Question NW85 to the Minister of Water and Sanitation

Reply:

The Department of Water and Sanitation notes the submission that there are 71% Regional Bulk Infrastructure projects that are delayed which have resulted in cost escalations of R9, 4 billion. These figures are from the Auditor General (AG) findings report, which states the following:

• 71% of the total RBIG projects are delayed in terms of completion
• Over the years, as the projects were delayed the initial budget continues to be revised. To date there is an increase of budget by R9,4 billion
• The spending on these projects is also not always aligned to the initial plan. Variations in scope can be due to poor planning by municipalities.
• If the root causes for poor project management is not corrected, there is a risk that other projects may be similarly delayed

 

The Department acknowledges that, per findings by the Auditor General in a report to the Portfolio Committee on the 2022/23 Annual Report, there have been delays on a number of projects over a period of time due to numerous reasons including:

• Appointment of beneficiary municipalities with history of poor financial controls and lacking adequate capacity
• Poor performance of implementing agents – inadequate contract management – no actions taken for poor performance
• Poor performance of contractors not identified in a timely manner.
• Contractors abandon site due to cash flow challenges or non-payment by municipalities
• Delays in the procurement process both to appoint contractors and also on procuring some of the materials
• Access restrictions by community leaders and protests by the community as they also want to be part or benefit from the project
• Poor project management both by the implementing agent and the department
• Poor oversight and monitoring by the department
• There are also instances where the projects are multi-year projects which are broken down into different phases which are funded over a number of years.

In terms of the Department’s report to the Portfolio Committee on its 2022/23 Annual Report, the DWS reported an achievement of 5 out of 13 RBIG funded projects in the year under review and further indicated that there were delays for the following projects:

Project name	District municipality	Project start date	Initial completion date	Revised completion date	Original project cost	Revised project cost
Mpumalanga
Driekoppies phase 1A	Ehlanzeni DM	03 September 2018	18 September 2020	The project is undergoing a litigation process a revised completion date will be known once the courts have decided on the matter	R96 743 094	Cost not revised
Empuluzi/Methula RBWS phase 3B	Gert Sibande DM	22 May 2020	28 March 2023	30 April 2024	78 698 005	Cost not revised**
Empuluzi/Methula phase 5, 6 & 7	Gert Sibande DM	04/03/2021	14/12/2023	30 April 2024	194 472 739	Cost not revised***
Kwa Zulu Natal
Driefontein BWS	Chris Hani DM	Jan 2011	Dec 2021	Not yet determined	R397 742 111	Not yet determined
Eastern Cape
Cluster 9 BWS	Chris Hani DM	Sept 2010	Nov 2022	Feb 2024	R254 695 667	R485 700 000
Cluster 4 BWS	Chris Hani DM	Apr 2022	May 2023	Mar 2024	R427 099 000	R849 474 094
Cluster 6 BWS	Chris Hani DM	Jun 2010	May 2023	Jan 2025	R323 952 670	R474 323 951
Limpopo
Nebo BWS	Sekhukhune DM	Jan 2009	Jul 2016	Aug 2024	R1 379 080	R700 000
Free State
Ngwathe Bulk Water Supply Phase 2	Fezile Dabi DM	Jul-2020	Dec-22	Jun- 25	R129 027 000	R249 2961 47

Based on the project list provided above, the projects collectively do not add up to 9.4 billion as some are funded over multiple years and others have no revised costs. Even where there are cost escalations, it is not anticipated that it will amount to R9.4 billion.

• The Driefontein Bulk Water Supply Project - The project RBIG commitment ceiling has been reached. There is no allocation for the current financial year. The project is about 99% complete and the contractor moved off-site due to the municipality’s failure to pay its invoices. The Minister is intervening on this project, it is currently under planning to finalise for finding alternative water source to ensure long term sustainable water supply. Currently being the users are supplied water via Ladysmith WTW and boreholes.

• Nebo Bulk Water supply Project – the delays are due to the contractor having been stopped from working by the construction mafias. Meetings were held with these Construction Mafias and an MoU signed as attached to allow Contractor to proceed with the work. 

• Chris Hani District Municipality Cluster 4 - Phase 4 and 5: where the delays are due to poor contractor performance delayed the completion of these projects.

• Ngwathe Bulk Water Supply Phase 3 of 3, where the delays are as a result of community strikes, relating to 30% sub-contracting. The project has lost many days that have affected the completion time. The contractor was also experiencing challenges of cash flows including non-payment by the municipality.

• Empuluzi phases 3B, 5, 6: Delays by the contractor to finalise the works was affected by flooding.

There was a fatality caused by flooding which led to the Department of Labour closing the site for investigations. Currently the site is opened, the contractor working and project to be completed by June 2024

DWS is actively implementing the recommendations made by the Auditor General in its 2022/23 Budgetary Review Report for improving RBIG Project Management. For instance, in relation to the Auditor General’s recommendation that the project management unit must be adequately capacitated with the right skills to drive the performance targets that have been set for RBIG colleagues, the DWS introduced a new structure in 2022 to address such capacity and skills inadequacies and inefficiencies. The DWS has reconfigured the structure strategically, which has resulted in a dedicated Branch for Water and Sanitation Services Management to provide support to municipalities on activities such as, project planning, project management, monitoring. The branch is capacitated by professional engineers who are now supporting municipalities.

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