The Department of Water Affairs and Forestry was confident in the municipalities’ ability to spend 100% of its budget allocation. Some municipalities did not have the capacity to build the required infrastructure and were assisted by deploying staff to the relevant municipalities. There was a problem with late submission of invoices that often caused a spike in spending at the end of the financial year. This Department was working closely with Departments of Public Service and Administration as well as Provincial and Local Government. The Department justified their request for additional funding by informing the Committee of the old infrastructure resulting in the lack of water security, especially in provinces such as Limpopo and
Members raised concerns around implementation, and asked for lists of all projects, and asked for explanation of the different areas of responsibility of the Department or the municipalities, while also recommending greater involvement of the Department with municipalities. The position in Limpopo was addressed, especially the problems around water security, and the Department was asked to provide a list of allocations to the provinces, which provinces had not signed agreements, a list of staff and projections on staff transfers. Further questions related to capacity building, how the Department ensured that the money transferred was spent, those municipalities who had not submitted invoices, the inter-departmental problems, and the reasons for the request for further funding. The problems in Delmas and Govan Mbeki municipalities were queried.
The Department of Minerals and Energy reported on progress of the Integrated National Electrification Programme, giving a summary of capital expenditure and numbers of household connections. Challenges were outlined as the need to build bulk infrastructure and the lack of execution capacity in municipalities. Eskom allocations for 2007/08 and performance as at December were outlined. Challenges in this area included shortage of material for construction, design and survey resource problems, and excessive dependency on bulk infrastructure. Expenditure on electrification of schools and clinics was summarised, and the performance was explained. The Department would concentrate on the completion of the programmes, infrastructure and development for electrification, and maximise the number of schools to be electrified in 2008/09. Questions from Members largely addressed questions of supply, including how much was supplied to other countries, building projects which had not included electrification, municipal programmes and the lack of spending in certain municipalities. The nature of the National Electrification Programme was queried, as were projections and assessment of spending, and ability to complete projects. Members asked whether there was forward planning, the ramifications of black-outs and load shedding, the ability to provide further electricity, planning and reporting, and the situation with Regional Electricity Distributors.
Water Services Bulk Infrastructure Programme: Department of Water Affairs and Forestry (DWAF) briefing
Ms Lerato Mokoena, Programme Manager: DWAF, informed the Committee that originally R1.4 billion was allocated to this programme, but was revised because some of the municipalities were ready with their refurbishment plan and money had to be found within DWAF to augment the refurbishment. Expenditure was based on the revised allocations. Kwazulu-Natal (KZN) was at 25% as their refurbishment plans were due next week. Money would only be transferred to KZN once those plans were completed.
Shortly the Department would attend to having the outstanding agreements signed. It was also going to look at the refurbishment plans. The final staff transfers were to be completed by March. Thereafter there would be facilitation of the Aftercare programme
Ms Thandeka Mbassa, Deputy Director-General: Regions: DWAF, shared with the Committee the initiatives that DWAF had with its strategic partner ESKOM. The legislative framework provided guidelines that ensured that DWAF fulfilled their duty to provide water to support economical, social and environmental sectors. ESKOM was identified as one of the 26 strategic users of water and were considered priority in attaining access to water. The Department had initiated studies in areas that had been identified by ESKOM that would require additional water. DWAF was working on a relevant strategy that would ensure that it was strategically positioned to provide ESKOM with required water.
The Chairperson informed DWAF of a community in the
Ms Mbassa provided a brief background to the programme. Currently funding was within the Municipal Infrastructure Grant (MIG) programme. DWAF realised that municipalities were struggling to find funds and implementing projects on a regional level, specifically projects beyond municipal boundaries. DWAF wanted to provide assistance and capacity to develop water services programmes. On that basis National Treasury had agreed to allocate R1.2 billion to the Department over a three-year period. National Treasury insisted on specific conditions for their funding to be utilised. The framework included water resource development, regional bulk infrastructure and internal bulk infrastructure. One of the objectives was to assist in the Bucket Eradication Programme. There were cases where there was not enough bulk infrastructure within municipalities to support the construction of flushed toilets. It was important to note that special DORA conditions that Treasury insisted on were to ensure that there was a proper involvement of the municipality. All the role-players had to be involved to avoid the problems that were prevalent with the transfer of infrastructure. Prior to implementation, agreement had to be reached on ownership, implementation, operation and maintenance and social and economic component funding.
Funding allocation for programme management also looked at feasibility studies and ranged from R39 to R50 million. The bulk of the funding went to the development of the infrastructure. The purpose of the infrastructure was to distinguish between direct service delivery of reticulation schemes, which MIG was targeting, and several other benefits. Since the programme was unique it took a while to come up with a policy, agree with the criteria and obtain agreement from the municipalities. Many procedures had to be followed so actual implementation only started in October 2007. That would affect progress to date.
Special focus was placed on monitoring and implementation of the programme. This was important because there was concern around the ability of sector departments to monitor progress on the ground. This would help with the sustainability of the infrastructure. The Department had provided strategic support and guided the municipalities with studies. Feasibility studies were important to ensure that programmes were not implemented in areas that did not have enough water.
Progress to date was given for the provinces. In
The amount spent to date was R126 million, however, according to their projections all the funds would be spent without any fiscal dumping occurring. The key challenges were the procurement processes within the municipalities. Municipalities often would not submit their invoices by due date. Usually they rushed them in at the end of the year, which was the reason why the Department would experience a spike in spending at the end of the financial year. The delay in starting the projects had an impact on the progress. DWAF needed to improve on aligning the programmes and projects.
In conclusion Ms Mbassa said that DWAF had put mechanisms in place to ensure that the programme achieved its objective. DWAF was also considering attaining additional funds from National Treasury, as the original funding of R1.2 billion was allocated based on the studies done in the past. The project implementation would be finalised as well as the staff transfers.
Mr M Robertson (ANC,
Ms Mbassa replied that the project locations were set according to areas where more than one municipality had to share resources. DWAF first did a feasibility study to know how much water was available and whether it would be able to serve the regions.
Mr Robertson was concerned with contradictions in the presentation.
Ms Mbassa replied that there were no contradictions. A decision was taken that in cases where the municipalities had capacity they would receive money. In the municipalities where there was a lack of capacity, DWAF would be directly responsibility for that project implementation. DWAF was working closely with Department of Public Service and Administration (DPSA). The difficulties experienced lay with those municipalities that had indicated that they had capacity.
Mr Robertson wanted to know what had been physically implemented regarding the projects.
Ms Mbassa replied that the actual implementation of projects consisted of DWAF assisting with coordination. The Department had an agreement with DPSA to coordinate the deployment of engineers. The Department of Provincial and Local Government (DPLG) had indicated that they required DWAF’s assistance to provide support to the relevant municipalities. She felt that DWAF was doing well in as far as support to municipalities was concerned. DWAF was concerned about the sustainability of the infrastructure that government had invested in. They had to be realistic about the capacity of local government. There were limited skills in the country, especially the skills that DWAF relied on. DWAF was trying to be as innovative as possible to bridge this gap, but it must be realised that it was limited in what it could do.
The Chairperson responded that relevant competencies were necessary. DWAF should develop clear financial competencies. Part of the problem was investing in an infrastructure that was not sustainable.
Mr Robertson recommended that DWAF become more involved with municipalities in order to ensure compliance.
Mr Robertson remarked that most of the municipalities in the
Ms Mbassa replied that
The Chairperson wanted a list of allocations given to the provinces.
Ms Mbassa replied that she would provide the list as soon as possible.
Mr D Botha (ANC,
Ms Mbassa replied that she would provide the list as soon as possible.
Mr Botha wanted a commitment from DWAF that the five outstanding agreements be signed by March.
The Chairperson wanted to know which municipalities had not signed.
Ms Mbassa replied that the list would be made available to the Committee.
Mr Botha wanted to what would happen if the money was not spent, and how would the Department assist the municipality.
Ms Mbassa replied that there were municipalities who had no financial expertise, and that was where the most problems occurred. DWAF would actually have to go and provide a system, even though it was outside the scope of support. The specific information would also be made available.
Mr Botha remarked that in the previous five years there was a dry season when there was no water in
Ms Mbassa replied that there was a problem with the original office in the province that resulted in political intervention. Water security throughout the country had typical Apartheid planning in that the provinces that were termed ‘homelands’ had no water security, and this included
The Chairperson asked if money had been set aside for capacity building.
Mr E Sogoni (ANC,
Ms Mbassa replied that DWAF was concerned about the
Mr Botha asked how the Department made sure that the money that had been transferred to the municipalities was spent.
Ms Mbassa replied that certain things needed to be in place before a project was implemented, such as feasibility studies, interrogation of the appropriate business plans and ensuring that there was capacity. The Department did encourage the municipality to use water boards. In addition there were nine regional offices with dedicated regional managers for monitoring. In the past there were fully-fledged monitoring and evaluation units, however, when DPLG took over that function stopped. DWAF was in the process of resuscitating the function. In cases where there was a Bucket Eradication Programme, staff from other provinces were taken and deployed where required. DWAF was strict on how the money was utilised. In other areas of their work there was room for improvement in monitoring.
Mr Botha wanted a list of the municipalities that had not submitted the invoices.
Ms Mbassa replied that she would make the required list available.
Mr Botha was concerned by the lack of sustainability of the project after two years.
Mr Botha remarked that all the projects in
Mr Botha commented that interdepartmental politics were not acceptable and asked what department was causing the problem.
The Chairperson was not sure of the nature of the interdepartmental politics, but agreed that this needed to be resolved or the problems of service delivery would not be resolved. He suggested that DWAF convene a meeting with Department of Provincial and Local Government (DPLG) and National Treasury to resolve the issues. The minutes of the meeting should be given to the Committee. A lack of communication between the departments meant that there was a compromise on service delivery.
Ms Mbassa replied that according to the Constitution the provision of water and sanitation services was the responsibility of Local Government. DWAF was accountable for the achievements and the failures that were happening at that level of local government, even though it did not have the authority to sort it out. DWAF was the custodian of the water resource and were concerned that it was used effectively. Concerns in that area had led to the approach to National Treasury, since it was felt that DWAF could assist with the formation of regional bulk infrastructure. DPLG was the view that DWAF should not have anything to do with the implementation of local projects, as it was their responsibility. She added that amongst the three departments the issue was resolved and that was why strict conditions on how the money was to be used were imposed. She added that the Committee would be provided with the relevant information.
Mr Sogoni considered the lack of spending by the provinces, and noted that there were attempts to avoid a spike in spending at the end of the financial year, and wanted to know what DWAF was doing to inform communities of the events and the projects.
Mr Sogoni mentioned Delmas and the fact that for the second time there had been a breakout of a disease. He wanted to know why the Department, along with the municipalities, did not look at a water reticulation scheme to ensure that the disease was not in the water.
Mr Sogoni mentioned that in respect of the Govan Mbeki area, the Committee received reports that the Bucket Eradication Programme had been completed, but the community had stated that they had no water system. He questioned the authenticity of some of the reports.
Ms Mbassa replied that in Delmas there were various challenges. There was a problem of housing informal settlements, maintenance of old infrastructure, and the ability of municipality to purify the water. There was problem with simple hygiene. Money had been reallocated from provinces that were under spending to deal with these issues. Govan Mbeki had eradicated the bucket backlog. There had always been confusion within the community regarding the definition of the backlog. The programme had targeted people living in formal housing. This had caused a problem in the informal housing sector as they had also thought they were to be included in the eradication. DWAF learnt that some of the interim measures put in place led to further problems. The problem had since been resolved.
Mr Sogoni wanted to know how did DWAF ensure the accuracy of the information received in those reports.
Ms Mbassa replied that DWAF were held accountable for progress. DWAF used its comprehensive information system to collect information. In consultation with DPLG it had created innovative ways to verify information.
Mr Sogoni felt that DWAF should be projecting by how much there would be under spending, as he doubted that DWAF would spend 100% of the budget.
Ms Mbassa replied that the Department was closely monitoring the situation and would not dump money toward the end of the financial year.
Mr Sogoni wanted justification for the approval of more funding for DWAF when it had routinely under spent.
Ms Mbassa replied that a study was done looking at water infrastructure throughout the country. Water infrastructure was old and outdated. The study revealed that in order for the old infrastructure to be refurbished DWAF required R26 billion over several years. However the concern about the ability to spend was a valid one. Mechanisms were being put in place to ensure that there was capacity. If DWAF asked for money it should be based on the cash flows and how the projects had performed.
Department of Minerals and Energy (DME): Performance of the Integrated National Electrification Programme as at 31st December 2007 (Third Quarter) presentation
Mr Martin Masemola, Assistant Electric Manager: DME, reported to the Committee on progress of the Integrated National Electrification Programme (the Programme) as at 31 December 2007. There had been progress in financial and implementation matters. The Municipal programme included a summary of the capital expenditure for 2007/08, and a summary of household connections up till December 2007. The challenges were the need to build bulk infrastructure and the fact that execution capacity was lacking in municipalities.
The ESKOM programme presentation summarised the allocations for 2007/08 and the performance as at December 2007, ESKOM household expenditure and ESKOM household connections. The challenges included the shortage of material for construction, design and survey resource problems, and excessive dependencies on bulk infrastructure, especially in
The ESKOM expenditure on electrification on schools and clinics for 2007/08 was summarised. ESKOM gave reasons for their performance for the year to date, including access to sites after rainfall and commissioning delays. ESKOM also provided mitigation on current performance, which included designs having to be redesigned in accordance with new structure standards.
Mr Masemola noted that the Department would be focusing on the completion of the 2007/08 Programme and preparation for the finalisation of the 2008/09 programme. It was to concentrate on infrastructure and development for electrification, and maximise the number of schools to be electrified in 2008/09.
Mr Robertson noted that the priority for both ESKOM and government was to supply electricity. He wanted to know if the big projects would be placed on hold in order to ensure that there was enough electricity.
Mr Alwie Lester, Regional Customer Services Manager: ESKOM, replied that what had been done with big projects and entities was that a completely up-front investigation was done to find out what was the minimum requirement of energy. The impact on the economy was realised. However a balance needed to be maintained.
Mr Robertson wanted to know how much electricity was
Ms D Robinson (DA) was concerned about the reports that
Mr Lester replied that there were agreements in place with the Southern African Power Pool that included countries like
Mr Robertson commented that when the Committee was in
Mr Sogoni wanted to know about the municipal programme and capital expenditure and the problems with the problems with the provinces.
The Chairperson asked if there were risks and implications for the communities affected.
Mr Sogoni asked why there was no spending and asked if there were business plans when these allocations were made, and if so why was there no expenditure.
Mr Chris Van Zyl, Capita Programme Manager: DME, responded that some of the municipalities were still busy with 2005/06 and 2006/07 projects, and that had caused the delay in projects for 2008/09. It was ultimately a problem of planning within the municipalities.
Mr Sogoni said he had the impression that the Department expected the municipalities to build the bulk infrastructure. The information he had received was that ESKOM was supposed to build electricity infrastructure in the
Mr Masemola replied that the implementation of the National Electrification Programme was a two-fold Municipal and ESKOM programme. Municipalities were licensed to distribute and would then be responsible for those areas, and similar dispensations applied to ESKOM. Bulk infrastructure from ESKOM was referring to sub-transmission lines, however, both of them needed to build bulk infrastructure. The municipalities were licensed to distribute electricity and would then have to build a rural distribution centre, even if this meant tapping into the ESKOM network transmission line.
Mr Sogoni was informed that the allocation to municipalities was made in June. He noticed that the work only started three months later. He wanted to know what basis was used for the allocation of funds. He thought that the introduction of the Municipal Finance Management Act was to align budget approval at ninety days before the end of the financial year.
Mr Masemola replied that there was no change in financial year for municipalities. Basically municipalities had their Medium Term Expenditure Framework allocation and most of them would receive confirmation of projects in February. They were aware of their allocation by March and it would be expected that municipalities would start claiming in April. The reason that funding was received by the Department for municipal level was that projects needed to go through the process and had to be included in the budget. At the beginning of the municipal financial year the internal processes would begin, these included advertising for tenders and so forth. On-site construction would perhaps start three months later.
Mr Sogoni wanted a list of the municipalities that were experiencing problems of this nature. It seemed that the Committee was getting conflicting reports.
The Chairperson asked how did the DME intend to resolve the planning problems within the municipalities. Allocations of money should not be given if there were problems with planning. He also asked for a list of municipalities that were experiencing these problems.
Mr B Mkhaliphi (ANC,
Mr Sogoni wanted information on the projections of spending and asked if the municipality budget would be spent by the end of the financial year.
The Chairperson asked, in the event that there might be projections for under spending, how was this to be dealt with.
Mr Masemola replied that progress was continuously assessed. The DME engaged monthly with municipalities. Municipalities should be not be judged on their performance with March as a deadline, but rather June should be used as a deadline. Ideally municipalities were half way towards actual implementation at present.
The Chairperson responded that the municipalities were judged using two quarters as the yardstick.
Mr Masemola confidently replied that the majority of the municipalities would be able to complete their projects. The bulk infrastructure needed to be built in order to deliver on those connections and that would happen in the two quarters. Much work was done between construction and connection.
Mr Isaac Sokopo, Corporate Specialist: ESKOM, responded that what was reflected on paper was mostly connections. Most of the work lay in what was not seen. Expenditure was the best way to note if there had been progress. Electricity was regulated. There were licenses given to the municipalities, to ESKOM and to City Power to be able to distribute electricity. Municipalities were licensed in the whole area except for those areas supplied by ESKOM, and they usually experienced a constraint in housing.
Ms D Robinson wanted to know why the
Mr Masemola replied that all clinics in the
Ms Robinson wanted to know if ESKOM had the ability to plan ahead and anticipate the needs for electrification.
Ms Robinson asked why were residential areas not targeted, as people could be inconvenienced, which was understandable. But there were even bigger ramifications if big business continued to suffer black outs as people’s employment and the status of our economy was also important.
Ms Lester replied that ESKOM was clear in terms of equity. There were special arrangements, called Demand Market Participation (DMP), with industrial customers, where ESKOM would pay them to reduce consumption. When load shedding occurred the amount was rotated and shared equitably amongst residential and industrial customers. Those who were not direct ESKOM users, in some municipalities and metropolitan areas, would be asked to shed a specific amount. Those areas would then already have plans in place. Direct ESKOM users would be evenly affected. Furthermore load shedding was the last resort to conserve energy. There were a number of things, such as exhausting all generation capacity in the country, implementation of the DMP agreements, and hot-water load control during peak times.
Mr Botha questioned ESKOM’s ability to provide electricity to all the new connections, when there was already a shortage of electricity in the country.
Mr Lester replied that there were priority programmes in place, which would be the least impacted. There were schemes currently looking at reducing consumption across the country by 10%, and ESKOM was looking at how this would affect the different sectors of the country.
Ms Robinson asked if ESKOM had consultants available.
Mr B Mkhaliphi asked did ESKOM go about their planning and implementing in those areas that received electricity directly from ESKOM. Furthermore, he asked how did ESKOM go about reporting on a regular basis to the affected municipalities.
Mr Sokopo replied that ESKOM did report and was in constant engagement on a regional level with the councillors.
Mr Mkhaliphi asked what effect would the abovementioned scenario have in terms of the report given to the Committee.
Mr Sokopo replied that the municipality approved all projects undertaken by ESKOM. If at implementation a capacity problem was to be discovered, they would have to return to the municipality and inform them of the issues and move on to the next project.
Mr Mkhaliphi asked for a simple explanation, without all the technical jargon, on the situation regarding the supply of electricity from ESKOM.
Mr Botha asked if there were plans in place for municipalities to take over the supply of electricity directly to areas from ESKOM.
Mr Sokopo replied that the Regional Electricity Distribution centres (REDs) were supposed to address this issue.
Mr Botha asked for a timeframe.
Mr Sokopo replied that when REDs scheme was announced a timeframe was put in place. However, due to issues with the framework, those timeframes were not met.
Mr Botha wanted a list of the clinics and schools not yet connected in
It was noted that some questions were not answered due to time constraints.
The meeting was adjourned.
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