Unfinished Water and Sanitation infrastructure projects

Water and Sanitation

27 February 2019
Chairperson: Mr M Johnson (ANC)
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Meeting Summary

The Department of Water and Sanitation (DWS) and the Lepelle Northern Water Board met to discuss its unfinished water and sanitation infrastructure projects in the Limpopo, Gauteng, North West, Free State and Northern Cape provinces. The aim was to show and bring to the table the reasons for the delays in the completion of the projects, the proposed or implemented interventions, and the projected completion dates.

The unfinished projects were divided into four categories: augmentation projects; strategic asset management; sanitation – specifically the bucket eradication programme (BEP); and regional bulk infrastructure projects.

The augmentation projects looked at the status of the Mdloti River Development Project: Raising of Hazelmere dam in KwaZulu Natal (KZN), the raising of Tzaneen dam in Limpopo and the Olifants River Water Resources Development Project. The delay causes ranged from contractual and claim disputes, loss of public confidence, illegal mining, water shortages and the transfer of a project from Lepelle North Water to the DWS. The interventions for these projects were based on strategic management and construction. The project completion dates were between March 2020 and 2021.

Under strategic asset management, the DWS had focused on three projects -- the Marico Bosveld Dam in Groot Marico, North West; the Kalkfontein Dam located in Koffiefontein in the Free State; and the Rietspruit dam in Ventersdorp, North West. Delays were caused by contractual disputes between the DWS and an external contractor, as well as community strikes and the procurement of an environmental control officer. The internal contractor would commence with site establishment in April 2019, and the contractor would follow an accelerated programme to complete the project during 2019.

The presentation gave an overview of the BEP projects at certain municipalities in different provinces. Most of these projects aimed at resolving sewer collection and the building and maintenance of bulk mains and pump stations.

Bulk infrastructure projects involved costs varying from small (up to R250 million over the project life cycle), large (R250 million to R1 billion), to mega (at least R1 billion). There were 15 mega projects, 53 large projects, and 38 small projects. The causes of delays varied from community unrest, to funding shortfalls, contractual disputes, non-payment, delays in payment and energy supply problems. The expected completion of the projects was between 2020 and 2021.

The briefing on the unfinished Giyani project was done by Lepelle Northern Water. The project milestones included completing the remaining 16 boreholes with package plants by 30 April 2019, and repairing 63 vandalised boreholes with major defects by 31 June 2019.

Members raised numerous questions, comments and concerns involving the non-payment of contractors, proper project planning, the escalation of prices, site monitoring and supervision, and intervention to ensure safety at open trenches. The Chairperson commented that the delays spoke to time and costs (monetary, socially and politically) and that there was something that was not being done properly -- either due to a lack of planning, consultation or funding. Some Members felt that the reasons furnished for the delays were not acceptable, as many could have been avoided or dealt with during project planning. They also expressed disappointment and concern that many of the Department’s crucial positions were either vacant, or there was an acting employee. There was a need to tighten up the administration.

Meeting report

Chairperson’s opening remarks

The Chairperson said the aim of the meeting was to get an update and be briefed by the Department of Water and Sanitation (DWS) on the unfinished projects that it was accountable for. Its responsibility was to avoid any future accidents of people falling into open trenches, like the six-year-old Nsuku Mhlongo, this was not the first case and it was an event that should not occur again. The Minister and Premier had visited the family to convey their condolences.

LTE was not present at the meeting, nor was there communication for their absence. The Committee did not take this well. The Chairperson expressed the need for LTE ‘s technical responses.

He also expressed the concern that the DWS had no Director General (DG) and Chief Financial Officer (CFO), which were key positions. It was an indication that the Department was not performing well and under-spending. He was concerned about the countless suspensions of the DG, which was not communicated to the Committee. There must be never be an assumption and taking things for granted. Members of the Committee took note of what occurred and those who did not attend as expected. There must be professionalism and respect for parliament. Going forward, there was a need to investigate the DWS’s organogram.

Project delays

Mr Leonard Mannus, Acting Deputy Director General: DWS, gave an account of why the completion of DWS projects had been delayed. These projects were divided into four -- augmentation projects, strategic asset management, sanitation (the bucket eradication programme), and bulk infrastructure projects.

Augmentation projects

The completion delays of the Mdloti River Development Project: Raising of Hazelmere Dam in KwaZulu-Natal (KZN) in the eThekwini Metropolitan Municipality, with a budgetary allocation of R110 million, was caused by the contractor, dispute resolution and contractual claims. The contract expired on 31 July 2018, and subsequently the termination by the contractor on 9 October 2018. Despite the delay in procurement, 95% of the work had been completed by now. The proposed interventions for the project are that the DWS Construction Unit will execute all the works that do not require a specialist contractor. They would implement solutions that would resolve contractual disputes, claims and variation orders on the terminated contract. There would be compilation of definitive scope of work breakdowns and timeframes to complete the works, and alignment of all contracts  -- engineer, environmental control officer, occupational health and safety and contractor), with definitive scope of work and time frame. The expected project completion date is March 2020.

The completion delays of the raising of the Tzaneen dam wall in Limpopo located in the Greater Tzaneen Municipality, with a budgetary allocation of R208.9 million had been caused by the delays in appointing a contractor as a result of the transfer of the project from Lepelle North Water to DWS, water shortages, loss of public confidence and water users’ financial compensation. The interventions for this project were the use of the DWS construction unit and engineering services as the professional service provider (PSP) and the engagement of stakeholders. The expected project completion date is October 2020.

The completion delays at the Olifants River Water Resources Development Project (ORWRDP-Phase 2D, E & F) located in Limpopo: Sekhukhune District Municipality, had been caused by funding constraints, land matters and illegal mining, the relocation and compensation of affected land owners who resided on the critical path, borrow pit licence negotiations and the encroachment on the pipeline servitude. The budget allocation for Phase 2D ‘s budget was R160.2 million, but nothing for phase 2E & F. The proposed intervention includes reprioritising funding within the ORWRDP, prioritising land acquisition and social facilitation, securing Department of Mineral Resources (DMR) intervention on illegal mining activities, engaging with the DMR to resolve the challenge rehabilitating funds for the project, finalizing a Memorandum of Understanding with tribal authorities and negotiating with Dikolong Mine to secure availability of the site. The expected project completion date is 2021, but this depends on the availability of funds.

Strategic Asset Management

The delay at the Marico Bosveld Dam in North West Groot Marico, with a budgetary allocation of R5 million, was caused by a contractual dispute between the DWS and the external contractor. The contract between the parties expired before the contractor could commence with site establishment.  To remedy the non-performance and expiry of the contract, the Department had approached the internal contractor to assist through taking over the project and completing it. The internal contractor would commerce with site establishment in April 2019 and was expected to complete the project in six months from commencement, by 30 September 2019.

The delay at the Kalkfontein Dam located at Koffiefontein in the Free State, with a budgetary allocation of R5.4 million, had been caused by community strikes advocating the sourcing of the local labour for the project. The local labour had been appointed as of 12 February 2019 and they were due for medical tests on 5 March 2019 to confirm their fitness for working in construction.  It was expected that the contractor would follow an accelerated project programme to complete the project. The expected completion date was 31 May 2019.

The delay at the Rietspruit dam at Ventersdorp in North West, with a budgetary allocation of R15.7 million had been caused by the removal of the project from the 2018/19 financial year due to delays by top management to approve the request to procure the service of an environmental control officer. The request was expected to be served at the next top management meeting scheduled for 5 March 2019. In the meantime, the internal contractor had been appointed and requested to start with the procurement of the required materials. The expected completion date was 31 July 2019.

Sanitation: bucket eradication programme (BEP)

Northern Cape Province

The DWS had resolved to use the internal constructor unit for the completion of four of the six projects, of which four projects require sewer collectors and bulk mains to allow for functional sanitation services. Two projects would require pump stations and a further two projects would be completed by the Water Services Authority (as a Schedule 5B Water Services Infrastructure Grant (WSIG)). It was planned to start with construction in February 2019.

In the Siyacuma local municipality, there were two BEP projects. The Griekwastad project had 475 buckets, and the sewer pipelines had not yet been connected. For the connection to be completed, there had to be a completion of the internal reticulation and installation of a pump station, for which the DWS was responsible. The other project was the Campbell project, with 596 buckets, and the sewer pipelines had not yet been installed. The DWS was required to attend to the outfall sewer and pump station to match new municipal proposed oxidation ponds.

Free State Province
A turnkey contractor had been appointed to complete the BEP in the Free State. The Department had issued a notice of intention to terminate the contract after the contract lapsed in March 2018. One out of 12 projects remained incomplete -- Senekal requires the completion of internal reticulation. The Department resolved to utilise the internal constructor for the completion of bulk infrastructure, of which seven projects require bulk services to enable the flushing of new toilets.

In the Setsoto local municipality there are three BEP projects. The Ficksburg project had 1 469 buckets and some areas had sewer pipelines connected, and some were not yet connected. The DWS was responsible to ensure that 1 215 buckets were eradicated and functional.

The Senekal project had 2 435 buckets and sewer pipelines were not connected. The DWS was required to ensure it looked into the lack of water supply that required the grey-water circuit to connect the sewer collector system to a bulk sewer main and pump-station, and ensure completion of internal reticulation.

The Clocolan project had 3 379 buckets and the sewer pipelines were not connected. The DWS was required to connect the sewer collection system to the bulk main, and therefore not be connected to the waste water treatment works (WWTW).

In the Nketoana local municipality, there were three projects. The Reitz Projects had 739 buckets and had no sewer pipelines connected. The DWS was required to work on the bulk sewer main and pump station.

The Arlington project had 1 192 buckets and had no sewer pipelines connected. The DWS needed to deal with the inadequate water supply, to erect a water tank and a grey-water package plant to be connected to the pump station and bulk sewer main.

The Petrus Steyn project had 960 buckets and no sewer pipeline connected. The DWS needed to construct the bulk sewer main as well as a pump station to connect the collector system with the WWTW.

In the Tokologo local municipality, there was a Dealesville project with 1 290 buckets and no sewer pipeline connected. The DWS needed to construct two pump stations.

Regional Bulk Infrastructure Projects
There were three categories of bulk infrastructure projects. There were 15 mega projects -- projects whose total cost was at least R1 billion over the project life cycle. There were 53 large projects, whose total cost was at least R250 million to R1 billion over the project life cycle. There were also 38 small projects with a total cost of up to R250 million over the project life cycle.

The delay in the completion of the Sebokeng Wastewater Treatment Works located in Gauteng, with a budgetary allocation of R128.9 million had been caused by constant community and labour unrest. To resolve this matter, the National Treasury had involved in South African Defence Force to implement some of the project modules, in partnership with the Department. This had also assisted in dealing with community unrest. The expected completion date was 2020.

The delay in the completion of the Polokwane Bulk Water Supply located in Limpopo, with a budgetary allocation of R531 million, had been caused by the municipality increasing the scope which was funded through their internal funding. The project was being implemented within the central business district (CBD) of Polokwane, and this had caused some delays as there was congestion within the CBD. The proposed intervention was that the implementing agent should extend the contract for the contractor – to extend the time frame to implement the amended scope. The expected completion date is 2020.

The delay in the completion of the Mametja Sekororo project in Limpopo, with a budgetary allocation of R70 million, had been delayed because of a funding shortfall. To remedy this, the project had been reallocated R70 million to ensure completion. The expected completion date is 2021.

The delay in the completion of the Moutse bulk water scheme (BWS) in Limpopo, with a budgetary allocation of R75 million, was caused by the very slow project progress due to a number of issues that affected the project. There was the unresolved dispute between the service delivery model (SDM) implementing agent (IA) and the PSP, the expired contract period of DWS construction, and the extension of a time claim submitted but not yet approved. The proposed intervention is that the DWS has to try and resolve the issues with the implementing agent. The Department should fast track the issues of procurement to ensure that the project is completed. The expected completion date is 2021.

The completion of the Ratlou BWS Phase 1 (Setlagole) in North West, with a budgetary allocation of
R40 million, was being held back by non-payment/delays in payment, and currently there was no construction activity taking place on site due to termination of the contract by the pipeline contractor. The proposed solution is that there must be adjudication of the new contractor, which is awaited. The projected completion date would be revised soon as the contractor was appointed.

There was no construction related to the completion of the Madibeng BWS Phase 2 in North West, with a budgetary allocation of R40 million. All phases were 100% completed, but there was a challenge with energy supply to the plant being in operation. The proposed solution was that Eskom required R1.8 million for connection and installation of the big transformer. The expected completion date is 2020.

Unfinished Giyani project

Mr Phineas Legodi, Chief Executive Officer: Lepelle Northern Water, said the Ministerial directive regarding the Giyani water supply project dated 21 December 2018 had been received and acknowledged. Lepelle Northern Water had already started and would continue to meet the expectations and adhere to conditions as stipulated in the directive in servicing the community of Giyani.

The project nilestones could be summarised as follows:

  • Complete the remaining 16 boreholes with package plants by 30 April 2019;
  • Repair 63 vandalized boreholes with major defects by 31 June 2019;
  • Complete outstanding milestones on pipelines by 31 August 2020; and
  • Operation and maintenance was an ongoing project.oing

The challenge was that there was a need to fast track the project to its conclusion, and therefore enough resources should be marshalled. The need for the project to continue to phase two mainly entailed reticulation, with regular oversight of the project performance and budget.

The Giyani Homu village accident, where six-year old Nsuku Mhlongo died after falling into a manhole chamber that had been left open by Khato Civils since 5 October 2017, had resulted in the establishment of a multi-governmental task team led by the Executive Mayor of Mopani District Municipality to consider ways of supporting his family. The government regretted the incident and had offered its deepest condolences to the Mhlongo family on the untimely passing of their young one. Government representatives who visited the family had also committed themselves to not only assisting the family with funeral arrangements, but also to lending a helping hand should the family decide to take legal action against the service providers.

The way forward would be to fast track both immediate and short-term projects, create a partnership in the long-term projects, particularly on the funding model for phase 2 of the project. Also, there was a need to integrate between bulk and reticulation to ensure seamless implementation and commissioning of the projects, to implement the management of water demand, and to address unauthorised connections and vandalism.

Discussion

The Chairperson asked if the 92 projects were countrywide. He commented that the delays spoke to time and costs (monetary, socially and politically), and that there was something that had not been done properly, either due to a lack of planning, consultation or funding.

Mr L Basson (DA) asked for an explanation on the Madibeng Plant Project, particularly the cost of the first phase and the status of the project.

Dr D Kabini (ANC) asked for the Giyani unfinished project timeline. He also asked how the Department dealt with the contractors over escalating prices, and how this had been addressed. Regarding the open trenches, he asked if there were hazard tapes put in place, and if not, why they were not in place. The acting positions were a concern to him, and he asked when the Department would be ready to fill the positions. He commented that the Department had poor working relationships, there was no proper leadership and there was a need to tighten up administration.

Mr M Zwane (ANC) said that a process plan was vital. One should consider strikes and budget issues and find an amicable date to finish the project. With experience, it must be known that there was a possibility of strikes. He therefore suggested that the Committee should not accept the reasons given for the delays.
He also commented that the steps taken to remedy the open trench accidents were not enough. The Committee would expect suspension, termination of contract or the like. The life of a human being was invaluable. He also asked why the Department had not paid LTE. Why did the Department not fulfil their responsibilities but expect the project to be completed on time and properly?

Ms M Khawula (EFF) asked if there was a contractor on site, and if there were background checks and progress monitoring. In Giyani, boreholes were dug and most had no water -- had this been given the required attention? In ward 26 in Majuba Newcastle, there was a situation where there were three open trenches, and for the safety of the children parents had to accompany them to school.  At eMnandoni, the community had been moved for a dam to be built, and sub-standard houses had been built for them and people had not been compensated for the move. She asked if compensation was taking place.

Mr R Hugo (DA) asked how much had been paid to LTE, and what amount could be claimed for inflating prices.?

Ms N Bilankulu (ANC) commented that the challenges were a result of poor planning. The Department should appoint qualified people for the critical posts. She asked how it was possible to appoint contractors that would not deliver until the expiry date. She applauded the great work that had already been done, but emphasised that the Giyani project must be the Committee’s legacy. She also urged the Department and Lepelle to take action and complete the projects on the proposed project completion dates.

Mr D Mnguni (ANC) asked if the targeted project completion dates were dates where the Department and Lepelle had considered all the possible circumstances that could affect them. He asked for clarification on how it was possible for the contract in Senekal to lapse in March 2018, yet the Department said they had indicated to the contractor that the contract was coming to an end. He asked Lepelle what the negative impacts had been on ending the contract. How did the Committee balance the Department saying they did not pay LTE for non-performance, while on the other hand LTE was making a contractual claim? What were the payment conditions of the contract between LTE and the Department? In Sedibeng, the South African Defence Force had joined forces to assist and was now claiming R200 million. What were the conditions to this arrangement, and were there funds available to make the payment without taking funds from other projects?

The Chairperson asked for an update on the unfinished Clanwilliam and Zimvuku dams.

Mr L Basson (DA) asked if there had been no co-funding for Phase 2a completed in 2016 July.

Department’s response

Mr Mannus replied to the question about the Madibeng Project. He said that Phase 1, which looked at the refurbishment and water treatment works, had been completed in November 2014. Phase 2a had been an emergency component of the project, was 80% completed and would be completed in December 2019. The expenditure allocated was R69.3 million of the R127 million allocated this year.

Regarding the planning issue, when a project was outsourced, there was a bidding system and service providers competed. The service providers did the costings of the project and forged its plan and implementation. Through regulation, the Department was compelled to accept a plan that had low costs. This was something that the Committee had to consider. The financial unit dealt with the financial costs and recorded them in the financial statements. As for the costs of the projects, those numbers could be provided to the Members.

Regarding the BEP, he said the construction unit of the Department was now responsible for this project. The project plans given in the Free State had a completion date of March 2020, while Clocolan, Senekal and all the others would be completed this year. The Department sent reports to the Minister every two weeks on these project plans.

Responding to the expiration of the contract with no work done, the adjudication panel and the documents provided for during adjudication by the service provider had been well prepared and covered what was required. Regulations did not allow the contractor to move on to site without the required documents, such as the health and safety file, and required an environmental control officer to be on site. These were some of the reasons why it was decided not to extend the contract.

Ms N Bilankulu (ANC) was not convinced that the adjudication and awarding went hand in hand. The Department must check during adjudication, and ensure that all the required documents were in place.

Mr Mannus replied that during adjudication, there was a requirement to produce a safety file as it was site specific and there were cost implications. The environmental officer must be impartial and independent of the contractor and comply with the National Environmental Management Act. The two requirements must be dealt with after the acceptance of the plan. The contractor, after numerous requests, had failed to furnish one.

On the Clanwilliam project, the Department was busy with the basement works, and at the Zimvuku project, the advanced work was being commenced, and the site had been secured.

Mr R Meso, Acting Chief Director, bulk infrastructure, replied to the question about the Ratlong project. He said the project had experienced funding challenges, and reallocation would assist to pay where necessary. The contractor would be back on site because of the availability of the funds.

On the follow up question on Giyani, Mr Legodi replied that the project had started in August 2014. In terms of the contract, it was to conclude in October 2019. On the process plans, he said before there was a rigorous process that considered the possible delays. There had never been a price escalation with this project that had not been dealt with accordingly.

Regarding the open trenches, there were some with hazard tapes, and some that did not have them.

The Giyani project was not moving slowly -- there were eight bulk pipelines that were being replaced over a combined distance of not less than 325km. Water treatment works had been completed, with 138 boreholes, including six that were drilled and equipped at the Nkhensani Hospital.

Regarding the Mhlongo child, the Department could not terminate the contract with the contractor because the contract had already been terminated. That was why it was assisting the family to get legal action against the contractor.

Whether there was site supervision, accountants, quantity surveyors and engineers would go to the site and monitor and make sure of a satisfactory service. To improve this, the Department planned to involve community representatives, such as traditional and religious leaders.

Mr Legodi said that on the LTE claim, he would rather not share too many details, as this matter was in the courts.

Chairperson asked if projects of this nature had reached as far as Newcastle.

Ms Mochotlhi replied that she was not aware of this project, but would note it down and investigate it.

The meeting was adjourned.

 

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