Water Management Institutional Reform: Department briefing

Meeting report

WATER AFFAIRS AND FORESTRY PORTFOLIO COMMITTEE
22 June 2005
WATER MANAGEMENT INSTITUTIONAL REFORM: DEPARTMENT BRIEFING

Chairperson: Ms C September (ANC)

Documents handed out:
Department PowerPoint presentation on Water Management Institutions
Department PowerPoint presentation on Institutional Reform Of Water Services Provision

SUMMARY
The Department gave an overview of how the institutional roles and responsibilities of water resources and water services would be divided at national, provincial and local levels. The role of the Department would change from ‘implementer’ to ‘regulator". Responsibility for water management would devolve to a local level, while monitoring would be a national department responsibility.

The Department outlined the need:
- to create awareness for institutional reform of water services provision;
- to clarify the scope of water services provision reforms;
- to clarify the role and governance of water boards, and
- to describe the proposed processes and actions in terms of institutional reform investigations, governance review, and national boundary study.
The mandate for reform had been given by Cabinet in September 2003 in the Strategic Framework for Water Services document.

Members were concerned whether the objectives of the transformation process were linked to the broader ideal of providing free basic water to all citizens. Concerns were also raised about the viability of water service providers, their presentation of quarterly reports, infrastructure budgets, water service associations, and the meaning of ‘Section 78’.

MINUTES

Department briefing
Ms E Karar, Department Director of Catchment Management, gave an overview of how the institutional roles and responsibilities of water services and water resources would be divided on national, provincial and local levels. The national department’s role would be one of oversight in terms of providing support, monitoring and regulation. Management of water resources and water services would be managed at a local level.

Ms M Brisley, Department Senior Manager of Water Services Sector Development, gave a presentation on the need for and scope of institutional reform of water services, the role and governance of water boards, the proposed processes for institutional reform investigations, and the governance review and national boundary study. The mandate for reform had been given by Cabinet in the Strategic Framework for Water Services in September 2003.

Discussion
Mr J Arendse (ANC) asked how the Department would ensure the viability of water service providers and whether it would create a leverage opportunity for Black Economic Empowerment (BEE). Ms Brisley answered that the viability of water service providers and the enhancement of BEE was ensured through the procurement process and guidance from the Department. Water Service Associations (WSAs) decided on water service provision arrangements.

Mr Arendse enquired whether the Department could provide quarterly reports as decided at a previous strategic meeting. Ms B Schreiner, Department Senior Executive Manager of Policy and Regulation, responded that the Department needed to realign their project timelines as some projects were not substantive enough to deliver reports quarterly.

Mr T Ramphele (ANC) asked the meaning of ‘Section 78’. Ms Brisley replied that Section 78 of the Municipal Systems Act covered local government legislation. The Act dealt with water service provision, electricity and health.

Mr Ramphele enquired whether the infrastructure budget was adequate to meet the needs of the Department. Ms Brisley admitted that the budget was a challenge for management. The Department would have to work closely with the Department of Provincial and Local Government. The Department would also have to set conditions for receiving grants and check whether municipalities were spending their equitable shares on water management services. The Department would further try to access other grants like the Municipal Improvement Grant to set up institutions to provide water services.

Mr Ramphele asked whether the WSAs had been constituted in accordance with Department specifications. Ms Brisley answered that WSAs were a regional service provision arrangement and had proved efficient. They were fragmented however, because there were no economies of scale. WSAs needed cross-subsidisation from bigger cities to make them viable. District municipalities used an ‘optimal scale’ method, while smaller towns in local municipalities used aggregated into bigger regional service provider. The performance of Water Service Providers (WSPs) would be improved through legislation, regulation, contracts and accountability to the Department.

Mr Ramphele queried whether water irrigation boards had been transformed. Ms E Karar responded that the process of transformation had been long because the mindset of water boardmembers had to be changed. Advocacy had been needed to manage resources adequately. The Department supported transformation by providing water to labourers to irrigate their plots, or through contractual agreements with Catchment Management Agencies (CMAs).

Ms C September asked whether the objectives of transformation were linked to the overall objectives for water provision in South Africa. She questioned why white farmers needed incentives to contribute to transformation. Ms Schreiner said that the Department needed to be guided on this matter.

Mr P Ditshetelo (UCDP) questioned who would monitor the transformation of irrigation water boards. Ms Karar replied that the Department could play an oversight role in monitoring, regulating and supporting. The Department would provide training and diversity management.

Ms M Gumede (ANC) asked whether the Department had included citizens with disabilities when they spoke about capacity-building. Ms Brisley responded that the Department would include such marginalised groups.

Mr M Sibuyana (IFP) asked the name of the author of the National Water Resource Strategy. The Chairperson answered that the President had tasked the Department to draw up this strategy.

Mr Sibuyana queried whether the strategy had drawn from domestic or international research. Ms Schreiner replied that the National Water Act and the country’s water policy had been drawn from countries like the Netherlands, Australia, the United Kingdom and states in South America. The Dutch model involved a 30-year, incremental development process. The UK used a privatised model. South Africa preferred a public service provision model, and managed water through hydrological and not political boundaries. Primarily women users had to be involved in managing water resources. South Africa had followed a long, democratic consultation process. The Department would present the international scenarios to the Committee at a future date.

Mr I Mogase (ANC) felt that the need for water services was greater in rural areas than in small towns. Ms Brisley admitted that service delivery had been critical in the rural areas. Institutional, community-based models would be used in rural areas. Small towns used the aggregation model.

Ms September commented that the Treasury had extended the deadline for transfer of water schemes from 2005 to 2006. She wanted to know whether the Department would meet this deadline. Ms Brisley responded that the transfer strategy and implementation of agreements involved the SA Local Government Association (SALGA). The institutional reform task team would prefer a position of consensus and not of compromise.

Mr Ramphele enquired whether the Department regulated the actions of the municipalities. Ms Brisley confirmed that the Department had a regulatory role. Municipalities had to meet minimum technical standards and meet certain criteria in terms of costs, tariffs, and contract agreements.

The meeting was adjourned.