Documents handed out:
Department of Water and Sanitation 2016 Strategic Plan
Department of Water and Sanitation 2016 Annual Performance Plan [Document not available email firstname.lastname@example.org]
The Department of Water and Sanitation (DWS) briefed the Committee on its strategic and annual performance plans for 2016. A detailed presentation was delivered that covered the process followed when putting the budget together in terms of the legislative and regulatory environment. The Department also took great pains to align the budget with the National Development Plan Vision 2030.
The programme descriptions, along with their focus areas, were outlined. There were five programmes: Administration; Water Planning and Information Management; Water Infrastructure Development; Water and Sanitation Services; and Water Sector Regulation. The Vote 36 medium term budget and the overview of the Water Trading Entity’s medium term budget was presented by two respective Chief Financial Officers (CFOs).The first budget was presented by the CFO for the DWS main account, and the second by the CFO for the Water Trading Entity of the DWS.
Members were concerned that the crisis regarding the drought had not been included in the budgetary allocation. They asked why the Bucket Eradication Programme (BEP) had not received a budgetary allocation in certain provinces. The DG provided a lengthy explanation for this and contextualised the issue in great detail for the Committee.
The Chairperson was displeased that the annual performance plan (APP) was missing. This document should also have been presented and would have provided clarity with reference to a number of critical issues. The Chairperson requested that this document be sent through to the Committee as soon as possible. In addition, the Chairperson also noted that the budget had been presented in the absence of a report from the previous year, although she acknowledged that this was not the Department’s fault. A Member was displeased that there were also missing pages within the document -- it had been presented at the National Assembly, and was slightly different to the one presented at the Committee meeting. The Chairperson requested a written explanation for this.
Department of Water and Sanitation on its Annual Performance Plan
Ms Margaret-Ann Diedricks, Director-General, Department of Water & Sanitation (DWS) outlined the process that the Department followed when the budget was put together. The legislative and regulatory environment informed both planning and budgeting in the Department. This included the Public Finance Management Act, the Public Audit Act, the Money Bills Procedures and Related Matters Act and the Public Services Act. In addition, sector specific legislation was also included, namely the National Water Act, the National Services Act and the Governance, Legislation and Policy framework. This was all encapsulated by the Constitution which enjoined Section 55, 56, 92, 195, 215 and 216, and provided a basic overview within which the Department functioned. Further the Department also took pains to align the planning with the National Development Plan (NDP) for vision 2030, specifically the following Chapters:
- Chapter 3: Job Creation
- Chapter 4 : Improving Infrastructure
- Chapter 5: Transition to a low carbon economy
- Chapter 6: Inclusive and integrated rural economy
- Chapter 13: Building a capable state
Further, the Medium Term Strategic Framework (MTSF), which must give effect to the NDP every five years, was aligned to outcomes 4 (jobs), 5 (economic infrastructure), 10 (environment), 7 (rural development) and 9 (local government), which were directly linked to the Department’s own sector specific matters which fell under the national water strategy objectives. Outcomes 4 and 5 were linked to the objective that water contributes to the economy and job creation. Outcome 10 specified that water was protected, used, developed, controlled and managed sustainably and equitably. Outcomes 7 and 9 specified that water supported development and the elimination of poverty and inequality. The objectives could be found in the annual performance plan. Finally, with regards to the budget structure, this included the main account as well as the Water Trading Entity (WTE). There were five programmes that fell under the main account and the rest of the financial management was contained under the WTE.
Ms Babalwa Manyakanyaka, Chief Director, Corporate Planning Services, (DWS) quickly outlined the programme descriptions as well as the focus areas of the programmes:
Programme 1: Administration
This programme deals with the Department’s support and corporate services as well as international relations programmes.
The high level focus areas are for a targeted percentage of the procurement budget to be spent on qualifying small enterprises. This was in line with the government’s requirements, where revenue must be spent, debtor days must be reduced, and middle and senior level management services must be assessed against the Department of Public Service and Administration (DPSA) competencies. In addition, international programme activities must be aligned with outcome 11, which was related to global standards. Finally, the DWS communications plan must ensure that awareness was created with regard to the Department’s activities.
Programme 2: Water Planning & Information Management
Infrastructure and sanitation planning are housed here. The high level focus areas are related to the implementation of:
- Water monitoring in priority catchment areas.
- Integrated water quality management strategy.
- Assessment of water losses in large water supply systems.
- Master plans for district municipalities.
- Audit of water service authorities.
- Socio-economic assessment on benefits of infrastructure to households.
The Department also monitors the eco-status of different rivers that have been prioritised provincially – for example, Limpopo had four rivers, the Vaal had six rivers, and so forth. Slide 13 showed all of the water resources projects (bulk infrastructure) per province and their implementation readiness. Mpumalanga had seven feasibility studies and five water resources projects, the Eastern Cape had six water resources projects, six feasibility studies and six implementation readiness, etc.
Programme 3: Water Infrastructure Development
This was the infrastructure implementation arm, where dams and water services infrastructure was developed and implemented. The high level focus areas are related to the implementation of:
- Completion of dam safety rehabilitation projects.
- Implementation of a national asset management plan.
- Bulk raw water projects were under construction and completed.
Slide 5 mapped out the projects per province, both large and small that would be constructed and completed during the year. Similarly, operational and maintenance projects were mapped out provincially on slide 16. These infrastructure projects were linked to job creation. Monitoring would be done on unscheduled maintenance and compared to the DWS asset management plan.
Programme 4: Water & Sanitation Services
Rural support initiatives and the sanitation programme are housed here. Slide 17 mapped out the Bucket Eradication Programme (BEP) as well as the Rural Household Infrastructure Programme (RHIP) per province. There were provinces such as the Northern Cape, North West, Limpopo, KwaZulu- Natal and Mpumalanga that did not have BEPs for the year in question. However, the RHIPs were being targeted for implementation in all of the provinces in question. Additional activities such as rural support included the Rain Water Harvesting (RWH) programme as well as the Resource Poor Farmers (RPF) programme. Slide 19 mapped out these proposed programmes per province.
Programme 5: Water Sector Regulation
Compliance, monitoring, enforcement, regulation and technical barriers to trade (TBTs) are housed here. Finally, there was the Water Trading Entity programme that looked at the Department’s financial operations and revenue. The focus areas are to:
- Assess waste water treatment systems against the Green Drop standards.
- Monitor non-compliant waste water systems, and assess water supply against the Blue Drop systems.
- Monitor water users’ compliance and investigate non-compliant cases.
- Assess catchments for acid mine drainage (AMD).
- Implement mitigation strategies for assessed catchments.
- Finalise applications for water use authorisation within 300 days.
- Approve the national water and sanitation resources and services strategy.
In addition, there would also be the establishment of a National Water Infrastructure Agency, a water economic regulator and water pricing regulations. This would be to achieve the sound governance and oversight of the DWS entities. Slide 22 illustrated the map showing the number of waste water treatment works (WWTW), dams, water management institutions (WMI) and water treatment works (WTW) that would be monitored per province.
Overview of Vote 36 Medium Term Budget
Mr Sifiso Mkhize, Chief Financial Officer (CFO) outlined the 2016 allocations for the Estimates of National Expenditure (ENE). He noted that the bulk of the budget (77%) was concentrated in Programme 3 -- Water Infrastructure Development -- while the rest of the budget was split up between Water and Sanitation Services (5%), Water Sector Regulation (2%), Administration (11%) and Water Planning and Information Management (5%).
The total budget allocated to the DWS was R15.2 billion, and was divided amongst the programmes as follows: Administration (R1.6bn), Water Planning and Information Management (R8.4m), Water Infrastructure Development (R11.6 bn), Water and Sanitation Services (R7m) and Water Sector Regulation (R3.4m).
Overview of Water Trading Entity: Medium Term Expenditure Framework (MTEF)
Mr Mpho Mofokeng, (CFO), Water Trading Entity, DWS said the focus of the presentation was on two specific projects, -- the development of new infrastructure and the revenue projects’ refurbishment and rehabilitation.
The Oliphant’s River Water Resource Development Project (ORWRDP) in Limpopo and Mpumalanga had four phases. The first phase of this project was nearly completed. The total cost of this project was R3.3 billion and the total expenditure to date was R2.9 billion. The total cost budgeted to complete this project was R27.9 million. The total budget for the Groot Letaba River Water Development Project (GleWap) Phase Dam (Nwamitwa Dam) in Limpopo was R510 million. The cost of raising the Clanwilliam dam wall in the Western Cape was R377 million to date, and over the MTEF the total would be R1.2 billion. The dam safety rehabilitation project budget totalled R 1 billion for programmes that would be executed across the country in the MTEF. The budget to deal with Acid Mine Drainage totalled R3.3 billion.
The Chairperson commented that the Committee did not have a performance report from the previous year to work from. This was by no means the fault of the Department, but it did make the work of the Committee difficult. Further, she admonished the DWS with regard to the missing Annual Performance Plans (APP), which were not presented at the meeting. The APP would have clarified many issues as it was critical and would have answered many questions from Members. She also expressed concern regarding the MTEF, as it did not clearly indicate what would be done in the current financial year.
Ms Pam Tshwete, Deputy Minister, DWS, responded that the Department would ensure that the Committee received the APP. The Chairperson requested that the APP be sent to the Committee early on Wednesday morning in order to give the Members time to prepare for their speeches.
The Chairperson asked why there was not a budgetary allocation for the bucket eradication programme (BEP) in all provinces.
Ms Diedricks explained that the BEP was an inherited function from the Department of Human Settlements in November 2014. The inherited function was called “sanitation,” but there were two programmes attached to this function. First, was the BEP, and was defined as the eradication of buckets in formal settlements. It was important to distinguish between the chemical toilets and the porta portty system. It was also important to note that the DWS had dealt with the BEP only where there was a formal dwelling. The information they had received from Statistics SA was that there was a finite number of buckets in formal dwellings across the country. There were some provinces that did not have buckets in formal dwellings at all – for example, Gauteng. Therefore it was important to note that the budgetary allocation was meant for this, and not for the buckets in the informal settlements.
The Department had thus been left with the Free State and the Eastern Cape in terms of the presentation, so this was what was being done. The Northern Cape and the North West were being wrapped up. There were five provinces where complete eradication had taken place. Further there was the Rural Household Project (RHP) -- this was a dry sanitation solution that was being provided. The budgetary allocation the Department had received for this was as per Treasury’s allocation. She emphasised that this was not an allocation made by the DWS itself. However, the discussion also took place at a provincial level, and structures had been set up by the Department for this. The premier in a province would convene all of the executive mayors and from here a discussion took place around allocations in a particular province. This was done to create ‘buy-in”, as there were finite resources and there was a huge backlog. Therefore going forward there would be no more allocations for the BEP. A conversation must now be held with Treasury and the National Planning Unit regarding eradicating the bucket system in informal settlements. There was no policy position on this currently, and it was mainly dealt with by the metros.
The Chairperson responded to the DG by requesting reports that had been given to the Portfolio Committee regarding the BEP.
She asked for an explanation on the definition of “ear-marked” and “unear-marked” funds. Further she requested clarity on the funding of water boards and their functions.
Mr Mkhize responded that ear-marked referred to conditional grants, and unear-marked funds referred to specific projects.
Mr C Hattingh (DA, North West) said that the report presented at the meeting was different to the report presented at the National Assembly (NA). It appeared that there were many pages missing from the presentation. The comparative columns of the 2014/5 and 2016/17 budgets had deliberately been removed. The National Council of Provinces (NCOP) should have the same presentation as that of the NA. Information should not be removed as it hampered interaction with the Department.
Ms L Zwane (ANC, KwaZulu-Natal) responded that the guidance of the Chairperson was needed with regard to the sections of the report that were missing. She suggested that judgment should not be passed on the Department as the reasons for the omitted sections of the report were yet unknown. The Department should be given an opportunity to explain itself. Her comments and concerns with the presentation were related to her interest in projects that occurred per province. She requested that the fonts for the presentation be increased, as it had been difficult to read.
The Chairperson responded to Mr Hattingh by suggesting that the DWS should respond to his question in writing so as to avoid having two meetings in one.
Mr Hattingh said that there had been serious under-spending, with more people delivering less and the existence of serious backlogs. In addition, how did high capacity municipalities get to owe more than R3 billion, and how would the Department recover this money?
Ms Tshwete responded that the Department was still fairly new and as such they were learning and following the master plan. Thus they had under-spent at first in order to avoid spending money before they could fully understand their mandate and objectives.
Mrs Zwane asked for clarification with regard to slide 15, as there were two items with the same name and money allocated to each of them. In addition, she asked why it took 300 days to process applications for water usage.
Mr Anil Singh, Deputy Director-General: DWS replied that this was legislated, and an outer time limit to complete the authorisation process. It did not mean that it would take 300 days, but rather that it would be completed sooner should all technical information be received from the applicants. It would take approximately 150 days, as an ordinary environmental assessment took 150 days, as per the Department’s target.
Ms Mpambo-Sibhukwana (DA, Western Cape) asked what criteria were followed by the Department in terms of its budgetary allocation per province. How much had been spent on wasteful expenditure and how much had been taken back to Treasury, and what had been the time frames before it was given back?
Mr. Mkhize responded that the Department had requested a rollover from Treasury, and the audit for the last financial year was still under way. In addition, 99% of the Department’s budget had been spent in the last financial year. The process regarding wasteful expenditure was still under way, and once this was finalised the reports would be made available.
Ms Mpambo-Sibhukwana also requested that the Department give an update regarding the drought and whether a budgetary allocation had been made for it. It was critical, as there had been protests because of it.
The Deputy Minister responded that the Department had implemented interventions per province to deal with the drought, and would forward the reports to the Committee before Thursday.
Ms Diedricks apologised for not addressing the drought issue in the presentation. She explained that there had been no allocation or programmes for drought. The allocations with regards to this were held by the Disaster Management Centres and various units around the country. A special allocation had been made, based on a Cabinet decision that the DWS, Cooperative Governance and Traditional Affairs (COGTA) and Rural Development should form an inter-ministerial committee. This committee would then deal with the crisis as it arose. Therefore, there would not be any information in either the APP or the ENE. However, the information around how the drought crisis had been dealt with would be found in the annual report.
Mr M Khawula (IFP, KwaZulu-Natal) requested clarity on how the DWS monitored projects implemented by districts. This was important, as on a site visit he had received three different figures for expenditure from officials.
He asked about the BEP in KZN, as well as the figures relating to the RWH in the province, as the figures seemed too low. With regard to WWTWs, how many were there in total per province, besides those that were being monitored? What would happen to those that were left unmonitored?
What would the consequences be if the DWS received a qualified audit from the Auditor General after spending R27million on an internal audit?
Finally, with regards to the Mzimvubo Water Project, KZN had not been mentioned in the presentation but it had been stated on paper. He requested that if this was an error, it should be mentioned as such.
Mr D Stock (ANC, Northern Cape) asked the DWS to clarify why it had two Chief Financial Officers. He commended the DWS on its swift response to an issue that had been escalated to the Department by his provincial delegation. The DWS had made a budgetary allocation to address the issue, and Mr Stock requested that the Department ensure that the funds were properly utilised.
The meeting was adjourned.
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