Restructuring Water Distribution: Department and Municipalities’ briefings

Meeting report

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE
7 June 2005
RESTRUCTURING WATER DISTRIBUTION: DEPARTMENT AND MUNICIPALITIES’ BRIEFINGS

Chairperson: Ms N Ntshulana-Bhengu (ANC)

Documents handed out:
Institutional Reform of Water Services Provision Powerpoint Presentation
KwaZulu-Natal Regional Bulk Water Supply Concept: Powerpoint Presentation
Uthukela District Municipality Restructuring of Water Supply Sector
Department Strategic Framework for Water Services
Water and Sewer prices in various KwaZulu-Natal municipalities

SUMMARY
The Department briefed the Committee on their strategy framework for sustainable water services provision. Stakeholders had to provide water efficiently in terms of conservation, management, capacity, financial sustainability, affordability and accountability. Their strategy was in keeping with the targets set by the State President as per the Millenium Development Goals (MDG).

Umgeni Water in KwaZulu-Natal then briefed the Committee about increasing access to sustainable water and sanitation through bulk water supply. The Committee was keen to see this model rolled out more throughout the country. Municipality representatives from elsewhere in KwaZulu-Natal and Gauteng then briefly presented the water service provision scenarios in their respective areas.

MINUTES

Department strategy briefing
Mr J Sindane, Department Deputy Director-General: Regions, briefed the Committee about the manner of providing water services in South Africa. Since July 2003, a strategy framework for sustainable provision of water services had been developed. Stakeholders had to provide water efficiently, in terms of conservation, management, capacity, financial sustainability, affordability and accountability. The strategies of the Department were linked to those of municipalities to enhance synergy with Section 78 processes.

Umgeni region supply concept briefing
Mr P Jonas, head of water services of Umgeni Municipality, then briefed the Committee about how the Umgeni region was providing water to communities. Their challenge was to increase access to sustainable water and sanitation through bulk water supply, in keeping with Millenium Development Goals (MDG). Municipalities were able to meet these challenges, institutionalise Black Economic Empowerment (BEE) and create jobs through the Expanded Public Works Programme (EPWP). They asked the Committees to meet the Millenium Development Goals’ target "put water in houses in the shortest possible time".

Uthukela District Municipality briefing
Mr P Neethling, Municipality Deputy Executive Director: Technical Services, submitted that the implementation and restructuring of water provision had been a successful, ongoing process but there was no structure for information sharing. There had been positive spin-offs in terms of cross-subsidisation, planning of water service infrastructure, economies of scale, free basic water provision and bulk water supply.

Department on distribution restructuring
Mr F Stevens, Department Deputy Head: Technical Services, then briefed the Committee on the restructuring of water distribution. The review of Section 78 was still in progress. He confirmed that restructuring had had many positive benefits, but there were challenges in securing funding for the municipality.

Mr Khumalo briefed the Committee on the thirty-year strategy plan for water provision for the fifteen municipalities in the Tugela catchment area. Water and sanitation would be integrated as per the Umgeni initiative. There were many challenges, including lacks of integration, appropriate infrastructure investment and co-ordination.

Discussion
The Chairperson highlighted the relevance of the Masakane example as it referred to the kind of development that should be achieved, and the type of constituencies to which services were being provided. It talked about the rights and responsibilities of those communities. The Municipal Systems Act referred to the necessity of engaging communities in both policy formulation and the implementation of those policies. Training should take into account community ownership. The community should be concerned about its rights as well as its responsibilities and obligations. The document had been central to ensuring that the mindset of both government officials and consumers changed.

She added that study tours to vandalised government facilities, such as public water standpipes, pointed to a lack of understanding of community responsibilities. Local government needed to promote a sense of responsibility in citizens towards the resources of the country.

The other training challenge related to the attitudes and behaviour of government officials in dealing with the consumers unable to afford services. Consumers deserved to be treated with dignity irrespective of skin colour or indigence. Promoting those principals would be a challenge to local government.

Newcastle Municipality and Uthukela Water Ltd briefing
Mr Hoosen of Newcastle Municipality described the restructuring of water services in Newcastle, as it became part of Uthukela Water PTY Ltd. The birth of Uthukela Water had begun some 15 years before with the formation of a Water Board for the Uthukela Catchment Area. In 2003, the Newcastle Municipality had been pronounced a ‘Water Authority’ and joined the then multi-jurisdictional partnership of three municipal districts. This eventually had become a company called Uthukela Water PTY Ltd.

The decision to form a company had been influenced by a number of issues. Newcastle had faced enormous challenges in providing water and sanitation services in an equitable manner to all its residents. The regionalisation of water and sanitation was seen as the answer. It was also much easier to raise European and American funding as a company, rather than as a multi-jurisdictional partnership.

Uthukela Water Company had experienced the typical problems of any new company but these were not insurmountable. Newcastle did not subsidise water and sanitation through rates, but was an independent trading service within the municipality. In order to begin providing equitable services and implement cross-subsidisation, tariffs had to be increased. Many customers were unhappy as tariffs were increased in the first year. However, the current year had seen a reduction in tariffs compared to the increases of the past year. For the first time, every householder was receiving 6 kilolitres of free water, and all indigent customers (18 000 users now and projected at 25 000 in the coming financial year) were not paying a cent for any services. The indigent users had been removed from the debtors’ book and were being treated in different manner altogether. Newcastle Municipality had allocated a certain amount of their equitable share of Uthekela Water as free basic water for all indigent users.

The cost of cutting the water and sanitation backlog had been estimated at R1.1billion. Unless new and innovative ways of rendering water services were initiated, they would not be able to meet that challenge. Therefore, despite problems, they strongly endorsed the regionalisation of water.

Discussion:
Mr Sokhela (Umshezi Municipality) noted that while the Umshezi Municipality had the cheapest water, the service was poor, with many blocked toilets and water stopages. Uthukela had not responded to these problems when telephoned.

The Chairperson felt that the meeting should not seek to apportion blame, but rather find constructive solutions to the problems of water restructuring.

Mr P Smith (IFP) pointed out that much of the discussion had been about bulk delivery. He questioned whether a different model might be needed for rural areas. He asked whether the regionalisation of water would mean one or more models for all provinces, and about the role of private companies.

Mr W Doman (DA) raised issues around job creation, the accountability of municipalities in the regionalisation process, the role of financial institutions and where the responsibility for free basic water lay.

Mr S Mashudulu (ANC) stressed the importance of the Department working closely with local government. Given the historical imbalances in South Africa, it was essential that municipalities be structured to ensure an equitable distribution of resources. Community participation was central to this process and was often not done adequately.

Members had raised questions about similar problems in other provinces. The Chairperson responded strongly that the discussion at the meeting had been deliberately focused on KZN. She felt the KZN example would encourage Members to raise problematic issues from their own constituencies for discussion at future meetings. She would welcome any issues for the agenda that were rooted in ‘on the ground’ constituency experiences.

Mr Sindane of the Department noted that creating such structures was always a challenge, especially with the issue of autonomy versus accountability. Water Boards were always accountable to the Minister. As they moved into a more regulatory function, the Department would continue to relate to municipalities when developing water service plans. The Department had been reviewing problem areas and consolidating municipalities. A joint MinMEC meeting would soon be held. The Boundary Study would determine the size of regional bodies, and the Department was a part of the task team.

The Department’s position on free basic water was that indigent people should receive a basic service, but that people who could afford water should not take advantage of that. There would be registers on this in municipalities.

The Chairperson noted that even where consultation within communities had taken place, the message was not always understood clearly by all parties. It was essential that local government kept its message simple and ensure that all involved reached a common understanding. There was a need to regroup and further continue this discussion.

The meeting was adjourned.