortages, but had not provided established strategies to deal with the issue. The departments should bear in mind that South Africa was faced by a high unemployment rate. What was the DWS doing to eradicate the skills shortage or, alternatively, promote education? Were there bursaries, and if yes, how were these bursaries granted? He suggested that the DWS should submit a report to the Committee consisting of all the challenges that the DWS was facing, and how they should be resolved.

Ms M Manana (ANC) said the presentation was informative, but the 2013/14 report had not been good at all. More needed to be done. She asked whether people who had been appointed had the capacity to deliver. Was the allocated RBIG budget sufficient to carry out the project? Referring to the Eastern Cape oversight visit, she said that service delivery had not been very good. Was the DWS monitoring and evaluating to ensure that money went on activities which it had been asked for? She joined others in seeking clarity on the eradication of the bucket system.

Mr A McLoughlin (DA) asked why there would be a decrease in earmarked funds in the 2016/17 and 2017/18 financial years. What was replacing the bucket system? Why were more RBIG grants being allocated to Kwazulu-Natal? What were the criteria forallocating funds? He further remarked that 98% of South Africa’s water was being supplied, so there was no need to build more dams and the DWS should rather focus on the equitable distribution of water.

Ms S Shope-Sithole (ANC) said she appreciated the Minister’s demonstration of strong leadership at the previous day’s question-taking session, and was impressed by her approach to water and sanitation services delivery, which was that planning and monitoring should take place before a request for more money was made. Referring to the Eastern Cape oversight visit, she remarked that there had been progress.

The Chairperson sought clarity on the Department’s collaboration with the National Treasury and the Auditor General. According to these institutions, the budget was about maintenance and the Committee was tasked to see whether the allocated budget achieved its goals. The issue regarding grants raised critical questions. How were the bulk of funds transferred between the national and municipal authorities? Issues of social and economic progress, and job creation, were matters to be taken seriously when evaluating how the budget was spent.

Minister’s response
The Minister thanked Members for their insightful and valuable comments. These had been noted, along with the questions that had been posed. She believed that the reason for her coming to the Committee was to find solutions to issues that had been raised and the challenges her Department was facing. Despite the challenges that the DWS was facing, she could bring to the table what the DWS had achieved. For instance, 88% of the South African population had access to water. The problem that needed to be tackled was to ensure water delivery was sustainable. Certain water taps were dry. This was due to an absence of operating and maintenance capacity. In that regard, the meeting of 70% of the MDG was a challenge. What had been missing in the operation of the DWS was the National Water Master Plan. It was supposed to guide how the government ought to work. The government had also adopted an outcomes-based approach, where the departments were forced to work together to deliver. Irrespective of the collective approach, each department individually had to work hard to deliver.

The National Development Plan (NDP) had achieved wonders. To understand this, one should look at how South Africa had performed before the introduction of the NDP. South Africa had performed as a federal state and as a result, performance had collapsed. With the NDP, the country needed water security. In that case, it needed a national water plan. Before, it had not been clear what South Africa should do with its water. Over time, information had been pointing to the fact that collectivism had improved delivery. The 2014/15 financial year had been the first in which the vision of NDP had been implemented.

Oversight, in conjunction with monitoring and evaluation, was needed to ensure that the allocated budget went where it was supposed to go. Since the time of former President Mandela, the Umzimvubu Dam had remained at the centre of discussion. If it was still on the table of discussion, this should mean that someone should take responsibility.

The Minister said consequence management was an issue that was not taken seriously, but which she believed should be given more attention. People were hiding behind the public service, making it difficult to deal with issues of non-performance. Referring to performance agreements, she said that results always depended on what one put in the pot. She received reports from the Public Service Commission and the Auditor General, which looked at the issues of non-performance, which had been raised by Members. To improve performance, people should be placed in positions which they were capable of managing or performing.

Regarding engagement with other institutions, the Minister said she had been engaging with the National Treasury and Auditor General to find the best ways to work as a team. In her own history, the Minister had been achieving a clean audit. During her tenure, she had visited all the provincial governments except Limpopo. Even if a province had no capacity to deal with water, there ought to be an inter-governmental relationship. If the national government bore the responsibility to render support, that support could be rendered on water and sanitation.

The situation in Kwazulu-Natal had brought with it the need to allocate a huge budget. Kwazulu-Natal had been declared a drought area. Rivers had no water. The budget was high because iussues that were being dealt with included traditional matters.

In accordance with the CoGTA report, there were 27 districts -- mostly in the Eastern Cape, Free State, North West and Nelson Mandela Metro -- which were unable to manage projects, as well as problems with local governments. They could not perform their core businesses.

On the issue of job creation, the Minister responded that she was working with the Department of Trade and Industry (DTI) to find a way in which the local manufacturing industry could intervene.

On the issue of sanitation, the Minister said there was a need to set a national standard. This could be possible through the introduction of a national policy. The issue of the bucket system being eradicated was being looked at in terms of the toilets that were being built -- but there were not always water connections. A major problem was that South Africa was very weak on water preservation. It did not recycle water. It was dependent on surface water. Companies were using drinkable water to clean their tools. 68% of water was allocated to agricultural activities. The availability of water was insufficient, and the inadequacy of energy exacerbated the situation. Water could not be pumped if there was no energy.

Mr Shaik Emam, referring to the bursary programme, sought clarity on which criteria were followed to allocate bursaries to students. Referring to non-performance, he asked whether people who did not perform were disciplined.

The Chairperson, referring to Meru Water, said that the DWS had improved its services by installing a big pipe there, but people had been demonstrating and complaining about the water. Regardless of the installation of a pipe, there was no water in the area.

Mr Figg appreciated the DWS’s work, and commented that he was expecting more on the side of service delivery in the following year.

On the issue of bursary allocations, the Minister responded that bursaries were allocated according to provinces. Certain problems that the Department was facing could be traced back to 2010. Nobody had been held accountable. Since the Minister had taken over, she had tried to change the Department. She was taking the issue of management and accountability seriously. She was afraid of no-one. Accordingly, some managers were sitting with disciplinary notices. Those who could not comply with their mandate would be penalised. This included issues of insubordination, incompetence and non-compliance. In this respect, she could make available a report on what she had done.

Ms Shope-Sithole remarked that the Constitution gave power to Parliament to call whoever it needed to give an explanation, especially on issues that fell in the main item on the agenda. The fact that events had occurred three years ago should not imply that the responsible person should escape liability. Accounting officers should not be spared because they had left their positions for another position in other institutions. The Minister should obtain more information about the issues in question and report back to Parliament, and Parliament would hold those responsible to account.

The Chairperson agreed. The DWS ought to work optimally. There would be no reason for it to exist if it did not hold people to account. On behalf of the Members, he appreciated the Minister’s frankness on the challenges the DWS was facing. This would help the Committee to assist the DWS to find a way forward.

The meeting was adjourned.


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