Department of Water and Sanitation 2019/20 Annual Performance Plan; Human Settlements Budget: Committee Report; Legacy reports

Human Settlements, Water and Sanitation

05 July 2019
Chairperson: Ms M Semenya (ANC)
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Meeting Summary

The Portfolio Committee was briefed on the Department of Water and Sanitation’s Legacy Report and 2019/20 annual performance plan (APP), and were given details of the budget of the expanded Department of Human Settlements, Water and Sanitation.  

The discussion on the Legacy Report was suspended, as Members agreed it would be pointless to continue until they had received Minister’s input. The Committee report on the Human Settlements budget was adopted after careful consideration of the observations and recommendations. Members called for changes in the wording of matters involving title deeds, the challenges facing departmental entities, and the Presidential vision of “Smart Cities.”

The Department of Water and Sanitation’s APP outlined its various programmes, its intentions to achieve a turnaround, and its financial projections. Members were concerned about the poor performance of the organisation, departmental instability, the expenditure on the ‘War on Leaks’, the on-going Bucket Eradication Programme, and misuse of the Urban Settlements Development Grant (USDG). They urged the Department to implement consequence management policies, and raised questions concerning its ability to fund its own operations, and the sources of funds for its entities.

Meeting report

Water and Sanitation: Legacy Report

Ms Shereen Dawood, Committee Content Advisor, and Mr Thomani Manungufala, Committee Researcher, briefed the Committee on the Water and Sanitation Legacy Report.

At the end of the Fifth Parliament, Members of the Portfolio Committee had compiled the Legacy Report which highlighted their activities during that term. During the process, the Committee had undertaken meetings with different departments for the purpose of oversight within the water and sanitation sector. Some of the issues and challenges that came out of these reports were compiled and certain recommendations were made.

In 2014, a proclamation had been issued by the President whereby the sanitation component of work, which was within the Department of Human Settlements (DHS), was shifted to the Department of Water and Sanitation (DWS).

The Department played a critical role in the government’s current and future involvement in respect of water scarcity, as well as water supply and demand. The mandate of the Department was to look at the way in which water could support development and how it could assist the developmental agenda in addressing poverty and the elimination of inequality in society. The Department was also tasked with the responsibility of looking at how water would contribute to the economy and job creation. Of critical importance was the way in which the Department managed its water resources.

Because South Africa is a water scarce country with a semi-arid geographical landscape, the Department has to ensure that the water that is used will be conserved, managed and controlled sustainably and equitably.

As with all the Departments, there are certain entities that undertake work on behalf of the Department within its various facets. In the Department of Water and Sanitation, there was the Water Research Commission that undertook research and produced a lot of research. The Committee could also engage the Water Research Commission to ask them to undertake research on their behalf on certain aspects of the work.

The intention of the Department was to establish nine water catchment agencies. However, thus far, only two catchment management agencies had been established. This was one of the critical issues that the current Committee could investigate to determine when and how the seven outstanding catchment management agencies could be financed.

The Water Boards undertook work on behalf of the Department to provide not only intellectual capacity, but also to try to ensure that the water resources in their work area were utilised and provided to communities.

Mr Manungufala said that in the past five years, the budget had increased from R13 billion to R16 billion. In 2014/15, expenditure was 85% of the budget. In terms of the audit account, the main account got a qualified opinion and the Water Trading Entity (WTE) received an unqualified audit.

In 2015/6 the expenditure was 98%of the budget. The Department achieved 28% its the targets. The main account received an unqualified audit opinion and the WTE received a qualified audit opinion

In 2016/17, the Department overspent by 7%, achieved 52% of the targets, and both accounts received qualified audit opinions.

In 2017/18, the expenditure was 96.8% of the budget. It achieved 52% of its targets. Both accounts received qualified audit opinions

In 2018/19, the expenditure was 98.5% of the budget. The targets achieved could not be calculated because the audit was still under way and the annual report was not out yet.

The Fifth Parliament highlighted some issues that the current Committee should consider pursuing going forward. Some of these issues include:

  • A forensic audit, particularly on programme three: water infrastructure development and the WTE. The programme performed badly compared to other programmes. It achieved only 25% of its targets in the previous year.
  •  As of 31 March of 2018, the amount of accruals stood at R 2 billion. The previous Committee recommended that this issue should be highlighted for the Sixth parliament.
  • Over-expenditure jeopardised the financial sustainability of the Department. There was uncertainty regarding the operation of the Department going forward, and the Committee had to consider this issue and follow up on it.
  • Deferral of projects due to lack of funds.
  • Non-implementation of bulk water projects due to money being spent on other projects which were not part of the annual performance plan (APP), such as the ‘War on Leaks’.
  • Regarding emergency interventions, the previous Committee recommended that the Department should consider using the construction unit which was within the Department, to save costs and to eliminate the costs associated with implementing agents.
  • The municipal debt was about R10.1 billion. The previous Committee recommended that the Department and the Department of Cooperative Governance and Traditional Affairs (COGTA) should come up with a plan to assist municipalities to pay the debt, as it was affecting the financial sustainability of the Department.



Mr L Basson (DA) was concerned about the financial burden of the Department of Water and Sanitation. The previous Committee had had meetings with National Treasury (NT) and the Auditor General (AG) on how to help the Department with its financial problems. The problem with the Department was that it had no commitment to fixing anything.

There was a need for the Department to appoint a new Director General (DG) with vast experience in the water sector, otherwise the Department would continue to face the same problems and the Seventh Parliament would face the same issues. To survive in the water sector, one needed to have expertise in water affairs. A DG with no experience would be there for only a couple of months and then resign or be transferred.

The Department of Water and Sanitation was one of the most important departments in government. There was a need to give people water, to preserve water and to build infrastructure. However, none of this was happening. The Department would continue to under-perform if the problems were not addressed.

Mr Basson suggested the Committee should start off by focusing on what the previous Committee could not complete. It should continue pursuing the forensic investigations to improve the performance of the Department.

He also proposed that the Committee should have a meeting with the Minister to get her views on the Department going forward.

Mr M Tseki (ANC) proposed that Committee should not go ahead with the discussion on the Legacy Report, because everything would be discussed again after the presentation of the Minister.

Mr M Mashego (ANC) supported the idea of suspending the discussion.

The Chairperson suspended the discussion on the Water and Sanitation Legacy Report presentation.

Committee Report: Human Settlements, Water and Sanitation Budget Vote 38

Mr Sabelo Mnguni, Committee Content Advisor, briefed the Members on the Committee Report.

The Committee, having been briefed by the Department and its entities on its strategic plans, annual performance plans and budget, provincial business plans and the metropolitan municipalities, had deliberated and observed that:

  • Municipalities did not comply with the Urban Settlements Development Grant (USDG) policy parameters. There was a need for punitive measures for the lack of compliance. This would assist the Department to regulate the use of the grant.
  • There was a practice of fiscal dumping of the USDG grant.
  • The Department had not provided a list of informal settlements that needed to be upgraded.
  • The Department did not have a human resources (HR) plan.
  • A number of Reconstruction and Development Programme (RDP) houses had been sold to foreign nationals.
  • There was huge backlog in the beneficiary waiting list.
  • There was lack of capacity in some critical programmes within the Department, such asd the Anti-Corruption unit.
  • There was an increase in land and home invasions.
  • There was an increase in farm worker evictions.
  • The Department and municipalities were not responding optimally to emergency situations.
  • The issuing of title deeds was at a slow pace. In addition, the Indian and coloured areas were still lagging on title deeds.
  • There were misconduct allegations against the “Red Ants” in the demolition of houses in Alexandria Township.
  • There was an increase in community protests.
  • The accreditation of municipalities in building homes was at slow pace, such as in Polokwane.
  • The Department viewed the 2019/20 APP as a delivery contract with society. This would give space for society to monitor the work of the Department. In addition, this would assist the Committee with its monitoring work.

Discussion on observations

The Chairperson asked Members if they had any comments on the observations.

Ms Tseke reminded the Committee that there were some clarity-seeking questions that had been raised during the meeting, and the DG had committed to submitting written responses. She asked that the written responses should be considered if they were submitted. She said the RDP houses had not been not sold to foreigners only, but to South Africans as well.

Mr Mashego said that the USDG grant was not given to any other municipalities, apart from the metros. However, the recommendation had referred to municipalities. The inter-usage of metro and municipalities could misrepresent information.

He said there were a lot of corrections in the presentation which did not appear in the document presented to the Members. The documents needed to represent what was being presented. The presentation had represented what was said in the meeting, but the write-up had not necessarily represented the content of the meeting.

Mr Tseki asked who was responsible for the fiscal dumping of the USDG grant.

He said the Committee had not observed that "the Department did not have a human resource plan," and proposed that the observation should be deleted from the report.

He confirmed that the RDP houses were also sold to local citizens and not only to foreign nationals.

The Chairperson said Human Settlements did have an HR plan, but it had not brought the document to Members yet. The report should note that all the policy documents that the Committee did not have should be submitted to the Committee for the purposes of oversight.

Mr August requested to see the Fifth Parliament's observations when they started their term. He asked the Researcher to provide the Committee with a breakdown, over the five years, of the observations and what the Departments, both Human Settlements and Water and Sanitation, had implemented and improved over the term.

Mr S August (GOOD) asked if there was a quarterly report on financial spending, and if the monitoring was on an annual or quarterly basis.

Ms H Arries (EFF) said that most of the findings of the Auditor General (AG) in the Committee report were under investigation. There was need for a progress report on the AG’s findings. The Committee should know what progress the Department had made.

The Chairperson said the annual report stated that the Department had to comply with the project metric that they had submitted to the AG. Departments were usually expected to draw up a plan which they had agreed on with the AG, so there was already a decision and there was no need to repeat it. As the Committee interacted with the Department, it would request feedback on their progress with the report.

She said that the Committee received both quarterly and annual reports from the Department.

Ms N Sihlwayi (ANC) referred to the observation about responding optimally to emergency situations, and asked for clarity on the definition of emergency.

Committee Report continued

Mr Mnguni continued with the recommendations section of the presentation.

The Committee, having been briefed by the Department of Human Settlements (DHS) on its strategic plans and budget vote 38, recommended that the Minister of Human Settlements should ensure that the DHS:

  • Enforces punitive measures for the municipalities that are lacking compliance in the utilisation of the USDG. The funds should be ring-fenced and be used for their intended purpose. There should also be punitive measures in place to deal with poor performing municipalities.
  • Provide a list of the informal settlements to be upgraded in South Africa, including their geographical location; distressed mining towns; and of blocked projects, with plans to unblock them. The Department should also clarify the rectification programme.
  • Fast-track the release of suitable land for human settlements purposes.
  • Improve community involvement to ensure community satisfaction and prevent community protests.
  • Prevent the informal sale of state-subsidised houses, as it was alleged that the most these houses were sold or rented to out to foreign nationals.
  • Prevent illegal evictions of farm workers by farmers.
  • Upscale support to women and youth contractors. There should be plans to capacitate them to improve their performance.
  • Densification strategies for informal settlements should be incorporated into Departmental plans in urban areas.
  • Conduct occupancy audits or studies to determine the ownership of state-subsidised RDP houses. This would assist the Department to determine the effectiveness and responsiveness of the programme.
  • Educate beneficiaries on their role as home owners, stressing the importance of ownership and benefits.
  • Fast-track the issuing of title deeds, including the eradication of the pre- and post-1994 backlog.
  • Provide the provisions of the prevention of illegal evictions from the Unlawful Occupation of Land Act that is being considered, for the purpose of amending the Act.
  • Ensure management of the Housing Subsidy System (HSS) is monitored, as the waiting list is still a challenge.
  • Clarify the utilization of the emergency grant -- how it is administered, what constitutes the emergency or the prerequisites, as most people affected by disasters were still out of shelter.
  • Provide plans to assist military veterans, as some houses were built without amenities.
  • Put plans in place to realise the dream of the President in creating new ““Smart Cities””.


Discussion on recommendations.

Ms E Powell (DA) referred to the President’s plans to create “Smart Cities”, an said that the Minister had beeen very clear that these were long-term aspirations. There were many more serious issues to address in the strategic planning. She suggested that the Department should not focus on the “Smart Cities” right now, as there were other pressing challenges that needed urgent attention.

Mr Mashego advised the Content Advisor to ensure that Members had the updated versions of the document during the meeting. There were so many things being corrected during the presentation which were not written in the report distributed to Members.

The Chairperson apologized on behalf of the Content Advisor. Some of the changes had been made when the report was being finalised. Members were supposed to have been given the report two days before the discussion. However, because of time constraints, this could not happen.

Ms Sihlwayi said that it seemed municipalities undermined the guidelines of the USDGs. She suggested the Department should enter into an agreement with the NT to deal with the issues of USDGs.

She said that the President had a vision of “Smart Cities,” while the Department had entities that were dealing with high density, like social housing, which was the start of the smart city vision. The Department had to come up with a five-year plan on how the vision could be realised.

Mr Tseki argued that densification was not for informal settlements, but for urban areas. He proposed that the recommendation on the management of housing subsidies should be moved to the observations section.

He agreed that the Minister had said the “Smart Cities” were not urgent. However, based, on the State of the Nation Address (SONA), there was a need for preparing the plans.

Ms S Mokgotho (EFF) said that the fast tracking of title deeds should also be done for people who had bought houses who did not have title deeds, and those who had bought houses after 1994. It should not be only pre-1994. There were people who had bought houses after 1994 and were still waiting for their title deeds. She clarified that she was talking about houses that had belonged to the Bophuthatswana government, which had allowed people to pay through the Housing Cooperation agency. However, after 1994, the Housing Cooperation agency had been phased out and Human Settlements was put in its place. When people had asked for their title deeds, they were told to go to Human Settlements, as the Housing Cooperation agency was no more. When they went to Human Settlements, they were sent from pillar to post. Until now, most of those people had not received their title deeds. Those who had managed to get their title deeds were the ones who had bought through the banks. This situation was happening in many municipalities.

The Chairperson agreed with Ms Mokgotho. Even in the formal townships, people were paying rent, but the government was holding title deeds on their behalf. There had been a decision by the then President, Thabo Mbek,i that these people must get their title deeds. The fast tracking of the issuing of title deeds was relevant for everyone pre- and post-1994.

Ms Sihlwayi was concerned that the report did not include the challenges that the Department encountered from its entities. Densification referred to high density programmes which were carried out by the housing entities. The fact that the challenges were missing from the report gave the impression that everything was fine.

The Chairperson said that when the Director General (DG) had presented, he had referred to entities that served under the Department, and had said that the Department was working on the one entity which had challenges and a lapse of its Board. The Minister had said he was going to work towards extending the board, but because of the elections, they could not accommodate advertisements and other requirements. Regarding the Development Finance Institution (DFI), the Department was busy finalising the matter.

She said that by law, the Committee was expected to call the entities one by one to discuss their APPs. Their APPs had been submitted, and they would be assessed based on their APPs. The Committee would also engage the entities as they submitted their annual reports. Parliament had the power to call any entity, even those that did not report to the Department.

Ms Mokgotho said another challenge was the use of grant funding to pay consultants, such as. Programme three, which had used the most funds. The finding had been that the bulk of the money budgeted for projects had been given to consultants, instead of it being directed to establishing those projects. She asked what the recommendation should be for this issue.

The Chairperson responded that there was already a decision that government departments had to limit the use of consultants. Departments had a percentage threshold for the use of consultants. The issue would be considered and phrased properly, to be included in the report.

Adoption of Committee Report

Mr Mashego moved the adoption of the Committee Report.

Mr Tseki seconded its adoption.

The Chairperson said that the Committee had adopted the Committee Report with the amendments and corrections that had been made.

Department of Water and Sanitation: 2019/20 Annual Performance Plan.

Deputy Ministers’ overview

Ms Pamela Tshwete, Deputy Minister: Human Settlements, Water and Sanitation (DHSWS) said that she and Mr David Mahlobo, Deputy Minister: DHSWS, had officially been assigned to lead the team of Water and Sanitation with Mr Mbulelo Tshangana, DG: Human Settlements, and Mr Squire Mahlangu, Acting DG: Water and Sanitation, by the Minister of DHSWS, Ms Lindiwe Sisulu. The Minister was unable to attend due to other commitments.

She acknowledged that Committee Members would be preparing for the Budget Vote debate. As such, the Department had to give a comprehensive explanation on the various issues. She would be dealing with Human Settlements. It was clear that there was need for an orientation workshop for the Committee to understand the issues, because the Department was very broad.

The Department had been struggling because of instability. The officials in the Department did not have a DG to lead them. For a long time, it had only acting DGs, and the Chief Financial Officer (CFO) was also acting. The hope was that after the handover to the Minister, there would be some kind of turnaround in the Department.

She requested that the Department unpack the APP, and said that the Committee should help the Department to come up with solutions to the challenges being faced.

She said the Department did not deliver water as that was the work of the municipalities, and therefore it only supplied raw bulk water and built dams.

The Department was given money to deal with drought issues. When people were suffering, NT gave the Department money to give to municipalities. However, the money was not being used by some municipalities. Their explanation was that the money had been received very late and so they had applied for a rollover. There was therefore money with municipalities for relief funding.

Deputy Minister Mahlobo said that one of the issues in the presentation had been to demonstrate whether the Department had the money and capacity to implement the plan that was presented. This was important, because the Members needed to be sure when supporting the plan on 16 July that the things that the Department promised would be delivered.

The Chairperson alerted the Committee Members that a letter from NT had been circulated to them. NT had been invited to attend, but they had given an apology and provided a letter with information on the finances. As the Department presented, there would be a guide from the NT to complement or differ with the content of the presentation.

Annual Performance Plan

Mr Tshangana said that the most important thing that was expected of the senior managers in the Department was to demonstrate clarity of purpose. There had to be clarity on what it was, what they wanted to do and where they were taking the organisation.

The finances of the Department were not in good shape. Any organisation's reputation was at stake when it had more a billion rands of irregular expenditure, and it was therefore the area that needed attention. It meant that the processes of procuring some of the big projects had not gone well, so there was a need to prioritise that as well as to demonstrate clarity of purpose in solving that problem.

As the Department presented the APP, the first part that would help the Committee to understand how it was going to stabilise itself was Programme one, which dealt with the state of health of the organisation and its administrative stability.

In Programme two, some of the things happening at the project level was because the Department had not invested time and energy in planning. Programme two was about gathering data and gathering information to plan for the projects.

Programme three was the core business of the organisation, and it was about delivery. The presentation would show the linkages in the entire water and sanitation life cycle. If any part of the supply value chain was broken, it affected the entire system. That is why there was a need to ensure that there was good administration in Programme one to take care of the core business in Programme three.

Mr Tshangana said that Programme four was about authorisation, licensing and transforming the sector. Programme four was critical, because there was a need to use the legislative mandate to transform the sector and the whole process of water use licences.

All the programmes were interrelated, so if any programme was not performing well, it affected the entire business of the organisation. This was one area where senior managers needed to demonstrate clarity of purpose.

The other part of the presentation was about the water trading account. The section was about how the entities could assist municipalities to deliver on their mandate. Some municipalities were failing to perform their function.

Mr Squire Mahlangu, Acting DG: Water and Sanitation, said the Constitution states that local government has the functional competency for water and sanitation services, domestic water and sewage disposal systems. Furthermore, the responsibility for providing water and sanitation services rests with district and metropolitan municipalities. However, the Constitution allows the Minister of COGTA to authorise a local municipality to perform these functions.

Mr Frans Moatshe, Acting CFO: Water and Sanitation, explained that the main account of the Department dealt with social obligations. These included policy, legislative development, protection of water resources, planning infrastructure for the country, and development of social infrastructure through the grants that were transferred to municipalities.

He explained that the Water Trading Entity (WTE) was responsible for the economic obligations. That was where the Department’s sales of bulk water and the development of infrastructure such as dams took place. The Department also used the WTE to raise loans through the capital market. The WTE was also responsible for operations and maintenance of the infrastructure that belonged to the Department.

Mr Moatshe said that for the 2019/20 financial year, the main account had been allocated R16.4 billion and the WTE had been allocated R14.6 billion, which included mainly projections of sales of water and the recovery that would be made by the entity.

In the main account, the R16.4 billion will be allocated as follows; R1.8 billion to administration, R970 million to water planning and information management, R13 billion to water infrastructure and development, and R462 million to water sector regulations. In terms of economic classification, the R1.8 billion would be allocated to compensation of employees, R1.6 billion to goods and services, R9.1 billion to transfers and subsidies, and R3.8 billion to capital payments.

The total revenue projection for 2019/20 of the WTE is R14.6 billion. The projected estimates of revenue were R11.3 billion from the sale of water, R46. 6 million from construction revenue, R19.2 million from lease revenue, R110.1 million from other tax revenue, and R2.1 billion from transfers received.


Mr Basson said that as of May 2019, no subsidy or transfers had been given to provinces or municipalities. Why was that the case?

Mr Mashego said that there was a need for clarity on the labelling of the ‘War on Leaks’ as "goods and services". Goods and services were normally an account involving many things and a lot of money. The Department should make it simpler for the Committee to understand the level at which it would tap into goods and services.

Ms Sihlwayi said that the Committee was comfortable with the turnaround strategy that had been presented. However, new accruals were likely to come again as long as there was a budget. There was a need to get a very clear remedy or recovery plan in place.

She commented that the Department had a huge challenge in terms of personnel and capacity. These issues needed to be raised, because the instability came from the personnel who were appointed and were not able to do the work properly. It was clear that the Department did not have a planning process. It should present on the practical issues so that the Committee could assist it.

Where were the sites of the ‘War on Leaks’ -- in which provinces and where? How many were done? How many were not done?

She said that the Department needed to look into the issue of municipalities who had the money but did not use it. Was the money still there? There had to be complete integrity within the municipalities in the use of the budget of the Department.

Mr Tseki said the Committee should accept the Deputy Minister’s proposal of a workshop, as there was a need to engage on a different platform.

She observed that the Department was capable of funding itself, and asked it to comment on this.

Ms Mohlala said the presentation had not addressed the Bucket Eradication Programme. She asked how many years the programme had been on going. What had the budget for the programme been from its inception till now?

The Chairperson commented that the ‘War on Leaks’ had been classified as unauthorised expenditure, and asked for an explanation as to why it had not been properly budgeted for by the Department.

She said that the letter from the NT raised issues concerning the Department's failure to adhere to legislation. She asked the Department to commit that the issues would be addressed and that the Committee would be provided with the action plan to deal with all the issues raised by the Auditor General.

Department’s response

Deputy Minister Mahlobo said the Department would return with a turnaround plan. There was a lot that was needed to be done to stabilise the administration. There were too many acting positions. Part of the work would require stabilising at the top level to ensure that there was certainty in the organisation. The plan would have to include information on how to build the technical know-how of managing the water resources.

He agreed there was a need for the Minister to intervene by bringing someone in specifically to look at all the instances of irregularities, wasteful expenditure and accruals. If the accruals were not curbed, they could become perpetual and escalate all the time. The Department would return to the Committee to deal with the issues that had been raised.

He agreed that at face value, it looked like the Department could fund its own operations. However, the development of water infrastructure in the country had been neglected, as well as its operation and maintenance over time. The Department was happy with the willingness of the Committee to support the Department. There were certain programmes that were important, but without the support of the Committee the Department would not be able to get the necessary resources to implement them.

Deputy Minister Tshwete referred to the ‘War on Leaks’, and said that the President had been responding to the water that was lost every year. He had said the Department had to train 15 000 youths, which would reduce unemployment among the youth and equip them with new skills. The project was going to concentrate on areas with leaks. The problem was that the project was not in the APP, but the Department had to do it because it was a Presidential project.

She agreed that the Department could fund itself, as it was a trading entity which could make money. However, people did not want to pay for the water, therefore the Department did not get back money for the water provided.

The Minister was dealing the Bucket Eradication Programme. There was an article in the newspapers which indicated that in six months’ time, the Minister would come up with a report that would deal with bucket eradication. The Department was left with two provinces, the Free State and Northern Cape, where it had to make sure that it completed the Bucket Eradication Programme.

Deputy Minister Mahlobo said that the issue of grants being used for other purposes was a serious matter. Municipalities were in a dire position, as most of the grants went to salaries or overheads. The Department would ensure that the matter was dealt with.

Mr Tshangana said that the Bucket Eradication Programme had been budgeted for this year. There was an amount of about R637 million allocated for the programme. The budget was for two provinces -- the Northern Cape, with more than 2 000 buckets, and the Free State with 10 212 buckets. The Minister had given the Department a six-month deadline to complete the programme.

Deputy Minister Mahlangu said that no transfers had been made to provinces and municipalities in the first because the Department had not scheduled any transfers in that quarter. The transfers were scheduled for the second quarter.

Further Discussion

Ms Mohlala asked the Department to state how much the budget on the Bucket Eradication Programme had amounted to from its inception to date, as well as for how many years it had been on-going. Was the Department going to start any new projects in the medium term?

Mr Basson commented that when municipalities were given money, it was not used for the intended purpose. The result was that people on the ground suffered. He suggested that instead of giving money to municipalities, the Department should let its construction unit do the work on behalf of the municipalities. In that way, the work would be done and the Department would save money.

Ms Sihlwayi requested that the implementation of consequence management should be included in the recovery plan.

Deputy Minister Mahlangu responded that consequence management was currently taking place. Action was being taken, and there had been results. The problem was that it was taking too long to deal with some of the cases because they needed to be investigated by an independent group of people who had to produce a report for action to be taken.

He was working on making sure that the Department had a management which functioned and that the chief directors did the work that they were employed to do. The Department of Water and Sanitation had 43 chief directors and if they were utilised effectively, the Department could turn around in six months.

The Department would provide figures on the Bucket Eradication Programme to the Committee in writing.

Mr Tshangana said that there had been no budget for bucket eradication in the beginning. In 2014, the Department had asked National Treasury to top slice the Housing Development Grant by five percent. This had realised an amount of about R890 million. The top slicing arrangement was meant to run for two years. In 2015, the amount had been R900 million. After two years, it had ceased to exist, and that was why it was now funded from a different grant, as it was no longer funded from the top slicing.

Ms Mokgotho asked if there were any policies in place that gave guidance as to what form of action should be taken against people or officials who were incompetent in delivering work that they had been hired to do.

Mr Mahlangu responded that the Department did have a policy to deal with people who were not competent in their jobs. The major problem with government as a whole was that there was a need to improve the management of employees to make sure that the agreements between employees and managers were really strict in terms of goals and evaluations.

Mr Mahlobo said there had been challenges with the big projects with respect to their planning, funding modelling and the budget. It had been an area of concern, as the mega projects were still part of the plan. The sixth administration had 22 priority projects, and of these, seven were related to water.

Ms Arries asked if the entities were relying solely on the funds received from the Department, or if they had their own funding.

Ms Mohlala said that there had been a report which said that from 2017 till now, 58 officials from the Department had been referred to the National Prosecuting Authority (NPA). It was very disturbing. The Department was playing with taxpayers’ money. The executives of the Department had to sort their internal matters very urgently because the problems of the Department were affecting the people on the ground, such as the poor people who did not have water.

Mr Mahlangu responded that the entities could send requests to the Minister to borrow money if there was a project for which they had insufficient funds. The entities also raised funds from donors, so they were able to raise money.

Mr Mahlobo added that it depended on the establishment of the entity. There were those that had their own funds, such as the water boards. The Department would like the entities at some point to share their schedules with the Committee. The Committee would be able to identify which ones were self-sustainable, and their responsibility in the whole supply value chain.

The meeting was adjourned.

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