SA Local Government Association & Various Water User Associations on Department Annual Report: hearings

Meeting report

WATER AFFAIRS AND FORESTRY PORTFOLIO COMMITTEE
14 October 2005
SA LOCAL GOVERNMENT ASSOCIATION AND VARIOUS WATER USER ASSOCIATIONS ON DEPARTMENT ANNUAL REPORT: HEARINGS

Chairperson: Ms C September (ANC)

Documents handed out:
SA Local Government Association PowerPoint Presentation
Overberg Water briefing
Central Breede River Water Users Association Annual Report 2005
Umgeni Water Annual Report: PowerPoint Presentation
Lepelle Northern Water: PowerPoint Presentation
Vaalharts Water Users Association briefing
Impala Water Users Association briefing
Kakamas Water Users Association briefing
Orange-Riet Water Users Association briefing
[documents available here shortly]

SUMMARY
Various Water User Associations from across South Africa provided background information on service delivery, sanitation, financial performance, relationships with municipalities, sustainability of services, community outreach programmes, water distribution, operational aspects, capacity, challenges and transformation of management committees. Only pressing issues were raised as each presentation lasted only ten minutes, interspersed with Committee questions.

Representivity transformation of the water users’ association boards was of particular concern for the Committee. After the Department gave a comprehensive response to the submissions, the Chairperson summarised some of the major themes that had emerged over the previous three days of hearings on the Department Annual Report. These included:
- finances, tarriffs and the possibility of bringing the national Treasury more on board.
- disparity between the management and financing of water boards.
- guidelines for the staff of water users’ associations, and increased capacity for municipalities.
- varying service delivery and the provision of free basic water provision, particularly due to inadequate infrastructures in less advantaged areas;
- how to bring together dispersed skills and fragmented organisations into a coherent water sector
- the unauthorised use of water which had been made conspicuous by the silence around the topic;
- water service agreements; and
- the impact of land and land claims.

The Committee agreed to further discuss many of these issues on Monday 17 October at 10 a.m.

MINUTES

SA Local Government Association briefing
Mr W Moraka, Manager: Water Services, highlighted SALGA’s mandate and contributions in the water services sector. He made recommendations on how to meet critical municipal needs like the transfer of funding and rehabilitation, building municipal capacity, providing water services provider support, their methods of achieving water and sanitation targets, and their consolidation of support targeted to real needs.

Discussion
Mr M Masala (ANC) commented that the transfer of power to municipalities had had unexpected consequences. Some municipalities had ignored advice. The Department seemed unable or unwilling to intervene. What was the relationship between water boards and municipalities?

Councillor Amos Simbela of SALGA answered that relations between local and district municipalities had improved in the last five years. Some councillors from smaller municipalities held full-time jobs while being part-time councillors. This situation impacted negatively on their performance. Mr N Macleod, a SALGA consultant, cited a survey by the SA Institute of Civil Engineers on the lack of service delivery. SALGA had partnered with the Department to gather information about the status quo in 120 municipalities. The findings would be made available by early December 2005. The database would include information on service levels, coverage and tariffs. He felt the lack of skills replacement was ‘staggering’. Mr Moraka added that the lack of skills was a sector problem and not only found at municipal level.

Ms Maine asked SALGA’s views regarding restructuring of municipalities. Mr Moraka said the Municipal Systems Act, section 78, defined that municipalities should determine the best service delivery mechanism to restructure services. Services were brought closer to the community through local government and municipalities. These entities were dependant on provincial and national government to ensure staff capacity and support in terms of service delivery. Councillor Simbela stated that there needed to be better co-operation between water boards and municipalities regarding section 78. He challenged Mr J Sindane, Department Director-General, to speed up the reform process, because it impacted on the performance of the water boards.

Overberg Water briefing
Mr D Potgieter, Managing Director, submitted a written document that focused on service delivery to the ‘poorest of the poor’ in keeping with water supply targets for 2008. The Association had the capacity, infrastructure and expertise to make a difference, and they had had a good working relationship with the Department’s regional office and SALGA. They had developed a school programme to promote careers in the water service industry.

Discussion
Mr V Mabuya-Khulu (ANC) asked why Overberg Water was experiencing problems regarding the bucket system and provision of water while Breede River Water was not. Mr Potgieter of Overberg Water reported that he had submitted a proposal on the bucket system to the Theewaterskloof municipality, but no progress had been made because of bureaucratic red tape.

Ms S Maine (ANC) enquired who was being capacitated in the municipalities. Who was being trained? Who was failing? What could be done to assist? Mr Potgieter answered that councillors needed to be better trained as failures were a ‘complex issue’. Agreements on training between the SA Associations of Water Users (SAAWU) and SALGA had been initiated, but needed capital investment to speed up institutional reform for faster delivery. A central co-ordinating committee was needed to plot the way forward.

Mr J Arendse (ANC) asked more about the Overberg Water Users Association’s relationship with schools. Mr Potgieter answered that there was a pilot programme and campaign in progress. They needed the co-operation of the Department of Education and others. The Association’s technical staff had visited schools and addressed learners. They had showcased water services as a career option for students at the Learning Cape Festival.

Ms M Gumede (ANC) remarked that there was much water pollution in Worcester. The water board had complained to the Department but the latter had not addressed the problem. Should the water board do something about the pollution themselves? Mr R Boesak felt it was the responsibility of the Department to act on the pollution. He extended an invitation to Members to visit the area.

Central Breede River Water Users Association briefing
Mr C Baard, Chief Executive Officer, stated that one of the principal objectives of the Association was to regulate the distribution and division of raw water in the Breede River. The municipality of Worcester discharged waste water into the Breede River. The resultant pollution affected all water users. The Association wanted to implement initiatives like the Water Allocation Reform (WAR) programme to help previously disadvantaged beginner farmers. Bureaucracy had hampered progress and the affected public were frustrated.

Umgeni Water briefing
Ms N Gevers, General Manager: Finance, said that there had been a profit turnaround from a R37 million loss to a R55 million profit. Revenue had increased by 11%. Cash flow from operations had increased by R125 million. Net debt had been reduced by R300 million. Umgeni Water was characterised by affordable tariffs and sound management principles to eliminate water backlogs. By 2008, all local citizens would have access to water. By 2010, sanitation would be available to all households. They would link water resources and water supply to provide sustainable water solutions.

Discussion
Mr Arendse asked Umgeni Water whether their extensive restructuring process had impacted on their profitability. Ms Gevers answered that they had used their cashflow to reduce their debt levels. Operational costs had been reduced from 25% of revenue to 20%. They did not get a government subsidy. They had used commercial banks or bond holders to settle their gross debt of 3.2%. They had paid off R834 million by 30 September 2005. By the end of the year, they would be paying off another R130 million. It would take them three years to get their debt levels down.

Mr Mabuya-Khulu commented that Umgeni Water had started with infrastructure development. Had they forged relationships with municipalities in the event that they were not successful with the section 78 application? Could municipalities absorb the costs of the infrastructure? Ms G Moloi, Umgeni Chief Executive Officer, replied that people were getting affordable water in the shortest possible time that was sustainable.

Ms Maine asked Umgeni Water whether they had evaluated their partnerships in terms of meeting aims and service delivery. Ms Moloi answered that Umgeni was working with the three tiers of government. The Water Summit in KwaZulu-Natal had been welcomed by municipalities across the province.

Lepelle Northern Water briefing
Ms Z Ngendane, job title?, stated that the water supply chain needed to be paid for by consumers to sustain services. The board worked on a five-year planning cycle, which included security of supply during droughts. The board would provide assistance and support to municipalities. Their financial position had been consolidated and the gearing levels had been reduced. Municipal debt remained a challenge. There had been no proper costing of the free basic water (FBW) policy by municipalities.

Vaalharts Water Users Association briefing
Mr J Momberg said that the principal function of the Association was to supply bulk raw water in an economical way to municipalities, which then purified and distributed the water. The Association did not supply sanitation infrastructure or services. The Association’s income was derived from supplying irrigation water (96.2%) and industrial and household water (3.8%). Their infrastructure was more than 60 years old and was expensive to maintain and refurbish.

Discussion
Mr Arendse enquired whether they had a list of assets and infrastructure like dams. Mr Momberg said that they only had moveable assets like vehicles and computer equipment.

Ms Gumede commented that the majority of the community did not have access to water from the canal. Why did they not make water available to communities, even those three kilometers away? Spitzkop Dam was ‘big and full’, but there was no access to it. Mr Momberg explained that water was allocated to holders of application authorisations. Old lists and old water permits to extract water from the canal system for distribution had been inherited from the Department. Permit holders could not extract more water from the Vaal water system than their permits allowed.

Ms Maine asked about the composition of the board regarding transformation and gender balance. Mr Momberg replied that the board comprised twenty members. The Minister of Water Affairs and Forestry required that 18% of the board be comprised of black Africans and women. The management committee had complied with the requirements as nine members were in from the above groups. The board had found it difficult to persuade traditional leaders from the Taung area to be on the committee, but they had persuaded one woman to join the committee.

Impala Water Users Association briefing
Mr Volschenk, Association legal advisor, stated that they distributed water to farmers, for industrial use, for municipalities, and other smaller users from the Pongola and Bivane rivers. Relationships had been built with various stakeholders. Catchment management activities included erosion and alien plant control, pollution prevention and water quality monitoring. Impala provided Zululand District Municipality and uPhongolo Municipality with raw water. These municipalities purified the raw water and supplied the rural communities through the bulk supply and reticulation networks. Their management committee included two women.

Mr Arendse enquired about the population figure in the Impala area. Mr Volschenk answered that there were 80 000 citizens excluding farmers and their families.

Mr Arendse reflected that 98% of water was used for irrigation. Mr Volschenk said that the water available was sufficient, even in periods of drought.

Ms Maine asked whether the association had delivered value for money over time. Mr Volschenk felt his was the case, but it was a difficult question to answer. They had been embroiled in litigation from members challenging the Water Act. It had been a troubled three years for the management committee in terms of dam construction and the Water Act.

Ms Maine felt that women needed to be better represented to achieve transformation and gender balance.

Kakamas Water Users Association briefing
Mr M Williams detailed their water users as the local authority, emerging farmers, and irrigation, domestic, industrial, environmental and recreational users. Their management committee comprised 15 members. Due regard had been given to gender and race when filling posts. The Association was a bulk water supplier and did not supply purified water or any sanitation infrastructure.

Discussion
Mr Arendse queried the composition of the association regarding the demographics of the area. How representative was the structure? Mr Williams replied that they had a problem with the composition of the committee. Once the posts were vacant, they would address gender and race representation. They would sort out the problem and then come back to the Committee.

Orange-Riet Water Users Association briefing
Mr N Knoetze, Chief Executive Officer, said that the Association supplied water to five towns, farmers small users, industries and diamond diggers. A telemetry system, use of satellite images and minimum payment of 85% reduced losses. Water saved through water conservation and demand management would be used for emerging farmers. The management committee comprised seventeen members of which three were female.

Discussion
Mr Arendse asked about the representivity of its management committee because commercial farmers had nine representatives, while emerging farmers only had two. Mr Knoetze responded that they had supplied five municipalities, but since demarcation, they now supplied two. They also supplied emerging farmers. Their business plan showed more representation. The guidelines from the Department were incorrect and needed to be changed, as they did not make provision for empowerment.

The Chairperson asked for the guidelines to be sent to the Committee about what had caused the all the water associations’ problems. The report compiled by the Committee would be sent to Impala and Umgeni..

Director-General’s response
Mr Sindane said that the Directorate of Finance had been restructured. They would look at problems with ‘new eyes’. They had appointed a project leader to deal with the comments from the Auditor-General. The Department would build on the initiatives of the Committee. They would address the instability in the top leadership in Human Resources. They would submit quarterly reports to the Committee. The Department would finalise the strategic plan 2006/07 by Monday. The date for the strategic plan of 2006/07 would be made available. Capacity problems would be addressed by working with other departments like Education, Health, Provincial and Local Government, and SALGA. They would address the Civil Engineer’s Report on the lack of skills.

Mr Sindane (ANC) reported on various meetings he had attended. The matter of municipalities without engineers or technicians was brought into focus. In this regard, SALGA and the SA Institute of Civil Engineers had been approached to discuss the opening of technical support posts and finding suitable recruits. Sindane suggested that suitable recruits should be based at regional offices so as to allow greater availability.

Mr Sindane also confirmed the important role that the 30 ‘imported’ Cuban engineers had played. However, he also stressed that these Cubans had been ‘stretched’ because of the demand for their skills, so they are working in placement areas rather than transferring skills. He suggested a 50: 50 distribution of work between Cubans and locals, and, ideally, a 75: 25 distribution where the Cuban acted as a supervisor.

On bursary schemes Mr Sindane reported positively. He had initiated meetings with leaders of various training institutions to develop a ‘one-stop shop’ bursary scheme, which would consolidate information about available funding. It should be monitored closely in order to assure that the scheme provided what was required.

Mr Sindane extended an invitation to Members to visit to the Department’s regional offices. While the Department was already working closely with provincial governments and departments, he conceded that there was room for improvement, particularly in relation to ad hoc interventions and had occurred in Delmas.

Currently, the Department observed water service authorities’ spending patterns. The Department had written to authorities and offered their assistance in cases of underspending. There had been various provincial water summits. This was where the Minister had tried to get an integrated, interactive, understanding appreciation and plans for the water-related matters in each province. Such summits involved not only the Department, but provincial governments and municipalities. The summits served to explore how each was aligned in relation to the availability of resources in each province. The Department could still do more.

In conjunction with the provincial departments of Education and Health, the study of water issues was being promoted and integrated into the school curricula. Mr Sindane then explained that some of the current provincial structures were not as strong as they could be, such as Gauteng. From the Water Summit currently underway in Gauteng, a plan of action would be drawn up including proposals for better structures.

Mr Sindane continued that section 78 of the Municipality Systems Act had created expectations from water service authorities. However, it had also exacerbated tensions resulting in Department interventions more than once. The process intended to allow certain municipalities to provide services themselves if they had the capacity, while also considering alternative means of providing the services. The Department sought to smooth out relations and assist the authorities in completing the process that had been initiated. . After consultation with SALGA, it had been agreed that matters of contention regarding low-skilled staff had to be dealt with. Now that these matters had been resolved, results should follow.

In response to the query about the tardiness and shifting deadlines of the transfer schemes, Mr Sindane replied that progress should now be much faster. While he acknowledged several reasons for the slow pace of target attainment, the main reason was that the Department was addressing many related problems, such as poverty alleviation, unemployment and local economic development. However, the price paid in addressing these issues was time and quality. He called for alternative methods to top-up what the Department was doing, such as possibly bringing in the private sector. Such a move, however, would require balancing price and money in relation to speedier delivery. Such decisions could affect local organisations and Non-governmental Organisations (NGOs), as well as local government.

The degree to which other institutions were accountable to the Minister was complicated by the fragmented structure of various water services, authorities, boards etc. It might be time to begin to bring together the disparate parts to alleviate planning difficulties. In the interim, he suggested promoting other structures of accountability such as quarterly reports. Such measures towards better structures of accountability could be accomplished, even if they required re-assessing established legislation.

The Department had considered the matter of pollution within a developmental approach. The municipalities did not have the financial resources to manage this problem. The Department had worked with the municipalities to draw up plans for a solution. The National Treasure had also been approached for funds to upgrade existing water purifying facilities. The CEO of SALGA has asked him to bring this information to the Executive Committee so that they could review how they could be of assistance.

Chairperson’s conclusions
The Chairperson recommended viewing the documentary film "Thirst" which depicted water-related affairs across the world. She then summarised major points that had emerged in the hearings of the previous three days.

Finances were one unconcluded issue. How to take this matter further, such as in exploring new avenues and bringing the treasury on board, would be discussed in the future. She felt that the Catchment Management Agencies were still lagging behind.

With regards to Water Boards and Water Use Associations, the Chairperson observed that there was disparity between the management and financing of water boards. There was a disjuncture between transfer management services. For example, there might be 2 to 3 boards servicing a particular area, yet situations such as the case of Delmas, still occured. While some boards had borrowed money from various institutions, others had managed to develop coping strategies. This matter was indicated in the Department Annual Report.

The guidelines for the staff of water users’ associations should be further interrogated. Capacity had been a much-discussed issue, especially by municipalities. Quality was a matter of concern and the Committee would further discuss this issue on Monday 17 October at 10 a.m.

The presentation of financial performances and required solutions such as tariffs differed from province to province and board to board. Similarly, service delivery varied. This has resulted in much tension in various provinces. Challenge still existed around free basic water provision, particularly due to inadequate infrastructures in less advantaged areas. The matter of how to bring together dispersed skills and fragmented organisations into a coherent water sector, remained crucial.

Cost recovery had also been a frequently discussed topic. Similarly, the equitable distribution of drinkable water had often surfaced in reports. Unauthorised use of water had been made conspicuous by the silence around it. Attending to this matter would require municipalities to be on board.

Water services agreements were yet another area that had frequently been discussed, especially the role of tariffs, municipalities and water boards. Around the associations, most discussions related to
- the functions, regulations, distribution and allocation of water;
- the growing demand for water and waterborne sanitation and how this impacted on the water user associations;
- the operation, maintenance and the infrastructure of such proceedings.

The Chairperson also highlighted the impact of land, land-claim issues and their impact on the make-up of the boards. This was an area that should be explored further as the land and water were indivisible topics.

With regards to SALGA, the Chairperson mentioned disjunctures and called for an integrated plan. The Department was a sector leader in this and the Director-General had responded regarding this issue.

The Chairperson concluded that, of the invited boards, associations and organisations, three had not arrived. It was perhaps a situation worth investigating.

The meeting was adjourned.