Water Research Commission & Trans-Caledon Tunnel Authority Annual Reports 2006/7: briefings

WATER AFFAIRS AND FORESTRY PORTFOLIO COMMITTEE
17 October 2007
WATER RESEARCH COMMISSION & TRANS-CALEDON TUNNEL AUTHORITY ANNUAL REPORTS 2006/7: BRIEFINGS

Chairperson: Ms C September (ANC)

Documents handed out:
Water Research Commission (WRC) Annual Report 2006/7: Presentation
WRC; Abridged Knowledge Review 2006/07
WRC Annual Report 2006/07
Trans-Caledon Tunnel Authority (TCTA) Presentation
TCTA Annual Report 2007

Audio recording of meeting

SUMMARY
The presentation focused on the role of the WRC and its mandate, and looked at the review that was conducted to establish the significance of the Commission in South Africa and around the continent. Dr R Kfir highlighted the challenges of the Commission and some of its achievements. She explained how the research that was conducted benefited the economically marginalised, and described its impact on the environment

The Committee stated that they were impressed at the WRC’s contribution to the future of water in South Africa. Members enquired if the guidelines introduced by the Commission had been put to use and, if not, the plans for their implementation. They also queried bio-fuels and their effect in South Africa, as they were in use in South America. Members were concerned about the amount of money spent on supporting students in tertiary institutions who seemed more interested in working for the private sector rather than DWAF or the WRC. They asked if the Commission monitored the students it sponsored.

The presentation looked at the TCTA’s mandate, as well the work it did in collaboration with DWAF. The CEO reported that the TCTA was a non-profit organisation that supported the natural environment and social impact of South Africa. Detail was provided on the organisation’s three main projects: the Lesotho Highlands Water Project, the Berg Project and the Vaal Pipeline project.

MINUTES
Briefing by the Water Research Commission (WRC)
The presentation was made by Dr R Kfir (Chief Executive Officer; WRC) on the Commission’s mandate, governance, achievements, and the report of the Auditor-General on their financial statement. The mandate highlights functions such as promoting co-ordination, building co-operation and communication in all areas of water research and development. The Commission also decides on the priorities in the country by consulting their shareholders in the Department of Water Affairs and Forestry (DWAF) and the Department of Environmental Affairs and Tourism (DEAT), but it should be taken into account that there are also other players in the water sector as well.

Dr Kfir told the Committee that the WRC not only produces research reports, but also made an effort to disseminate the knowledge. They also try to build capacity, as it does not help to have knowledge without capacity. In this they targeted not only capacity for research, but also the capacity to try and absorb the research. The role of the WRC provided for the making of informed and knowledgeable decisions, as water quantity and quality are critical to South Africa’s long-term sustainability. Many decades of research and development have provided the basis for the development of policies and strategies and this allows for the sustainability of water resources.

The Commissions achievements include, leading water-centered knowledge, investing in new knowledge, and sharing water-centered knowledge. Dr Kfir stated that the WRC has fulfilled its role as the ‘hub’ of water-centered knowledge, reporting to and supporting its shareholder, DEAT and employing innovative strategies to develop new and practical ways of packaging and transferring knowledge which includes, such as policy briefs.

Their vision includes putting South Africa on the global map, not just in the African context. The WRC continues to strengthen its role in Africa in support of the South African Government’s initiatives and NEPAD and further linking the South African water sector and the research community to Africa. In 2001/02 the WRC went through a major change in their focus, and Board, as well as the stakeholders deciding to put an International Institutional Review together. A panel of experts was asked to review the WRC’s effectiveness and efficiency. The aim was to provide the WRC Board and Management with feedback on strategy and operations for the 2001/02 to 2005/06. The Review found the WRC to be a relevant organisation, that its performance has continually improved and that it was aligned to sustainable development and poverty eradication programmes.

Key Strategic Areas
Key strategic areas are divided into four categories: Water Resource Management looks at water resource assessment and development, impacts on water resources, water resource protection and policy and institutional arrangements. Water linked-ecosystems examine the ecosystem processes, ecosystem management and utilisation and ecosystem rehabilitation. Water Use and Waste Management examines water services, water supply and treatment technology, wastewater, effluent treatment and reuses technology, industrial and mine water management, and sanitation, health and hygiene.

Water Utilisation in Agriculture looks at food fibre production, fuel wood and timber production, poverty reduction and wealth creation and resource protection and reclamation. The WRC has also empowered communities by making flush toilets more affordable, by reviewing land tenure systems and support structures, making nanotechnology affordable for the provision of safe drinking water, as well as supporting people with HIV/AIDS. The Commission has also embarked on an environmental safety, by using technology to separate oil from industrial wastewater, reusing grey-water wisely, and greening with mine water.

Dr Kfir stated that their vision for the future was to strive to serve South Africa by providing the right information at the right time about water research.

Mr N Patal (Chief Financial Officer: WRC) presented the Commissions financial statement. He stated that the WRC had an unqualified audit report with emphasis on one matter, which was that project debtors were previously overstated due to the accounting policy adopted. Adjusting the prior year’s financial statements rectified the matter. The Commissions balance sheet is stronger in comparison to 2005/06; this was because of the growth in investments, as well as growth in receivables, due to the increase in Water Research Levies due from DWAF.

Discussion
Mr J Arendse (ANC) said that the WRC had said they would like to amend the WRC Act of 1971 on their mandate, which was last amended in 1996. He asked the CEO to inform the committee of the areas she would make recommendations on, and how soon she planned on making these recommendations.

Dr Kfir replied that they had begun consulting with the Minister about the Act the previous week. The Act needed to be modernised, and they had gone through a process of looking through the amendments, but it was still "early days”.

Mr Arendse stated that Dr Kfir had referred to several guidelines that they had developed and “workshopped”. In terms of the topical issues that arise in the media about water and its safety, such as maggots in the water, did the WRC feel that in some instances the guidelines were not applied, and therefore the matter could have been prevented, and how do they deal with this kind of situation?

Dr Kfir said that when they developed guidelines, the Commission ran workshops that were tied to them. They tried to relate guidelines to topical issues, and people affected by the problems. Their role, however, was not to police whether they are being used; the Commission only engaged in research.

Mr Arendse wanted to know more about bio-fuels, saying that there are groups that had visited Brazil to look at bio-feul initiatives in that country that were being successfully developed. Since South Africa was a water scarce country, had the Commission looked at crops that use less water, and could they also be effectively used as bio-fuels?

Dr Kfir said that bio-fuels have implications on water quality because of the production of ethanol. Another debate was whether food is being taken from the poor, as questions were being asked about whether maize is being grown for food production or bio fuels for vehicles.

Ms Manana (ANC) asked if the Commission had anything to say about the report that Members of Parliament had handed in.

Dr Kfir said that as far as she knew, no comments from the Commission had been made

Mr B Mosala (ANC) said his question related to the Commission’s breeding new life into irrigation skills. Emerging farmers needed guidance, and he enquired if these guidelines were available. They operated alongside established farmers and were in danger of being taken over - how could the WRC help them?

Dr Kfir said that is unsure about whether there are guidelines for irrigation schemes. A lot of research had been done on the guideline, but the problem is implementation

Mr Swathe (DA) asked whether a mechanism had been put in place to monitor students that the WRC supported to make sure that they did not go into the private sector with their skills, instead of the Department. He heard the CEO mention an underwater service franchise, especially in the rural areas and peri-urban areas. He would like to find out how they were planning to make the franchise work in disadvantaged communities, especially in the rural areas where people did not have any water.

Dr Kfir replied that it was a major effort to keep track of students who are supported by the WRC, because after they left the learning institutions they moved into the private sector. They were working with DWAF and trying to create a link with learning institutes. On the matter of the franchises, she stated that the WRC will try and push for it, and get other Departments and stakeholders involved

Mr M Sibuyana (IFP) asked if there is any comparative research that has been done in South Africa to examine if the lack of water in rural areas is justified as compared to counties such as Israel.

Dr Kfir responded that there has been no comparative study between Israel and South Africa. She believes that South Africa’s political history has affected the water issue.

Mr K Moonsamy (ANC) asked where the Commissions various projects where concentrated, and if they represent the demographics of the country.

Dr Kfir replied that there is a specific program looking at gender issues, as well as examining how many women are researchers.

Ms S Maine asked if the Commissions reports are taken seriously when they are taken to learning institutions or DEAT.

Dr Kfir said that she believed the Department took them seriously. She said that she understands that not all of their ideas can be implemented, as they are costly, therefore, the Department has every right to not agree to all their suggestions.

Presentation by the TCTA
Ms M Van Rensburg (CEO: TCTA) began her presentation by describing the mandate of the TCTA, which was established in terms of the Treaty between South Africa and Lesotho in terms of the Public Finance Management Act (PMFA), in order to manage the funding and financial risk management of the Lesotho Highlands Water Project. The Authority reports to DWAF and Cabinet, and included in its duties are design and supervision, construction project management, funding and debt management, income management and natural environment and social impact management. TCTA also deals with project preparation and project implementation, in projects initiated by DWAF.

The Authority is a non-profit taking organization. She stated that current legislation specifies that the TCTA needs to ring fence their projects and their costs separately, as well as reporting on it separately. In terms of high priority projects, the TCTA plays a direct role or supported DWAF; some of these projects include the empowerment of women, improving the governance and alignment of DWAF entities, meeting water and sanitation targets as well aiding in strategic engagement within the region and the continent. It is also aligned with the Government agenda by working in the Accelerated and Shared Growth Initiative for South Africa (ASIGISA) program with the department relating to infrastructure development. Some of their projects are for pure economic development whilst others include both the economic development as well as social impact.

The TCTA’s key highlights include their board appointment and induction in 2006 and the appointment of an assurance team. One of problems they faced was the delay in water delivery for the Vaal Pipeline Project. This project was done in conjunction with DWAF. In terms of operational performance Ms Van Rensburg stated that the TCTA had a clean audit report and were fully compliant by international financial reporting standards. It had also grown from accommodating 90 people to 115 people in the organisation; the diversity profile consisted of 63 percent black people and 60 percent women.

The TCTA’s main concerns included reviewing the Lesotho Highlands Water Project, the Berg Water Project and the Vaal Pipeline Project long term solvency in terms of the ability to service and repay debt after operational expenditure.

The future looked at continuing its social and environmental mitigation, as well as making repairs on the Mohale Dam in Lesotho

Discussion
Mr Arendse congratulated the TCTA on their efficiency; however there were a few aspects that he had missed. He asked if the CEO could elaborate on the R425 million she had spoken about. He also wanted to know about why the revenue for the Lesotho Highlands Water Project would begin to decrease in 2024, just ten years after the CEO said it had increased when she had been explaining the tariff methodology graph in her graph.

Ms Van Rensburg said that the R425 million they have recovered in relation to the hydro-power cost from the Government of Lesotho comes from the project. The spike going up in 2024, currently looked at further payment of Lesotho that could come into play. The infrastructure was not looked at in isolation but in a longer term

Ms S Maine (ANC) said the establishment of the National Water Resources Restructure Agency would integrate the TCTA, and asked the TCTA to provide details for the projected impact of this, and the manner in which they were engaging with them.

Mr Sibuyane asked about the kinds of challenges the TCTA comes across in their advisory role.

The Chairperson said that the annual report did not go into much detail when it came to the PMFA, it also did not examine supply management and infrastructure effectively, and these are the aspects the Committee was interested in. She asked the TCTA to comment on the fact that if they look at other countries, and their role in infrastructure development, such as the building of dams, they tended to borrow from the World Bank subject to certain conditions. What had South Africa learnt from this, as it seemed that the risks that came with their loans were minimal?

Ms Rensburg stated that TCTA took note of the comments made about the annual report, and The lessons that the TCTA had learnt with regard to foreign investment was to try to strike a balance by finding different sources, therefore their projects were not controlled by their donors.

The Chairperson asked if TCTA located its role in the financing of infrastructure, or more on their social contribution.

Mr M Gantsho (Chairman: TCTA) said that the TCTA was devised to develop and fund infrastructure. The role it would play would be an interactive one.

The Chairperson thanked the delegation.

The meeting was adjourned.