Bulk Potable Water Service provision: Water Boards follow-up briefing

Meeting report

The Chairperson encouraged the Department to reveal the underlying challenges so that the Committee could assist when necessary. She expressed her concern about the water boards not meeting targets adding that it was not an ideal situation when citizens had no hope of access to potable water. She said that illegal informal settlements had a huge impact on water and sanitation, and inquired about the commissioning of implemented projects.

Mr Anil Singh, Deputy Director General, Department of Water and Sanitation (DWS), said the report had been consolidated by compiling the inputs of all the water boards. The water boards were strategic entities in terms of socio-economic development and in terms of supply, so that reliable, healthy, and cost effective bulk services could provided. There were currently nine water boards operational in South Africa. The relationship between the Minister and the water boards positioned the Minister as the shareholder and executive authority, and the water boards as the accountable entities.

Mr Singh gave an overview about the value-adding contributions of the water boards that reflected their core businesses as using water for promoting the socio-economic development agenda, reducing inequality through access to water and job creation, leveraging additional investments for infrastructure development, enabling rural communities to use water for rural livelihoods, promoting greater citizen participation in decision making, and allowing for innovation and knowledge generation. He reflected on the various outcomes in terms of effective water resource management, and provided a graphic illustration of the current distribution of assets, highlighting Rand Water as the highest, followed by Umgeni Water. He added that the Trans Caledon Tunnel Authority (TCTA) was not a water board. 

The water boards’ medium term budgets were R15.7bn for 2014-15, R15.4bn for 2015-16, R19.2bn for 2016-17 and R21.2bn in 2017-18. Effective and holistic water service provision required attention to product quality, customer satisfaction, employee or leadership development, water resources adequacy, community sustainability, financial viability, infrastructure stability, operational resiliency, operational optimisation, and stakeholder support. A snapshot of consolidated performance on functionality and provision of water supply showed that product quality had a 99% compliance with South African National Standards (SANS) 242, and a customer satisfaction rating of 80-82%. Financial viability was extremely important, and non-payment of bills by municipalities needed to be addressed if water boards were to function. All water boards had achieved 100% reliability of supply against their targets. To provide increased access to services, capex for all water boards was R7.2bn. A key performance indicator of the DWS was effectively managing avoidable water losses. Avoidable water lost as a percentage of water produced had dropped from 4.6% in 2011 to 3.5% last year, and was down to just over 3% year-to-date.
The overall consolidated performance for 2013-2014 reflecting a net surplus of R2.337bn, which was 42.7% above the R1.638bn budgeted.

Mr Singh described the contributions of the Amatola water board towards strengthening water supply included influencing and supporting the process and model for a regional water utility in the province, and developing a fully integrated provincial master plan, including funding considerations. He also briefed the committee on the key projects, values, challenges, statuses and current supply areas of Bloem Water, Lepelle Northern Water, Mangalis Water and Mhlathuze Water respectively.

The drought in Kwazulu-Natal was being addressed. Concerned parties, such as the Minister and the Department, were intervening as much as they could. In terms of consumers, Mondi was the major industry, while other role players were Richards Bay and Empangeni.

There had been improvements in service levels due to the work being done by the water boards. Overberg Water, though the smallest in size, had played a critical role in strengthening water supply. Current projects, such as the upgrades in waste water treatment, were still mostly in their planning stages. Rand Water’s footprint was spread from Gauteng to Mpumalanga, and the value of its projects was significantly higher due to their magnitude.

The President and the Minister had announced a campaign known as “War on Leaks,” which sought to address how South Africa could make consumers aware about the need to conserve water. The aim was to train various classifications of specialists, such as technicians, plumbers and scientists. The complexity of Rand Water’s operations was also highlighted, as operations had been extended by ministerial directives. There were 27 new local councils, inclusive of Gauteng and Limpopo, and Rand Water was doing well in supporting the Minister’s targets of water supply. 

Mr Singh highlighted Sedibeng’s projects and values, even though the municipality was known as the poorest municipality in the country. Umgeni Water also played a vital role in strengthening water supply; The Midmar waste water treatment plant was a major project in the area. The targeted supply to the rural community was 40%.
A major challenge faced by water boards was non-payment of debts by municipalities. The negative impacts were enormous and debts outstanding for more than 120 days added up to about R2.1 billion. The culture of non-payment should be addressed. Even though it was impossible for one organ of the Government to sue the other, adequate measures should be taken to tackle the issue. Infrastructures in the country were under a severe threat, and new security measures would be taken in partnership with SAPS to mitigate the risks of vandalism and theft. Other challenges were related to capacity and funding issues.   

Discussion
The Chairperson highlighted the missing vital statistics in the presentation, giving an example of the KZN province, where the report had not given a clear picture of the impacts made in strengthening water supply, and the challenges.

Ms L Zwane (ANC, Kwazulu-Natal) inquired about the statistics reflecting the number of people benefiting from current projects. She supported the Chairperson’s comments about the missing relevant figures.

Dr Limakatso Moorosi, CEO, Bloem Water, addressed the concerns about the missing statistics. She said that Bloem Water, as an example, currently served four municipalities and as a result, it would be difficult to give provincial statistics. Water boards only provided bulk services.

The Chairperson repeated her argument by inquiring about the municipal statistics, since the water boards did not have provincial statistics available.

Mr Cyril Gumede, CEO, Umgeni Water, said that the statistics which seemed to be a major concern were available, but the presentation of the report had been influenced by the format requested by the Committee.

Mr Singh said that there would be a written response to the inquiries regarding the figures.

Mr M Khawula (IFP, Kwazulu-Natal) asked if the issue of under-spending raised in previous engagements had been addressed. He sought further clarity on the existence of contingency plans and relief measures water boards had in place to tackle issues such as the drought in the KZN. As regards the R2.1 billion owed by municipalities, he expressed his shock about the non-payment of bills by municipalities even though provisions were made to pay for such services.

Ms Zwane referred the Department to the report which indicated the targets that had been met, and inquired why most water boards were not meeting their targets. She also sought clarity about the non-payment for services by the municipalities, emphasising that this was a negative culture which should not be tolerated. She suggested strict measures in the form of tariffs for those who exceeded the limits of their allocated water resources, and asked about the progress made so far relating to proposals on the “War on Leaks.”

Ms P Mququ (ANC, Eastern Cape) said that using the Eastern Cape as a case study, it was government departments which owed money to municipalities. She asked if water boards could follow up on this issue, because some municipalities complained about improper billing by service providers.

The Chairperson addressed the confusion about the report format, and emphasised the seriousness of the concerns raised. Using Rand Water as an example, she asked about the meaning of the status “ongoing,” as the statement was ambiguous and did not give a clear picture about the duration of the projects and their respective statuses. A number of the boards were at the conception and planning level, and were not really reporting. Addressing concerns around the non-payment for services by municipalities, she said that municipalities were disputing billing for services, and it was crippling the boards. She inquired about the responsible party for leaks when bulk services were provided, and suggested that the issues of infrastructure should be properly tackled. Why did the boards keep complaining about insufficient funding when the current funds were not fully utilised? Were the water boards facing capacity issues?       

Mr Singh responded that there would be a joint session of all portfolio committees on water and sanitation, as well as those of Cooperative Government and Traditional Affairs (COGTA), on 26 August and all the relevant issues would be addressed.

Mr Gumede responded to Mr Khawula’s inquiry about the drought in the KZN. The drought had been the result of far below average rainfall. The Umgeni River had not been affected but the north and south coasts had been because of the small sizes of the dams. There were contingency plans in place, such as the daily pumping of three to five megalitres of water from the Umgeni River. The contingency plans included restrictions to pumping in order to conserve water. JoJo tanks had been installed and over R60 million had been spent on alleviating the KZN drought.

Ms Zwane confirmed that the Umgungundlovu district had been badly hit by the drought. She asked about the interventions that had been made in the municipality.

Mr Khawula inquired about the Departmental interventions that had been made, and supported his inquiry by adding that Ugu transported water by road overnight to meet its daily demands, and the municipality claimed that the Department’s interventions were long overdue.

Mr Gumede reiterated that water boards were limited by the municipalities in terms of the interventions that could be made. Using Umgeni Water as a case study, he said that only the northern part of Ugu was allocated to the water boards to deliver services.

Mr Sibusiso Makhanya, CEO, Mhlathuze Water, said that transfer schemes had been implemented and that only 32% of the 70% forecasted water level had been realized. The lakes served the purpose of supporting the big river, and the board was patiently hoping the rain came soon.

Mr Percy Sechemane, CEO, Rand Water, clarified that most of the presented information related to project renewals. The ongoing projects are not new projects, but rather for maintenance purposes. He said that although the services were affordable for the municipalities, the funds were received from the government and were then redistributed. The Bushbuckridge municipality in Mpumalanga currently owed a lump sum but arrangements and interventions were underway to facilitate payments. The core operational area in Mbombela was being serviced by a private company and as a result, there was no form of economic benefit for the community.

The Chairperson suggested that the ongoing projects should rather be termed “maintenance” projects. She asked about the status of projects that were yet to be commissioned. While responding to concerns about private companies servicing major urban areas, she mentioned that she had witnessed the contract signing between the Department and Simcorp in Singapore and as a result, the wounds were self-inflicted. She added that water boards were offering services in rural areas where service users did not want to pay for services.

Mr Sechemane confirmed that the root cause of problems faced by the boards were non-payment issues. Tariffs would be balanced they were related to the maintenance of infrastructure, as there were no Government interventions in regard to maintenance. He confirmed that the requested statistics would be furnished.

Mr Singh suggested that a comprehensive written response to the issues raised would be presented.

Mr Khawula sought clarity on the issue of delivery in terms of infrastructure, as there were discrepancies between the Department and municipalities

Mr Singh replied that the information requested was out of his jurisdiction, as he dealt with regulation.

The Chairperson suggested that the written response, as mentioned by Mr Singh, should be presented on Friday 9 August 2015.

Mr Sechemane confirmed that the “War on Leaks” was a national programme, and not just an ordinary Departmental initiative.

The Chairperson said that the requested report should be concise, rather than detailed operational information. Although bulk services were being provided, they might not be reaching people because of reticulation problems.

The meeting was adjourned