Department of Water and Sanitation Annual Performance Plan 2024/25; DWS Budget Vote Report; with Minister and Deputy Ministers

Meeting report

The Chairperson greeted everyone present and welcomed them to the meeting, extending the greeting specifically to the Minister, Deputy Ministers, Committee Members, and staff from the Department of Water and Sanitation (DWS).

The Chairperson explained that the purpose of the meeting was to receive a briefing from the Department on the budget vote report. He asked the Minister to introduce her team, as the Committee Members were all new, and afterwards, the Members would give a short briefing about themselves before starting the work.

Ministry introductions

Ms Pemmy Majodina, Minister of Water and Sanitation, congratulated Mr L Basson (DA) on his election as Chairperson of the busy Committee. She introduced herself as the Minister of the DWS, accompanied by Deputy Ministers David Mahlobo and Isaac Seitlholo, who introduced themselves to the Members.

The Chairperson asked the Minister to introduce the Director-General (DG) and the panel.

Dr Sean Phillips, Director-General (DG), DWS, introduced himself, and introduced the DWS officials, starting with Dr Risimati Mathye, Deputy Director-General (DDG): Water Services Management. He was followed by:

Ms Deborah Mochotlhi, DDG: General Water Resources Management;

Mr Livhuwani Mabuda, DDG: Water Resource Infrastructure Management;

Mr Xolani Zwane, DDG: Regulation Compliance and Enforcement;

Mr Frans Moatshe, Chief Financial Officer (CFO);

Ms Nthabiseng Fundakubi, DDG: Corporate Support Services; and

Ms Petunia Ramunenyiwa, Acting DDG: Governance and International Cooperation.

 

Dr Phillips explained that Ms Ramunenyiwa was acting, because the usual DDG was in hospital, and the DG Infrastructure post was vacant but had been advertised.

The Chairperson thanked Dr Phillips, and called for introductions from the Members. The Members of the Committee introduced themselves. All expressed a willingness to work together to ensure service delivery.

The Chairperson then introduced himself as Leon Basson, with ten years of experience in the Portfolio Committee. He expressed his anticipation of working with the Minister, Deputy Ministers, and the Department, and asked the Minister to proceed with the presentation.

Ms M Mohlala (EFF) expressed concern that the Department's briefing did not include the entities mandated to it, such as the Water Research Commission (WRC), the Trans-Caledon Tunnel Authority (TCTA), and the Catchment Management Agencies (CMAs). She questioned why these entities were not included in the meeting, and when they would be invited.

The Chairperson responded that the Department would address her concerns in the future. Currently, the Committee is focused on a specific agenda item. He handed over to the Minister to continue.

Minister's overview

Minister Majodina highlighted the importance of adhering to the Constitution, referencing specific sections that ensure the rights to dignity, a safe environment, and sufficient food and water. She noted that while municipalities were responsible for water and sanitation services, the DWS was often approached due to its name. The Minister emphasised the need for government support without taking over municipal responsibilities.

She detailed the constitutional obligations of the government to intervene when municipalities fail to fulfil their duties, citing issues like sewage spillages affecting people's dignity, specifically mentioning the Vaal and Ekurhuleni areas. While access to water had improved nationally, from about 60% in 1994 to 90% now, reliability had decreased sharply. She pointed out that some communities had 100% access while others had zero access, and many areas faced water shortages. Municipalities often prioritise refurbishment and repair of existing infrastructure over new infrastructure due to budget constraints, leading to deficits in water supply.

The Minister discussed the challenges of balancing water supply and demand, exacerbated by droughts, population growth, and delays in water projects. She acknowledged the inefficiencies within the Department and the need for improved infrastructure procurement and performance of implementing agents. She said municipal non-revenue water had increased from 37% in 2014 to 47% in 2023, indicating significant water losses. She outlined the critical state of water infrastructure, highlighting issues like leaks, poor maintenance, and lack of qualified staff. The percentage of water supply systems with poor or bad microbiological water quality compliance had increased from 5% in 2014, to 46% in 2023, leading to increased waterborne diseases.

To address these challenges, the Minister proposed several solutions, including amendments to the Water Services Act, increased private sector participation, and institutional reforms. She mentioned the establishment of a regulator commission, and catchment management agencies to oversee water resources management.

She concluded by noting progress in processing water use licence applications and unblocking major water resource infrastructure projects, such as the Lesotho Highland Water Project Phase II and the Clanwilliam Dam.

DWS 2024/25 annual performance plan and financial overview

Dr Phillips said that as there was a new Portfolio Committee, they had included additional content on the Department's long-term strategic priorities and progress. He highlighted the legislative framework concerning water tariffs, distinguishing between municipal tariffs (retail tariffs), bulk tariffs charged by water boards, and raw water tariffs. He noted the current lack of regulation over municipal water tariffs, unlike electricity tariffs regulated by the National Energy Regulator of South Africa (NERSA).

He explained the Water Services Act's provisions for appointing water services authorities and providers, emphasising that these entities were typically internal units of municipalities. He clarified that only 144 municipalities served as water services authorities out of over 250 municipalities in South Africa. These authorities oversee water services according to national standards, and may appoint entities, including municipalities themselves, as water service providers. He referred to the role of water boards in supporting municipalities with bulk water services, highlighting their regional economies of scale benefits.

He detailed the domestic water cycle, from abstraction to wastewater treatment, underscoring the importance of meeting quality standards to safeguard public health. He outlined national and municipal roles in water resource management, as mandated by the Constitution and the National Water Act, including issuing water use licences and managing large-scale infrastructure projects. He noted the establishment of catchment management agencies and the pending National Water Resource Infrastructure Agency, which was designed to streamline management and the financing of water infrastructure.

Dr Phillips concluded by summarising the achievements under the Department's current strategic plan, including progress in infrastructure projects, financial management improvements, and regulatory reforms. He described ongoing efforts in water conservation, private sector partnerships and regulatory compliance, aiming to address challenges like high levels of non-revenue water in municipal systems. Finally, he mentioned legislative amendments to the Water Services Act and the National Water Act, pending submission to Parliament for approval.

Annual Performance Plan

Ms Babalwa Manyakanyaka, Chief Director: Corporate Planning, DWS, introduced the annual performance plan and its alignment with budget programmes under the National Water Act and related legislation.

She outlined the three main programmes: Administration, Water Resources Management, and Water Services Management. These programmes corresponded with strategic outcomes and included activities such as compliance with internal audit requirements, risk management planning, and maintaining engineer and scientist vacancy rates below 10%. Training interventions for managers and Department personnel were emphasised, along with ongoing security and safety assessments of DWS buildings.

Key to supporting these activities was the maintenance of operational information technology (IT) systems to ensure Departmental continuity. She stressed the importance of communication and public participation programs aligned with government objectives. She highlighted targeted procurement initiatives supporting small, medium and micro enterprises (SMMEs), with specific support for women, youth, and persons with disabilities, based on turnover thresholds.

Regarding financial management, she reiterated efforts to reduce irregular expenditure and achieve 100% budget spending. The Department aimed for a debtor payment period of 150 days, and managed international relations concerning water boundaries with neighbouring countries. An annual stakeholder management and partnerships programme was underscored, aligning with the collaborative efforts mentioned previously.

Moving to the Water Resources Management programme, Ms Manyakanyaka mentioned activities like river classification and monitoring, resource quality objectives implementation, and wastewater management strategies. Plans included establishing catchment management agencies to devolve responsibilities over time, alongside initiatives like river and coastal status monitoring.

She said there were ongoing updates to the national water and sanitation master plan, addressing changing circumstances and the inclusion of reconciliation strategies in water supply systems. Climate change resilience efforts featured prominently, including risk and vulnerability assessments across water management areas.

Infrastructure projects for monitoring programs and maintenance were detailed, which aimed to keep state maintenance below 30%. Safety rehabilitation projects and conveyance systems were being prioritised to maintain water supply security. Regulatory compliance focused on upcoming legislation like the Water Amendment Bill and the water charges framework, alongside institutional assessments and performance monitoring.

In the water services management programme, Ms Manyakanyaka noted plans for implementing the "No Drop" report and various water services' infrastructure projects funded through grants. This section of the presentation concluded with plans for district municipality support, sanitation-related strategies, and updates on water services legislation and board performances.

Budget analysis

Mr Frans Moatshe, Chief Financial Officer (CFO), DWS, provided an overview of the budget planned for the 2024/25 financial year, underscoring that detailed budgetary information was accessible through the published estimates of national expenditure (ENE) and the Appropriation Bill.

He said a total allocation of R134 billion was earmarked over the medium-term expenditure framework (MTEF) period spanning from 2024/25 to 2026/27. This budget was delineated into two principal components -- the main account and the Water Trading Entity, which generates revenue primarily from water billing and sales. These funds were crucial for meeting financial obligations, including loan repayments and operational expenses.

Highlighting the Department's ongoing commitment to financial prudence, he reiterated efforts towards eliminating improper expenditures, encompassing unauthorised, irregular and wasteful spending. He stressed that historical cases were actively being addressed through collaboration with law enforcement agencies and internal investigations, which were aimed to completely eradicate such instances.

Figures from the presentation included a breakdown of:

• The main account budget amounting to R24 billion for the current financial year, with allocations specified for subsequent years.
• Significant transfers and subsidies, including disbursements to municipalities, the water trading entity, and water boards.
• An allocation of R18.5 billion designated for the Water Trading Entity in the 2024/25 fiscal year, totalling R61.9 billion over the MTEF period.
• Key grants managed by the Department, such as the Regional Bulk Infrastructure Grant (RBIG) and the Water Services Infrastructure Grant (WSIG), with detailed allocations provided per province and municipality.
• Transfers allocated to Departmental entities, including R5.2 billion to the Water Trading Entity for the current financial year and R742 million over the MTEF period.
• Transfers amounting to R2.4 billion directed to water boards for the 2024/25 fiscal year, rising to R5.2 billion over the MTEF period.
• Augmentation projects under the auspices of the water trading entity, with a cumulative budget of R4.4 billion for the current financial year.

Concluding his presentation, Mr Moatshe assured the Committee of the availability of detailed municipality-specific information upon request. He invited further inquiries to facilitate a comprehensive understanding of the budget allocations and expenditures.

See attached for full presentation

Discussion

Mr K Ramilia (ANC) began by noting the Department's efforts in implementing effective financial systems to improve audit outcomes. He acknowledged the challenge faced by new Members in approving the budget without a full historical context, but anticipated adjustments as the year progressed.

He raised concerns about legacy projects, citing examples such as the Sekhukhune Dam project, completed over 15 to 20 years ago, yet still not providing water to the local community. He also mentioned a similar situation in Giyani, Limpopo. He questioned whether the current budget would address these issues, considering legislative competency and the Department's intervention capabilities.

He also highlighted the Moutse Bulk Water Supply project, which had faced delays despite multiple mayoral terms. He questioned the role of departmental entities in project execution and expressed concerns about their effectiveness, particularly in instances where municipal empowerment for construction had been hindered.

Mr Ramilia's concerns extended to the Department's approach to reducing water demand and increasing supply, which he perceived as urban-focused. He questioned whether the budget adequately accommodates rural areas, emphasising the lack of universal water access in South Africa's rural regions. He sought clarification on how water conservation and demand management strategies would be applied effectively in these areas, particularly amidst increasing water demand and economic challenges.

He expressed the need for further discussion on these issues, particularly regarding the Department's plans for achieving universal access to water, and addressing water conservation challenges in rural communities.

Mr S Moore (DA) extended gratitude to former Minister Mchunu and Deputy Ministers Seitlholo and Mahlobo for their leadership in the previous term, noting the stabilisation achieved under the Sixth administration.

Turning to the critical challenges of the Seventh Administration, he raised concerns about the water supply system potentially spiralling out of control if not managed effectively in the coming years. He stressed the importance of addressing issues at the local municipality level, particularly regarding financial management and network maintenance.

Mr Moore requested the Director-General (DG) and his team to elaborate on initiatives aimed at encouraging local municipalities to improve financial discipline and infrastructure maintenance. He said that despite efforts to increase water supply nationally, significant losses due to leaks in municipalities, such as those in Johannesburg and eThekwini, amounted to billions of rands annually. Addressing these losses was crucial for ensuring financial sustainability and efficient use of water resources.

He also pointed out the importance of expanding networks to accommodate new consumers and industries. However, he noted that this expansion would be viable only if leakage issues were resolved first, allowing additional capacity to be effectively utilised, rather than merely patching existing gaps.

Ms M Mohlala (EFF) acknowledged efforts made by the previous Minister and expressed hope for positive changes. She raised a question regarding specific targets that may pose challenges over the medium term, including the number of river systems, mine water resource quality objectives, and the monitoring systems for implementing regulatory targets. She referred to the Department's aim to significantly increase these numbers, and inquired about additional resources put in place to ensure the initiative's viability.

She addressed the implementation of catchment plans for mine water and wastewater management and the assessment of water supply systems for compliance. She emphasised the critical nature of these regulatory targets, which involve complex regulatory and technical challenges essential for the Department's mandate under the National Water Act and the Water Service Act. She queried how the DWS planned to address challenges under the Water Resource Management programme.

Ms Mohlala then detailed several significant projects receiving funding to ensure sustainable water resource management and development. These projects included the Lesotho Highlands Water Project II, with an investment of R40 billion, and the Mokolo Crocodile Water Augmentation Project II, with R4 billion set aside for construction starting in May 2024 and a targeted completion in 2030. She also mentioned Limpopo’s Olifants Resource Development Project, underway with R24 billion allocated and a projected completion by 2030. The Northern Cape's Vaal Gamagara Project, budgeted at R10 billion, with an expected completion by 2030, was also highlighted. She noted the Groot Letaba Water Augmentation Project at the Tzaneen Dam, beginning with a R500 billion budget and slated for completion in 2025, as well as the Berg River Voëlvlei Augmentation Scheme in the Western Cape, with a budget of R1.2 billion and a completion date in 2026.

[Unfortunately, Ms Mohlala was interrupted due to network challenges, prompting the Chairperson to invite the next Member, Ms Webster, to continue speaking.]

Ms N Webster (BOSA) initially noted that her question pertained to the commercial supply of water to entities like Sasol and the mines serviced by the DSW. She acknowledged that she might have missed some context, and sought clarification on the Department's plans regarding the infrastructure that supports this commercial water supply.

Ms Mohlala interjected, requesting to be allowed to complete her thoughts before yielding the floor to another Member. She emphasised the Department's historical challenges in project management within the water and sanitation value chain.

The Chairperson intervened, acknowledging Ms Mohlala's statement, and invited Ms Webster to proceed with her question.

Ms Webster then reiterated her query about the commercial supply of water to entities such as refineries and mines, emphasising the strain on existing infrastructure and the need for maintenance and sustainability measures to ensure continuous supply for revenue-generating purposes. She sought clarity on the Department's plans for maintaining and recovering this infrastructure.

Mr S Dithebe (ANC) said that the President, upon accepting his responsibility to lead in the Seventh administration, had emphasised the electorate's desire for clean water, which was a significant statement made during his inauguration at the Union Buildings. He stressed the importance of this mandate in guiding the Government of National Unity’s (GNU's) priorities.

He recalled a successful water summit held at Gallagher Estate in 2022, where valuable recommendations were generated, particularly on groundwater management and preventing illegal tapping of water sources. He requested the DG to elaborate on how the Department planned to implement these recommendations.

Addressing another concern, he raised issues of infrastructure destruction in water utilities, citing examples such as the merger in the Free State, and vandalism in municipalities. He queried the Department on synergies and collaborations, particularly within the District Development Model (DDM) and with the Department of Human Settlements (DHS), to address growing water demands in informal settlements.

Lastly, Mr Dithebe inquired about advancements in water purification technologies, referencing the Water Research Commission's (WRC's) role in exploring more efficient methods than reverse osmosis for achieving blue drop status. He sought information on potential technologies being researched in collaboration with science councils.

Mr M Dlelanga (ANC) inquired about the progress of the Umzimvumbu Dam project in the Eastern Cape, which was crucial for providing relief in the province. He sought clarification on any delays in the project's implementation and the Department's plans moving forward.

Secondly, he addressed the performance of entities under the Department, noting concerns about underperformance. He requested information on the Department's strategies to improve the performance of these entities, emphasising their mandate to deliver water services to the public.

Lastly, he raised the issue of eradicating bucket toilets, particularly in the Free State and Northern Cape provinces. He questioned whether there were challenges in addressing this issue, including sufficient budget allocation for their eradication.

Department's responses

Minister Majodina thanked the Members for their comments on the presentations. She indicated a readiness to give Mr Mahlobo an opportunity to respond comprehensively once all the questions had been addressed. She expressed appreciation for the questions raised, noting that they provided clarity on matters the Department should elaborate on further.

Deputy Minister Mahlobo

Deputy Minister Mahlobo emphasised the comprehensive nature of the Minister's overview, and highlighted the Ministry's commitment to address various municipal challenges. He mentioned specific interventions under Section 154 of the Constitution, leveraging grants to support municipalities. He underscored the need for coordinated efforts across ministries on water-related issues, citing examples like the Municipal Infrastructure Grant (MIG) managed by the Department of Cooperative Governance and Traditional Affairs (CoGTA). He advocated increasing allocations towards water and sanitation within these grants.

Regarding financial sustainability, he mentioned ongoing discussions with National Treasury and other stakeholders to ring-fence funds from water sales for maintenance and repairs. He highlighted challenges with non-revenue water due to losses and illegal connections, stressing the need for better financial management and infrastructure upkeep.

On private sector involvement, he mentioned initiatives like public-private partnerships without privatising water resources. He referenced examples where private entities were contributing to infrastructure development, and underscored the need for financial planning at the municipal level to support infrastructure expansion.

Addressing concerns raised about specific provinces and projects, he assured Members of ongoing interventions and partnerships aimed at improving water access and infrastructure across the country. He acknowledged the disparities in water usage among sectors and regions, emphasising the importance of water conservation and management practices to ensure sustainable usage.

Mr Mahlobo concluded by noting the Ministry's commitment to professionalising the water sector through training and development initiatives. He reiterated the focus on addressing water quality and safety issues in municipalities. He deferred detailed technical questions to the Department's team for further clarification. He said there was an overview that could be provided to the Committee for further clarification in another session.

Deputy Minister Seitlholo

Mr Seitlholo appreciated the comprehensive responses given earlier, and highlighted the extensive experience of Deputy Minister Mahlobo in water and sanitation issues. He emphasised the Department's responsibility for providing dignity to South Africans, particularly children attending schools with inadequate facilities like bucket toilets, which he deemed unacceptable after 30 years of democracy.

He stressed the need for collaboration with other departments such as Basic Education (DBE), DHS and COGTA to address these challenges effectively. He acknowledged the Department's role in ensuring accountability at the municipal level. He called for a framework to address leadership crises in municipalities, thereby upholding constitutional provisions and improving sanitation infrastructure nationwide.

In conclusion, Mr Seitlholo reiterated the importance of ongoing collaboration and clear plans in the Seventh Administration to restore dignity through improved water and sanitation services across South Africa.

DWS

DG Phillips acknowledged the concerns raised about the Department's construction unit, clarifying that it was part of the Department, and not a separate entity. He agreed with the Member's observation that, historically, the unit had faced delays despite its past reputation for efficiently constructing major dams in South Africa. He highlighted the unit's longstanding presence within the Department and its accolades for quality construction work on these dams.

Regarding changes in the unit's operations, he said that amendments introduced in the 1990s, influenced by the Public Finance Act, had led to a loss of control over its supply chain, resulting in a perception of inefficiency and slow delivery. To address these challenges, the Department launched the Construction Efficiency Improvement Programme, which aimed to restore the unit's efficiency and effectiveness, transforming it into a competitive state-owned construction company. New procurement strategies, such as implementing long-term contracts for materials and equipment and incorporating private sector expertise through management contracts, were already showing initial benefits. He anticipated further improvements over the next year or two from these initiatives.

Regarding funding for water supply, Dr Phillips underscored the Department's commitment to financial self-sustainability. He explained that the current fiscal system in South Africa required water services to be primarily funded through user fees, rather than tax revenue. This approach aimed to enhance municipal billing, revenue collection, and budgeting for water and sanitation infrastructure and maintenance. He acknowledged the challenges faced by municipalities in this regard, especially those with substantial backlogs in paying water bills.

On legislative matters, he outlined proposals to strengthen the Water Services Act. These included criminalising non-compliance with water and sanitation standards, and establishing an operating licence system for water service providers to ensure competence.

Dr Phillips also addressed the Department's efforts to support municipalities in Gauteng, commenting that regular meetings were held with mayors and officials to address technical challenges and to improve service delivery.

He said the main challenges faced by municipalities and Rand Water included managing interruptions to water supply. These challenges stemmed primarily from delays in Phase Two of the Lesotho Highlands Water Project, which was originally planned to address the increased water demand in Gauteng by 2019, but had started nine years late and was now expected to come online only in 2028. To mitigate these challenges, municipalities needed to reduce physical water losses, invest in improving pump and reservoir infrastructure for better resilience, and lower average water consumption in Gauteng to international levels.

Regarding the Umkomaas Project in eThekwini, he noted delays due to funding issues and the recent resolution facilitated by National Treasury, enabling the municipality to sign an off-take agreement in January of the current year. He also mentioned his co-chairing of the presidential intervention in eThekwini, which focused on water and sanitation issues, including implementing a turnaround strategy approved by the Council a year ago. He pointed out improvements in infrastructure procurement and project management practices, aligned with National Treasury guidelines.

Dr Phillips said that the 2022 Water Summit had led to several recommendations regarding groundwater. The DWS was implementing various measures, including developing generic standard operating procedures (SOPs) for municipalities. These procedures cover groundwater planning and exploration, borehole building and testing, monitoring, and maintenance. Compliance with these standards would be incorporated into the revised norms and standards for water services, which had been released for public consultation.

He referred to the Department's efforts to support municipalities with capacity building and data on groundwater aquifers that had the potential for sustainable exploitation. Strengthening the regulation of groundwater was also deemed crucial to ensure its sustainable use. The Department had begun conducting spot checks to ensure groundwater users adhere to legal requirements and licence conditions. New regulations would require all groundwater users to register their boreholes and provide abstraction volumes, while borehole drillers would need to report their activities to the Department.

He also addressed a summit decision concerning underperforming municipalities. It had been agreed that, under Section 78 of the Municipal Systems Act, municipalities should undergo public consultations to explore alternative water service providers. The South African Local Government Association (SALGA) would lead this initiative, coordinating with the Department, to assist struggling municipalities. He cited the Ekurhuleni local municipality in Gauteng as an example, where Rand Water was supporting sanitation improvements. The municipality's council had approved a partnership with Rand Water to create a special purpose vehicle for water and sanitation services, which would manage billing, revenue collection, and infrastructure maintenance.

Dr Phillips acknowledged the Water Research Commission's development of new technologies, particularly alternative forms of sanitation. Given the challenges with current waterborne sewage systems, research into decentralised or localised sanitation options was underway. Collaborations with international organisations, such as the Bill Gates Foundation, were exploring non-waterborne sanitation solutions.

He then addressed the status of the Ntabelanga and Lalini Dams. The Ntabelanga Dam, intended for domestic and agricultural water use, had faced delays due to funding issues. National Treasury had recently approved funding for the dam, and construction had commenced. He said the Lalini Dam, primarily for hydropower generation, might attract private sector investment under the new regulatory framework for electricity.

Regarding the performance of entities appointed as implementing agents for grant projects, Dr Phillips said that some had not met expectations. To address this, the Department was diversifying its implementing agents, and was also now using the Development Bank of Southern Africa (DBSA).

Referring to the bucket eradication programme, Dr Phillips confirmed that there was sufficient budget to eradicate buckets in the initially identified communities. However, he acknowledged that some municipalities still issued buckets in informal settlements. The programme had faced delays due to being repeatedly transferred between different departments and entities, including the Department of Human Settlements and the Gift of the Givers. To address ongoing issues, the revised norms and standards, once legally enforced, would prohibit the use of the bucket system altogether. This would ensure that municipalities provided better and safer sanitation solutions.

Mr Livhuwani Mabuda, DDG: Water Resource Infrastructure Management, DWS, emphasised that the Department conducts regular price assessments on mega projects and large infrastructure projects, from conceptualisation to implementation and closeout. This was to ensure projects were delivered within budget and on schedule. It had a project risk management plan that was monitored monthly. Additionally, he highlighted the importance of having a clear procurement plan and management approach, which had been improved by the new procurement strategy, reducing the time required to secure materials. He also mentioned the enhancement of the project management team, the development of an appropriate management information system, and performance management.

Mr Mabuda discussed the necessity of regular contact and engagement with stakeholders to manage issues raised by business forums and community leaders, ensuring no delays in project implementation. He also talked about a large segment of the plan needing upgrading, and a planned renewal plan, including a special purpose construction workshop. This workshop would help to procure or produce pipes and materials not readily available commercially. He noted the importance of building capacity through the involvement of experienced and retired engineers to assist with project implementation.

Dr Phillips addressed a question from Ms Mohlala about whether there were sufficient funds to meet all targets. He confirmed that the targets in their Annual Performance Plan (APP) were funded and carefully checked to ensure they could be met. He then asked Dr Mathye to answer a question about water supply to communities around Sekhukhune and briefly discuss the project.

Dr Risimati Mathye, DDG: Water and Sanitation Services Management, DWS, confirmed that the Department had been supporting Sekhukhune with the integration of several projects, including the funding of planning through their Regional Bulk Infrastructure Grant (RBIG) and Water Services Grant (WSG) projects. He said they were running an integrated model, which included the planning of villages supposed to benefit from the same pipelines. He referred to a regional bulk scheme linked to the Loskop Dam project, which provides water to areas in Limpopo. The project had been underway for over three years, with several work packages already implemented. When the Minister returned to update the Portfolio Committee, they would provide more details on the project's progress.

He also confirmed that a budget had been allocated for the treatment works to support areas around Sekhukhune, adding that these were some of the key issues needing clarification.

Dr Phillips said that in the past, many dams were built without coordinating the use of grants to ensure that the surrounding communities received water. However, this approach had changed, and now the priority was to ensure that communities around dams without water were given assistance. Grants were being used to help municipalities put in place the necessary infrastructure to provide water to these communities.

Ministry's closing remarks

Minister Majodina said that at an appropriate time, the DWS would request an opportunity to present a summary of its interventions in each province. She highlighted several projects, such as the Lower Sundays River project in the Eastern Cape, which involved about R800 million. She acknowledged challenges with Amatola Water, and mentioned interventions in areas like Greater Tsomo and Makana. She said R2.3 billion rand had been allocated for projects in the Eastern Cape, including those in municipalities facing significant challenges. She also referenced recent interventions in eThekwini, and mentioned the election of a new mayor who could help address issues in the area.

Ms Majodina acknowledged the misunderstanding from the previous day, explaining that it had been due to changes in the programme, and was not out of disrespect. She thanked the Committee for the opportunity to present, and apologised for any miscommunication.

The Chairperson expressed gratitude to the Minister, acknowledged the previous day's issues, accepted the apology, and suggested adjourning the session for lunch until 14h30.

 (Lunch break)

Consideration and adoption of DWS's Budget Vote 41 and APP

Mr Thomani Manungufala, Committee Researcher, began by explaining that the report was ready, but was still a draft. He said the report would be shared on the screen, and briefly summarised its contents, including the budget vote, strategic plan, and APP of the Department. The introduction covered the purpose of the vote, the legislative mandate from the National Water Act and Water Services Act, and the Department's work from 2019 to the present. The report aimed to record the processing of the budget vote and the APP, including observations and recommendations for the Committee's adoption.

Section 2 detailed key constitutional prescripts, the relevance of the State of the Nation Address (SONA) to the sector, and other priorities guiding the Department's work. This section drew from the Bill of Rights, the National Development Plan (NDP), and the five-year strategic plan.

Ms Mohlala requested a thorough presentation, noting that Members had not received the report and rushing it would not allow for adequate deliberation.

The Chairperson acknowledged that the report had not been shared with the Members, and confirmed the meeting would proceed as requested.

Mr Manungufala said that presenting the full report would not be an issue, since it was just 18 pages long.

He began by explaining the introduction and vote details for the DWS and its entities, including water boards, catchment agencies, and the Trans Caledon Tunnel Authority (TCTA). The purpose of the vote was to ensure the availability of water resources to facilitate equitable and sustainable economic development and ensure universal access to water and sanitation services. The Department's legislative mandate derived from the National Water Act and the Water Services Act, in line with the Constitution, to protect, manage, develop, conserve, and control the country's water resources through regulation and support for effective water supply and sanitation delivery.

Mr Manungufala noted significant improvements in the Department's performance compared to the start of the MTEF period. This improvement was attributed to the aggressive implementation of a financial recovery and turnaround plan, which had reduced under-expenditure, irregular, fruitless, wasteful and unauthorised expenditure, and improved audit outcomes for the main and water trading accounts. The stabilisation of senior management by filling critical vacant positions had also contributed to these improvements.

The Department responded positively to the President's call to reduce the turnaround time for processing water use licence applications from 300 days to 90 working days, achieving an average processing rate of 70%, up from 30% previously. Major water infrastructure projects, which had experienced delays, had been accelerated. Examples included phase two of the Vaal River System water project, the Mzimvubu water project in KwaZulu-Natal, phase two of the Vaal Gamagara regional water project in the Northern Cape, the raising of the Hazelmere Dam wall, and the Nandoni to Xikundu raw water transfer pipeline.

Several municipalities, including uMkhanyakude, Mopani, Sekhukhune, Mangaung and uThukela, were currently receiving support to improve their water services, in line with findings from the Drop Report and the Municipal Strategic Assessment Report. The Department had allocated R21.3 billion as of May 2024 to water boards, which affected the financial sustainability of the entire water sector and the ability of the water sector to self-finance.

National implementation of regulatory actions had been standardised, improving compliance enforcement. The budget report also provided a brief on the processing of the budget vote and annual performance plan (APP) for the DWS, including its entities and their respective APPs, along with the Committee's observations and recommendations for adoption of the budget.

Key constitutional prescripts underpinned the Department's work, as noted in the SONA 2024, the NDP, South African Vision 2030, and the outcome-based approach referred to in the five-year strategic plan 2019-2024, the Medium Term Strategic Framework, the National Water and Sanitation Master Plan, the African Union Vision 2063, and the United Nations Sustainable Development Goals (SDGs).

The Bill of Rights and the Constitution guarantee the right to sufficient water, mandating the government to take reasonable legislative and other measures within available resources to progressively realise this right. Water supply and sanitation services were municipal functions, but national and provincial governments must support municipalities and intervene when there is a failure to fulfil constitutional obligations. Section 139 of the Constitution allows government intervention in municipal affairs, while sections 40 and 41 require all government spheres to cooperate.

Through the Water Services Infrastructure Grant, the Department planned to complete 37 regional bulk infrastructure phases, seven mega projects, 22 large projects, and 234 small water infrastructure projects. The Water Services Management Programme had been allocated R44 billion over the next three years. Strategic projects include the Nooitgedacht Water Scheme, the raising of the Clanwilliam Dam wall, and projects for high water demand areas. Expenditure on these projects was expected to increase significantly due to additional budget allocations.

The Department intended to diversify its water mix by exploring groundwater, treating acid mine drainage, desalinating seawater, and implementing wastewater treatment plants. Funding for these initiatives would come from the Water Resource Information and Management Programme, with a budget of R1.9 billion over the next three years. Policy reviews would align departmental policies with national, regional, continental and global development agendas, amending the National Water Act and Water Services Act during the MTEF period.

The overview of the 2025 medium-term APP organised the Department's budget under three programmes: administration, water resources management, and water services management. The budget increased from R21.366 billion in 2023/24, to R24.024 billion in 2024/25, driven by real growth in the Water Resources Management Programme.

The main account and Water Trading Entity account fund the Department. The main account receives budget allocations, while the Water Trading Entity account generates revenue through bulk water sales. Over the MTEF, the Department would focus on improving water quality regulation, integrated water resource management, and municipal water service management. The total budget for the Department over the MTEF was R134 billion, with allocations of R42 billion, R46 billion, and R45 billion in the 2025/26, 2026/27 and 2027/28 financial years, respectively.

Mr Manungufala noted that the Water Services Amendment Bill would be tabled in Parliament during the financial year. He suggested that the SP2 Water Services Policy and Strategy, which had only one target, should have been combined with SP6 Water Resources Policy and Strategy in Program Two, to form an inclusive water resources and services policy strategy. He recommended that the Department consider this in the next planning cycle.

The DWS had 15 entities dealing with infrastructure development, research and development, water sources management, and bulk water supply. These entities had been allocated R34.2 billion for the 2024 financial year. Table 6 listed the entities allocated by that amount, while Table 7 showed a full list of entities reporting to the Department with their respective mandates and budget estimates for the year under review, as reported in their respective annual performance plans and business plans.

The TCTA, established in 1986 as a state-owned entity (SOE) specialising in project financing, implementation, and liability management, operated under a water treaty covering the design, construction, operation, and maintenance of the project, as well as the export of water to South Africa. It had a budget of R8.8 billion. The Water Research Commission, established in terms of the Water Act, promotes coordination, cooperation, and communication in water research and development. It had a budget of R399 million. Catchment Management Agencies (CMAs), established in terms of Section 78 of the National Water Act, investigate and advise on the protection, use, development, conservation, management and control of water resources in each water management area, among other functions. Six CMAs had been established, with varying budgets.

The Department's APPs indicated that water boards, established in terms of Section 38 of the Water Services Act, provide water services to other water service authorities within their service area. The budgets of these water boards, derived from their APPs, include Amatola (R736 million), Lepelle Northern Water (R1.1 billion), Magalies Water (R1.2 billion), Overberg (R78 million), Rand Water (R21.9 billion), Sedibeng Water (R1.6 billion), and Umgeni Water (R4.2 billion).

During the Committee's observations and questions, several concerns had been raised. These included legacy projects like the War on Leaks, which was completed years ago, yet surrounding communities still lacked water access. The lack of universal access to water between rural and urban areas was also discussed, with suggestions to support water demand and conservation management in rural municipalities. Recommendations were given to the former Minister, Mr Mchunu, and his deputies to stabilise the Department and improve its performance. The issue of water losses, particularly in Johannesburg and eThekwini, had been highlighted, with questions about the Department's assistance in addressing these losses.

Other concerns included increased planned targets, such as rivers in the River Ecosystem Monitoring Programme, and delayed mega-projects like the Lesotho Highlands Water Project and Mokolo Crocodile Water Augmentation Project. The strain on bulk infrastructure for commercial entities and the readiness of the Department to meet the President’s call for clean water had also been discussed. The outcomes of the 2022 Water Summit, issues of vandalism of infrastructure, and the need for improved water technologies have been raised.

In response, the Department had outlined several measures. These included interventions under Section 154 of the Constitution for cooperative government, reconfiguring grants with water and sanitation components, and establishing the Water Partnership Office to support municipalities in partnerships with the private sector. Public-private partnerships and a water access campaign for communities around Mzimvubu were mentioned. Training and capacity-building programmes for local government were planned to avoid incidents like the cholera outbreak in Hammanskraal.

Cape Town's model for reducing water consumption and managing water scarcity has been cited as exemplary. Municipal water sales funds should be allocated to water and sanitation-related activities, and revenue collection from municipalities needs improvement. Amendments to legislation, such as the Water Services Act, were recommended to have stronger penalties for criminal water cases. Efforts to address project delays, contributions from the National Treasury, and bucket eradication programmes, were also highlighted.

The Department emphasised the need for a sustainable financing model for water, different from the National Health Insurance (NHI), and mentioned ongoing support for municipalities to mobilise private sector finance for projects. Qualified personnel would be appointed to manage water and sanitation facilities, and there would be a focus on prosecution for criminal water cases. The Mzimvubu Water Project and other priority projects were discussed, with assurances of progress and budget availability.

Discussion

The Chairperson asked if anyone wanted to speak on the report before moving to recommendations.

Ms Mohlala sought clarification on a statement on page 14 of the presentation by Mr Manungufala regarding water being exported to South Africa from Lesotho. She asked for a clearer explanation of this point.

Mr Manungufala clarified that the statement meant water was being imported by South Africa from Lesotho. He promised to amend the text to make this clearer by explicitly stating "import from Lesotho to South Africa."

Mr Dithebe suggested ensuring consistency throughout the document by writing out terms like the State of the Nation Address in full, before using acronyms. He also recommended properly naming pieces of legislation referenced in the report for clarity, especially for readers unfamiliar with Committee jargon. He advised specifying which part of Section 27 of the Constitution was relevant when referring to water. He also pointed out the importance of correctly spelling terms like 'Inkomati' and 'City of Johannesburg,' and ensuring rhetorical questions end with question marks. He appreciated the comprehensive capture of the Members' concerns, despite these minor issues.

The Chairperson thanked Mr Dithebe and instructed the Committee Researcher to implement the suggested changes.

Mr Manungufala expressed gratitude for the advice on grammatical errors and cosmetic issues, assuring the Committee that they would be addressed before finalising the report.

Mr Ramalia raised concerns about the involvement of the private sector, specifically the Lebalelo Water Association in the Eastern region, which had significant mining development. Despite its long-term operation, the Association had not ensured that villages along the pipeline benefited from potable water. He questioned whether there was now a change in approach. He also highlighted the issue of underground water contamination in rural areas, caused by on-site sanitation and mobile toilets, making the water non-potable unless processed. He stressed the need for stringent policies to address this problem effectively. Lastly, he pointed out the lack of a clear mention of alignment between the implementation-ready studies and the District Development Model (DDM), emphasising the importance of cooperative integration with municipalities.

Adoption of report

Mr Dithebe proposed a motion to adopt the report, and another Member seconded.

Ms Mohlala requested that the report be sent promptly so that Members could prepare their speeches for the upcoming plenary session scheduled for next week. She expressed dissatisfaction with the tight deadlines and the inadequate process followed by the Committee, stating that the EFF rejected both the process and the report.

The Chairperson acknowledged Ms Mohlala's comments, noting the EFF's rejection of the report and its process. He instructed the Committee Researcher to finalise the recommendations as discussed, and circulate the report.

He declared the report approved, noting the addition of the EFF's rejection.

The Committee Researcher confirmed he would address the issues raised and amend the recommendations accordingly. He deferred to Ms Nosipho Bavuma, the Committee Secretary, for guidance on the next steps.

Ms Bavuma explained that once the changes were incorporated, the report needed to be finalised for inclusion in the Announcements, Tablings and Committees (ATC) by the end of the following day, ahead of the budget vote debate on Friday.

Mr Dithebe commented that although parts of Ms Mohlala's speech were unclear, he understood that the EFF rejected the report and the budget. He suggested that understanding the substantive issues behind their rejection might benefit the Committee.

Ms Mohlala clarified that the EFF had rejected the report due to operational issues, including insufficient engagement opportunities and exclusion from input processes, as the Chairperson had not given the EFF an opportunity. She emphasised that their rejection was based on these issues, and promised to provide more detailed reasons during the plenary debate.

The Chairperson thanked Ms Mohlala for her input, and clarified that there was no intention to shut down anyone. He acknowledged her technical issue with her gadget, and assured her that she had been given the opportunity to speak. He then informed colleagues that they would receive the report later that night to allow Members to prepare for Friday's budget session.

The Committee Researcher noted that the changes required were minor, and he expected to complete them within the next two to three hours.

See final report here https://pmg.org.za/tabled-committee-report/5895/

Closing the meeting, the Chairperson thanked everyone for their participation during the long day and apologised for any inconvenience caused, emphasising that such situations were part of the learning process. He reminded Members to expect the report later that night, and said that any updates regarding the debate would be communicated via the WhatsApp group.

The meeting was adjourned.