Department of Water and Sanitation Q2 2023/24 Performance; with Deputy Ministers

Meeting report

The Chairperson, Mr M Mashego (ANC), thanked the Committee for the work done thus far. There were challenges, such as Eskom, but the Committee had done well and should complete its work for the term so that a proper handover to the incoming Committee could be done.

The Committee Secretary said there was an apology from the Minister of Water and Sanitation. The Department of Water and Sanitation (DWS) delegation would be led by the Deputy Minister Water and Sanitation, Ms Judith Tshabalala.

Ms R Mohlala (EFF) asked what the Minister’s reason for being absent was.

The Chairperson said the Minister was not a Member of the Committee and only appeared when invited. He asked the Committee to proceed to the presentation from the DWS on the second quarter expenditure report for the 2023/2024 financial year. He asked Deputy Minister Tshabalala to proceed, but there were problems with her network connection. 

Ms G Tseke (ANC) pointed out that the Director-General of the DWS was connected.

The Chairperson said the political head had to give the go-ahead for the Director-General (DG) to make the presentation.

Deputy Minister of Water and Sanitation, Mr David Mahlobo, said the DG should be allowed to proceed while Deputy Minister Tshabalala sorted out her connection. The Deputy Minister would comment at the end of the DG’s presentation.

The Chairperson asked Ms Tseke to take over as Chairperson as he had to attend another meeting.

DWS:  Quarter two report (1 April to 30 September 2023)

Dr Sean Phillips, Director-General (DG), DWS briefed the Portfolio Committee on the Department’s second quarter performance for the 2023/24 financial year.

Comparison of non-financial and financial performance

• Administration Programme: 53 percent of the targets were achieved and 52 percent of the budget was spent.
• Water Resources Management Programme: 63 percent of the targets were achieved and 66 percent of the budget was spent.
• Water Services Management Programme: 45 percent of the targets were achieved and 39 percent of the budget was spent.

Overview of the Department’s Budget Programme Performance

The overall consolidated performance was:

• 55 percent of the targets were 100 percent achieved.
• 18 percent of the targets were partially achieved.
• 27 percent of the targets were not achieved.

Progress on Implementing the 2022 Preferential Procurement Regulations

Annual procurement per SMME category:

• Exempted Micro Enterprise (annual turnover of R10 million and below): 23 percent was achieved from a target of 15 percent.
• Qualifying Small Enterprise (annual turnover between R10 million and R50 million): 15  percent was achieved from a target of 15 percent.
• Generic Enterprise (annual turnover above R50 million): 62 percent was achieved.

Annual Procurement from designated groups:

• Black companies with 50 percent or more ownership: 44 percent of procurement expenditure amounting to R2.087 billion and midterm procurement expenditure of R4.764 billion.
• Companies with 50 percent or more women ownership: 54 percent from the target of 40 percent, amounting to R2.549 billion.
• Companies with more than 50 percent youth ownership: 12 percent from the target 30 percent, amounting to R569 million.
• Companies with more than 50 percent ownership by people with disabilities: 2 percent from a target of 7 percent, amounting to R71 million.

Non-financial performance

Programme 1:  Administration

• Departmental management: 50 percent of the targets were achieved and 50 percent were partially achieved.
• Corporate services: 25 percent of the targets were not achieved and 75 percent were achieved.
• Financial management:  42 percent of the targets were not achieved, 29 percent were partially achieved and 29 percent were achieved.
• Provincial and international coordination: 100 percent of the targets were achieved.

Programme 2: Water resource management

• Integrated water resource planning: 100 percent of the targets were achieved.
• Water ecosystems management: 100 percent of the targets were achieved.
• Water resource information and management: 33 percent of the targets were not achieved and 67 percent were achieved.
• Water resource policy and strategy: 50 percent of the targets were not achieved and 50 percent of the targets were achieved.
• Water resource infrastructure management: 40 percent of the targets were not achieved, 10 percent were partially achieved and 50 percent were achieved.
• Water resource regulation: 16 percent of the targets were not achieved, 38 percent were partially achieved and 46 percent were achieved.
• Water resource institutional oversight: 100 percent of the targets were achieved.

Programme 3: Water Services Management

• Regional Bulk Infrastructure Grant: 40 percent of the targets were not achieved, -30 percent were partially achieved and 30 percent were achieved.
• Water services and local management: 20 percent of the targets were not achieved, 10 percent were partially achieved and 70 percent were achieved.
• Water services Infrastructure Grant: 75 percent of the targets were not achieved, 25 percent were partially achieved.
• Water services policy and strategy:  100 percent of the targets were not achieved.
• Water services regulation: 100 percent of the targets were achieved.
• Water services institutional oversight: 50 percent of the targets were partially achieved and 50 percent were achieved.

Financial performance

Adjusted Budget and Expenditure: 2023/24 financial year

Cabinet approved reductions of R881.390 million to the department’s baseline, reducing the appropriation of R22.257 billion to R21.376 billion), of which:

• R48.996 million was in Programme 1: Administration.
• R331.333 million was in Programme 2: Water Resources Management.
• R501.061 million was in Programme 3: Water Services Management.

The expenditure for the period ended 30 September 2023 amounted to R9.789 billion, representing 46 percent of the total adjusted appropriation of R21.376 billion, resulting in an available budget of R11.587 billion for the remainder of the financial year. Budget and expenditure per economic classification were as follows:

• Compensation of employees: Spending amounted to R918.201 million which represents 49 percent of the total adjusted appropriation of R1.874 billion. The adjusted appropriation included R63 million used to fund the 2023/24 wage increase. These funds were reprioritised from the operational budget and included savings from cost containment measures.
• Goods and services: Spending was R882.659 million which represents 49 percent of the total adjusted appropriation of R1.796 billion. The adjusted appropriation includes reprioritisation for funding the 2023/24 wage increase and conversion of the capital portion of the Regional Bulk Infrastructure grant for the integrated Vaal River pollution remediation project.

• Payments for capital assets: Spending was R1.848 billion which represents 40 percent of the total adjusted appropriation of R4.426 billion. Approval was granted to shift the amount of R308.906 million of the indirect component of the Regional Bulk Infrastructure Grant (RBIG), from payments for capital assets to the Water Services Infrastructure Grant (WSIG). This budget reprioritisation would contribute to accelerating projects and increasing overall spending.

Financial recovery plan

Broad strategies included: 

• Funding and budget management: Implementation of audit action plans; zero balance on overdraft; implementation of a debt collection and revenue enhancement strategy.
• Expenditure control, financial governance and accountability: Implementation of the accruals and payables management plan; fruitless and wasteful expenditure condonations and remedial measures; irregular expenditure condonations and remedial measures report; report on implementation of exit strategies on irregular contracts.
• Alignment of strategic intent: Align strategy, annual performance plans and budgets.
• Capital budget and assets management: Comprehensive reconciliations of assets and liabilities to enable maintenance of proper accounting records for management and reporting purposes.

Unauthorised, irregular, fruitless and wasteful expenditure

• Unauthorised expenditure regarding the main account in 2023/24 was R641 109 000.
• Fruitless and wasteful expenditure regarding the main account was R354 065 000 and R132 290 000 regarding the water trade entity.
• Irregular expenditure regarding the main account was R6 641 773 000 and R5 462 022 000 regarding the water trading entity.

In prior years, the unauthorised expenditure related to overspending on bucket toilet eradication and War on Leaks programmes.

Fruitless and wasteful expenditure related mainly to the Vaal River Intervention project and construction costs that could not be recovered from internal and external construction projects.

The irregular expenditure included R114.879 million and R1.049 billion submitted to National Treasury for condonation, and R5.433 billion referred back to the Department to finalise compliance requirements and other legal processes. These amounts were categorised as under investigation.

Reported unauthorised, irregular, fruitless and wasteful expenditure incidents were at various processing stages, including investigations by the Department, Special Investigating Unit and South African Police Service and disciplinary and court proceedings.

The Department appointed contract workers and a panel of professional service providers (PSPs) to augment the current investigation capacity of the Internal Audit Unit. The investigations were expected to be concluded by 31 March 2024.

Irregular Expenditure

• The Main Account and the Water Trading Entity (WTE) accounted for total irregular expenditure of R12.104 billion. Of this; R4.664 billion was under assessment; R2.007 billion was under determination; and R5.433 billion was under investigation.
• No new cases were identified in the Main Account for the second quarter.
• A new case involving R102.389 million was identified and assessed for Water Trading Entity in the second quarter, regarding irregularities in evaluation of infrastructure bids. These were currently under investigation

• The transfer payments and War on Leaks irregular expenditures were submitted to National Treasury and were currently under consideration for condonation. The required approvals were not obtained as per the Treasury regulations. The total irregular expenditure condoned to date amounted to R6 061 238 000.

Strengthening credit control

The DWS water boards were putting in place the following measures to strengthen billing and revenue collection

• The DWS would collaborate with the National Treasury to ensure that equitable-share allocations were withheld from non-paying municipalities.
• The DWS would ensure that standardised credit control and debt recovery processes were put in place across all the water boards. This would include consistent enforcement of water limitations on non-paying municipalities and legal processes to attach municipal bank accounts where necessary.
• Implementation of the Revenue Enhancement Strategy focusing on, amongst others, aggressive debt collection. Fourteen debt collectors participating in the National Treasury Transversal Contract were appointed.
• Water boards would install bulk prepaid meters in municipalities with poor payment record.
• The Minister was in the process of consulting with mayors about the measures to be taken.
• In addition to credit control measures, the Department continued participating in inter-governmental relations forums. 

(For the detailed presentation, see attached.)

Discussion

Ms Tseke said she would allow the Committee Secretary to proceed in terms of the National Assembly Rules which stated that if a committee chairperson was absent, another chairperson must be elected.

Ms M Matuba (ANC) proposed that Ms Tseke be made Acting Chairperson. 

Ms N Sihlwayi (ANC) seconded Ms Matuba’s proposal.

The Acting Chairperson invited Members to interact with the presentation.

Ms Matuba noted that ecosystem monitoring was implemented on only 85 out of the 696 rivers in South Africa. When would this be done for the other 611 rivers?

The report indicated that provinces such as the Northern Cape and North West did not perform well in the first and second quarters. What were the Department’s strategies to ensure improved performance and that no underspending was reported at the end of the financial period?

Ms Matuba said communities were protesting and complaining about the billing system challenges. What support would the Department provide to local municipalities to address the water and sanitation services billing system? What mechanisms and strategies would be implemented to ensure that communities paid for services and municipalities, in turn, paid the water service boards, thus ensuring local municipalities and the boards were in a stable financial position to execute their mandates?

According to slide 19 of the presentation,  217 cases of non-compliance with water resource regulations were being investigated. What would the repercussions be for those found to be in the wrong?

Ms M Mohlala (EFF) said the DG had emphasised the transformation of irrigation boards. How many directives were issued to irrigation boards? How many irrigation boards successfully transitioned into water user associations? What were the challenges during this transformation process? What was the set timeframe for irrigation boards to transform into water user associations? Were there consequences for non-compliant irrigation boards?

She asked the Department to submit a written report on the number of district municipalities being assisted by the Department. What were the related challenges? Was the Department transferring skills to municipalities to handle water scheme technicalities? Would the Department continue to transfer skills or support dysfunctional municipalities after it had concluded its assistance, as in Mopani Municipality where the Department took over everything?

Ms Mohlala asked for a column to be added to the Department’s presentation on financial and non-financial information related to the risk associated with budgets and targets not being met. What strategies would be used to alleviate this risk? Could the Department submit an overview of the impact of targets not being met in each programme?

Regarding Sol Plaatje Municipality in the Northern Cape, the report indicated that contractors terminated contracts with the implementing agents but no reason was given. What was the reason for the terminations? Terminations incurred greater costs so, for example, the Department ended up spending R1.3 million instead of R1 million. The Committee needed reasons and a report that detailed everything that had happened.

Ms Mohlala said some farmers were greedy with free-flowing water in rivers. They created small dams that stopped the river’s flow and water could not reach other places. How did the Department ensure that private landowners did not infringe on natural systems and resources? The target for monitoring river systems was not being met. She asked for clarification on this issue.

The prioritisation of funds for Hammanskraal was good, because the President had visited and nothing happened. People were still suffering and had been waiting for water for years. The prioritisation of these funds was good and it needed to happen as soon as possible so that lives could be saved and people’s dignity could be prioritised.

Ms M Pietersen (ANC) said in terms of the 1 000 vacancies reported, the Department managed to advertise more than 800. How many of these positions had been filled or had shortlisted candidates? What was the demographic profile of the filled positions in terms of gender and race?

Ms Sihlwayi referred to slide 18 on water resource infrastructure management. It was indicated that 209 jobs were created for water resource infrastructure projects. Given the high number of infrastructure projects and job seekers at a municipal level, where were these 209 jobs located? How was this weighed against the millions spent on implementing the infrastructure projects and the need to create jobs at a municipal level? Was the Department underscoring the jobs created? Did the Department have clear data management about these jobs? What jobs was the Department talking about?

Slide 21 reported that construction at the Clanwilliam Dam was at 12 percent instead of 18 percent, therefore the target had not been met. When the Committee visited the dam in 2021, it had progressed in terms of its programme. However, the Department was now reporting that construction was still at 12 percent. To what area of the dam did this 12 percent relate? 

She hoped that the issue of the access road at the Mzimvubu Dam would not be reported on again. In 2021 the access road was the cause of anxiety because the Committee, before being educated on the issue, did not understand the need for it. The Committee now accepted that an access road was needed due to the nature and location of the Mzimvubu Dam. Construction of the access road was reported to be at 78 percent instead of 90 percent, therefore the target was not met. The Committee was waiting for a progress report from the Department on a legal procurement issue related to construction and land. How far along was the Department? The conclusion of this issue would result in progress. 

Ms Sihlwayi referred to the reduction of the budget appropriation from R22 billion to R21 billion. She did not know how National Treasury and the DWS reached this number. It was not enough for the work the DWS did in dealing with infrastructure, dams and rivers across provinces. What measures was the DWS using to monitor performance so that funds from non-performing programmes could be transferred to performing programmes? When did the Department redirect funds to avoid National Treasury taking the funds back? These funds need to be protected.

The Acting Chairperson said the Committee could agree that a lot had been done regarding water access, but there were still challenges. She shared concerns about the recurring issue of poor performance in the Department’s procurement of goods and services. What measures would the Department be taking to improve performance in this regard?

The slow implementation of the bucket toilet eradication programme was a concern. Would the Department complete the implementation of this target by the set date? What was the Department’s recovery plan in terms of this programme?

The Acting Chairperson welcomed the budget from National Treasury to address issues in Hammanskraal. A task team was established to deal with the water crisis and collapsed systems in Hammanskraal. Could the DG share what progress was being made?

She asked if programmes or projects were being implemented through public-private partnerships. She noted that the Development Bank of Southern Africa (DBSA) was involved at some point, but the presentation did not mention this. 

What were the challenges with the dam safety rehabilitation programme? Previous reports had mentioned challenges in achieving the rehabilitation target.

The Acting Chairperson appreciated the efforts of the Deputy Ministers and the Department’s officials to appoint staff that could assist with the processing of water use licences, as there had been an outcry about this.

Responses

On the issue of under-expenditure, the DG, Dr Sean Phillips, said the Department’s regional officers supported and advised municipalities on improving project management and avoiding under-expenditure. In addition, the Minister met with municipal leaders to emphasise the importance of getting projects going. The DWS sometimes asked water boards to assist municipalities with getting projects going. The Minister also had municipalities agree to action plans with set timeframes for project implementation. However, despite the Department's support, municipalities sometimes still failed to implement projects timeously or encountered unforeseen challenges such as disruptions by labour and business forums.

Where it was clear that municipalities would not be spending all the allocated funds in the financial period, these funds were redirected to other projects with high levels of expenditure. For example, during the current financial period, the DWS had big projects that were going well, where a lot of money was being spent, but the pace of the work could still be increased. A good example was the Giyani Water Project and all the distribution work being implemented in the Mopani District Municipality. When needed, the Department got approval from National Treasury to reprioritise funds that municipalities were not spending on the implementation of projects. The Department then increased the allocation to municipalities that were implementing projects. This did not mean that projects where there was underspending would not be implemented in the future. Funds would be allocated to these projects in the next financial period. This was one of the reasons for National Treasury’s introduction of the three-year Medium Term Expenditure Framework (MTEF). It allowed planning for projects over three years instead of one year so departments could redirect the funds of underperforming projects in one year to performing projects and return the funds to the underperforming projects the next year.

Dr Phillips said the DWS was liaising with National Treasury regarding municipal billing. Treasury was primarily responsible for working with municipalities to improve billing systems. There were various initiatives, including hiring people in provincial treasury offices who specialised in supporting municipalities with the improvement of billing systems. In its engagements with the municipalities, the Department, constantly emphasised the importance of billing and revenue collection. The strategy was to ensure that customers who received water from municipalities paid for these services so that municipalities paid water boards and water boards paid the water trading entities within the Department.

In addition to the Department’s collaboration with National Treasury, the DWS also liaised with water boards to develop operating procedures for standardising billing and revenue collection between the water boards and water trading entities. The liaison with water boards was also to learn from the example of the Eskom debt write-off that the Minister of Finance announced. The write-off was a complicated mechanism that enabled debts owed by municipalities to be written off on condition that the municipalities paid all current Eskom invoices. The Department was engaging with the Treasury about a similar mechanism in the water sector. Treasury had agreed that the DWS could proceed in certain areas where municipalities owed a lot to the water boards.

An example of this would be Matjhabeng Local Municipality in the Free State. This municipality owed the Vaal Central Water Board over R5 billion, and in turn, the Vaal Central Water Board owed the DWS billions. The DWS was discussing with the Vaal Central Water Board a possible agreement with Matjhabeng that if the municipality developed a track record of paying its current invoices in full then parts of its debts could be incrementally written off.

Dr Phillips said the DWS had introduced an incentive mechanism for direct customers to pay all current invoices in full.

The Department would submit various written reports providing information on issues such as the number of municipalities the Department assisted. When the DWS worked with municipalities some skills were transferred. The Department’s water boards, regional offices and water services branch regularly interacted with municipalities. The Department assisted municipalities with setting out and monitoring action plans. It advised municipalities on infrastructure procurement which would result in capacity building. It collaborated with the Municipal Infrastructure Support Agent (MISA). MISA arranged technical training related to infrastructure for municipal officials and the Department of  Cooperative Governance and Traditional Affairs (COGTA).

Dr Phillips said information on the impact of unmet targets would be submitted in the form of a written report. He said he was unsure about where Ms Pietersen got the figure of 800 advertised vacancies. The DWS was not able to advertise 800 vacancies because its personnel budget was constrained. The personnel budget had been reduced in real terms and the DWS had almost no funds for hiring additional staff. In the last financial period, the DWS spent its entire personnel budget and the same would be true for the current period. The Department did prioritise the advertising of a few posts. A priority was to hire additional technical staff to improve the turnaround times for processing water use licence applications. The figure for hiring additional technical staff was 93 and 24 of those were hired to increase water use licensing capacity. 

Dr Phillips said the Clanwilliam Dam project had been delayed because of changes in the implementation of the project. There were delays in deciding whether the project would be implemented through tender contractors or by the Department’s construction unit. These issues were now resolved and construction work was underway. The delays in procurements and subcontracts for materials and equipment were resolved. The Minister, the MEC for Infrastructure in the Western Cape and the Mayor of Cederberg Municipality had visited the project in the previous week and it was fully underway.

The Mzimvubu Water Project was delayed due to a deadlock about funding for the project. National Treasury was of the view that the project was too expensive to be funded through the fiscus. The Department looked for investment interest from the private sector. This process did not produce results that National Treasury found acceptable. The DWS reached a resolution with National Treasury on funding the project. The Department reconfigured the project, resulting in a 50 percent cost reduction and it was on this basis, Treasury agreed to fund the project through the fiscus. The DWS was busy with preparatory work, including environmental approvals and a construction licence for the project to proceed. Phase two would start before the end of November. Phase two was the construction of the Ntabelanga Dam. The DWS would start with the construction of housing for the workforce that would be building the dam and there would be clearance of the area which the dam would inundate. The Department’s target to start the major construction work on the Dam was April 2024. Progress with the access road was at 87 percent which meant it was almost done.

The reduction of the budget was due to the Minister of Finance’s announcement of budget cuts across the government because of South Africa’s fiscal situation. All departments had budget cuts; there was not an emphasis on the DWS. The Department’s budget was cut by a lower percentage than a lot of other departments. National Treasury had tried to protect the DWS’s budget as much as possible.

In improving procurement of goods and services, the Department focused on infrastructure procurement. The Department’s construction unit was the only large construction unit still in existence within the government. It had more than 3 000 employees and was still capable of sophisticated construction work such as the construction of dams. However, the issue was that a construction unit of that size needed efficient procurement processes that the DWS did not have in the past. National Treasury and the Construction Industry Development Board (CIDB) put in place guidelines and a special regulatory framework for infrastructure procurement, recognising that infrastructure procurement needed to be treated differently from the procurement of other goods and services. The Department was now taking advantage of these frameworks and the accounting officer, Dr Phillips, had approved a new infrastructure procurement policy and strategy which the DWS was in the process of implementing. This policy and strategy would make procurement more efficient and effective. It would reduce the number of tenders to ensure procurement became more manageable and establish longer-term contracts to avoid needing a procurement process every time the construction unit had to purchase something. The DWS started implementing the policy and strategy in the current year and was seeing the fruits of it.

Dr Phillips said the reduction of fruitless and wasteful expenditure in the construction unit was an issue in the past because the unit did not have the necessary tools, equipment and supplies due to procurement delays. The DWS wanted this to become a thing of the past with the new approach to procurement.

He said the Department was seized with finalising the bucket toilet eradication programme. The programme was a major focus and the DWS was working with municipalities where the initial design of the programme still needed to be completed. The Department was doing everything to ensure that the projects related to this programme were completed in the current financial year.

There was progress in Hammanskraal and the DWS was working with the City of Tshwane, the Development Bank of Southern Africa (DBSA) and National Treasury. The Treasury had consistently said the DWS was not allowed to provide funds to the City of Tshwane because Tshwane received an urban settlement development grant which was supposed to be used for sanitation projects. This remained the case but Tshwane had now budgeted around R350 million to improve the Rooiwal wastewater treatment works. The project run by Tshwane was cancelled due to corruption allegations which were now being investigated by the Special Investigating Unit (SIU). The repair of the Rooiwal wastewater treatment works was now being resuscitated using a different contractor.  

Dr Phillips said the DWS had reached an agreement with the task team that Magalies Water would construct a small water treatment works on its premises near Hammanskraal to provide treated water to the Hammanskraal water distribution system. This construction would mean that people in Hammanskraal would no longer rely on water tankers. The DWS approached National Treasury for permission to change its infrastructure grant allocations to allocate funds to Magalies Water for the construction and approval was granted. Magalies Water had issued a tender for the construction and the project was on track to be put in place by April 2024. The task team was working with National Treasury and the DBSA to put in place a combination of funding to increase the capacity of the Rooiwal works. Rooiwal did not have sufficient capacity to deal with its sewage load. This work was progressing. Design and planning work related to upgrades to Rooiwal was underway. While Rooiwal was being upgraded, Hammanskraal would be supplied through the small wastewater treatment works on Magalies Water’s premises. This wastewater treatment works would start to provide water from April 2024. 

The Department was pursuing two types of public-private partnerships. One was more of a collaboration than a commercial partnership. A good example of this was the Olifants Management Model programme (OMM) where there was a collaboration with mining houses to build a major pipeline in Limpopo that would provide mines and surrounding communities with water. It involved a R24 billion project with government and the mines contributing 50 percent each.

Dr Phillips said the DWS had established a Water Partnerships Office (WPO) that supported municipalities with public-private partnerships. The office was a ring fenced institution housed by the DBSA and was coordinated by a committee representing the DBSA, the DWS and the South African Local Government Association (SALGA). Appointments had been made and there was a process for hiring more staff. A business case for the Water Partnerships Programme was developed and submitted to the National Treasury for approval with the request that this office could approve public-private partnerships for the water sector. The WPO was working with various municipalities. A range of partnership projects were in the early stages of development in areas such as non-revenue water and water reuse. These partnership projects would eventually result in bids for private sector investment.

Ms Babalwa Manyakanyaka, Chief Director: Corporate Planning, DWS, responded to the question about monitoring of rivers. The Department’s monitoring programme tracked the flow of rivers and therefore rivers that were dry were not necessarily monitored.

She said the Department monitored the creation of new jobs per project. These jobs were temporary. The reported 209 jobs were the new temporary jobs that the Department managed to create through its infrastructure build programmes. They did not include existing temporary construction jobs, in the construction space, section 76 jobs which were longer term and water and sanitation jobs created at a municipal level.

Ms Manyakanyaka said the Department did own dams and there were delays several years ago in the dam safety rehabilitation programme. The Department was now seeing improvement and traction in this area. Efficiencies the DWS was introducing within the construction space would ensure the implementation of projects and the achievement of targets.

Regarding the issue of investigations and repercussions, Mr Michael Motsatsi, Chief Audit Executive, DWS, said the Department investigated allegations of fraud, corruption and other irregularities. After the conclusion of investigations the DWS made recommendations for further action such as disciplinary action in instances of misconduct by officials. In instances where the Department suffered financial loss, civil recovery processes through the courts were followed to recover the funds. The civil recovery processes also included internal debt recovery mechanisms where officials signed debt acknowledgement forms and repaid the Department. These forms also included acknowledgement and agreement that deductions from the pensions of these officials could take place if, for example, they were dismissed. The DWS also referred criminal offences such as corruption or fraud to law enforcement agencies. 

Mr Conrad Greve, Chief Director: Human Resources Management, DWS, said that the DG signed off recommendations for disciplinary action. An initiator and a presiding officer would then be appointed and the employee would be served with disciplinary charges. If the DWS believed the offences did not require a public hearing, corrective or progressive disciplinary action was taken and the employee was issued a written or verbal warning or referred for counselling. If there was a need for a public hearing the presiding officer made a pronouncement and the DG implemented this pronouncement. Employees at levels 1 to 12 were allowed to appeal the outcome of the hearing. Senior managers could not appeal but could declare a dispute.

Dr Phillips said the information on the racial and gender profile of appointed people would be submitted in writing as Mr Greve was not able to get this information during the meeting.

Ms Anet Muir, Chief Director: Water Use Compliance, Monitoring and Enforcement, DWS, said that

the ecosystem monitoring concerned water quality, aquatic life and plants that surrounded the rivers. 

The DWS had compliance officials and catchment managers that went out into the field. Where illegal dams were observed, they were reported for further investigation and action. There were regular enforcement activities that were not a part of the Annual Performance Plan (APP) targets but were conducted at a catchment level. The focus here was on obstruction and storage facilities and confirmation of their authorisation status. Where there was no authorisation, the Department used a standard operating procedure for decommissioning such dams.

Ms Iketletso Lekalake, Northern Cape Provincial Head, DWS,  said the termination of projects in Sol Plaatje Municipality was due to the municipality's contractual matters and obligations. Service providers opted for the termination of their contracts. This affected the work of the contractor who would have to wait for the municipality to confirm the reappointment of professional service providers.

Ms Thoko Sigwaza, Chief Director: Institutional Oversight, DWS, addressed the question about the transformation of irrigation boards to water user associations. She said the Minister issued a directive for a 90-day period which ended in July. At the end of July, the DWS had received extension requests from 70 irrigation boards due to various challenges. There were positive outcomes and 30 irrigation boards had submitted transformation proposals that the Minister had processed. These 30 irrigation boards would be gazetted as water user associations soon. The Minister strengthened political oversight by dividing the 175 irrigation boards between the Deputy Ministers. This was so the Deputy Ministers could assist with monitoring non-compliant and lagging irrigation boards. The Department hoped to finalise this process by the end of March 2024.

Response by Deputy Minister Tshabalala 

Deputy Minister Tshabalala said there needed to be awareness of the fundamental reform needed to address the decline in water services. There were limitations to the national government interventions that needed to be considered. The cause of this decline was the poor maintenance and operations of municipalities that had to be funded through revenue collection from the sale of water to customers within these municipalities.

She said it was a municipality's responsibility to ensure customers were billed accurately. Communities sometimes did not pay for water services because the billing systems were not factual. The Department’s responsibility was to ensure that regulations were issued and that the DWS was paid what was required. The Minister was exploring other means. There perhaps needed to be a study into giving Rand Water the responsibility to bill customers. This was an issue under discussion. Even with bigger municipalities such as Tshwane, Rand Water was over-pumping. The discussions were about avoiding a situation where customers were not able to pay because the billing system was inaccurate or not in place and water continued to be provided, resulting in the municipality owing lots of money it could not pay.

Other reforms were needed to address the issue of municipalities that needed to continuously be provided with grants to repair poorly maintained or deteriorated infrastructure. Parliament needed to be aware of this and at a ministry level, the issue of declining water and sanitation services needed to be arrested and turned around. Water and sanitation needed to be fixed and it required fundamental reforms.

There were various core challenges such as declining services, low investment and poor-performing institutions, that increased debts and reduced payments. The key driver behind these challenges was the poor performance of institutions due to poor governance, ineffective management and a difficult external environment. The economy was not doing well and that made it harder to succeed. These issues were not necessarily the sole cause of the decline in water and sanitation services but rather things that needed to be considered so the decline could be successfully addressed.

The Ministry needed to increase investment to improve services, address payment issues, and manage capable, efficient, financially viable institutions. The issues with revenue, tariffs and grants needed to be considered too. The assistance the Department provided was to regulate and support municipalities in fulfilling their constitutional obligation to provide water and sanitation services. The Minister visited municipalities across South Africa plagued with severe water and sanitation challenges. In the worst municipalities, the Minister and municipal leadership agreed to improve water and sanitation services through technical advice and management support from the DWS.

The Deputy Minister said she would give a high-level synopsis of the DWS’s interventions in municipalities in each province.

In the Eastern Cape, the Nooitgedacht Low-Level Water Supply Scheme was implemented through Amatola Water and Nelson Mandela Bay Municipality with an allocation of R534 million. The completion date was June 2023. Phase 3 of this scheme entailed construction work to increase the capacity of the wastewater treatment works from 70 to 210 megalitres per day. There was also the Lower Sundays River Groundwater System (GWS.)

At Mbizana, there was the Regional Bulk Water Scheme and repair of the Ludeke Dam which was implemented through Umgeni Water with a completion timeframe of July 2023 to July 2024. This entailed the upgrade of the Nomlacu treatment plant and bulk lines in Mbongweni and Luthuli. The Department was assisting the Mnquma, Ndlambe and Makana municipalities.

In the Free State, the DWS was assisting Maluti-a-Phofung Local Municipality, which was in the news for various reasons. This project included the upgrading of the Sterkfontein water treatment works (WTW); refurbishment and upgrading of the Fika Patso water purification plant; upgrading of the Intabazwe rising main bulk water supply to Tshiamo and Makgolokweng; upgrading of the supply to Phuthaditjhaba and the CBD area; refurbishment of the Elands WWT; upgrading of the Kestell wastewater treatment works (WwTW); and refurbishment of the Makwane WwTW. The implementing agency was Bloem Water and the included areas were Sterkfontein, Fika Patso, Tshiamo, Makgolokweng, Phuthaditjhaba, Qwaqwa, Kestell, Harrismith, Intabazwe, Schoonplaatz and Wilgepark. The allocation for this project was R1.1 billion with the timeframe of June 2023 to April 2027.

The Department was also assisting Matjhabeng Local Municipality in the Free State. This project included the unblocking of sewer networks in Welkom, Bronville, Virginia and Thabong and the unblocking of sewers in Odendaalsrus CBD, Kutlwanong, Nyakallong and Thabong. This project had an allocation of R1.5 billion with a timeframe of June 2023 to April 2027.

In Gauteng, the Department assisted Emfuleni Local Municipality and Mogale City Local Municipality. In Emfuleni, there were the Vaal River Systems Interventions for areas including Sebokeng, Meyerton, Leeukuil and Riet Spruit. The implementing agency was Rand Water. The allocation for this project was R4.7 billion with a timeframe of March 2022 to June 2027. This project included training and skills transfer. The Mogale City intervention included the replacement of an aged pipeline and refurbishing the Flip Human WwTW. Other work involved the Dr Sefularo Housing Development Project and the Dr Motlana Housing Development Project. The implementing agency was Mogale City. The allocation for this project was R285 million with a timeframe of August 2023 to December 2024.

In KwaZulu-Natal, the DWS was assisting the Zululand District Municipality, uMkhanyakude District Municipality, Jozini Local Municipality, Big Five Hlabisa Local Municipality, uMhlabuyalingana Local Municipality and Mtubatuba Local Municipality. The project included extracting raw water from Jozini Dam, laying a 28 km bulk line and pump station, and upgrading the Mandlakazi and Mkuze WTW and others. The allocation for this project was R2.7 billion with a completion date of 2026.

The DWS also assisted Ugu District Municipality. The Committee would appreciate that the work in Ugu was completed. The reprioritised R150 million allocation was used for boreholes, pipe replacement and management of leaks and pressure. The Department also provided practical assistance to uMzinyathi District Municipality, Amajuba District Municipality and Newcastle Local Municipality.

In Limpopo, the Department was assisting Vhembe District Municipality and Mopani District Municipality. The project in these district municipalities was the Nandoni to Nsami Regional Bulk Water Scheme which provided a raw water pipeline from Nandoni to Nsami WTW and a clean water pipeline to Giyani Water Services. This project also included upgrading Nandoni WTW from 60 megalitres per day to 120 megalitres per day. Targeted areas included Vhembe, Collins Chabane Local Municipality, Malamulele East, including Muswane and Mphambo, and Mopani District Municipality. The budget allocation was R1.8 billion with a completion date of April 2023.

In Limpopo, the DWS was also assisting Mopani with the refurbishment of the Giyani WTW which was in Phase 1 and the reticulation of 24 villages which was also in Phase 1. The budget allocation for this project was R1.3 billion with a timeframe of January 2023 to April 2024. The Department was also assisting in Polokwane City, Capricorn, Masodi Local Municipality, Polokwane Local Municipality, Vhembe and Sekhukhune District Municipality where Deputy Minister Mahlobo was deployed and doing a lot of work.

In Mpumalanga, the DWS was assisting Chris Hani Local Municipality and Sekhukhune District Municipality with the Loskop Regional Bulk Water Supply Project. The implementing agent of this project was Nkangala District Municipality. The Department was also assisting with a water and sanitation intervention in Lekwa Local Municipality.

In North West, a ministerial intervention was set-up by the Minister and Premier to start new water and sanitation projects under the theme “Operation Bulela Metsi”, by reallocating under-expenditure of the Water Services Infrastructure Grant (WSIG) and the Regional Bulk Infrastructure Grant (RBIG). This work would be done across four district municipalities  - Dr Kenneth Kaunda, Dr Segomotsi Mompati, Bojanala and Ngaka Modiri Molema. The intervention was already underway. The Committee would have seen the Brits WTW Project and Moretele South Bulk Water Supply Project in the North West.

In the Northern Cape, the DWS assisted Kgatelopele Local Municipality with a rising sewer main and an upgrade of the Danielskuil WwTW. The implementing agent was Kgatelopele. These projects had an allocation of R61.5 million from June 2023 to March 2024 and R185.5 million from June 2023 to June 2027. The Northern Cape was doing well and through the intervention of technical task teams. ,

Regarding metropolitan municipalities, there was a ministerial intervention in Gauteng to address the water crisis that affected Ekurhuleni, City of Johannesburg, Tshwane Metro, and district and local municipalities. A technical task team Led by the DWS was put in place and timelines and budgets had been set for strategic water and sanitation projects. The Vlakfontein reservoirs had been completed with a capacity of 210 megalitres per day. The Zuikerbosch pump station had also been completed with the addition of 150 megalitres per day.

In the eThekwini Metro, the DWS, there was a ministerial intervention to implement projects to alleviate sewer spillages. The initiative entailed refurbishment, upgrades, operations and maintenance.

The Department also assisted the City of Tshwane in addressing the state of emergency in water and sanitation services in Tshwane and in Hammanskraal, where Deputy Minister Mahlobo was at the forefront of the political task team. The intervention aimed to alleviate the effluent discharge from the Rooiwal WwTW into the Apies River and poor potable water quality from the Temba WTW.

Deputy Minister Tshabalala said the Ministry had done well to ensure a hands-on approach to these matters. The DWS would not be able to do everything at the desired speed because of challenges with municipalities but the DWS, together with provincial heads led by the DG and the DDG, was babysitting municipalities and assisting them. She apologised for her long response but she wanted the Committee to have a detailed picture and appreciation of the work. At the executive level, it would not be business as usual. Things had to be done with great speed whilst adhering to National Treasury’s regulations.

She agreed with the Committee that the Department was not doing well when it came to the procurement of goods and services. The DG had mentioned that the DWS wrote the Treasury about prescripts for the tender system which took too long. This was an issue about which she had  clashed with the Department because she wanted improvement in the programme, 

The Acting Chairperson thanked Deputy Minister Tshabalala for the detailed response and noted that information on the interventions the Deputy Minister spoke about could be found on slide 60 in the presentation.

Ms Mohlala thanked Deputy Minister Tshabalala for her detailed response and asked that the Department submit a report on the information the Deputy Minister had provided on interventions. A report with quantifiable information would assist the Committee with oversight.

The Deputy Minister said the DWS would submit a report.

Response by Deputy Minister Mahlobo

Deputy Minister Mahlobo said the fiscal environment in which the DWS operated was precarious. Legislators and the executive needed to be aware that this would affect the sustainability of the sector. He said the Department had discussed options to ensure the sector was sustainable. As the Sixth Administration wrapped up, there was an expectation that the legislation would strengthen that allowed the Department to support and intervene in municipalities and water services authorities. The Committee had also requested stronger legislation. He asked that time be found before the Committee concluded its work to address this issue. Over the years, issues with the legislative instrument the DWS used resulted in citizens being denied access to water and sanitation. This had been clearly defined in reports written by the Human Rights Commission of South Africa, the Public Protector and this Committee.

The DWS's attitude was not to wait for issues to arise in water services. The reforms the Department had implemented at water entities were beginning to yield results. The water boards were much closer to the water authorities and the attitude of municipalities on working with the DWS was starting to change. This was despite some municipalities still asking for funds to do the work themselves. The DWS had made an effort to deal with the Vaal Central Water Board’s liabilities, including R5 billion owed by one municipality. This water board needed to be supported like Eskom but obviously, the approach used for Eskom was not a blanket one. Overall, the Department was pleased with the progress made with the Committee’s oversight support.

The DWS could confirm that the issue in South Africa was not one of shortages but a supply one which stemmed from infrastructure management issues. This was one of the reasons for the establishment of a Water Partnerships Office. It was an important instrument that included the private sector in infrastructure and technical training-related matters in the water sector. The public-private partnerships should not be confused with the privatisation of water. The State under the ANC had no intention of privatising water. The purpose of the office was to find partnerships in line with the President’s compact and to raise resources. These partnerships were always around regarding water purchase agreements and the mining sector.

The Department was turning a corner, but South Africans still did not have access to water and its associated benefits. This issue was top of the mind for the Department. The DWS was the only department that had all the information on what was happening in this sector across the country. It could speak on the pulse of the nation around water issues. The Department was committed to ensuring people had access to water and sanitation.

The Acting Chairperson thanked the Deputy Ministers for their responses and said the Department had the Committee’s support. The Department had prioritised all the issues the Committee had raised. The Acting Chairperson also thanked the Director-General and his team for their hard work, presentation, and responses. She said it was the Department’s responsibility to ensure that communities without access to water were provided water through the support of municipalities and water boards. She asked that the reports that the Committee requested from the DWS be submitted before Tuesday the following week. Deputy Minister Tshabalala said the DWS would submit these reports as requested.

The meeting was adjourned.