Trans Caledon Tunnel Authority, Water Research Commission, Inkomati Usuthu & Breede Gouritz Catchment Management Agency 2017/18 Annual Reports, with Minister

Water and Sanitation

10 October 2018
Chairperson: Mr M Johnson (ANC)
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Meeting Summary

Annual Reports 2017/18

The Portfolio Committee on Water and Sanitation met with four key Water Catchment Agencies operating within the country. The Water Research Commission, the Trans-Caledon Tunnel Authority and the Inkomati-Usuthu Water Management Area had received clean, unqualified audits. the Breede-Gouritz Water Management Area had an unqualified audit with an emphasis of matters because of a lack of clarity about money transferred from the Department of Water and Sanitation. One of the biggest challenges experienced by all entities was the delay in allocation of funds through the Department of Water and Sanitation and National Treasury. All agencies present agreed that the Department needed to do better in terms of releasing funds on time and offering the relevant support for the various projects.

All entities agreed that there was need to avoid irregular and fruitless expenditure  and more needed to be done to ensure that accountability took place.

Transformation through the creation of a single national Water Catchment Agency was discussed in the meeting but that concept was not welcomed as the agencies believed that it would be difficult to have one agency because each area had its own set of demands.

The appointment of Water Board members, who were supposed to monitor the work of the Chief Executive Officer, by the Chief Executive himself needed to be investigated. Legal advice had been sought through Parliament.

Another challenge was the challenge of waste management. More research had to be done and new ways of cleaning waste had to be introduced.

Several towns in the Central Karoo had run out of water. More needed to be done to raise awareness of access to water. BGCMA stated that its area of water management happened to be in a rainy summer region and it hoped for water soon in Beaufort West and the Central Karoo area. However, 40% of water supplied in the Beaufort West area was not accounted for.

In response to a proposal that it might be a viable option to borrow initiatives such the Inga Project taking place in the Democratic Republic of Congo, Mr Gugile Nkwinti, the Minister of Water and Sanitation, said that it was best to be practical and to make use of what was applicable in the South African context, especially as the two countries were on different paths.

Most of the agencies were engaging with various communities and spreading knowledge about protecting and preserving water had been a key priority.

The role played by technology in terms of aiding water protection was emphasized in the meeting. Transboundary relationships existed in water management. Countries such as Lesotho, Mozambique, Zambia, Botswana and Zimbabwe are partners. Challenges existed in the transfer of diseases, such as cholera from Mozambique as explained by Inkomathi-Usuthu Catchment Management Agency.

Members asked how the degradation of the ecosystem (water and land) should be addressed. She What was the quality of the water in rivers as well as that of drinking water? Was the Minister playing his part in ensuring clean and safe water? What BGCMA is doing to intervene in the Central Karoo area where there were empty dams and boreholes and no water in towns such as Beaufort West? Members wanted to know whether the communities in which the projects undertaken by the Agency were informed about these community projects. How did the Agency ensure that people that received training through the projects actually came from the communities these projects were taking place?

Members expressed concerns about finances, especially high expenditure on domestic travel expenditure. Had water levies had any impact on the agencies? Were there delays in the payment of levies? How much money was being wasted on people who failed to attend scheduled training? Why were the poor people from the communities ignored so much by departments and agencies when they are actually supposed to be assisting them? Were there any consequences for people not attending training? The recruitment of people coming from outside of South Africa had to be investigated. A Member asked if there was no skilled personnel available in South Africa.

Members said that over-expenditure on construction was a concern. Was it true that an emergency job of three months had been pushed up to three years by the contractors? Whether farmers in the province actually paid water rates and adhere to the water restrictions, and whether they were monitored for their water consumption.

Meeting report

The Chairperson started the meeting by apologizing on behalf of the Minister, Mr Gugile Nkwinti, who was in another meeting and was meant to arrive later in the day. The Deputy Minister, Ms Pam Tshwete, was receiving medical treatment in Pretoria. All delegates present were welcomed warmly by the Chairperson.
The Chairperson highlighted that it was important for all entities involved to bring all their board members to the meeting. The Portfolio Committee had not participated in the appointment of Water Board members and several issues had arisen with the way in which members were appointed. For instance, the Chief Executive Officer (CEO) had been involved in selecting his bosses in some entities. That was an anomaly. Parliament had been approached to seek legal advice on the matter. The legal team would provide input on the matter. The timing of the issue was important, factoring in elections which were around the corner in 2019. The legal process would transcend to other boards not related to Water and Sanitation, if need be.

Inkomathi-Usuthu Catchment Management Agency (IUCMA) was first to present to the Committee.

Inkomati-Usuthu Catchment Management Agency Annual Report 2017/18
Ms Thokozane Nyakana Maluka, Chairperson of the IUCMA introduced her delegation.

She said that decentralization of water management in the catchment area was important. Achievements by IUCMA included:
*  Bursaries being given out to students, some of whom had been employed within the agency and by the Department of Water and Sanitation (DWS).
*  Employment equity was currently at 89% and 49% were young students. There were three doctors within the institution. Most of those employed were black people.

Some of the challenges included:
*  The role played by waste and how it was to be managed. IUCMA had reached out to various stakeholders to try and resolve the anomaly.
*  Late transfer of funds from the Department of Water and Sanitation (DWS) had affected the progress of certain projects.
*  The National Water Act of 1998 led to the establishment of only two Water Management Agencies. There was a need to activate the other seven to provide support.

Overall, there had been a lot more achievements than challenges.

The Chairperson noted that there was a bilateral agreement between two Catchment Management Agencies (CMAs). There was a need for more CMAs to be established. The DWS had shown that there were prototypes in place which would soon be fully established CMAs. The Department had tried to advocate for one CMA following some research. The researcher had been tasked to look at the background and achievements of CMAs.

Ms Maluka replied that the centralization of CMAs should not be the same across the country. This would be against the policy on decentralization of water management as described by the National Water Act. There was currently an engagement with traditional leaders and municipalities. It would be difficult to engage with them on a broader scale.

Mr Bongani Mwisi, Chairperson of the Breede-Gouritz Catchment Management Area (BGCMA,) introduced himself and his delegation. He apologized to the Chairperson for only coming as a small team. Their Board was indeed invited but had cancelled last minute because they had been informed that it was not a requirement for the full board to attend the meeting.

The Chairperson asked him who had given the instruction that the full board was not supposed to attend.

Mr Jan van Staden, acting CEO of BGCMA, replied that the letter came from the Minister’s office and had stated that not all board members could attend.

The Chairperson emphasized that the Minister and the DWS did not deal with invitations to Portfolio Committee meetings and the CMA needed to adhere to the requirements of the Portfolio Committee.

Mr D Mnguni (ANC), seconded the Chairperson’s remarks that BGCMA needed to adhere to the instructions from the Portfolio Committee.

Mr Mwisi apologized for the communication breakdown. He explained the role of the CMA and how it was important for them to have a strategy in place before engaging the public. He stressed that land without water access meant nothing. He supported the establishment of multiple CMA’s as that was important for provinces as each had its own set of needs and demands. He commended the DWS for transferring funds to the organization on time and without issues.

The Chairperson turned the discussion back to the IUCMA team.

Dr Thomas Gryedu-Ababio, CEO of IUCMA, highlighted the objectives of IUCMA. He said that the agency had performed well in most of its projects and had an 87% success rate. Validation was achieved at 69%. Water sampling was important and 3 132 samples were taken and 3 075 were reported on. Eight Compliance Reports were planned, but a total of 15 reports emerged. 34 water quality recommendations were made giving a 100% success rate.

Ms Zanele Mngoma, Chief Financial Officer (CFO) of IUCMA explained that tariff proposals had been submitted and approved by the Minister. IUMCA had created employment and bursaries had been established. Other income had decreased because of a loss of expertise, in particular, engineers. However, balance sheet numbers had gone up. IUCMA had raised invoices but did not get the receivables. There was a need to show actual funds received rather than those to be received as that presented a true reflection of actual funds available. Delayed transfers from the DWS had affected operations at IUCMA. The entity had received an unqualified audit.

Dr Gryedu-Ababio focused on the role played by stakeholder engagement forums and the CMA’s direct communication with the clients to source funds. The issue of pollution was still being worked on and the entity was working hard at reclaiming money from defaulting municipalities. He admitted that irregular expenditure did exist.

Ms Mngoma discussed the irregular expenditure and attempted to explain why the financial statements had shown an increase in irregular expenditure. The irregular expenditure was in dispute. IUCMA advocated that the expenditure was in line with regulations and yet the auditors were saying it was not. It had been reported on. The irregular expenditure was R15 000 which was on a taxpayer certificate. Another issue reported was about a supplier called Copper Leaf that had been incorrectly paid. Legal steps had been taken to recoup the money.

Mr Beza Ntshona, Head of Office, DWS addressed three main issues. Firstly, in respect of the role of the CEO in selecting his bosses, he stated that transformation was something that was being worked on. Secondly, he apologized for the late transfer of funds. Lastly, he said that the Minister was in full support of the progressive move of CMAs.

Mr Mnguni said there was a negative connotation in the delay in transferring funds. He was impressed that IUCMA had received an unqualified audit. He had been happy with the visit to Mpumalanga earlier in the year and had noted that there had been an improvement on spillages, but more work had to be done. He congratulated the entity on the great work on Black Economic Empowerment (BEE) with the move from 30% to 37%. He asked what some of the challenges of transboundary water management were. He also asked how the degradation of the ecosystem (water and land) should be addressed

Ms M Khawula (EFF) asked whether the communities in which the projects undertaken by the Agency were informed about these community projects. How did the Agency ensure that people that received training through the projects actually came from the communities these projects were taking place? Members have been exposed to these things during oversight visits where people who were receiving training and benefits through the projects were not actually from within those communities and this act of corruption needs to be put to an end. In Mpumalanga, we learnt that even the ward committee was not aware of the projects that were undertaken. She asked the Agency to assist Members on how it went about planning for the projects and confirm that people taken in for projects where from the communities.
Members did not come to Parliament to ask questions for the sake of it; this was a process of accountability and it needed to be taken seriously. She asked why were the poor people from the communities ignored so much by departments and agencies when they are actually supposed to be assisting them. She stated unequivocally that she was not happy because nothing has happened that benefited people from the communities through the agency’s projects.
Ms K Bilankulu (ANC) said that the Committee could not continue talking about spillages; more needed to be done. She asked about the impact of the delays in the transfer of funds? What was the IUCMA perspective on the appointment of senior officials?

Ms Maluka said that transboundary activity has led to more achievements than challenges. IUCMA flows into Swaziland and back into South Africa and then into Mozambique. The entity was engaging with various stakeholders and they had tried to engage local municipalities.

Dr Gryedu-Ababio supported the notion that transboundary activity had worked well but there were issues such as cholera. The entity needed to work on capacity issues such as information technology and funding. IUCMA was currently working on validation issues.

The Chairperson said that the issue of fraud and irregular expenditures need to be addressed as they were of key importance.

Ms Mngoma informed the Committee that the issue of irregular expenditure has been resolved. IUCMA had put a system in place to ensure that no incorrect payments were made. It had not been a case of fraud but rather a technical issue.

The Chairperson stated that he was concerned by the R5 million expenditure for domestic travelling expenses, and not international travel. That amount raised eyebrows. The travel bill had to be explained. He asked why the entity was making use of a private auditing firm.

Dr Gryedu-Ababio said that river campaigns were ongoing and did not wait for the DWS. A lot of travelling was involved.

Ms Mngoma said that the entity was trying to limit travelling.  The CMA made use of travel agents who charged a fee. The Auditor General charged R1 million for an audit whereas the private firm charged R200 000. It was cheaper to make use of the private firm.

Ms Maluka thanked the Chairperson and said she would report on outstanding issues. The Chairperson gave the Department two weeks to do so but then changed the deadline to Friday 12 October 2018.

Water Research Commission (WRC) Annual Report 2017/18
In her opening remarks the chairperson of WRC, Ms Nozibele Mjoli, said that the WRC was funded by the Water Research levy and not by the DWS. However, WRC reported to Parliament through the DWS. WRC was not an implementing organization and needed partners for assistance.

Mr Dhesigen Naidoo, CEO of WRC, explained the role of the paradigm, people, positioning and partnership for WRC. The most important aspects were partnerships and how WRC got their products out. WRC was meeting its targets. South Africa had survived the drought comfortably. Mr Naidoo focused on the role of Parliamentary Briefs, such as the investigation into the health risk of emerging containments. He discussed the role of microplastics in the water system and the impact both on rivers and people. WRC empowered communities and supported the economic development national agenda.

Members were astonished by the initiative taken through the establishment of new urinals for women that enabled them to use the toilet whilst standing. WRC focused on food security and advocated the production of food components that used less water. WRC collaborated with the DWS to establish antibiotic resistances.

Mr Fazel Ismail, CFO of WRC, said that the organisation had a clean audit – an unqualified audit status. The WRC had tried to be as cost effective as possible by saving on costs such as travelling. The entity also had a Research and Development budget. WRC had consultated the Minister, National Treasury and the Portfolio Committee to try and find out what was more feasible: to sale or to upgrade the WRC’s office in the Marumati building. The decision had been made that it was better to sell it. WRC had disposed of the building in 2016/17 for a value of R9.7 million which was the best price but it came with financial implications. He Ismail explained that the fruitless and wasteful expenditure was a result of travelling expenses and interest and penalties charged by the South African Revenue Services (SARS).

Mr Naidoo said that WRC had a corporate citizen responsibility. It had established a strong carbon footprint in research and in its impact on the environment.

The Chairperson congratulated WRC on the clean audit.

Mr L Basson (DA) asked if the WRC had new ways of assessing water quality coming out from waste treatment plants. What was the quality of the water in rivers as well as that of drinking water? Secondly, the income had dropped by R12 million. Did that have anything to do with water levies? He asked if there were delays in the payment of levies.
Ms M Khawula (EFF) said the main focus should be on ensuring that marginalized people had clean water. Secondly, people in some wards drink unclean water and she has tried to produce photographs and proof for this problem to be dealt with but nothing has been done. In Newcastle, there are people that contaminate water to an extent that it affects both the animals and the people in the area are getting sick. How are you going to ensure that people drank cleaned water?
She indicated that there are instances where mine companies would come in local communities to set up operations, and once they have finished with their operations they disappear and leave people staying in those communities in disarray and high dry with massive shortages of water and unsanitary environment. So what could be done to ensure that these companies clean up after their messes in our communities?
Lastly, the Committee recently went to eMfuleni for oversight visit and Members witnessed something that was very bad where people are dying due to their conditions, and that goes to show that nothing really happens on the ground. The Commission seems to be doing well on paper before Parliament but no tangible changes actually take place on the ground. Next year it’s going to be the very same thing, she appealed that her comments be taken seriously because this was the last term of Parliament – changes need to be effected.
Ms B Maluleke (ANC) noted that there were heavily polluted rivers in Limpopo and Newcastle and nothing was being done about them. She asked about the role of WRC in food pollution at restaurants and airports.

The Chairperson stated that mitigation and validation programmes had to be put in place. Some communities had lived on Day Zero for years. Communities needed assistance through green funding. The DWS officials were not implementing anything and more had to be done.

The Chairperson asked DWS what its strategy was in terms of the zero-vat rating of water. He also asked if the WRC had made a profit from the sale of the building.

Response from WRC
Ms Mjoli explained that WRC only worked on providing solutions and the DWS undertook implementation. Pollution that took place due to dead bodies in rivers was the responsibility of DWS and not WRC. Food security was the responsibility of the Department of Health which, in turn, ensures that quality food was made available. She added that WRC did not have the financial capacity to deal with problems at a local level.

Mr Naidoo said that it was the mandate of the Human Right’s Commission to make an inquiry into the quality of water and he was uncertain about the results of any such inquiry. Food security information could be accessed through parliamentary briefs and WRC could only assess what was known and determine what could be done.

Mr Ismail stated that the reduction in income took place because of a leverage decline regarding partners. There had not been much of an impact from levies. The DWS funded the WRC on time. He said that WRC had made a profit of R1.5 million from the sale of the Marumati building.

Ms Mjoli explained that the building had to go as it was in a depressed and unattractive area of Pretoria.

Mr Naidoo said that water quality systems assessment did exist, however they were expensive to service. Real Time monitoring would be hard to put in place in many areas. Water quality was a big issue.

The Chairperson asked the DWS if it had something in place to assess the blue drop and green drop systems of measuring water quality.

An official from DWS responded that various reports existed that had assessed the quality of water through various agencies. However, Treasury had flagged issues of irregular expenditure around that process. DWS added that compliance issues existed within various municipalities.

The Chairperson enquired if there was a set and solid budget for that as the DWS had mentioned that there were budgetary constraints.

DWS was unable to say whether a budget existed for water quality assessment programmes.

Mr Basson was not happy with the response from the DWS and suggested that the Department was not doing enough. The Minister had to make sure that the water was safe. That was part of his mandate. He did not care where the money came from but clean the water was essential. The DWS had to sit down with the researchers and find ways of ensuring clean and safe water. R31 million had been spent on bonuses and not on alleviating water issues.

The Chairperson said that the Annual Report was mandatory. There was no other option. The National Water Act had to be adhered to. The Act spoke about preserving and protecting the water. The DWS was not doing enough and could easily be liable for criminal action. The Department needed to do what was right.

Mr Naidoo said that the WRC was ready to assist the DWS. The WRC was putting a school sanitation programme in place. He also said that to prevent a permanent day zero coming, there was a need to push for under-serviced areas to be covered. He added that recycled water should become a priority and the country should make use of recycled water.

Mr Basson said that if the WRC took on the initiative to protect water, business would take on interest in assisting the entity. He noted that if it were not for the programme on Carte Blanche, the DWS would not have made a move on the Vaal River crisis.

The Chairperson said that the Minister had stressed that businesses were keen to assist. A total of 66 municipalities have been identified for assistance. Funds would not be given to municipalities. However, engineers would be made available and that would come with a budget.

The Chairperson thanked WRC and dismissed the meeting for lunch.

Trans-Caledon Tunnel Authority Annual Report 2017/18
The chairperson of Trans-Caledon Tunnel Authority (TCTA), Ms Zodwa Manase, introduced her delegation. She thanked the Committee for the invitation to present the Annual Report. She said that TCTA was proud to have a healthy financial position and have had their 32nd unqualified clean audit.

The Chairperson asked how long TCTA had existed.
Ms Manase replied that it has been in operation for 32 years. Ms Manase continued her presentation, saying that TCTA had the capacity to raise its own borrowings. She said that the entity had wanted R9 billion but had managed to raise offers of up to R11 billion. The board had appointed a new CEO who would start on the 22 October 2018.

Mr Ola Busari, the Acting CEO of TCTA, said that TCTA has been found to be a going concern. The managing of debt was important to the organization. Some of the strategic goals of the entity included delivering on the Ministerial directives, social transformation, cost-effectiveness, building knowledge and capacity and to have a high-calibre of human capacity. He said that there were two important aspects to the business model that they used. Firstly, the upper part which related to how they delivered water to the users via the department, and secondly, the lower part which related to the agency’s interaction with lenders. In his presentation, he spoke of TCTA’s footprint based on 10 projects in various parts of South Africa.

Mr Busari explained that TCTA had a good rating and that drew funding. TCTA was saving and had spent only 54% of its budget. Revenue collected was 104%. Capital expenditure had met only 5% of the expected target because the Oliphants Phase 2B project had not taken off.

He said that the entity employed more females than males and supported the creation of black entrepreneurs by establishing partnerships with them.

Ms Halima Nazeer, CFO of TCTA, stated that the water tariff bill was more than expected because of a positive variance due to higher water usage. Tariffs were based on volumes and approved by the Minister. Running costs were lower because of maintenance costs, staff costs and royalties. Finance charges were lower due to low borrowings. The total irregular expenditure had increased from R49 million in 2017 to R260 million in 2018. The irregular expenditure related to three main issues: Acid Mine Drainage (AMD), Claims and Variation Orders. Internal auditors were currently investigating the Irregular Expenditure. She said that going forward more steps would be taken to enhance a controlled environment and compliance with legislation. She was happy with the 32nd consecutive unqualified audit.

The Chairperson welcomed Minister Gugile Nkwinti and asked the Minister if he had anything to say based on the presentation by TCTA. The Minister did not have anything to say.

The Chairperson was happy that long term plans were being put in place towards AMDs. Johannesburg structure says that it might be prone to floods. He was keen on hearing the vision for TCTA and the role played by TCTA in water supply and infrastructure.

Mr Basson asked if the decrease in the outstanding debt by R1.5 million was because of a delay in payments. He asked about the running costs and what percentage of the income those costs accounted for. What were some of the risks involved in future projects given that TCTA might need to borrow money. What was TCTA’s vision? When TCTA borrowed money for projects like the Lesotho project, did the entity put the assets in the books or were the funds transferred to the Department? What were the risks in TCTA’s approach?
Ms Khawula said in reference to page 15, contractors do not do their jobs as expected because they would start contractual work and leave it half way. So what steps do you take to ensure that this was mitigated? This is painful because its taxpayers and the citizens of this country who end up suffering and there is a lack of oversight over these contractors. Irregular expenditure continues to increase, and it is becoming a lot of money. Is this being monitored and what steps were being taken to mitigate this matter?
The Chairperson translated what Ms Khawula had said. She had asked how the TCTA dealt with contractors who did not finish the job. How did TCTA appoint people without such capacity? Secondly, Ms Khawula asked about irregular expenditure. Did TCTA have project managers to manage big projects?

Mr Mnguni apologized for leaving the meeting early but he had to attend the chief whip’s meeting starting at 12:30. He said that he was happy that TCTA had an unqualified audit. He wanted the company to move towards a clean audit, and he knew that the entity was working on it. There was a need to deal with irregular and fruitless expenditure. More money would be available if their expenses were curbed.

Mr Mnguni referred to the example of the “Fees Must Fall” movement. Fruitless expenditures that were being referred to as small, could, in practice, be someone’s salary. Mr Mnguni asked how long the Acting CEO had been in office. He said that if people did not attend training, then the Minister should intervene as money was being wasted on food and transport. Were there any consequences for people not attending training? The recruitment of people coming from outside of South Africa had to be investigated. He asked if there was no skilled personnel available in South Africa.

Mr Basson enquired why long-term loans were reflected as debt on the entity’s statement. Was the figure also a reflection of those who have not yet paid the agency?

The Chairperson asked what the plan of TCTA was, given that the agency was now venturing into long-term goals. Secondly, in terms of financing the asset, what guarantees was it taking and was it supported by the DWS? Was the agency borrowing on the strength of its assets and did it work in the agency’s favour. Had a cost and benefit analysis been done on the debt? What was the opinion of TCTA regarding being audited by Ernest & Young versus being audited by the Auditor General.

The Chairperson asked the Minister if he had any questions. He did not have any.

Response by TCTA
Ms Manase said that in response to Mr Basson’s question, TCTA was in the process of trying to relocate all its debt with support being given by the Minister, DWS and Treasury. The raised borrowings but were not accounted as assets. She added that questions arose in terms of the value of the asset and what to do with it etc. All contractors tended to finish their work and the agency only had an issue with one that did not do so.

Ms Manase stated that TCTA was disappointed in the increase in irregular expenditure which she said was in relation to the new regulation issued out by the National Treasury. TCTA had been working hard to ensure a clean audit without irregular expenditure. She told Mr Mnguni that the CEO position had been filled as she had indicated earlier when Mr Mnguni was not present. Litigation was a challenge. The first step was always to investigate internally and if that did not work, the agency took it up with a higher authority. The agency worked hard to ensure that it was on the right side of the law. In terms of foreigner workers, she said that TCTA had been established to work in Lesotho and South Africa and all laws and regulations were followed with regards to that through the Home Affairs.

Ms Nazeer said that debt obtained through the DWS was accounted for as loans. What was owed was deemed an asset. That was according to the accounting policy used by the agency.

Mr Busari said that in terms of the vision of TCTA, the agency was trying to be aspirational through suppling water sustainability. Regionally it was working to work with countries like Zimbabwe, Zambia and Botswana. In terms of acid mine drainage (AMD) discharge, that had stopped in the Gauteng area. A full treatment of AMD was currently being worked on.

Mr Busari stated that there was a need for new sources of debt so as not to rely solely on the DWS. Performance bonds existed to ensure that projects were run smoothly. TCTA had state guarantees for such projects as, for example, the Lesotho project.

Further discussion
The Chairperson enquired about the role of technology and innovation in current basins. He wanted to know if those were being implemented to secure safe water levels. From the DWS, he asked what happened when projects were stopped mid-way. Did they standardize things so that they did not fall off? Contractors took chances. For instance, some began as an emergency job of three months but pushed up to three years. He asked if the DWS had any plans to move towards the Inga Project, such as that being initiated in the Democratic Republic of Congo.

The Minister stated that the DRC Inga project was not applicable in the South African context as the two countries were on different paths. He spoke of poor project management which was due to issues such as corruption. Investigations were being undertaken into the Giyani Water Project. The DWS was working closely with TCTA to provide project management capabilities and that was linked directly to the professional services provider (PSP), which was where the problem lay, in terms of capability and overspending.

Ms Manase spoke about the technology aspect and said that there had to be proof of concept to show that it worked before TCTA made use of such technology. It was expensive. Maintenance was something that would need to be investigated. TCTA was, however, not excluding the possibility of introducing new technology.

Mr Busari said that TCTA was working closely with WRC in terms of testing new technology.

Mr Mnguni, standing in for the Chairperson, thanked TCTA for the good presentation.

Breede-Gouritz Annual Report 2017/18
In his opening remarks, Mr Mnisi, reintroduced his colleagues. Because of time constraints, he quickly handed over to the Acting CEO.

Mr Jan van Staden, Acting CEO of BGCMA, said that it had been a challenging year for the agency because of the drought in the Western Province. The function of revenue collection was also a challenge, but the was agency working on that challenge. Water was mostly used for irrigation in the area, with a minimal amount being used for industrial and residential purposes. BGCMA supported 17 local municipalities and four district municipalities. BGCMA employed more females than males. The agency was involved in social activities with institutions such as schools. Public awareness of water was also a key focus area.  BGCMA supported farmers with issues to do with water use.

Ms Zanele Mngoma, CFO of BGCMA said that the total assets of BGCMA had increased because of the transfer of debtors by the DWS. The amount transferred was R91 million from 2002 to date. Revenue increased due to taking over the debtors. Expenditure was for day to day spending and there was not much change. She said that the agency was supposed to earn R10 million from debtors but had only managed to collect R3.3 million. Users were taking time to pay their debt. BGCMA had an unqualified audit opinion with matters of emphasis because of the transfer of R91 million. The auditors could not verify that the correct amount had been transferred from the Department. There was no historical evidence of some of the debt. She said that the agency had had three successful tariff inquiries. There had been no fraud, irregular or fruitless expenditure. BGCMA had been declared a going concern.

Mr Mnisi said that water should not only be valued when one was thirsty or when one wanted to shower but it should be considered as something that should be protected.

The Chairperson thanked the BGCMA team.

Mr R Hugo (DA) said that there were reports of no water in the Beaufort West and Central Karoo areas. There were empty dams and boreholes. He asked what BGCMA is doing to intervene in this regard.
Ms Khawula stated that as a deployee of her party in the Western Cape she would not be misled about what was happening in the province. She wanted to know whether farmers in the province actually paid water rates and adhere to the water restrictions, and whether they were monitored for their water consumption. Secondly, she lamented about the unsanitary living conditions that African people in townships are exposed to on a daily basis. We need to look at the problems faced by people seriously and people who have problems with water are African people, black people in particular. Members are aware of the challenges faced by the people on the ground, and therefore, cannot be misled by stakeholders.
Mr Mnguni congratulated BGCMA on the clean audit report. The agency was doing well in terms of confining themselves in a legal context. Where had the R91 million come from? He wanted BGCMA to be more direct in handling the issue. He asked what BGCMA would do if the funds did not belong to the agency.

The Chairperson enquired how BGCMA applied for its licenses and how the system worked.

Mr Mnisi acknowledged the issue of no water in Beaufort West and Central Karoo area. There was a need for continued advocacy for the protection of water. BGCMA did not issue out any licenses.

Mr van Staden said that BGCMA’s area of water management happened to be in a rainy summer region and he hoped for water soon in Beaufort West and Central Karoo area. 40% of water supplied in the Beaufort West area was not accounted for. BCGMA would do more to ensure that water was safe and reached more areas.

Ms Mngoma said that they did not govern the Goodwood and airport area as asked by Ms Khawula, but jokingly said that DWS would not mind if the Minister handed over it to BGCMA.

The Chairperson asked if there were any additional questions, but there were none. He also said that there was work in progress that needed more work by all parties involved.

The meeting was adjourned.

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