Free Basic Water Policy: briefing by Rand Water Board & South African Association of Water Utilities

Meeting report

WATER AND FORESTRY PORTFOLIO COMMITTEE
30 May 2001
RAND WATER BOARD; SOUTH AFRICAN ASSOCIATION OF WATER UTILITIES (SAAWU): BRIEFING ON PREPARATIONS FOR FREE BASIC WATER POLICY

Chairperson: Ms B P Sonjica

Documents handed out
SAAWU presentation
Rand Water Board presentation

SUMMARY
The Rand Water Board and the South African Association of Water Utilities briefed the Committee about their preparations for Free Basic Water policy. They highlighted the obstacles and challenges and proposed various options for the implementation of this policy. The Committee promised that the proposed options would be discussed with the Department and the relevant Minister.

MINUTES
South African Association of Water Utilities (SAAWU) Presentation
Mr Nkuna (Representative from SAAWU) led the presentation.

SAAWU Background
SAAWU is a not for profit organization that represents public sector water service providers in South Africa. SAAWU consists of 19 Water Boards and 3 other public sector institutions. The objectives of SAAWU are to:
- ensure access of all South Africans to water services by promoting the interests of Water Boards and Regional Water Utilities,
- and to ensure effective integration and cooperation within the water services sector.

SAAWU’s support for Free basic water (FBW) policy
SAAWU fully supports the FBW Policy as an initiative to improve the quality of life of many South Africans (specifically the indigent and rural poor). The Water Boards have to play a meaningful role in assisting with the implementation of this policy. SAAWU feels that the municipal authorities are the most appropriate institutions to implement FBW policy.

Possible contributions by the Water Boards to the implementation of FBW policy
Water Boards have expertise that can be mobilized to support municipal authorities to implement FBW policy. This expertise relates to:
· Technical and financial (tariffs and cross-subsidisation models for municipalities)
· Water loss management
· Water demand management
· Credit control implementation
· Formulation of by-laws

Obstacles and challenges to the implementation of FBW policy
SAAWU has foreseen some obstacles and challenges regarding the implementation of FBW policy. These challenges are caused by:
- the recent demarcations (it has left many communities economical not viable),
- infrastructure backlogs in the former homelands, and
- there are also challenges associated with the use of equitable share allocations to municipalities

Other potential implementation options
SAAWU proposed the following potential options for the implementation of FBW policy:
· Rebate on raw water tariffs
· Free basic water levy at national level on all water users.
· SAAWU as vehicle to administer distribution or cross-subsidisation

(For more details on SAAWU’s presentation see attached documents)

Discussion
Ms Sonjica (ANC) said that SAAWU's presentations were well researched and the presentation provided the Portfolio Committee with the kind of insight needed for the realization of the FBW policy.

Mr Hanekom (ANC) asked SAAWU if they were aware of any municipalities that had already implemented the FBW policy and how successful that implementation was.

Mr Nkuna replied that they only know of Durban Metro in Kwazulu-Natal. He was unsure of the success this Metro had with the implementation of FBW policy.

Mr Ditshetelo (UCDP) asked to what extent SAAWU could offer their services to the municipalities. He also asked if SAAWU received a government subsidy to cover their expenses for services they offered to municipalities.

Ms Ferreira (Representative from Rand Water Board) replied that these services were offered free in the short term. For the long-term, they operate as public - public partnerships with municipalities. Municipalities had to pay for services provided in these partnerships.

Ms Sonjica (ANC) said that SAAWU's appeal regarding the review of government policy (regarding equitable share allocations to municipalities) and their proposals for implementation of the FBW policy need to be noted and forwarded to the Ministry for discussion.

Ms Ngwenya (ANC) asked what the nature SAAWU's relationship was with NGOs and CBOs in rural areas.

Mr Dumas (SAAWU Representative) replied that SAAWU works with the Mvula Trust which is the largest NGO in the water sector operating in rural areas. SAAWU also works with CBOs in rural areas (those that were known as water committees). In the past SAAWU assigned a technical Water Agent to assist these CBOs with bore-hole maintenance.
Ms Ferreira added to this by giving the example of the Magaliesberg water committee which received technical assistance from SAAWU Agents to maintain their water pipes.

Mr Simons (NNP) shared SAAWU's concern regarding the result of economic problems in peri-urban and rural areas. According to SAAWU the problem was that the recent demarcations had left peri-urban and rural areas economically not viable. This will lead to difficulty for municipalities in respect of generating enough revenue for cross-subsidisation. Mr Simons asked if SAAWU had solutions for this problem.

Mr Nkuna replied that all services in these areas had to be financed through the equitable share or the proposed National Water Levy.

Ms Nzanga (ANC) asked if issueing smart-cards could lead to the identification of those who connected water illegally.

Mr Duvel replied that they were using education officers in Mapopane (instead of using smart-cards) to educate the people so that they could stop connecting water illegally.

Mr Sigwela (ANC) expressed concern about the way in which the Water Boards were developed in the past. These Water Boards were used to bypass rural areas and to operate only in urban areas. He asked SAAWU to indicate if they were currently working in traditional areas. If they were he asked for an explanation as to why so many people were drinking dirty water in some rural areas.

Mr Nkuna replied that the water services Act made provision for Water Boards to reach out to the previously disadvantaged areas. However a resolution had to be reached between these Boards and the local municipalities before the Board could provide any services in that area.

Ms Ferreira commented that the Water Boards recognized problems that were encountered in rural areas. There are some legal restrictions that still need to be addressed. These restrictions make it difficult for these Boards to reach out to rural areas.

Mr Matebe (ANC) asked if SAAWU could share its expertise with all the Water Boards.

Mr Dumas replied that it is true that there is not uniformity amongst Water Boards when it comes to expertise. Therefore SAAWU will institutionalise and facilitate the sharing of skills and expertise among all Water Boards.

Ms Lishika (ANC) asked how the Water Boards deal with the deficit caused by non-payment for services provided to municipalities.
Ms Sonjica added that she would like to know if the funding received by these Water Boards from government is sufficient.

Mr Nkuna replied that they asked the Department for additional funds but the Department keeps referring them to the equitable share funds. These funds are not enough. Mr Nkuna proposed a discussion between the Water Affairs portfolio committee and the Local Government portfolio committees regarding funding for Water Boards.

Mr Matebe (ANC) asked if SAAWU had thought of any plan to stop those who were using water illegally.

Mr Nkuna replied that they already had models in this regard but they still need funds and other expertise. Some regional offices of the Department of Water and Forestry are reluctant to share their expertise with municipalities. He said that they need the support of the Ministry and politicians to make sure that these regional offices share their expertise with the Water Boards and municipalities.

Mr Ditshetelo (UCDP) urged politicians to take a leading role in educating communities about paying for the water provided to them. This includes asking constituents not to connect water illegally. Politicians must note the problems raised by SAAWU regarding the Department’s regional offices so that they can take steps to solve these problems. This is necessary for the implementation of FBW policy.

Mr Matebe (ANC) said that the ANC discovered that there were many disturbing things in the regional offices of the Department. ANC MPs asked the Minister for access cards to enable them to enter all the offices of the Department. They wanted to see if officials there were responsible and did their work well. They also wanted to ensure that communities received what they deserve.

Rand Water Board Presentation
Mr R Duvel led the presentation. The presentation encompassed information on:
- The background of the Rand Water Board,
- FBW tariff concept,
- Implications of tariff structure, and
- The conclusion made by this Board with regard to the implementation of FBW policy
(See attached documents for more details)

Discussion
Mr Matebe (ANC) asked how the Board proposed dealing with the situation where water tariffs are high in rural areas (because these rural areas are not economically viable for cross-subsidisation) while the Metros pay lower tariffs because of cross- subsidisation.

Mr Duvel (Representative from Rand Water Board) agreed that rural people pay more in some instances. This issue needs to be discussed with the Department of Water Affairs and Forestry to see if cross-subsidisation can be created at regional and national level.

Mr Maimane (ANC) congratulated the team from SAAWU and said that their presentation challenged the policy makers about the feasibility of the FBW policy. He urged committee members to take note of the options from SAAWU and to discuss this with the Department. He said that people would suffer if these options are not taken into consideration.

Mr Matebe (ANC) asked why the Water Board did not charge higher tariffs on agriculture and forestry.
Mr Duvel replied that charging agriculture and forestry more is not an easy task for the Department. It could cause many farms to go bankrupt. This is why caution had to be exercised in the way the Department deals with agriculture and forestry.

Ms Ferreira (Rand Water Board) suggested that the debate about infrastructure development be discussed with the Department. She said that those people who do not have infrastructure have to wait until infrastructure is developed before they could receive the benefit of the FBW policy. FBW policy will benefit those that happen to have the infrastructure and these are found mostly in urban areas.

Mr Maimane agreed that infrastructure development also had to be noted for discussion with the Department

Mr Nkuna commented that the Department has to provide funding for infrastructure beyond the RDP funds. He said that the available funds for infrastructure is not enough even to cover the backlog of projects designed in the past.

Mr Maimane said that the Water Boards have enough capacity. These skills must be transferred to the municipalities. Thus partnerships between these Water Boards and municipalities have to be encouraged.

Ms Sonjica (ANC) commented that the implementation of FBW policy is complex and challenging. The committee has to engage the Department and SALGA to ensure that FBW policy becomes a reality and is sustainable. She thanked both teams and acknowledged that the discussion with them would assist the Committee when dealing with the Department on realizing the FBW policy.

The meeting was adjourned.