report on the strategic plan/ business plan which will be dealt with in 2011 by the department of water affairs and its entities / agencies

Table of contents

1.	STRATEGIC OVERVIEW
1.1.	Vision
1.2.	Aim
1.3.	Legislative mandate
1.3.1.	Water paper on Water Supply and Sanitation Policy (November 1994)
1.3.2.	White Paper on a National Water Policy of South Africa (30 April 1997)
1.3.3.	Water Service Act, 1997 (Act No 108 of 1997)
1.3.4.	National Water Act, 1998 (Act No 36 of 1998)
1.3.5.	Water Research Act, 1971 (Act No 34 of 1971)
2.	PRIORITIES OF THE DEPARTMENT
2.1.	Promote Sustainable and Equitable Water Resources Management (outcome 10)
2.2.	Strengthening regulation of the water sector (outcomes 6 and 10)
2.3.	Contribute to Economic Growth, Rural Development, Food Security and Land Reform (outcomes 6, 7, 9)
2.4.	Support local government to deliver water services (outcome 9)
2.5.	Contribute to Improved International Relations (outcome 11)
2.6.	Build capacity to deliver Quality Services (outcome 12)
3.	PROGRAMMES OF THE DEPARTMENT
3.1.	Programme 1: Administration
3.1.1.	Building capacity for the achievement of the Department
3.1.2.	Expenditure patterns of the Department
3.2.	Programme 2: Water Sector management
3.2.1.	National Water Resources Strategy
3.2.2.	Prevention and management of floods/ disasters
3.2.3.	Legislative programme for 2011
3.3.	Programme 3: Water Infrastructure Management
3.3.1.	New water resources augmentation projects
3.3.2.	Regional bulk infrastructure
3.3.3.	Maintenance work on existing dams (Dam Safety Rehabilitation Programme)
3.4.	Programme 4: Regional Implementation and Support
3.4.1.	Report on the impact of the current rainfall (flooding) on Acid Mine Drainage (AMD) in Gauteng
3.5.	Programme 5: Water Sector Regulation
3.5.1.	Management of effluent and waste water treatment works
3.6	Programme 6: International Relations
3.6.1	Africa Cooperation:
3.6.2	Global Cooperation:
4	ENTITIES AND OTHER AGENCIES OF THE DEPARTMENT
4.1	Water Trading Entity (WTE)
4.1.1	Trading account 1: Integrated Water Resource Management
4.1.2	Trading account 2: Integrated Systems
4.1.3	Trading account 3: Bulk Water Supply
4.1.4	Challenges of the WTE
4.1.5	Envisaged solutions and initiatives to deal with the WTE challenges
4.2	Trans- Caledon Tunnel Authority (TCTA)
4.3	Water Research Commission (WRC)
4.4	Catchment Management Agencies
4.4.1	Inkomati CMA
4.4.2	Breede – Overberg CMA (BOCMA)
4.4.3	General challenges with the establishment of CMAs
4.5	Water User Associations (WUAs)
4.5.1	Capacity to facilitate transformation of Irrigation Boards
4.5.2	Government Water Schemes Infrastructure
4.6	Water boards
4.6.1	Years in existence
4.6.2	Term of office of board members
4.6.3	Areas of operations and water service level agreements
4.6.4	Financial situation and report on surplus and deficits
4.6.5	Assessment of the functioning of operations
4.7	Komati River Basin Water Authority (KOBWA)

List of tables

Table 1: Age analysis of employees in the Department
Table 2: NWRS roadmap
Table 3: Flows of the dams within Free State Province
Table 4: Other historical floods in Upington
Table 5: Overview of regional bulk infrastructure needs per province
Table 6: Regional Bulk Infrastructure budget allocation since inception
Table 7: Regional Bulk Infrastructure budget allocations per province
Table 8: List of regional bulk project completed
Table 9: List of dam safety rehabilitation dams completed
Table 10: List of dams and their various stages
Table 11: Dams Safety Rehabilitation expenditure patterns
Table 12: Term of office for board members
Table 13: Water service level agreements
Table 14: Function of elected boards and fiduciary challenges per water board

List of figures 

Figure 1: Gauteng floods in Centurion - Hennops River
Figure 2: KwaZulu-Natal - Qedusizi Dam
Figure 3: Bloemhof Dam - Northern Cape

1.	STRATEGIC OVERVIEW

1.1.	Vision

“A dynamic, people-centred Department, leading the effective management of the nation’s water resources, to meet the needs of current and future generations”

1.2.	Aim 

The aim of the Department of Water Affairs (the Department) is to ensure the availability and supply of water at national level, facilitate equitable and sustainable social and economic development, and ensure the universal and efficient supply of water services at local level.

1.3.	Legislative mandate

The work of the Department is informed by various key legislative, policy and regulatory frameworks that are discussed as follows:

1.3.1.	White paper on Water Supply and Sanitation Policy (November 1994)

The objective of this White Paper was to set out the policy for the new Department with specific regard to water supply and sanitation services. It did not address other functions of the Department such as the management of the quantity and quality of water resources except insofar as they are relevant to the main theme.

1.3.2.	White Paper on a National Water Policy of South Africa (30 April 1997)

The objective of this White Paper was to set out the policy of the Government for the management of both quality and quantity of our scarce water resources. This policy was one step in the process of reviewing the 1956 Water Act and the current practices and institutional arrangements for water management in the country. Both this White Paper and the review of the water law reflected the urgent need for change in this field, and the high priority given to appropriate water management by the national Government.

1.3.3.	Water Service Act, 1997 (Act No 108 of 1997)

The objective of the Act is to provide for the rights of access to basic water supply and basic sanitation by setting national standards and norms. Section 156, read in conjunction with Part B of Schedule 4 of the Constitution of the Republic of South Africa (Act No.108 of 1996), vests the executive authority and responsibility in the Minister to support and strengthen the capacity of municipalities to manage their own affairs, to exercise their powers and to perform their functions.

1.3.4.	National Water Act, 1998 (Act No 36 of 1998)

The objective of the Act is to ensure that South Africa’s water resources are protected, used, developed, conserved, managed and controlled in a sustainable and equitable manner, for the benefit of all persons. The Act provides that the National Government, as the public trustee of the nation’s water resources and acting through the Minister, has the power to regulate the use, flow and control of all water in the Republic of South Africa.

1.3.5.	Water Research Act, 1971 (Act No 34 of 1971) 

The purpose of the Act is to provide for the promotion of research in connection with Water Affairs and, for that purpose, to establish the Water Research Commission and Water Research Fund, the Minister appoints members of the Commission and exercise executive oversight in regard to the Commission.

2.	PRIORITIES OF THE DEPARTMENT

In line with the government’s outcomes approach, the Department has identified the following set of priority areas for the 2011 medium term period:

2.1.	Promote Sustainable and Equitable Water Resources Management (outcome 10)

The Department aims to ensure that the country’s water resources are protected by establishing a Water Resources Classification System; developing and implementing water quality management strategies to ensure that raw water of acceptable quality is provided to users; facilitating equitable allocation of water for sustainable growth and development; developing water reconciliation strategies; collecting and analysing information on water resources; improving water use efficiency through the implementation of water conservation and demand management; and implementing the adopt a river programme in all water management areas to ensure the information required for water resource management including rehabilitation of priority river systems.

2.2.	Strengthening regulation of the water sector (outcomes 6 and 10)

The Department as a water sector leader needs to ensure compliance with minimum water quality norms and standards. To achieve this, the Department commenced with the annual Blue and Green Drop assessments to ensure that water and wastewater systems are managed according to the set norms and standards. The Department has set a target of 99% compliance with the drinking water quality standards and an 80% compliance with the wastewater effluent standards.

In addition, the Department seeks to establish and independent economic regulator which will ensure efficient pricing in the water value chain and to ensure that inefficiencies in the water supply sector are not passed on to the users.

2.3.	Contribute to Economic Growth, Rural Development, Food Security and Land Reform (outcomes 6, 7, 9)

The Department will continue to invest in bulk raw water infrastructure to support economic growth and meet the growing social needs. To this end, seven (7) new water augmentation projects to supply additional water for the domestic, energy, irrigation and industrial sectors will be implemented using the capacity of the Water Trading Entity (WTE) and the Trans Caledon Tunnel Authority (TCTA). The Department will continue to rehabilitate the existing national water resources infrastructure to ensure that more than seven billion cubic metres of water is delivered annually to bulk users. Revenue will be collected in accordance with the Water Pricing Strategy which will be reviewed during the medium term period. Furthermore, the Department will ensure the continued implementation of the Regional Bulk Infrastructure Programme that connects the water resources to the distribution and reticulation systems which supply water to domestic and industrial users. Priority is given to bulk infrastructure projects that utilise local water resources and stringent requirements are prescribed to ensure that water supplied through these projects is used efficiently. 

In contributing to the rural development and land reform, the Department will continue to support the resource poor farmers with water as well as continue with the implementation of the rain water harvesting programme. In so doing, the Department plans to provide subsidies to 4500 resource poor farmers and distribute 21 000 rain water harvesting tanks over the 2011 MTEF period. In addition, the Department aims to develop alternative bulk water sources (i.e. 15 desalination plants, 12 recycle/re-use projects and 167 boreholes) to address drought in certain areas of the country. 

The Department will continue contributing to the Expanded Public Works Programme through the Working for Water and Working on Fire Programmes. These programmes are due to be transferred to the Department of Environmental Affairs.

2.4.	Support local government to deliver water services (outcome 9)

In support of local government in its function to provide water services to people, the Department will provide capacity through the deployment of engineers to municipalities to assist with infrastructure related programmes or projects; as well as training of staff required to ensure optimal operation of wastewater treatment works and compliance to the Green and Blue Drop assessments.

2.5.	Contribute to Improved International Relations (outcome 11)

South Africa shares four major river systems with six immediate neighbouring countries: Botswana, Lesotho, Mozambique, Namibia, Swaziland and Zimbabwe. The total area covered by the four shared catchments in South Africa is equal to about 60% of the countries surface area and the mean annual flow from these rivers amounts to about 40% of the total average river flow in the country. A number of bilateral and multi-lateral commissions and committees have been established between South Africa and its neighbours. South Africa is also party to a number of international conventions that relate to water.

 As a member of African Ministers’ Council on Water (AMCOW), South Africa has been elected as the chair for a period of two years from November 2009. 

In view of its strategic role and position, South Africa through the Department aims to strengthen the engagement with the Southern African Development Community (SADC) member states, host and promote continental dialogue in water-related matters.

2.6.	Build capacity to deliver Quality Services (outcome 12)

The Department will continue to provide leadership in policy development, advice and core support services through effective implementation of various systems and processes relating to financial management, human resources, communications, legal services, information management, as well as organisational performance management

3.	ORGANISATIONAL STRUCTURE

Current configuration: high level structure 

Challenges with the current configuration
•	The regulatory structure is currently functioning at about 40% as most functions are not performed 
•	Have established an CM&E function but still challenged with Law Enforcement (There is no clear accountability with directives regarding non-compliance. In  addition follow through and follow up is lacking)
•	DWA does not have the capacity to follow through some processes ( e.g. Prosecution)
•	Present skills are insufficient and some are not present in DWA ( i.e. There are some specialised skills that would need to be sourced outside DWA for example economists and legal skills)
•	Not all the regulatory functions in the region are grouped together
•	Regulatory functions happen in different directorates in region (i.e. Water Sector Support and Water Use & Regulation)

Proposed reconfiguration 

4.	PROGRAMMES OF THE DEPARTMENT 

4.1.	Programme 1: Administration

Provide policy leadership, advice and core support services, including finance, human resources, legal, information and management services, communication and corporate planning.

A few key performance areas in this programme have been selected and details descriptions are provided below: 

4.1.1.	Building capacity for the achievement of the Department

The Department will adopt an integrated process of ensuring continuous supply of talented individuals in key positions, and successors for critical, core and scarce skills categories of the organization in order to continuously meet the demands of the shareholder and mandate.
The capacity building of the Department is defined from a multi-dimensional approach including the workforce plan that will define the optimum operational structure without over-stretching any area or function. The other areas covered in this approach include attraction and acquisition; career exhibitions, workforce development, knowledge transfer, workforce movement, bought capacity, young graduates and global talent sourcing. 
A maturing workforce creates a risk for any organisation and the Department is no different. As an established institution the Department has an aging workforce which compounds the challenges of capacity availability. 

Table 1: Age analysis of employees in the Department
Salary Level	20-24	25-29	30-34	35-39	40-44	45-49	50-54	55-59	60-65	66-79	Total	
												
1	0	1	3	1	1	0	1	1	0	0	8	
2	61	87	137	192	358	427	370	490	365	3	2490	
3	27	63	66	76	200	412	457	653	440	1	2395	
4	13	40	72	82	120	164	153	149	105	0	898	
5	19	74	84	64	77	102	83	61	34	0	598	
6	54	160	153	112	140	212	150	75	32	0	1088	
7	31	142	167	101	96	118	75	54	34	0	818	
8	20	145	109	79	73	74	52	31	20	0	603	
9	3	47	98	60	70	62	52	30	20	0	442	
10	3	51	105	82	50	57	35	27	7	0	417	
11	0	6	28	38	20	16	24	26	10	2	170	
12	0	8	43	51	42	43	24	25	20	3	259	
13	0	0	14	27	24	17	20	23	11	0	136	
14	0	0	1	5	12	5	3	6	4	0	36	
15	0	0	0	0	2	3	4	1	0	0	10	
16	0	0	0	0	1	0	0	2	0	1	4	
Unclassified	50	99	85	76	37	31	20	12	2	1	413	
Total	281	923	1165	1046	1323	1743	1523	1666	1104	11	10785	

Implementation of a Leadership Development Programme that builds the following capabilities:
•	The provision of strategic direction to maximize shareholder value.
•	The understanding of stakeholders for the positioning of the Department accordingly.
•	The ability to set clear and challenging targets.
•	The empowerment of employees throughout the organization for superior performance.
•	The motivation of employees to go the extra mile by tapping into the employees’ knowledge and emotional energy for an outward focused service delivery.
•	To built a high performance culture through diagnostic process that work.

4.1.2.	Expenditure pattern of the Department

Main exchequer account 

As at 30 November 2010, the Department had spent R4 543 655 million of the total allocation of R8 203 193], which represents a 55% spending of the total appropriation made in favour of the Department. Based on a straight line projection, the Department should have spent 67% of the total allocation as at 30 November which represents a 12% under-spending.

Table 2: Quarter 2 expenditure per programme
Economic classification	Adjusted Budget
2010/11	2010/11 Actual
R’000	% spent	Available Budget	
Programme 1: Administration	967 498	563 664	58	403 834	
Programme 2: Water Management	402 939	218 834	54	184 105	
Programme 3: National Resources Infrastructure Programme	2 238 232	1 725 962	77	512 270	
Programme 4: Regional Management	4 354 342	2 481 073	57	1 873 259	
Programme 4: Water Sector Regulations	240 182	82 470	34	157 712	
TOTAL	8 203 193	5 072 003	62	3 131 190	

Table 3: Quarter 3 expenditure per economic classification
Economic classification	Adjusted Budget
2010/11	2010/11 Actual
R’000	% spent	Available Budget	
Compensation of Employees	1 166 181	716 684	63	449 497	
Goods and Services	2 564 642	1 340 849	52	1 223 793	
Interest and Rent on land	-	705	-	(705)	
Theft and Losses	-	92	-	(92)	
Transfers and Subsidies	3 353 542	2 976 129	89	377 413	
Payments for Capital Assets	1 118 828	37 544	3	1 081 284	
Total	8 203 193	5 072 003	62	3 131 190	

Financial improvement plans of the department 

The department has developed a Financial Management Improvement Plan to address shortcomings on financial matters and details are provided below

Items	Auditor-General finding 	Action implemented	
Assets : Immovable assets
	Unable to verify the existence and completeness of immovable tangible capital assets as the final asset register was not provided in time	•	Perform frequent asset verification
•	Monthly meetings with WTE asset team
•	Meetings with relevant stakeholders responsible refinement process on the immovable Meetings with relevant stakeholders
	
Assets : Moveable assets
	Closing balance and additions of movable tangible capital assets as disclosed in the AFS do not agree to the balance in the asset register	Monthly performance of asset reconciliations between Asset Register and Trial Balance and to ensure sign-off by relevant  Chief Directors
	
Irregular Expenditure
	•	Proper procurement processes had not been followed 
•	The Accounting Officer did not implement and enforce controls to prevent the occurrence of irregular expenditure
	•	Awareness conducted to sensitise departmental officials
•	Issue a circular to articulate the processes to be followed once irregular expenditure discovered was issued to officials
•	Reporting tool to report irregular expenditure was issued

4.2.	Programme 2: Water Sector management

Ensure that the country’s water resources are protected, used, developed, conserved, managed and controlled in a sustainable manner for the benefit of all people and the environment through effective policies, integrated planning, strategies, knowledge base and procedures.

A few key performance areas in this programme have been selected and details descriptions are provided below:

4.2.1.	National Water Resources Strategy

South Africa is not well endowed with fresh water resources and water must be regarded as a critical resource and risk factor for growth and development.  Despite this situation, water managers have thus far done well in supporting a strong economy and a dynamic socio-economic development.
Water utilisation is reaching current capacity and water management is becoming critical to sustain the water balance.  “Smart” water management becomes essential and must include inter alia improved planning, optimised systems operation, water use efficiency, water resource protection, appropriate solutions and technology, as well as improved water management and governance. 
Most important of all, is the need to raise the profile of water as a critical and limited resource and that everybody participates in conserving and managing water for current and future use.
Considering the current water balance and the risks of climate change, it is essential that water is managed strategically in a participative and integrated manner.  The National Water Resource Strategy aims to fulfil that role and to facilitate integrated and participative water management.

4.2.1.1.	Critical Challenges to be addressed in the NWRS-2

Considering the current water situation and future socio-economic development scenarios, the following challenges are highlighted:
•	Limited freshwater resource
•	Climate change and related impacts on water security
•	Disparity between location of water resources and the location of water use
•	Constant growth in water demand due to population growth, increased living standards and economic expansion
•	Increased wastewater streams and pollution risks
•	Unacceptable water wastage
•	Service quality (operating efficiency of water schemes)
•	Infrastructure asset management
•	Disaster management (floods & droughts)
•	Skills shortages and institutional capacity 
•	Financial viability of water schemes (limited financial resources)

4.2.1.2.	Road Map towards a functional NWRS

The following road map is dictated by the set deliverable of a final approved strategy by end of March 2012.  To achieve this, all the necessary development actions are phased and scheduled to ensure that the output is achieved.  
It must however be noted that the delivery of an approved strategy is only the beginning of the real outcome, namely an implemented and applied strategy with effective water management according to the set roles and agreed outcomes.  This will require dedicated management of the implementation, with continued guidance, monitoring and support.

4.2.1.3.	Sequential Phases of the Road Map

The road map thus comprises 7 phases including:

Table 4: NWRS roadmap
Phase no	Description 	Selected activities 	
Phase-1	Preparation Phase	•	Conceptual design and scope of work
•	Programme management structure
•	Definition and agreement on the strategy development process	
Phase-2	Product Definition & Design	•	establishment of a knowledge base per theme and per sector
•	setup of supporting information system and tools 
•	drafting of a conceptual framework for the NWRS	
Phase-3	Engagement & Mobilization	•	Setup teams and mandate team leaders 
•	Schedule work sessions for deliberation process per sector
•	Schedule information sessions per province 	
Phase-4	Ministerial Approval & Gazetting	•	Prepare a draft NWRS by January 2011 (target a 90% completed product) 
•	Review and endorsement of the draft NWRS by the Minister
•	Gazetting of the draft NWRS 	
Phase-5	Public Consultation (90 days)	•	Publication of gazette draft NWRS for public comment (1Feb-30 April 2011)
•	Collation, evaluation and consolidation of public comments (provincial workshops)
•	Updating of draft NWRS	
Phase-6: 
	Final Review and Approval	•	Final approval by DWA top management (MANCO)
•	Ministerial approval of final NWRS
•	Cabinet approval of final NWRS	
Phase-7	Implementation of the Strategy	•	Formalisation of implementation action plan
•	Allocation of agreed actions to sector role players
•	Nation oversight and management of the implementation of the NWRS
•	Performance monitoring and strategic intervention to achieve target outputs and outcomes	

4.2.1.4.	NWRS Progress to date

•	To date, the programme has been setup and various consultations have taken place, within the DWA, with national role players and key sector role players. This resulted in theme papers reflecting on the deliberations and issues raised at these meetings.
•	An extended framework and concept has been developed which includes provision for integrated strategies and outcomes
•	Sector mobilization is in process and one-on-one meetings with selected sector champions have taken place, including the Planning Commission.
•	Setup of the knowledge base and consultation tools is in progress including a dedicated website for the NWRS-2.
•	Inter-sectoral meetings have been held including meetings with the Water Sector Leadership Forum, KZN and Mpumalanga Provincial Government.
•	DWA champions have been identified and some of the sub-strategy programmes have been initiated.
•	The Core Team commenced with concept reports and is developing the reporting process.

4.2.1.5.	Actions in planning stage

The following actions are planned:
1.	Establish a programme branding and promotion via letters and media
2.	Complete the conceptual design of the Strategy by end of March, with progressive products and supporting strategies towards a new era of smart water management:
•	Promotional chapter with water is a non-negotiable national priority and limited resource for sustained quality of life and socio-economic development
•	A knowledge base to present a clear understanding of South Africa and its water resources with associated implications.
3.	Sector mobilization and functional specific work sessions with progressive development of strategic theme frameworks
4.	Improved DWA involvement, ownership and governance role
5.	Supporting tools and research, including analysis of international strategies and best practice

4.2.1.6.	Risk management 

The programme is exposed to a number of risks which will have to be managed at functional and political levels.  This includes amongst others:
•	A limited time frame to complete an extensive and highly consultative process
•	Dependence on active participation by all DWA line functions
•	Sector cooperation challenges
•	DWA decision-making process
•	Access to critical information
The importance of the NWRS and its critical role in managing the water resources and water availability of the future requires high level political and management support and a hands-on progress and risk management approach.  This commitment is not only for the development phases of the strategy and must also include dedicated implementation management and operational oversight for the full life-cycle of the strategy.

4.2.2.	Prevention and management of floods/ disasters

Whilst South Africa is seen as a semi-arid country the rainfall is spread unevenly such that specific geographical areas are faced with severe drought conditions and flood conditions respectively. In accordance with the provisions of the National Water Act, Act 36 of 1998, the Department of Water Affairs has the responsibility of managing drought and floods and this is done in within the framework of disaster management objectives and in collaboration with other Departments and other spheres of government.

The Department’s Provincial Offices assume responsibility for the management of floods in their respective Provinces, however, due to the its strategic nature, the National Office is responsible for flood management of the Vaal and Orange River System which covers Gauteng, Free State, North West and Northern Cape. This System comprises 49% of the total area of South Africa.  
The main objectives of flood management are (a) ensuring the safety of the structure (and therefore human life) (b) minimisation of damage (due to high water levels) and (c) ensuring that the dams are 100% full at the end of the flood event.

During flood situations a wide network of both people and technology is put into action. The crucial first step is the gathering of accurate information about rainfall and runoff in the catchment areas of the rivers and the storage levels and inflows into dams. All flood information is sent to the flood management room in Pretoria where it is analyzed and processed. This information is then disseminated to the National Disaster Management Centre (when required), the media and officials involved in dam operations 

In 2010, the summer rainfall started very late in mid-December, as opposed to late October, over most parts of the country bringing relief to the drought stricken areas. The above-normal rainfall over the Vaal River catchment (mainly over the Free State) caused significant flooding in the Vaal and Orange River System. Parts of Kwazulu-Natal also received above-normal rainfall resulting in flooding in some parts of the country.

Approximately 42 fatalities have been reported, 1065 households have been affected and water infrastructure has also been damaged.  It has been reported that the agricultural sector also experienced some losses.

4.2.2.1.	Areas affected by floods

The areas that have been severely affected by floods are in Northern Cape, KwaZulu-Natal, North West, and Free State. These have prompted the Minister of Water and Environmental Affairs to undertake site visits to some of these areas. The nature disasters, impacts and interventions vary per province and are summarized below.

4.2.2.1.1.	Gauteng Province visited on 6 January 2011

Areas visited and stakeholders in attendance

On 6 January 2011, the Minister of Water and Environmental Affairs visited Departmental Flood Management room to understand how the Department performs its function of flood management. Related information is received within the country and from neighbouring countries in order to manage related disasters. Subsequently, the Minister accompanied by her senior officials then visited the Vaal Dam, where she opened the seventeenth flood gate. At the time the dam was 108% full with an inflow of 2 600m³/s and outflow of 2400m³/s. 

Damage in the Upper-Vaal has been limited to urban areas where development has been allowed to the flood zone, i.e. of 1:100 flood line as stipulated by the National Water Act, Act 36 of 1998. It should be noted that the flood control in the Upper Vaal River is managed at Vaal Dam based on releases from the Grootdraai Dam and on inflows from the rest of the catchment. The opening and closing of crest gates (sluices) at Vaal Dam is the only way in which flows to Bloemhof Dam can be controlled. The National Water Resources Infrastructure Central Operations Office took the responsibility of informing relevant Disaster Management Centres / Emergency Services and shares the information with a number of affected institutions downstream.(please look at this paragraph this should be part of the introduction that describes how we manage floods)

Brief Summary of the Floods impact in the Gauteng Province

•	The Lekwa Local Municipality downstream of Grootdraai Dam, as well as other local municipalities downstream of Vaal Dam, most notably Midvaal, Emfuleni, Ngwathe (Parys) and Orkney have been most affected by the floods. 
•	It was reported that a number of holiday resorts and private owners on the river banks, as well as the New Vaal Colliery supplying coal to the Lethabo Power Station were affected. Furthermore, one incident of drowning was reported in Ngwathe (Parys). Two main roads were closed in Emfuleni, and this affected about 20 000 road users that use the road on a daily basis. A total of 130 houses along the river were affected of which 80 were flooded and 50 experienced accesses challenges. 
•	It was further reported that the coal production at the New Vaal Colliery that supplies coal to the Lethabo Power Station had to be suspended when the flow in the river upstream of the Vaal Barrage exceeded 1 800 m³/s. This was part of precautionary measures taken to ensure safety of the workers.
•	As a result of the high local flows in the Zuikerbosch River, the Zuikerbosch Water Purification Plant of Rand Water was without access for a few days.
•	Some damage was reported at Lekwa Local Municipality downstream of Grootdraai Dam due to minor floods that occurred in the area.

Actions and commitments

•	Procedures were followed according to the flood control systems that are in the department. The Disaster Management Centre is communicating the warning messages
•	A temporary access road to the Rand Water Zuikerbosch Water Treatment Works was constructed. This will be followed by the rebuilding of the bridge crossing the Zuikerbosch River due to the importance of this plant for water supply to Gauteng Region and its environs to enable access at all times in future. 

•	No disruptions to basic services have been experienced due to the peak releases of 2550 m³/s. The extent of the peak flow and adequate warning time will allow the necessary mechanisms to be implemented and relevant actions to be taken to mitigate impacts. The close working relationship between the Disaster Management Units at the relevant municipalities is critical in ensuring that the impact of floods is minimised.
•	There are regular meetings planned with all disaster management centers and relevant departments and municipalities during the duration of the flood period to ensure a team effort in managing the floods. 

Figure 1: Gauteng floods in Centurion - Hennops River

4.2.2.2.	KwaZulu-Natal Province visited on 7 January 2011

Areas visited and stakeholders in attendance

On 7 January 2011, a delegation comprising of the following stakeholders visited the Klip River situated in Ladysmith and upper uThukela River situated in Bergville areas:
•	The Minister of Water and Environmental Affairs
•	Department of Water Affairs (National and Regional representatives)
•	Executive Mayors and Councillors from the Emnambithi Local Municipality and uThukela District Municipality 

Flood Situation and Impact during the visit

Ladysmith: The Qedusizi Flood Control Dam on the Klip River, upstream of Ladysmith, contained the flow in the river through the town to the capacity of the river channel. The Qedusizi Flood Control Dam which was built in 1997 by the Department of Water Affairs as part of the Ladysmith Flood Protection Strategy functioned as designed and prevented serious flooding of the Ladysmith lower lying residential areas and the central business district (CBD).
Storm water outlets from the lower lying areas of Ladysmith through the levees had to be closed to prevent water from the river backing up in the storm water drainage systems and flooding parts of the CBD.  This resulted in the accumulation of rainwater runoff from the town itself not being drained to the river and creating temporary local accumulation of flood water in the lower lying areas.

In isolated cases the gate structures isolating the storm water discharge to the river failed, resulting in some flood water from the river backing up into the storm water drainage system.  
The effect of the flood caused a temporary closure of some businesses in the lower part of the CBD in Ladysmith and temporary relocation of the taxi rank to higher ground for close two days
In the areas of Roosboom and Driefontein to the north of Ladysmith a large number of mud houses collapsed due to the prolonged rainfall and local flooding conditions. This allegedly led to the loss of lives of 5 people (3 through drowning and 2 through collapsed houses) because of the subsidence of these structures on families within the houses being trapped unaware.

Bergville: The Upper-Thukela river submerged the water abstraction pumping station and damaged the rising main pipeline to the water treatment works supplying the town of Bergville and surrounding areas with treated water. The damage is contained to electrical mechanical failure of pumps and switchgear and replacement of parts of the rising main pipeline.  However, this can only be affected once the flow in the river has subsided sufficiently to get back into the pumping station.  

The damage to the abstraction works on the uThukela River at Bergville, created major disruption to water supply to the town and adjacent communities.

Actions and/or commitments

Department of Water Affairs: The Minister requested the Department to investigate possible assistance and Department has since quantified the assistance as provision of rain water tanks (R500 000) and possibly the provision of equipment amounting to R400 000. This equipment includes a mobile standby pump with temporary rising main which would be used to supply water to the water treatment works. The office of the Acting Director-General has undertaken to consider financial support from its contingency funds in support of the proposed solution.

The uThukela District Municipality: Informal settlements on low lying areas adjacent to the river were evacuated as a precautionary measure on 2 January 2010.
The uThukela District Municipality as water services authority for the Ladysmith area is providing basic water supplies with available road water tankering in the mean time.

Other Affected Areas

Ethekwini Municipality and Ugu Municipality

Newcastle:  Measurable disruptions were experienced related to the water sector with an excessive rain that resulted in bridges being washed away. 

Figure 2: KwaZulu-Natal - Qedusizi Dam

4.2.2.2.1.	Free State Province visited on 10 January 2011

Areas visited and stakeholders in attendance

On 10 January 2011, a delegation comprising of the following stakeholders visited the Bloemhof Dam:
•	Minister of Water and Environmental Affairs
•	Department of Water Affairs (National and Regional representatives)
•	Agri SA
•	Sand Vet Water Users Association
•	Sedibeng Water 
•	South African Police Service’s Diving Squad

Flood Situation and Impact during the visit

The Department briefed the delegation on the flows of the six dams within the Free State Province, namely,

Table 5: Flows of the dams within Free State Province as at 25 January 2011
Free State dams	Capacity of the dams	Dams’ inflows	Dams’ outflows 	Comments	
Bloemhof Dam	95% 
	600m3/s	1300 m3/s	To increase  to 1600 m3/s	
Vaal Dam	98% 	600m3/s	600m3/s	6 gates have been opened 	
Gariep Dam	111% 
(Peak was 119%)	3300 m3/s	1550m3/s	Increase to 2000 m3/s on 2011/01/27	
Vanderkloof Dam	110%	1700m3/s	1600m3/s	To increase to 1900m3/s on 2011/01/29	
Tierpoort Dam	16%				
Kalkfontein Dam	34%				

The floods mainly affected the Agriculture sector as the irrigation pumps were submerged and this resulted in no irrigation practices taking place. Farmers will have to remove pumps from the flooding rivers which are a costly exercise and consequently fear that the pumps might require repair services.

The electricity at some power stations was switched off by the supplier (Eskom), increasing a risk of flooding as a result of no electricity.

Most of the settlement houses situated at the downstream of the Bloemhof Dam have been flooded. Due to proactive communication no casualties have been experienced. 

The Sandvet agriculture reported that infrastructure such as roads, canals; fence and fields were damaged by floods. Although no accurate estimates of damage to infrastructure have been done, it is anticipated that there will be huge costs that will be incurred to repair and this will delay the operations. The floods also caused considerable damage to the crops, thereby threatening food security and income in the province.

Actions and/or commitments

Department of Water Affairs: The Minister Undertook to raise the electricity challenge with the Minister of Energy.  The Minister was also requested to intervene on the high cost of water and electricity which is directly affecting the farming operations negatively. The water bills were quoted to cost around R18 000 per month and the electricity bills up to R20 000 per month on average. This is handled as part of the water pricing strategy currently under review. 

Areas Affected 

Phumelela LM
•	Will need R500 000.00
•	Warden the pumps have flooded and the bridge sewer connection are damaged 
•	Water quality has been impacted, but they managed to put more chlorine/flocculants and it has stabilised. However it is being monitored closely

Setsoto LM
•	Will need R1, 4 million. Marquard the sewer pump damages and overflowing next to the golf course and this is also due to the storm water drainage system (R400 000)
•	Caledon River – pump damaged and had been sent for repairs, currently using and old one that was overhauled. Damaged pump sent for repairs at Gauteng and do not have spares and they are only available in Germany. Need to purchase new one and a spare (R480 000 X2) 
•	Meulspruit dam the source starter that was damaged has been repaired

Ngwathe LM will need R 1 million
•	15 manholes flooded and pump station also flooded, bridge was badly damaged due to the flooding. 
•	Bridge need R500 000. Pump station will need R 100 000 (electrical and mechanical)
•	The other R400 000 will be used to rectify any other problems of manholes that once the water levels have dropped.

Mafube LM – the intake tower was flooded in Villiers and Tweeling, will need R400 000

Moqhaka LM Will need about R15 m
Moqhaka Local Municipality provides water services to a population of approximately 200 000 within its area of jurisdiction. The Municipality is divided into three regions which draws surface water from different sources namely: 
Kroonstad / Maokeng		Vals River
Steynsrus / Matlwangtlwang	Vals River
Viljoenskroon / Rammulotsi	Renoster River & Vaal River  

Recent flooding has had the following impact on the Municipality:
1.	Water shortage : High water flow velocity, obstruction by debris hence low inflow to the plant
2.	Raw water quality : High turbidity, total dissolved solids resulted in high chemical consumption as well as prolonged water cleansing time
3.	Raw water pump station structure : Building flooded and high humidity resulting in weakening of the structure
4.	Flooding of electromechanical equipment : Grobelaarsdam motors and electrical panels flooded requiring to be serviced and dried, Viljoenskroon damage to pumps
5.	Raw water storage facility damage (Morgenson Dam) : The dam was completed in May/June 2010 and was washed away during recent floods 
6.	Roads and Street conditions: Roads and access streets are inaccessible due to high number of potholes and sections of roads washed off.
7.	Spillages and blockages : High number of spillages and blockages experienced due to ingress of storm water into sewerage system, eroding of outfall lines, incapability of sewerage works operation
8.	Electricity power supply interruptions : High number of electricity outages due to damaged poles and cable faults in inaccessible areas      

Tswelopele – no impact, only the hailstorm damaged the houses however the municipality is dealing with that 

Mantsopa – impact on storm water drainage causing pump station to overflow 
Filter sands in Hobhouse and Ladybrand towns have been damaged and thus affecting Water quality 

Xhariep DM
Leetsemeng – Petrusburg and Koffifontein – stormwater drainage damaged and need R1,5 m to fix it back to order 

Motheo DM
Naledi- Wepenaar and Dewetsdorp mostly affected, as people live near foodline in terms on houses, storm water drainage feeds to sewer network lines and then the pump station blocked and also overflowing, this also affected the treatment plant. Need about R2m to repair Mantsopa and Mangaung. 

Infrastructure damages (DWA)
•	Washing away / silt-depositing on access roads;
•	Damage to measurement gauge plates by large debris (like tree-trunks) in the water;
•	Gabion / levee / embankment damage due to heavy flows.

4.2.2.2.2.	North West Province visited on 10 January 2011

Areas visited and stakeholders in attendance
On 10 January 2011, a delegation comprising of the following stakeholders visited the Christiana area:
•	Minister of Water and Environmental Affairs
•	Department of Water Affairs (National and Regional representatives)
•	Executive Mayors and officials from the Dr Ruth Segomotsi Mompati District Municipality and the Lekwa-Teemane Local Municipality the Lekwa-Teemane Local Municipality 
•	Provincial Department of Cooperative Governance and Traditional Affairs
•	Agri SA and local farmers
•	Business community from North West and Northern Cape
•	Public interest groups. 

Flood situation and impact during the visit

During the visit, the Vaal Dam outflow was at 2,700 m3/s which was anticipated to increase to 3,200 m3/s within the next few days. However, no further outflows were envisaged from the Vaal Dam beyond this level as rainfall seems to be subsiding up stream. 
Due to torrential rains in the Vaal River Catchment Management area since December 2010, floods have caused major catastrophe around the banks of the Vaal River. This was due to the outflow of water from the Bloemhof Dam which amounts to 2.700 m3/s and could increase to 3.2m3/s should the situation worsen. This outflow has caused major damages to the farming community, small tourism sectors and to private households around the affected areas. The estimate of the damage has not been concluded.

Actions and/or commitments

Department of Water Affairs: The Minister of Water Affairs in partnership with the Premiers office and Local Government are strengthening their interaction with communities to embark on innovative solutions to deal with the situation. An inter-departmental meeting is scheduled for 14 January with all relevant stakeholders under the leadership of the Premier’s office to agree on the intervention measures in the province.

Both the Vaal and Bloemhof dams are being monitored by experts who have since December 2010 assessed the conditions of these dams in order to inform the public and affected communities around these dams of any risks associated with the overflow.
The Regional office has through its youth programme with the Department of Basic Education  will be sharing information with the learners once the schools are open, raising awareness on flood risks and management.

The Minister of Water Affairs encouraged the farming community to contribute during the Climate change Conference in Durban around Mid November and December 2011. Any form of impact should be minimized through reacting better and faster and trying to find way of curbing future impact.

Other affected areas 
Tswasa Weir located in Marico River: Operation of Buoyancy Gates affected due to tree stumps in the scour gates and silt in the buoyancy gates. It has been repaired by DWA team and is fully operational again. Crocodile River: Due to flow of about 550 m^3/s released on 16 December 2010 from Hartbeespoort Dam, at least one low-water bridge has been damaged. The flow currently is above the area to be assessed.  Hartbeespoort Dam: During the operations of the flood control gates at Hartbeespoort Dam on 16 December 2010, a third gate became non-operational when the gate cables snapped. The dam is not suitably equipped with lock gates to ensure proper and regular maintenance. The lock gates are currently being designed by Protection Services and the Mechanical Maintenance Contractor is busy with the manufacturing of the cables which will be installed shortly. Since 16 December 2010 the flow was too high for the repairs to be done and there were difficulties in accessing the radial gates.

4.2.2.2.3.	Northern Cape Province visited on 10 January 2011

Areas visited and stakeholders in attendance
On 10 January 2011, a delegation comprising of the following stakeholders visited Douglas area (Vaal and Orange): 
•	Minister of Water and Environmental Affairs
•	Department of Water Affairs (National and Regional representatives) 
•	The Premier for the Province 
•	MEC for Environmental Affairs and Nature Conservation 
•	Mayor of Siyancuma (Douglas) 
•	Organized Agriculture (Commercial farmers) 
•	Orange Vaal WUA 
•	Disaster Management Unit (Frances Baard DM) 
•	 Municipal officials 

Flood situation and impact during the visit
The areas affected in Magareng are located around the low water bridge and next to the Vaal River.

The Dikgatlong Municipality area was also affected by heavy rains and gail storm winds. A total of 12 structures were reportedly affected and these include an Old age home and 9 RDP houses.

The farming community, particularly at the Lower Vaal was severely affected by the floods. In addition to the flooded areas, land was also irrigated away from the flood plain due to the fact that pumps had to be removed from the river, thus preventing irrigation to take place, leading to major crop losses.

Actions and/or commitments

Frances Baard District Municipality: Affected roads and bridges have been closed.  The pleasure resorts have also been closed down, and affected community members have been removed to a safer area at Riverton. Warnings have been issued to affected communities and Joint operation centres were established.

Other affected areas

Sol Plaatjie: The communities affected are the Riverton community. Furthermore, the Riverton and Langleg Holiday resorts were also affected and both resorts had to be closed down.

Magareng Local Municipality: The areas affected are at the low water bridge and next to the Vaal.  

Figure 3: Bloemhof Dam - Northern Cape

COMMUNICATION

The communication mechanisms relating to this process are twofold (a) first being the one embedded in the disaster management system in terms of the early warning system where the disasters management centres alerts all relevant stakeholders on risk areas. The second being the daily release of flood management information to all media by the Department (SABC TV and radio channels and ETV are updated on the dam levels on a daily basis). 
At the moment the communication going out is through emails to various stakeholders including regional disaster management centres, agricultural unions, media institutions, etc. Press statement is also issued daily at 14pm.

4.2.2.3.	Current situation 2011/01/25

Vaal – Orange River System
Vaal Dam:
Vaal Dam capacity is currently at 98% 
The current inflow is 600 m3/s with an outflow of 600 m3/s (6 gates). 
Bloemhof Dam:
Bloemhof Dam capacity is currently at 95% 
The current inflow is 600 m3/s (to increase to 1600 m3/s on 2011/01/28) and the outflow is 1300 m3/s

Gariep Dam:
Gariep Dam is currently at 111% (to increase to 115% on 2011/01/27)
The inflow is 3300 m3/s (peak) and the outflow is 1550 m3/s (to increase to 2000 m3/s on 2011/01/27)
Vanderkloof Dam:
Vanderkloof Dam capacity is currently at 110% 
The inflow is 1700 m3/s (to increase to 2000 m3/s on 2011/01/27) and the outflow is 1600 m3/s (to increase to 1900 m3/s on 2011/01/29).
Lower Orange River
Predicted high flow at Prieska of 3250 m3/s on 2011/01/30.
Predicted high flow at Upington of 3250 m3/s on 2011/01/31.

Rain forecast (from South African Weather Service):
 60% chance of showers and thundershowers for the next 24-hours in the Orange catchment with the possibility of heavy rain in the Central Free State.

Limpopo River at Pafuri: 
Current flow 750 m3/s and decreasing. Only flows that originated in South Africa were included in the routing.

Olifants River at Mozambique border: 
Current flow 500 m3/s and stable

Komati River at Komatipoort: 
Previous peak was 600 m3/s on 2011/01/15
Current flow 400 m3/s (peak)

Flows at Orange and Namibia boarder
With regard to Namibia and SADC Secretariat, emails are being sent and we receive feedback and appreciation of the good work we are doing 

Table 6: Other historical floods in Upington
Year	Flow (m3/s)	Stage (m)	Approximate return period of flood peak (year)	
1975	3100	6.2		
1988	8300	9.4	100	
1996	2400	5.6		
2010	3300	6.4	7	
“2011 predicted low”	“5100”	“7.7”	20	
“2011 predicted high”	“5400”	“7.9“		

Recommendations

•	Municipalities will be encouraged to ensure controlled development and to be strict in combating a development of settlements within the flood lines as these communities are mainly affected during the flood disasters.
•	Dedicated contingency funds need to be established and dedicated to deal with disaster management interventions. 
•	DCOG needs to take a lead in (a) declaring disasters in hard hit areas, and (b) mobilizing and securing disaster relief funds from National Treasury through its National Disaster Management unit.
•	The Department of Water Affairs and the Water Resource Infrastructure (WRI) Branch has geared itself to embark on a risk assessment on all areas that have been developed along the flood lines and Municipalities will be advised to take pro-active steps 
•	The Department’s Flood Management Team is constantly monitoring the situation and alerting the operators on action to be taken continuously. This information is communicated to the local Disaster Management Centres in order to disseminate early warnings to risk areas. This is complemented by the daily flood updates realised by the department to all media,  coupled with radio interviews in affected areas

Summary

Generally, the situation throughout the country is under control. There is however concern in Mpumalanga in the Olifants area. If more rains are received, there will be challenges with flooding. The National and Provincial Disaster Team are closely monitoring the situation.

Possible Cholera Threats

Mpumalanga, Limpopo, and KZN are putting in place measures to deal with cholera. Limpopo has revived the Anti-cholera team and is monitoring the high risk areas closely. The region is procuring cholera packs, is doing community awareness through pamphlets and community radios.

In North West where cases of diarrhoea have been reported last night, the Region is working with the municipality to assess support required. A report will be made available.

4.2.3.	Legislative programme for 2011

The Department of Water Affairs convened a task team to identify and consider areas of policy change which may affect the water sector. 

Twelve of the eighteen areas of policy change/shift in the water sector as identified by the task team were included in three key intervention areas:
(1)	Legislative Review
(2)	Economic Regulator, Water Pricing Strategy, Infrastructure Funding Model
(3)	National Water Resources Strategy.

Water Services Act, 1997 (Act 108 of 1997)

The Act requires a significant review to ensure alignment with the provisions of the Municipal Systems Act, 2000 (Act 32 of 2000) and the Municipal Finance Management Act, 2003 (Act 56 of 2003). The Act has to be revised to adequately provide for the following matters:
•	for the definitions of the Act to be amended (a number of new definitions and amendments to existing definitions is provided for in the Strategic Framework for Water Services);
•	to extend the Minister’s authority in respect of norms and standards and to amend the current regulations promulgated under sections 9, 10 and 19 of the Act; 
•	for the roles and responsibilities of sector role-players (water services authorities, water services providers, the Department of Water Affairs, provinces, other national government departments, water services agents and the like) to be clearly provided for; 
•	to provide for a number of requirements reflected in the Strategic Framework for Water Services such as consumer contracts, consumer charters, higher levels of service, business plans, asset registers, free basic water services, credit control and debt collection, water sector plans, and the lodging of consumer complaints with the Minister, among others; 
•	for water resources management to be more closely aligned to water services;
•	for the planning and reporting requirements of the various sector lead departments to be coordinated; 
•	for the process of assessing and appointing water services providers to be clarified and simplified (including the section 19 regulations under the Act); 
•	to distinguish clearly between local and regional water services and water services providers as the regulatory role of water services authorities and the Department differ in respect thereof; 
•	to improve the governance and regulation of regional providers, specifically water boards;
•	to better provide for measures to ensure legislative compliance (regulatory instruments);
•	to simplify the intervention processes and procedures provided for in the Act; 
•	for the ministers of the various sector departments to collaborate on the issuing of regulations which impact on water services provision; 
•	to amend the financial provisions of the Act to better reflect the latest policy and legislative positions in terms of the Municipal Finance Management Act, the Division of Revenue Act, and Municipal Infrastructure Grants, among others; and
•	to reconsider certain provisions of the Act such as the chapter on water services committees.
 
National Water Act, 1998 (Act 36 of 1998)

There is a need to review the Act to ensure that there is equity in the allocation of water, to improve water resources management and to streamline the regulatory processes.

Since the Act’s promulgation, it has come to light that to improve equity in water resource allocation and water resources management, the amendment of the Act is required to ensure streamlining of legislative and regulatory processes.

The main objectives of the review process are to address all the challenges with regard to the implementation of the Act to ensure that objectives of reform, decentralisation and service delivery are achieved through proper consultation with internal and external stakeholders.  

The primary reasons for reviewing the Act are as follows:
•	the regulations to support the implementation of the Act has not been integrated with the Act; 
•	the Water Allocation Reform Programme has been lagging behind and this has resulted in redress and equity not being effectively achieved; 
•	the establishment of water management institutions has been delayed due to uncertainties with regard to the future and transfer of staff;
•	challenges are being experienced with the development of a sound asset data base for all the water resource infrastructure in the country;
•	the issuing of water use authorisations has been a long and complex process due to the fact that delegations have not been completed to proto-CMAs;
•	recognition of the importance of water user associations due to a lack of transformation has been a problem;
•	the water sector did not have a strong communication and marketing strategy for water resources management;
•	water resources management has been completely under resourced; and 
•	water quality issues need to be addressed more effectively.

The review process will, through conducting a regulatory impact assessment, establish whether these issues result from gaps within the legislation itself, elements requiring clarification within the legislation and/or issues that require to be reconsidered in terms of implementability.

Water Research Act, 1971 (Act 34 of 1971) 

In 2006, the Board of Directors of the Water Research Council requested that a task be established to investigate the need to review the Act. The task team concluded that there was only a need for minor amendments to the Act in terms of modernising the language used, administrative issues, governance and alignment with specifically the Public Finance Management Act, 1999 (Act 1 of 1999).

The Department will, however, consider whether the mandate of the Water Research Commission in terms of the Act is still adequately addressing the research requirements of the Department and the water sector in general in terms of the changing environment and technological and research advances since 1971.

Economic Regulator and Pricing Strategy 

The Department is developing a methodology and framework to establish an Economic Regulator. This methodology/framework for the effective economic regulation of the entire water value chain is intended to ensure the alignment of legislation and furthermore to develop an operational model in order to deal with the current challenges resulting from the growing imbalance between supply and demand for water in South Africa. 

A revision of the current Water Pricing Strategy aims to improve the financial viability of government’s bulk raw water business.  The current provision to cap annual water tariff increases and exclude categories of users from paying the "Return on Assets" related tariffs, results in annual deficits.  Appropriate pricing of water is necessary to ensure that this scarce resource is valued by all citizens.

National Water Resources Infrastructure Agency Bill 

The Department currently manages national water resource infrastructure with an estimated depreciated replacement value of R67 billion. In addition South Africa’s interest in the Lesotho Highlands Water Project (LHWP) is valued at R21.5 billion. In cooperation with the TCTA, implementation of further projects with an estimated value of R7.1 billion has been initiated (the Berg Water Project (BWP), the Vaal River Eastern Subsystem Augmentation Project (VRESAP) and the Olifants River Development Project). Furthermore, other water resources projects to be implemented in this financial year include the Mdloti River Development Project, raising of the Hazelmere Dam, development of the Mooi-Mgeni Transfer Project (Phase 2) and the Komati Abstraction Works and Pipeline at a cost of R5.9 Billion. The 2004 National Water Resources Strategy estimated that R21 billion of water resources infrastructure development will further be required to meet the increasing water demand over the next 20 years, particularly for the domestic and industrial sectors.  Of this about 75% is considered economically or commercially viable, while the remainder is for projects to meet government’s social development objectives for domestic use by smaller municipalities and agricultural use by farmers, in particular emerging (resource poor) farmers.

Institutional options considered

Although a range of institutional options for the management of South Africa’s national water resource infrastructure were initially considered, the emphasis was on the two options that were found to be the most viable:

•	A continuation of the current arrangement where the TCTA is used to implement and finance new commercially viable projects using commercial funding whilst other projects are implemented by the Department with all government projects managed by National Water Resources Infrastructure (NWRI) Branch (the “Branch option”); and  
•	The establishment of an Agency outside of the Department to finance, develop and manage water resource infrastructure by merging of the resources of the NWRI Branch and the TCTA (the “Agency option”).

The fundamental institutional difference between the Department option and the Agency is that the latter will have more specific focus and accountability, with its executive accountable to a Board appointed by the Minister. This will avoid the regulator/implementer conflict inherent in present arrangements and also encourage a more specific focus on risk management while reducing direct risk to government. With sound governance, this should contribute to improved efficiency, effectiveness and service delivery. 

Response to issues raised at NEDLAC

The concerns raised during the consultation with NEDLAC are not new. All of these were addressed in the submission to Cabinet during August 2005 with the exception of the matter relating to the single public service which is a recent topic currently under review.  Briefly the response to these issues is as follows:

•	Need for an independent Regulator:  the Department will shortly be presenting a framework for the regulation of the complete water sector. For the interim the current institutional oversight unit in the department will be strengthened to regulate the proposed Agency.
•	The raw water component of the price paid for water by the end user will continue to be determined in accordance with the Raw Water Pricing Strategy established in terms of the Water Act.  It is expected that the Agency establishment will not negatively impact on end users.  They could expect to receive the benefits of greater efficiency.

4.3.	Programme 3: Water Infrastructure Management

Ensure a reliable supply of water from bulk raw water resources infrastructure, with acceptable risk, to meet sustainable demand objectives for South Africa, including soliciting and sourcing of funding to implement, operate and maintain bulk raw water resources infrastructure in an efficient and effective manner by strategically managing risks and assets.

4.3.1.	New water resources augmentation projects 

In support of the government’s outcomes based approach, seven (7) priority water augmentation projects were identified to form part of the programme of action (PoA). These dams will amongst other things address the insufficient supply of water to support the growing economy. The output proposes an intervention through government investment in the bulk raw water infrastructure network which will serve as a catalyst for growth in development corridors.

These projects will provide additional water to the energy, industrial, agricultural and domestic sectors in various parts of the country. They include three (3) projects to augment water supply to existing and new coal-fired power plants of Eskom (ie. Medupi, Kusile, Duvha and Matla). Additional water for domestic use in the supply area of Umgeni Water will be provided by the construction of a new dam and conveyance infrastructure and by the raising of the wall of an existing dam wall on another river. A storage dam, bulk raw water distribution system and regional bulk infrastructure in the Sekhukhune District will make much needed water available to domestic users and new mining development in this resource rich part of the Limpopo Province. An old dam on the Olifants River (Western Cape) requires remedial work to ensure its structural safety and at the same time a 13 metre raising of the wall offers a financially viable solution for providing additional water for the development of irrigation farming by resource poor farmers.
Funding for those portions of projects that are for commercial users (i.e. can afford to pay the full cost of the supply of water) is done by using off-budget funding. The preferred implementation model for such projects is to use the Trans-Caledon Tunnel Authority (TCTA) as implementing agent. Some of these projects however also have social components for which funding from the fiscus is provided. Two examples are the Mokolo Project which will also provide water to Lephalale Municipal area and the Olifants River Bulk Distribution System that will convey water from the De Hoop Dam to social and commercial users.

On all of these projects special arrangements will be in place to explore and utilise social and economic development opportunities with preference given to local communities. Typically the SED Charter was negotiated for the De Hoop Dam to ensure preference in awarding job opportunities and to set targets for the procurement of goods and services for the project that would promote local capacity development. For 2011/12 the capital expenditure of R 2,4  billion is expected to create 1830 job opportunities. 

The detailed description of each project is contained below:

4.3.1.1.	Vaal River Eastern Sub-System Augmentation Project (VRESAP)

Background 

The project is situated in Mpumalanga Province in the Sedibeng and Gert Sibande District Municipalities comprising of Mid-Vaal, Govan Mbeki, Dipaleseng and Lekwa Local Municipalities.

The project includes construction of a water conveyance system comprising an abstraction works, storage reservoir, high lift pump station, 121km pipeline with 1,8m diameter, surge tank and diversion structure.

Purpose

The purpose of this project is to augment water supply to Eskom and Sasol.  Famers and other small water users along the pipe are provided with option to take raw water.

Costs

The total estimated cost for the project is R2 698 million. The loan funding will be redeemed by levying of water tariffs (Off-budget funding)

Duration

The project is expected to conclude in 2011/2012. Commissioning of the last component, the permanent abstraction works, is scheduled for July 2011.

Key milestones

•	Project Agreements concluded in October 2004
•	Water delivery using temporary abstraction works started in 1 June 2009

Risks/challenges

•	The Contractor for the terminated contract could take legal action in an attempt to recover losses 
•	The operation of the temporary abstraction works is dependent on a storage level of Vaal Dam of 67% full or higher.

4.3.1.2.	Olifants-Doorn River Water Resources Project: Raising of the Clanwilliam Dam

Background 

The Clanwilliam Dam is located in the middle reaches of the Olifants River (Western Cape) in the vicinity of Clanwilliam Town.  The project involves the downstream thickening and 13m raising of the dam wall together with the realignment of the N7 road passing the existing dam on the western side.

Purpose

•	to restore the safety of the dam during flood events and stabilise dam distortion caused by alkali aggregate reaction of mass concrete material in the dam wall;
•	to increase the annual yield of the dam by 70 million cubic meters per annum (70mil m3 p.a.) to allow establishment of resource to poor irrigation farmers;
•	to improve the reliability of water supply.

Costs

The total estimated completion cost amounts to R1 994 million, broken down into 30% for the rehabilitation work and 70% for raising the dam.  Funds are to be provided by the Fiscus.

Duration

The design of the N7 realignment by SANRAL is scheduled to start in 2011 and therefore the design for the dam is also planned to start in 2011. The construction period is estimated to be 48 months and is planned to commence in 2012 with expected completion in 2016/17.

Key milestones

The DEA Environmental Authorisation was issued on 01 May 2009 and three appeals were received, investigated and later dismissed on 22 February 2010.

Risks/challenges

•	Due to the current state of the project readiness for implementation and other priority needs to be addressed elsewhere the budget allocation for 2010/11 and 2011/12 has been reduced.  As a result the completion moved out to 2016/17.
•	Plans to establish new irrigation opportunities for resource poor farmers are not yet complete. 
•	The conclusion of water supply agreements with the irrigators is outstanding.
•	Any delays with the appointment of the engineering and environmental teams would delay the construction of the dam raising
•	Traffic on route N7 will be seriously disrupted if the re-alignment of this road is not completed before concrete placing at the dam commences.

4.3.1.3.	Mdloti River Development: Raising of the Hazelmere Dam

Background 

The Hazelmere Dam is located on the Mdloti River 5km north of Verulam in KwaZulu-Natal.  The project involves the manufacturing and installation of seven radial crest gates, 5 m high by 13 m wide, on the uncontrolled spillway of the Hazelmere Dam.  Provision for installation of radial crest gates was already made during the initial implementation of the dam.  Minor civil works are required to ensure the safety of the dam during major flood events.

Purpose

The purpose of raising Hazelmere Dam is to augment the water supply to Umgeni Water (UW) for treatment and supply to the KwaZulu-Natal North Coast (Mdloti to Thukela). The project also supplies water for supplementary irrigation downstream of the dam.

Costs

The total estimated cost for the project is based on the assumption that the project will be completed within 3 years. The total estimated amount required for the project is R116,5 million (including R25 million for expropriation of land). Funds will be sourced from National Treasury. Capital cost recovery from the end users would be in terms of the Water Pricing Strategy and revenue collection through existing arrangements via Umgeni Water, the current operators of the scheme on behalf of DWA.

Duration

The estimated duration for approvals, detailed design, tender processes and construction is from June 2010 with completion of gate installation in December 2012. Steps towards expropriation of additional land still required for the raised water level started in March 2010.

Key milestones

•	The DEA Environmental Authorisation was issued on 01 October 2009
•	Award of a contract for the supply of crest gates scheduled for  September 2011
•	Water use license was issued on 31 May 2010
•	Completion of civil works by March 2013

Risks/challenges

•	The project will be delayed if the required funding is not secured from National Treasury
•	Any delays with the appointment of the PSP for engineering and environmental aspects would delay the project and consequently the augmentation of water supply to Umgeni Water.
•	Response to advertisement for the filling of vacant professional posts was insufficient to make appointments with consequent inability to allocate the required resources to the project team. 

4.3.1.4.	Komati Water Supply Augmentation Project (KWSAP)

Background 

The project is situated in Mpumalanga Province, Nkangala District Municipality; Emalahleni and Steve Tshwete Local Municipalities.It comprises of the construction of:
•	An additional pump station at the Rietfontein Weir with a total capacity of 2,16 m3/s;
•	A 1 100mm nominal diameter steel pipeline to the Duvha Power Station over a distance of 58,4km with a capacity of 1,684 m3/s; and
A 600mm nominal diameter steel pipeline to the Matla Power Station over a distance of 12,9km with a capacity of 0,474 m3/s.

Purpose

The purpose of the project is to augment water supply to Eskom’s Duvha and Matla Power Stations.

Costs

The estimated cost is R 1 736,4 million. All saleable water from the project will be used for Eskom’s requirements. TCTA will approach local banks as a source of funding.

Duration

The construction should be completed in 24 months.

Key milestones

•	Water Supply Agreements have been signed
•	Construction site was handed to the contractor on 10 January 2011 
•	Delivery of water by December 2012

Risks/challenges

The high cost of funding.

4.3.1.5.	Mokolo and Crocodile River (West) Water Augmentation (MCWAP) Phase 1

Background 

The project is situated in the Waterberg area in the Lephalale Municipality, an identified growth point in the Limpopo Province. Water supply infrastructure will be developed in phases to meet the aforementioned increased demands. The focus is on Phase 1 of the project: 
MCWAP-1:	This comprises a new pump station and 46 km pipeline delivering 30 million m3/annum of water from Mokolo Dam.  The existing pipeline supplying water to the Lephalale area, which is jointly owned by Exxaro and Eskom, will become part of the project and upgraded to extend its useful life
Purpose

The purpose of MCWAP-1 is to augment the water supply in the Lephalale area to meet the water requirements of the Medupi Power Station, Exxaro Coal Mine and Lephalale Local Municipality.

Costs

The estimated total capital cost to complete Phase 1 is R1,7 billion.  The acquisition of the existing infrastructure from Exxaro and Eskom (at an estimated cost of R96 million) forms part of the Water Supply Agreements currently being concluded. For this phase, 25% of funding will come from the fiscus and the remaining 75% will be funded off budget based on agreements with the commercial users.

Duration

The estimated construction period is September 2011 to September 2013. This is aligned with the additional water demands for the commissioning of the Medupi power station.

Key milestones

•	Engineering design commenced on 07 September 2009.
•	Water Supply Agreements to be signed by end February 2011.
•	Construction to commence by September 2011
•	First delivery of increased supply through part of the pipe line by September 2012 
•	Final delivery capacity achieved by September 2013

Risks/challenges

•	The short timeline for implementation where upfront delays occurred whilst the water delivery date is determined by the construction programme for the Medupi Power Station
•	TCTA’s ability to secure affordable funding for the project given current and projected world macro economic conditions.

4.3.1.6.	Mooi-Mgeni Transfer Scheme (MMTS-2)

Background 

The existing Mgeni River System is situated in KwaZulu-Natal Province, comprising four major dams on the Mgeni River, supplies water to about 5 million people residing in the municipal areas of the eThekwini Metropolitan Municipality (MM) (Durban and environs), the Msunduzi Local Municipality (LM) (Pietermaritzburg) and the uMgungundlovu District Municipality (DM) (towns and villages around Pietermaritzburg).  In the near future some water will also have to be supplied to the Middle South Coast and rural communities in the Richmond area. The project includes construction of the 42m high Spring Grove dam on Mooi River near Rosetta in KZN with a storage capacity of 142 million m3 and a transfer system comprising of a pump station and pipeline as well as the associated infrastructure and implementation of measures to mitigate the impacts of the project on the social and natural environment.

Purpose

The purpose of this project is to augment the yield of the Mgeni River System for it to meet future demand.

Costs

The estimated cost at completion is R 1667.4 million. Most municipalities within the supply area have a sustainable income and can therefore afford to pay for water. The municipalities in question (eThekwini Metro, Msunduzi Local Municipality (Pietermaritzburg) and uMgungundlovu District Municipality) have all previously agreed that the project should be implemented off-budget (i.e. levying of water tariffs to repay loans).

Duration

It is planned to implement (design and construct) the project starting in 2009/10 and completion in 2013/14 with design and preliminary work having started already.

Key milestones

•	Contract for construction of the dam to be awarded in February 2011
•	Commence impoundment in reservoir by September 2012
•	Deliver water via existing MMTS-1 transfer scheme by March 2013
•	Project close –out by March 2014

4.3.1.7.	Olifants River Water Resources Development Project (ORWRDP 2)

Background 

The project if situated in the Limpopo province, in the Middle Olifants River catchment area including Polokwane, Mokopane, Lebowakgomo, Steelpoort, Burgersfort and Jane Furse on the Nebo Plateau in Sekhukhuneland. Phase2 comprises of sub-phases which include:

Sub-Phase 2A: The De Hoop Dam on the Steelpoort River as the new storage unit to create additional yield in the Middle Olifants River Catchment. 

Sub-Phases 2B and 2G:  Pump stations and pipelines to convey water from Flag Boshielo  Dam to Mokopane area.

Sub-Phase 2C to 2F: Pump stations and pipelines to convey water from De Hoop Dam to users, including an off-take to the Nebo Plateau including Jane Furse.

Sub-Phase 2H: The Lebalelo Water Users Association (LWUA) developed bulk distribution infrastructure which needs to be incorporated into the ORWRDP to optimize the management of the water resource. 

Sub-Phase 2I: Eskom’s Tubatse Pump Storage Scheme (TPSS) has been omitted from the project scope due to Eskom postponing implementation beyond 2020 at the earliest impacting seriously on the economic delivery of potable water to the Nebo Plateau.  

Purpose

The purpose of the project is to convey bulk raw water from the Flag Boshielo and De Hoop dams to domestic and industrial users in the Middle Olifants River catchment area.

Costs

ORWRDP 2A:  R 3 075 million

ORWRDP 2B – 2I:  R 12 981 million

As originally conceptualised the National Treasury will fund 60% of costs for social component and the commercial cost component will be funded through loans. Due to the world-wide recession and its impact on demand for mining products, the mines are not ready to commit to payment for their share of the investment. Unless fiscus funds are committed now to allow implementation of the system as originally planned, a smaller project needs to be implemented to meet social needs in the area.

Duration

ORWRDP 2A: Construction of De Hoop Dam has commenced during June 2007 and is progressing steadily. First delivery of water from De Hoop Dam is expected by April 2012 and practical completion by November 2012.

ORWRDP 2B – 2I:  The estimated construction period is 4 to 6 years, depending on the funding strategy and final layout of the project.

Risks/challenges

•	Unless funds are available to construct the reticulation system ( at municipal level ), the internal bulk water infrastructure and the regional bulk infrastructure delivery to the end users may not be possible when the water is in storage in the De Hoop dam
•	Capacity of municipalities to implement potable water supply systems in parallel with the BDS and the affordability of such water with the projected tariff by far exceeding the equitable share;
•	economical benefits of scale of a larger project may be  lost if a less than optimum smaller scheme is implemented due to pressing social water needs whilst the commercial users are not ready to sign off-take agreements 
•	Availability of power supply from Eskom to the construction sites and pump stations.

4.3.2.	Regional bulk infrastructure

Bulk infrastructure connects the water resources to the distribution / reticulation system which supplies water to consumers, and also includes wastewater infrastructure such as wastewater treatment plants and the wastewater collection system. The development and effective management of regional bulk infrastructure plays a vital role in overcoming the key challenges in water services.

During 2007, National Treasury (NT) approved the funding of a three year Grant to support WSAs and the water sector to implement regional bulk infrastructure projects. The Grant has been appropriately referred to as the Regional Bulk Infrastructure Grant (RBIG). The funding of RBIG has been subsequently extended and the scope of RBIG has also been increased and it is now considered an ongoing programme and referred to as the Regional Bulk Infrastructure programme (RBIP). 
The Department is responsible and accountable for the management of the RBIP. This responsibility is based on the Departments role as the custodian of water resources and the leader and regulator of the water services sector, whereby the Department has to act as intermediary to facilitate integrated planning and implementation of such large multi-institutional and multi-year regional bulk infrastructure projects through the involvement of all stakeholders. Bulk infrastructure is a critical element of water services infrastructure and an integrated part of water services management.

4.3.2.1.	Overview of regional bulk infrastructure needs in South Africa

A consolidated overview of all bulk infrastructure needs was carried out during 2009/10. A revised more comprehensive process whereby regional bulk master plans are been developed is currently been undertaken. The results of the previous study indicate a total need for bulk infrastructure in South Africa in excess of R 113 billion. The following table illustrates the need for the various provinces.

Table 7: Overview of regional bulk infrastructure needs per province
Province	Need in billion Rands	% of total 	
Eastern Cape	R 11.5 b	9.9%	
Free State	R 10.9 b	9.4%	
Gauteng	R 12.6 b	10.9%	
KwaZulu-Natal	R 28.1 b	24.2%	
Limpopo	R 27.3 b	23.6%	
Mpumalanga	R 3.1 b	2.7%	
Northern Cape	R 3.8 b	3.3%	
North West	R 4.7 b	4.1%	
Western Cape	R 13.9 b	12.0%	
TOTAL	R 113 b	100%	

4.3.2.2.	Overall budget allocation 

Annually the grant split is as follows:
•	R20 million for the management of the programme.
•	R30 – R80 million for implementation readiness planning (feasibility studies).
•	Remainder for project implementation.

Table 8: Regional Bulk Infrastructure budget allocation since inception
Financial year	Budget allocation 	
2007/08	R 300 million	
2008/09	R 443.4 million	
2009/10	R 618.2 million	
2010/11	R 839 million	
2011/12	R 1 775.3 million	
2012/13	R 2 233.1 million	
2013/14	R 2 418.8 million	

Table 9: Regional Bulk Infrastructure budget allocations per province
Province	Budget allocation per financial year	Proposed allocation 	
	2007/08	2008/09	2009/10	2010/11	2011/12	2012/13	2013/14	
Eastern Cape	39,600,000	75,350,000	116,100,000	165 100 000	318 000 000	377 650 000	417 000 000	
Free State
	30,025,000	36,400,000	47,260,000	87 000 000	162 300 000	167 000 000	164 000 000	
Gauteng
	1,500,000	5,100,000	28,912,093	56 000 000	80 000 000	148 500 000	191 000 000	
KwaZulu-Natal	73,000,000	86,300,000	86,500,000	157 775 000	347 400 000	447 383 000	456 400 000	
Limpopo
	80,850,000	138,700,000	228,581,479	188 000 000	320 200 000	398 689 000	410 000 000	
Mpumalanga
	35,825,000	28,700,000	22,495,484	64 000 000	136 532 000	125 000 000	160 000 000	
Northern Cape	7,400,000	28,600,000	40,930,000	54 075 000	163 725 000	199 500 000	204 775 000	
North 
West	23,000,000	45,550,000	15,243,037	48 300 000	114 000 000	174 900 000	200 000 000	
Western Cape	3,600,000	2,300,000	17,643,000	33 557 000	78 200 000	138 700 000	160 000 000	
Special projects	0	0	0	2 500 000	0	0	0	
Head office
	300,000,000	450,000,000	13,087,907	36 693 000	54 983 000	55 785 000	55 633 000	

TOTAL	39,600,000	75,350,000	
616,753,000	893 000 000	1 775 340 000	2 233 107 000	2 418 808 000	

Progress report

During the 2007/08 financial year, 109 projects were started of which
•	50 projects have been initiated (i.e. are in construction, design or tender phase);
•	42 projects are undergoing feasibility / implementation ready studies; and
•	17 projects have been completed and are tabulated below.

The total number of job opportunities that have been created since inception is 6017.

Table 10: List of regional bulk project completed
No	Name of project	Province 	Financial year 	
1.		Chris Hani Tsomo RDP2 BWS	Eastern Cape	2007/08	
2.		Delmas Phase 1 Emergency 	Mpumalanga		
3.		Thaba Chweu BWS	Mpumalanga		
4.		Delmas Phase 2	Mpumalanga	2008/09	
5.		Maqwassi Hills RWS	North West		
6.		Mbhashe North BWS	Eastern Cape	2009/10	
7.		Mathulini BWS	KwaZulu-Natal		
8.		Greater Mthonjaneni BWS Phase 1	KwaZulu-Natal		
9.		Van Wyksvlei Interim Solutions	Nothern Cape		
10.		Van Der Kloof/Petrusville BWS	Northern Cape		
11.		Mjejane bulk water supply			
12.		Mthatha Bulk Water Intervention	Eastern Cape	2010/11	
13.		Malangeni Waste Water Treatment Plant			
14.		Greytown BWS	KwaZulu-Natal		
15.		Mbombela Water Supply	Mpumalanga		
16.		Hoxani BWS	Mpumalanga		
17.		Kenhardt BWS	Northern Cape		

Challenges / risks

The following programme challenges have been identified during the current financial year:

No	Description of challenges / risks	Actions to minimise risks	
1.		Budget constraints	The total budget allocation is far too small compared to the total needs for regional bulk infrastructure. The risk is that the water sector will not be able to meet its backlog related targets	•	Continue to motivate to NT for the increase in budget.
•	Pursue Private Public Partnerships (PPP) to fund various projects.
•	Develop tools and guidelines for local authorities on how to identify various alternative funding options.
•	Review all proposed projects and identify any cost saving measures	
2.		Scope of projects implemented	The is an urgent need to not only increase the overall budget of the programme but to also increase the scope to include the following; Waste Water Treatment Works, Asset management related projects and Internal bulk.	•	Hold a high level workshop with CoGTA, National Treasury and other key stakeholders.
•	Improve the quality of the project identification and budgets information.
•	Motivate to NT for the expansion of the programme.
•	Propose to NT to separate from RBIG a number of very large proposed projects (i.e. the Sedibeng Regional sewer scheme, estimated cost of R3,5 billion and the Olifantsriver Water Scheme, estimated cost of R5,1 billion from the RBIG programme and create their own specific grants.)	
3.		Slow expenditure of programme	•	Investigate, and where possible, help resolve problems that are delaying implementation progress. 
•	Re-allocate funds from problematic projects to those that can spend	
4.		Capacity of municipalities to implement	The existing capacity of many recipient municipalities is not adequate to ensure the efficient implementation of the projects	•	Appoint water boards as implementing Agents in weak municipalities.
•	Develop a Built Operate Train and Transfer contract and guidelines.
•	Identify projects implemented by weak municipalities and if necessary  take over the implementation	
5.		Capacity of municipalities to operate infrastructure.	There is concern with regards to the ability of a number of WSAs to sustain the infrastructure projects and ensure adequate operations and maintenance	•	Adopt a more stringent approach to prevent weak municipalities from operating regional bulk infrastructure and ensure an adequate alternative institution is appointed in such instances.
•	Develop O & M governance guidelines	
6.		Capacity of the Department	The current institutional capacity of DWA to manage the programme is not adequate. Only five of the approved 21 new posts have been filled	•	Appoint and train as soon as possible the remainder of the 21 new posts that have been approved during 2009. 
•	Develop a more comprehensive RBIP DWA team structure to meet the future requirements of the programme.
•	Re-appoint Umgeni as Implementing Agent to provide a support team for the RBIG programme for a further 12 months.
	
7.		Lack of positioning and perceived alignment for the RBIG programme	There are a number of conflicting strategic directions that the D: RBIG is faced with. These include conflicting view points from key stakeholders regarding the scope of work and which national department should be responsible for the programme	•	Hold an eternal strategic workshop within the Department.
•	Hold high level talks with external key role players.
•	Hold workshops with Water Services Authorities throughout S.A.
•	Revise the RBIG strategy.
•	Develop a Memorandum of Agreement between CoGTA, Human Settlement and the Department with regards to the alignment of policies and operational issues with MIG and the sanitation programme.

4.3.3.	Maintenance work on existing dams (Dam Safety Rehabilitation Programme)

The Department owns approximately 350 dams across South Africa. The safety shortcomings at some of these dams necessitated the Dam Safety Rehabilitation Programme that started late in 2005 and in 2007, 165 dams were identified for rehabilitation. 

Progress report

As at 31 July 2010, 58 dams were being rehabilitated of which 22 of the dams are completed (details are tabulated below). A further eight (8) dams are planned for completion by the end of the 2010/11 financial year. 

Table 11: List of dam safety rehabilitation dams completed 
No	Name of dam	Province 	
1.		Acornhoek Dam,	Limpopo	
2.		Gcuwa Dam	Eastern Cape	
3.		Gariep Dam	Free State	
4.		Goedertrouw Dam	KwaZulu Natal	
5.		Groter Brandvlei Dam	Western Cape	
6.		Klipdrift Dam	North-West	
7.		Kromellenboog Dam	North West	
8.		Lakeside Dam	North West	
9.		Makotswane Dam	Limpopo	
10.		Midmar Dam	KwaZulu Natal	
11.		Modjadji Dam	Limpopo	
12.		Piet Gouws Dam	Limpopo	
13.		Pongolapoort Dam	KwaZulu Natal	
14.		Taung Dam	North West	
15.		Toleni Dam	Eastern Cape	
16.		Vaalkop Dam	North West	
17.		Van der Kloof Dam	Northern Cape	
18.		Wentzel Dam	North West	
19.		Kabokweni Dam	Limpopo	
20.		Albert Falls Dam	KwaZulu Natal	
21.		Bospoort Dam	Limpopo	
22.		Belfort Dam	Eastern Cape	

To date twelve (12) dams are currently in the construction stage and twenty dams are in the design stage; four (4) dams are currently out on tender for preliminary design work whose outcome may lead to rehabilitation.  The details are tabulated below 

Table 12: List of dams and their various stages
No	Name	Province	Construction Stage	Design Stage (incl. prelim)	Tender stage for design 	
1.		Molepo Dam	Limpopo	X			
2.		Nsami Dam	Limpopo	X			
3.		Mashashane Dam	Limpopo	X			
4.		Chuniespoort Dam	Limpopo	X			
5.		Klein Maricopoort Dam	North West	X			
6.		Elandsdrift Dam	Eastern Cape	X			
7.		Rust de Winter Dam	Limpopo	X			
8.		Grassridge Dam	Eastern Cape	X			
9.		Glen Brock Dam	Eastern Cape	X			
10.		Tsojana Dam	Eastern Cape		X		
11.		Mhlanga Dam	Eastern Cape		X		
12.		Cata Dam	Eastern Cape		X		
13.		Mnyameni Dam	Eastern Cape		X		
14.		Mankazana Dam	Eastern Cape	X			
15.		Albasini Dam	Limpopo		X		
16.		Sterkfontein	Free State		X		
17.		Laing	Eastern Cape	X			
18.		Boegoeberg	Northern Cape	X			
19.		Grootdraai	Gauteng		X		
20.		Magwa	Eastern Cape	X			
21.		Majola	Eastern Cape		X		
22.		Ntshingwayo	KwaZulu-Natal		X		
23.		Lubisi	Eastern Cape		X		
24.		Stompdrift	Western Cape		X		
25.		Kouga Dam	Eastern Cape		X		
26.		Nondweni Weir	Limpopo		X		
27.		Casteel Dam	Limpopo		X		
28.		Tours Dam	Limpopo		X		
29.		Vaalkop II	Limpopo		X		
30.		Ncora Dam Pipeline	Eastern Cape		X		
31.		Hammerdale Dam	KwaZulu-Natal		X		
32.		Pongolapoort Phase II	KwaZulu-Natal		X		
33.		Darlington Dam	Eastern Cape			X	
34.		Mthatha Dam	Eastern Cape			X	
35.		Nzhelele Dam	Limpopo			X	
36.		Der Brochen Dam	Limpopo			X	

It should be noted that only when the Department’s internal design teams have no capacity, work is given to Consulting Engineers on a tender basis. The majority of construction work is handled by the Departmental Construction Unit and only when full capacity is reached work is given to private contractors on a competitive tender basis.

Historic expenditure patterns 
The Dam Safety Rehabilitation Programme recently surpassed the R1000 million mark and these funds were spent on professional consulting engineering fees and construction costs for the rehabilitation of dams.  Table 2 contains a summary of expenditure until 31 July 2010.  Delays experienced in earlier procurement of PSP’s are now evident in the downward trend in expenditure

Table 13: Dams Safety Rehabilitation expenditure patterns
Year	No of projects undertaken	Expenditure per financial year 	
2005/06	18	R       2,171,229	
2006/07	35	R     56,484,041	
2007/08	36	R   240,956,004	
2008/09	43 (11)	R   383,597,900	
2009/10	52 (20)	R   365,667,000	
2010/11	58 (30)	R     90,900,000	
2011/12	64 (43)		
2012/13	75 (52)		

Challenges

Unforeseen conditions are part and parcel of civil engineering projects and dam rehabilitation projects are especially prone due to unknown subsurface conditions and a lack of as-built drawings at dam rehabilitation construction sites.  This often leads to variations for both the consulting engineers and the contractors.  

Due to the large scope of work the Departmental Construction Unit has difficulty to procure goods within the current supply chain management delegations as the scope of their work is much bigger than what the supply chain management rules were designed for.  Slow procurement of goods often leads to delays in completion of rehabilitation work.  

4.4.	Programme 4: Regional Implementation and Support 

Coordinate effective implementation of the Department’s strategic goals and objectives at the regional level, including the establishment of water resource management institutions. Facilitate water conservation and demand management. Accelerate access to water infrastructure in communities.

4.4.1.	Report on the impact of the current rainfall (flooding) on Acid Mine Drainage (AMD) in Gauteng

Recent high rainfall and resultant localised flooding within Gauteng has raised concern that these conditions will lead to increased ingress (entry) of water into mine workings and amplify acid mine drainage (AMD) in Gauteng. The recent occurrence of flooding is in essence a matter separate to that of AMD; however, cognisance must be taken that flood water has potential to enter mine workings and also increase AMD. This synopsis provides an overview of the current mine water and AMD status in Gauteng subsequent to the region’s rainfall and flooding.

4.4.1.1.	Water ingress into mine workings

The ingress of water into mine workings is an important environmental concern as this leads to increasing underground mine water levels and formation of AMD. As the mine water levels rise, it contaminates groundwater. Further rises leads to decant (overflow) of the polluted water on surface, commonly known as AMD which has serious consequences on the environment.
For each of the following sources of ingress, increased ingress is expected during high rainfall / flood conditions:
•	Surface streams releasing water directly to mine openings.
•	Shallow groundwater systems which subsequently feed into mine workings. 

Open pit mining that offers a direct conduit for water flow from surface into the underground workings.

4.4.1.2.	Update on the Western Basin (West Rand area)

AMD decant flow rate

•	During the dry season, the decant of AMD is either absent or of relatively small volume, typically averaging 2 ML (mega litres) per day.
•	During the wet season (December 2010), this average increased to 15.5 ML per day.

In January 2011, following high rainfalls, the decant of AMD further increased to an average of 30 ML per day, in addition to 12 ML per day of partially-treated mine water (total decant is therefore 42 ML per day).

Impacted water resources

Surface water:
•	The above episodes of AMD decant are contaminating surface streams, i.e. the Tweelopies Spruit and Blaauwbank Spruit (both flowing north to the Crocodile River system).
•	Western Basin subsurface mine water is considered to be flowing via underground paths to the Wonderfontein Spruit, a river which feeds into the Vaal River.

Note that the recent incident of fish kills due to AMD as reported in the media could not be attributed to the AMD decant.

4.4.1.3.	Update on the Central Basin (Central Johannesburg area)

Subsurface mine water level

•	Previous evidence has shown the Central Basin rate of water rise to range from 0.3 m per day during the dry season to 0.9 m per day during the wet season (average rate approximately 0.55 m per day). Presently the water level is at 508 m below surface and there is no surface decant of AMD.
•	The latest results indicate the rate of rise fluctuates between 0.37 – 0.47 m per day. Despite the recent high rainfall, there is a slower rise than expected which is possibly due to delayed ingression or a more extensive network of lateral mine workings at the 500 m (below surface) level which is absorbing the ingress of water.

4.4.1.4.	Update on the Eastern Basin (East Rand area)

•	As with the Central Basin, there is no surface decant of AMD in the Eastern Basin and current subsurface mine water level is approximately at 700 m below surface.
•	Recent rainfall has boosted the rate of rise to around 0.4 m per day (about 7× faster than the rate during dryer conditions). At the prevailing rate, mine water can flood the pump station in as little as 16 days unless the Grootvlei Mine seriously increases pumping output. According to information at the Department’s disposal, Grootvlei mine is in the process of increasing pumping capacity.

4.4.1.5.	Recommendations for reducing impact of high rainfall and storm / flood waters on mine water levels and AMD

Ingress reduction measures

In accordance with the report titled Mine Water Management in the Witwatersrand with Special Emphasis on Acid Mine Drainage (prepared by the Expert Team for the Inter-Ministerial Committee on Acid Mine Drainage), reduction of water ingress into mine voids remain high priority. Urgent interventions are required to manage ingress. These are specific to each basin and include:
•	Western Basin – Reduce ingress via open pits and the local natural watercourses. Pit filling and lined canal systems are proposed solutions.
•	Central Basin – reduce ingress from stream crossing mining areas. Canalisation of streams and grouting (sealing) mining paths are proposed.
•	Eastern Basin – ingress management can commence immediately by expanding culverts in the Blesbok Spruit. This will prevent ingress of water from the Blesbok Spruit to the underground mine void.

4.5.	Programme 5: Water Sector Regulation 

Purpose: Ensure the development, implementation, monitoring and review of regulations across the water value chain in accordance with the provision of the National Water Act (1998) and Water Services Act (1997) and supporting legislation such as the Public Finance Management Act (1999).

4.5.1.	Management of effluent and waste water treatment works 

In 2003, the Department was mandated by Cabinet to act as Regulator of the water sector with the adoption of the Strategic Framework for Water Services. This policy framework for the local water services sector is the fundamental reason why the Water Services Act (Act 108 of 1997) is under review; this process allow for improved regulatory powers which might be currently lacking due to the fact that the basic concepts of regulation were not considered with the draft of the initial legislation. 

The National Water Act (Act 36 of 1998) was more accommodative to regulatory principles which allowed for the protection of water resources. This was allowed for compliance monitoring of water uses as allowed for under Section 21 of the said Act as well as for the enforcement thereof as explained in Section 19 and 51. While this legislation has been found to be extremely forward-thinking by various credible global water experts, it was rather challenging to implement all aspects thereof due to the complexities linked to radical institutional reform. 

Secondary legislation under the Water Services Act (promulgated in 2001) allowed for Drinking Water Quality norms and standards to be enforced. This was the basis for the introduction of conventional regulation of the South African drinking water quality in 2004. 

The concept of Incentive-based Regulation was introduced on 11 September 2008 to the water sector at the National Municipal Indaba in Johannesburg by the Minister of Water Affairs. The concept was defined by two programmes: the Blue Drop Certification Programme for Drinking Water Quality Management Regulation; and the Green Drop Certification Programme for Waste Water Quality Management Regulation. This incentive-based regulation programme was locally developed for uniquely South African challenges within drinking water quality management. It is a programme which allows for proactive management and regulation of DWQ through the introduction of excellence requirements based upon legislated norms and standards, as well as international best practice. It is important to note that a municipality in its entirety cannot be awarded a Blue or Green Drop but rather a water supply system or Wastewater system according to the performance for that specific system as it scores against the set requirements.

4.5.1.1.	Trend analysis on the performance of waste water treatment works

The analysis provides a snapshot view of the status and trends in current municipal wastewater treatment works. The results indicate that the majority of plants in provinces improved on their wastewater services profile in the last year, with the exception of KwaZulu-Natal. The national overview indicates that 466 (52.5%) systems showed progress, 198 (22.3%) systems remain unchanged and 223 (25.1%) showed digress.  

It must be noted that this is based on preliminary results and that confirmation and moderation (quality control) must be concluded, as planned for January/February 2011.

These results are an early indicator that the DWA incentive based approach may be a relevant and appropriate model and approach to ensure turn around and raising performance in the municipal wastewater industry.  The results exceed expectations, but will be verified to ensure that a credible and checked Green Drop Report is ready by June 2011 for release by the ministry.

Of further value, is that the red marked plants can be identified for early intervention or support initiatives to ensure that their performance will cross to the blue areas at time of Green Drop assessments August – December 2011. 

Provincial Green Drop trends as at December 2010

Red means number of plants that digressed; Yellow means number of plants that remained unchanged; and Blue means number of plants that improved

  

  

National Green Drop trend over the period November 2009 to November 2010

The Department is currently performing its second Green Drop assessment cycle and will only be able to determine the full extent of the wastewater management impact at the completion of the assessment. In spite of the existence of tangible improvement measurements there would be sufficient reason to be cautiously optimistic due to the evident cognitive improvements noted on elements previously completely neglected by the vast majority of municipalities. The activity on the GDS (Green Drop System) serves as indication that there are a vast number of municipal officials who acknowledge the need to improve their wastewater management approaches. This programme served as inspiration for municipal officials in most remote locations to have a tangible target set to strive towards; they planned accordingly and improvements are underway. Together with the risk based targeted approach (which saw the introduction of cumulative risk ratings for each wastewater treatment facility) ensure for unified understanding on what is required for improvement, and uniformity in improvement measurements.

However there is yet to be seen the desired impact it would have on the overall quality of effluent discharges.

3.6	Programme 6: International Relations

Strategically develop, promote, manage international relations on water resources between countries through bilateral, and multilateral cooperation instruments and organisations and further drive national interest at both Africa and global multilateral organisations and or forums.

3.6.1	Africa Cooperation: 
Promotes and facilitates collaborative activities in support of the Water sector through bilateral relations, participation in Africa multilateral institutions such as AU, AMCOW, NEPAD Programmes, SADC and regional integration engagement through SADC Shared Water courses and strategic bilateral relations in Africa. The Orange Sengqu River Commission (ORASECOM) was established in 2000, for the whole Orange River namely South Africa, Botswana, Lesotho and Namibia.  The purpose of the Commission is to advise the 4 member states on the management of water recourses of the Orange River Basin.  SA, as the host country, is expected to provide office accommodation for the Permanent Secretary.   SA is the implementing agent, thus the responsibility of hosting ORASECOM Secretariat rests in our jurisdiction with SA covering costs of building rentals (including Municipal services) for a period of 3 years.  Rental (including parking) is valued at R908, 818.48 (2010/2011) per annum, at R998, 600.33 (2011/2012) and at R1 098, 460,38 (2012/2013), At the ORASECOM meeting in Botswana on 26 October 2006, member states agreed that every member state will contribute equally towards the operation cost of the Secretariat and that each country should contribute R500 000 in each financial year.  R500 000 is contributed annually from 2007.

SA has taken over the Chairmanship of the African Minister’s Council on Water for two years starting form the year 2010/11 to 2013/14 and part of the requirements as a chairperson is that SA must pay membership fees and second officials to AMCOW secretariat in Nigeria.  R274,600.00 was contributed 2009/2010 and   10 000 US Dollars (approximately  R100 000) will be annually contributed to AMCOW.

3.6.2	Global Cooperation: 
Promotes and advances national interest at global governance institutions, strategically engages bilateral countries outside Africa and further looks at leveraging opportunities for international resources from strategic donor countries. The International Resources: Supports the Department by leveraging funding, human capital and knowledge, facilitating access to international research. Over the 2011 medium term period, the programme will intensify its efforts in sourcing the funds that will be utilised to strengthen water resource management in South Africa. This includes maintaining highly functional relationships with international partners at bilateral and multilateral level, and brokering these at institutional level. The efforts of the programme will be supported by the development of dedicated competence in research, which will increase the effective targeting of appropriate partners. Lastly, the programme facilitates the integration of partnerships with donor countries into the Department national and regional water structures. 

4	JOB CREATION 

A summary of projected job opportunities over the medium term is as follows 

PROJECT	DEPARTMENT/SOE	INVESTMENT (2011/12 & 2012/13)
(R million)	2011/12	2012/13	2013/14	REQUIREMENTS	
Water augmentation	DWA	1012	890	450	250	Secured funding	
Water augmentation	TCTA	3726	940	1300	1150	Authorisations	
Water services	DWA	1340	512	515	571	Technical capacity	
Rehabilitation & refurbishment	DWA	2266	2259	2490	2306	Favourable economical climate	
RBIG	Local govt	4561	6705	8497	9202	 
 	
Water boards	Water boards	5836	9486	9966	8430		
Natural Resource management programmes	Working for Water	1,010 010					
	Working on Fire	280,433					
TOTAL	 	18741	20792	23218	21909	 	

Water augmentation projects 

A.  WATER AUGMENTATION PROJECTS (WAP) OUTSOURCED	
A1. VRESAP	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	125	25	 	 	
Total number staff complement (professionals, skilled and unskilled)	100	40	 	 	
					
A2. MMTS-2A (SPRING GROVE DAM)	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	100	250	300	150	
Total number staff complement (professionals, skilled and unskilled)	30	200	450	200	
					
A3. KWSAP	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	160	560	660	300	
Total number staff complement (professionals, skilled and unskilled)	80	300	350	200	
					
A4. MCWAP-1	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	300	492	553	421	
Total number staff complement (professionals, skilled and unskilled)	50	200	300	250	
					
A5. ORWRDP 2B - 2H	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	150	458	428	1034	
Total number staff complement (professionals, skilled and unskilled)	40	200	200	500	
					
SUMMARY WATER AUGMENTATION PROJECTS (WAP) OUTSOURCED	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	835	1785	1941	1905	
Total number staff complement (professionals, skilled and unskilled)	300	940	1300	1150	
					
A.  WATER AUGMENTATION PROJECTS (WAP) INTERNAL DWA					
					
A6. RAISING OF CLANWILLIAM DAM	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	 	11	51	318	
Total number staff complement (professionals, skilled and unskilled)	 	15	50	250	
 	 	 	 	 	
A7. RAISING OF HAZELMERE DAM	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	17	49	43	0	
Total number staff complement (professionals, skilled and unskilled)	75	75	100	0	
					
A8. ORWRDP 2A	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	670	562	296	0	
Total number staff complement (professionals, skilled and unskilled)	800	800	300	0	
					
SUMMARY WAP INTERNAL DWA	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	687	622	390	318	
Total number staff complement (professionals, skilled and unskilled)	875	890	450	250	
					
A. WAP SUMMARY	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	1522	2407	2331	2223	
Total number staff complement (professionals, skilled and unskilled)	1175	1830	1750	1400	

B.  WATER SERVICES PROJECTS					
					
B1. NANDONI	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	151	386	496	401	
Total number staff complement (professionals, skilled and unskilled)	116	296	381	308	

B2. INYAKA	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	92	136	10	0	
Total number staff complement (professionals, skilled and unskilled)	70	104	7	0	
					
B3. HLUHLUWE	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	76	42	30	0	
Total number staff complement (professionals, skilled and unskilled)	58	32	23	0	
					
B4. GLEWAP	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	17	104	136	342	
Total number staff complement (professionals, skilled and unskilled)	13	80	104	263	
					
B. WATER SERVICES SUMMARY	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	336	668	672	743	
Total number staff complement (professionals, skilled and unskilled)	257	512	515	571	

C. REHABILITATION AND REFURBISHMENT					
					
C1. DAM SAFETY REHABILITATION PROGRAMME	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	 	 	 	 	
Total number staff complement (professionals, skilled and unskilled)	0	0	0	0	
					
C2. NATIONAL CONVEYANCE INFRASTRUCTURE PROGRAMME	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	884	1078	1188	1100	
Total number staff complement (professionals, skilled and unskilled)	1853	2259	2490	2306	

C. REHABILITATION AND REFURBISHMENT SUMMARY	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	884	1078	1188	1100	
Total number staff complement (professionals, skilled and unskilled)	1853	2259	2490	2306	

D. REGIONAL BULK INFRASTRUCTURE GRANT					
					
D. REGIONAL BULK INFRASTRUCTURE GRANT SUMMARY	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	 	1719	2179	2360	
Additional co-funding (17%)	 	292	370	401	
Total funding (R' million)	0	2012	2549	2761	
Total number staff complement (professionals, skilled and unskilled)	0	6705	8497	9202	

E. WATER BOARDS					
					
E. WATER BOARDS SUMMARY	2010/11	2011/12	2012/13	2013/14	
Capital cost (R' million)	2465	2846	2990	2529	
Total number staff complement (professionals, skilled and unskilled)	8216	9486	9966	8430	

F. NATURAL RESOURCE MANAGEMENT PROGRAMMES 
Project	Company/
SOE/
Government	Investment Value 
R ‘000
2011/12	Total Employment opportunities 2011/12	Total Employment Opportunities
by 2014	Critical reforms required to realise the jobs 	
Working for Water Programme	Government
(jobs created - EPWP)	R 1,010,010
(1) 	R 34,251 
(2) 	R 107,601 
(3) 	Institutional.
Capacity.
Delegations.	
Working on Fire Programme	Government
(jobs created - EPWP)	R 280,433 
(4)	R 4,156 
(5) 	R 13,041	Institutional.
Co-operative Governance.	

 1  This budget includes the EPWP base-line amount (R814.777m), the EPWP Wage Incentive amount (R132.133m), the Departmental  management contribution (R33.1m) and a contribution from the DWA Trading Account (R30m) for work undertaken as a contribution to water resource management.
2  This refers to the number of individuals to be employed for 2011/12, working for an average of 100 days per worker. This amounts to 3,425,000 person days of employment or 14,892 Full-Time Equivalents (FTEs is a person working for 230 days of the year). 
3   This is the cumulative figure of the number of people from 2011 to 2014 that will be employed for 100 days.
4.  This budget includes the EPWP base-line amount (R242.502m) and the EPWP Wage Incentive amount (R37.931m). 
5   Working on Fire employment figures already reflect full-time employment, thus amounting to 955,880 person days or 4,156 FTEs.

5	ENTITIES AND OTHER AGENCIES OF THE DEPARTMENT

Challenges and problems experienced with entities

4.1	Water Trading Entity (WTE)

The National Water Act of 1998 requires the Department to regulate water use in South Africa by ensuring that water is allocated equitably and used beneficially in the public interest. To achieve this, the Department is required to create a register of all water users in the country and the Act makes provision for cost recovery on services rendered by the Department to water users. 

This situation necessitated a need for the Department to create a Water and Equipment Trading Account which was approved in 1983 through circular SY3/6/B under the Exchequer Act, 1999 (Act No. 1 of 1999) and was subsequently amended by the Public Finance Management Act (Act No 1 of 1999) which converted it into a Trading Entity. The establishment of the Trading Entity was approved by National Treasury in 1996 and was later converted into Trading Entity under the Public Finance Management Act No 1 of 1999. 

The WTE has been operating as an integral part of the Department with very limited segregation of functions from the Department’s Main Exchequer Account. The business of the WTE comprises of the following components

4.1.1	Trading account 1: Integrated Water Resource Management

This covers specifically water resources management functions and this component funds the implementation of water resources management activities in each water management area, including resources quality management, control and authorisation of water use, and the promotion of water conservation measures. It also includes the portion of the Working for Water budget that is derived from revenue from water users.

4.1.2	Trading account 2: Integrated Systems

This covers consumption charges and where locally available water resources in a particular area cannot meet the demand, water is transferred from water-rich areas. The management, operation and maintenance of these schemes as integrated systems, as well as the revenue collected from water users, are reflected in this component. One example of this is the Vaal River system where a number of dams and pipelines are operated as one inter-linked system.

4.1.3	Trading account 3: Bulk Water Supply

This also covers consumption charges, however a number of water resources schemes (dams) are operated as stand-alone schemes and do not form part of an integrated system. The supply of water is mostly in bulk to different water users groups, but the agricultural sector is by far the largest consumer. Expenditure in this component covers operations and maintenance as well as management costs, and revenue is earned through the sales of water related services, mostly supplied in bulk.

4.1.4	Overall financial performance

ECONOMIC CLASSIFICATION 	ACTUAL YTD 	BUDGET YTD 	BUDGET 2010/11 	FORECAST 2010/11 	       %         UTILISATION  ACTUAL vs. BUDGET 	    %         UTILISATION FORECAST vs. BUDGET 	
  	R'000 	R'000 	R'000 	R'000 	R'000 	R'000 	
REVENUE 	 2 937 787 	 3 071 836 	4 129 810 	4 188 531 	96% 	101% 	
National Water Resource Infrastructure 	 1 102 317 	1 263 940 	1 706 407 	 719 756 	87% 	101% 	
Catchment Management Agencies(CMAs) 	164 266 	170 720 	240 503 	240 503 	96% 	100% 	
TCTA Revenue 	1 671 204 	  1 637 175 	2 182 900 	  2 228 272 	102% 	102% 	
OTHER INCOME 	252 584 	 480 995 	625 587 	625 587 	53% 	100% 	
Augmentation (Government Grants) 	 259 609 	340 846 	438 722 	 438 722 	76% 	100% 	
Interest received from customers 	(32 752) 	           - 	          - 	 - 	0% 	0% 	
Other Income 	 25 727 	 140 149 	186 865 	186 865 	18% 	100% 	
TOTAL INCOME 	  3 190 371 	3 552 831 	4 755 397 	 4 814 118 	90% 	101% 	
EXPENDITURE 	 3 069 661 	 3 222 870 	4 293 218 	4 267 691 	95% 	99% 	
Compensation of Employees 	  373 086 	 548 126 	748 335 	 729 123 	68% 	97% 	
Goods and Services 	 452 709 	 743 107 	969 366 	 963 050 	61% 	99% 	
TCTA Payments 	 2 243 867 	 1 931 638 	2 575 517 	  2 575 517 	116% 	100% 	
Bad debts 	- 	  - 	       - 	     - 	0% 	0% 	
Surplus/Deficit before depreciation 	 120 710 	 329 960 	462 179 	546 427 	37% 	118% 	
Depreciation 	  744 782 	 1 050 000 	1 405 353 	1 405 353 	71% 	100% 	
Operating surplus/deficit 	(624 072) 	(720 040) 	(943 174) 	(858 926) 	-34% 	18% 	

Analysis of financial performance
•	Revenue year to date is unfavourable mainly due to the fact that SAP front end billing system has some challenges that are still unresolved. However the projected revenue shows that the target will be met. 
•	The compensation of employee is below budget. This is mainly due to the vacant posts that still need to be filled. The fact that WTE needed engineering and other related skills that are very scarce resulted in delay in filling some vacant position. The government salary scales doesn’t attract scarce skills such as engineers.
•	Goods and services has been affected by the delay in filling of vacant positions. 
•	The operating deficit of R624 million is due to the fact that the pricing strategy allows for the capping of tariffs and exemption of Return On Asset (ROA) to water users and has resulted in ROA not covering the depreciation of R744 million. The exemption of ROA is not covered by revenue generated.
•	Asset Management plans requires an estimated R1,3 billion per financial year for refurbishment and betterment and currently funding of R636 million is available for refurbishment and betterment after operating cost. WTE is not generating enough cash to funds projects due to the fact that pricing strategy allows for the exemption and capping of ROA and Depreciation.
•	The refurbishment and betterment is under spent by R148 million due to the delay in approval of certain projects. 
•	The Revenue for TCTA is R1,6 billion and total payments made to TCTA is amounting to R2,2 billion which is inclusive of March 2010 invoice. This amount is paid to TCTA irrespective of whether it has been collected or not.
•	The bad debts provided for the fiscal year 2009/10 R628 million is inclusive TCTA bad debts.
•	The total non-current assets (infrastructure assets) for WTE amounted to R64 billion and current assets R1,8 billion.
•	Net cash position is a positive balance of R325 million. 

4.1.5	Challenges of the WTE

•	Deficit of finance technical skills to produce credible financial statements 
•	Inadequate financial management capacity 
•	Insufficient revenue management capability 
•	No credible financial systems 
•	Insufficient controls 
•	Lack of business direction in the management of the WTE
•	We have an obligation to service the TCTA debt whether we have collected or not from their customers and this is also affecting cash flow.
•	WTE is not generating enough revenue to funds for new infrastructures developments and refurbishment due to exemption on ROA and capping of tariffs (increases are limited to PPI plus 10%).
•	The improvement in the debtors books is due to provision of bad debts (write-off) and slightly improvement on collections.
•	The conversion of debtors into cash is supposed to be 30 days, due to the non payment of some debtors the conversion is now sitting at 297 days

Action plan to address challenges
•	Identify / Implement efficient debt collection methods.
•	The review of funding model and pricing strategy to be prioritised. 
•	The assets that were misstated on the asset register have been fixed and monitored on monthly basis.

Financial improvement initiatives

FINDINGS
•	Poor Inventory Management
•	Poor Contract Management

ACTION PLAN IMPLEMENTED
•	Policy on irregular expenditure drafted. Circular on irregular expenditure was implemented.
•	Inventory management policy implemented.  Procedures for inventory management and accounting have been drafted.
•	Contract management unit was established and staff appointed during 2010.

4.1.6	Envisaged solutions and initiatives to deal with the WTE challenges 

Proposals to deal with the key challenges of the WTE  are still to be presented to the Minister for consideration and endorsement. In the meantime the Department is continuing to address the issues raised by the Auditor-General. 

4.2	Trans- Caledon Tunnel Authority (TCTA)

The TCTA was established in 1986 in terms of the Water Act No. 54 of 1956 which was repealed by the National Water Act No. 36 of 1998. It is categorised as a Schedule 2 major public entity and is subject to the Public Finance Management Act, 1999 (Act 1 of 1999).

The TCTA is a multidisciplinary organisation engaged in project financing and implementation in addition to being a specialised liability management entity. It finances and implements bulk raw water infrastructure in a cost-effective manner to benefit water consumers, it also provides financial and treasury management services together with tariff setting and debt management services to designated water boards, water management institutions and the Department of Water Environmental Affairs

4.3	Water Research Commission (WRC)

The Water Research Commission (WRC) was established in terms of the Water Research Act, 1971 (Act 34 of 1971). The WRC plays an important role in water research by establishing needs and priorities for research, stimulating and funding water research according to each priority, promoting effective transfer of information and technology and enhancing the knowledge and capacity building in the water sector.

4.4	Catchment Management Agencies 

4.4.1	Inkomati CMA

The Inkomati Catchment Management Agency (ICMA) was established by Government Gazette notice No. 26185 on 26 March 2004 in terms of section 78(1), of the National Water Act, 1998 (Act 36 of 1998) (NWA). The Governing Board was appointed in September 2005 for a 3 year period.  The board's term of office has been extended until 31 December 2009.  The NWA makes provision for the Board to continue until a new Board is in place.

On 1 May 2006, the governing board appointed its first Chief executive officer, Mr. RS Ndlovu.  Mr. RS Ndlovu resigned on 30 April 2009.  On 13 May 2009, the ICMA governing board appointed the Executive Manager: Water Use, Mr.  Marcus Selepe as Acting CEO until the new CEO is appointed.  

The appointment of the new CEO by governing board has been deferred due to requests and recommendations by the ANC Provincial legislature as well as the Regional Head of Nelspruit and some of the members of the Board.   It is in the best interests of the institution for the CEO to be aligned with the governing board.  Should the newly appointed governing board not find the CEO suitable they may remove his/her from office in terms of Schedule 4 (3) of [The Act].  This would reflect as wasteful expenditure and affect the stability of the institution

The appointment of the new governing board has been finalized and the submission is en route to Minister for approval.

Transfer/delegation of functions to the ICMA

A Memorandum of Agreement (MoA) between the ICMA and the Mpumalanga Regional Office was signed in August 2007.  The ICMA has submitted four BusinessPlans to the Department as well as Annual Reports for the previous financial years.  The ICMA has been actively guiding and supporting stakeholder processes and has submitted the 1st order Catchment Management Strategy to the Minister for comments in April 2010. However, the ICMA and DWA regional office must cooperate continually to ensure alignment of their activities at an operational level to prevent double budgeting and possible audit queries. 

To date, seed funds have been provided for establishment and specific operational costs as specified in our policies.  DWA should not create the precedent of providing subsidies to support our public entities. However, we do need to recognise that until such time as the efficiencies of calculations of water use charges have been improved and the Department has appropriately delegated revenue collecting functions to the institution, the Department will be required to financially augment the CMAs to ensure effective service delivery.

Water resource management functions have been delegated to the ICMA to support them in their initial functions as set out in Section 80 of the [The Act] and to ensure their continued institutional development and legitimizing their role, functions have been delegated to the CMA in December 2010 (see annexure1).  The Department must provide technical and financial support to the ICMA to ensure effective implementation of the functions.

The DWA has considerable work with regards to ensuring that the financial aspects of CMAs are adequately addressed. Such aspects include the implementation of Waste Discharge Charge System (WDCS), the transfer of billing and revenue collection, inclusive and appropriate tariff setting and the transformation of the Regional roles and responsibilities together with appropriate budgeting and financing.  Should the above financial aspects not be realised there is a possibility that the ICMA will require further financial support by the DWA.  The transformation process between the establishment of the CMA and the evolution the DWA Regional Office has complex functional, personnel and financial implications that requires time and due diligence.

Catchment Management Strategy

One of the initial functions of a CMA is the development of a Catchment Management Strategy (CMS). The CMS provides the mechanism to implement and role out the vision, priorities and direction of the CMA in terms of its oversight. The ICMA has submitted the 1st order Catchment Management Strategy to the Minister for comments which requires that all water management institutions and other cooperative structures be established, so that these institutions are ready to support the implementation of the Catchment Management Strategy by performing water resource functions and driving Irrigation Board transformation, the ICMA will then be in a strong position to ensure that water resource management charges are paid and efficiencies of collection, which are currently poor, improved

Financial arrangements

Water resource management functions have been delegated to the ICMA as they are still only performing their initial functions as set out in Section 80 of the [The Act]. To ensure their continued institutional development and legitimizing their role, functions need to be delegated to ICMA.  This is particularly important in the institutional arena.

The total budget according to the ICMA's business plan for the 2009/10 financial year, is R20 958 313.00 million (R20 million from main account and R958 313.00 from trading account) which was transferred. In 2010/11 financial year the R21 million was transferred to.  

It is incumbent upon the Department, as part of its regulatory function, to ensure that our institutions apply sound financial management and are indeed effective in there service delivery mandate

4.4.2	Breede – Overberg CMA (BOCMA)

The BOCMA was established by Government Gazette notice No. 27793 on 13 July 2005 in terms of section 78(1) of the National Water Act, 1998 (Act No. 36 of 1998). The Governing Board of the BOCMA was appointed by the Minister of Water Affairs and Forestry in September 2007 after following the process outlined in section 81 of the Act. The term of office for the current board expired in September 2010 but it has been extended until 31 March 2011. It is prudent to consider the possibility of appointing a skills-based Governing Board as opposed to the current stakeholder body. This is in line with National Treasury’s framework and good corporate governance.  The Minister has appointed an advisory committee to recommend to her which sector should be on the board. This process will be finalized by the end of April 2011.

The Chief Executive Officer of the BOCMA, Mr PM Buthelezi, was appointed in May 2008. The BOCMA was in an institutional development phase during the 2009/10 financial year. Their first Business Plan, focussing on issues of strategic direction, organisational development and risk management over the next three years, was submitted to the Department in accordance with Schedule 4, Part 4, section 21(1)(2) of the National Water Act, 1998.

The BOCMA has submitted its Business Plan to the Department of Water Affairs (DWA) for the 20010/11 financial year, as well as its Annual Report for the previous financial year. The total budget as per the approved BOCMA Business Plan for the 20010/11 financial year is R17 150 000 million.

Transfer/delegation of functions to the ICMA
The BOCMA and the Regional office have been working closely in implementing water resource management functions resulting in a cooperative and successful relationship. The water resource functions have been formally delegated to BOCMA in December 2010 which will result in legitimising the institution. The Department must provide both technical and financial support to BOCMA to ensure that the functions are effectively performed.

Catchment Management Strategy (CMS)
The BOCMA has been actively guiding and supporting stakeholder processes and has developed the draft Catchment Management Strategy which has been presented to the board and forwarded to the Minister for comment by March 2011. It is prudent that the Department supports BOCMA in implementing the strategy.

4.4.3	General challenges with the establishment of CMAs

The concern has been raised as to whether SA can afford to have the number of CMAs that have been proposed – not only financially, but in terms of human capacity to fully staff 19 CMAs and the capacity of DEPARTMENT to effectively oversee and regulate 19 CMAs. Experience with the water boards has shown the importance of tight regulation and oversight of public entities.
Furthermore, the establishment of CMAs is premised upon stakeholder involvement in WRM decision making.  This requires empowered stakeholder bodies (civil society) representing all water user and interest groups, as well as effective institutional mechanisms to enable engagement, both during and after CMA establishment.

These and a number of other challenges are outlined below. On the basis of the examination of these challenges, some recommendations are made on how to move forwards.

4.4.3.1	Governance
There are a number of aspects of concern regarding governance of CMAs

Firstly, the Act requires the Minister to appoint a Governing Board “with the object of achieving a balance among the interests of water users, potential water users, local and provincial government and environmental interest groups”. The Minister is expected to determine, from time to time, the extent to which relevant local government should be represented on the boards of each CMA. The Minister must appoint an Advisory Committee to advise her on which organs of state and which bodies representing different sectors and other interests in the WMA should be represented on the Board.

The consequence of this may be the appointment of Boards that represent stakeholder interests, but don’t necessarily have the appropriate skills to ensure good governance of the CMA, particularly in relation to financial skills. Most Boards of private and public institutions appoint people to their Boards with a range of skills in financial management, human resource management, risk management, relevant technical abilities, etc.

Members of the Board are also required to be members of the key governance committees (including the Audit, Finance and Remuneration Committees). Board members who are selected on the basis of their representation of a stakeholder group do not necessarily have the skills required to fulfil the functions of these committees or of the Board as a whole. This may give rise to 

a) Potentially inadequate governance, organizational and financial control of the CMA,
b) The potential for mismanagement and corruption to go unchecked in the organization 
c) Inexperienced and unqualified Board members to being held accountable to decisions that they are not capacitated to take.

There is also a potential conflict of interest for Board members in that they are appointed as representatives of a particular stakeholder group, but Board membership requires a fiduciary duty to the organization above any private or other interests. Thus the Board members must put the interests of the CMA above the interests of the stakeholder group that nominated them – this is neither easy nor appropriate, and potentially conflicts with the requirement of the Act that they are accountable to the institution that nominated them for appointment.
It is recommended that the membership of CMA Boards be revisited, and smaller (5 to 7 person) boards consisting of members appointed due to their Board-related skills be put in place; depending upon the way this is done, it may require legislative amendment. Stakeholder guidance to the CMA should be given through an advisory council (committee, assembly) or similar structure where stakeholder groups are appointed / represented as they are currently on the Board.  The members of the smaller board may be selected from this stakeholder grouping to reflect the range of stakeholder interests (at least local/provincial government, agriculture, industry, community/development and environment/sustainability) and governance capacity, with the possibility of adding professional members to ensure adequate skills (if these are not available from the nominated candidates)

4.4.3.2	Financing

Concerns have been raised by stakeholders regarding the increased costs that will arise due to CMAs being in place and the impact that this will have on tariffs and on local government costs in particular. In particular, stakeholders are concerned about the start-up costs of the CMAs and how this will be funded.  The start-up costs will be covered on DWA’s budget, from the parliamentary appropriation. CMA establishment will therefore not add to the tariffs of end-users. 

To date is has been envisaged that CMAs will be financially self-sufficient, except for possibly a few of the smaller WMAs where this is unlikely to be possible. However, this may need to be reviewed and sufficient financial support be provided to CMAs via the fiscus to ensure effective staffing and management without overburdening water users with increased tariffs.  This is in line with the governance framework proposed by National Treasury and DPSA, in which agencies performing functions (by mandate) on behalf of government should primarily be funded from the fiscus. Furthermore, financial theory on user charges considers that there are some base functions that should be supported by the fiscus, with users paying a portion of the costs related to the benefits they receive.

This, however, requires adequate capacity in DWA to examine the budget, plans and financial statements of CMAs to ensure that funds are being spent effectively and efficiently. It also requires CMA transparency w.r.t budgets and costs to stakeholders, something that DWA has consistently failed on. 

There is also a concern regarding the financial systems to be used by CMAs. To date DWA has allowed too much independence for CMAs. DWA should proscribe the financial and HR systems to be used by CMAs and ensure that these systems are implemented and used effectively. Only when a CMA is mature and running effectively should DWA consider any requests from them to put in financial management systems of their own devising.

It is recommended that DWA accepts responsibility for financially supporting certain strategic and developmental functions of CMAs from the fiscus, with water user charges primarily paying for WRM functions that directly benefit water users.  This should be linked with clear regulations and guidelines on the governance and financial management of CMAs.

Stakeholder Involvement and Empowerment
It is clear that the policy vision for CMA establishment was to create an institution for decentralised water resources management (WRM) decision making, to reflect local requirements and interests, while ensuring that past imbalances and inequities are redressed and communities are represented and empowered to participate meaningfully in the management of local resources. 

Because CMA viability is partly related to the recovery of charges from users that have water entitlements and can afford to pay the charges, some commercial interests have indicated that they should have a greater representation on the CMA Board.  However, this position would entrench existing water inequities and empower economically powerful and capacitated groups, while the Act requires the Minister to consider a balance in representation between current and future use, local and provincial government, and environmental interests.

The appointment of CMA Boards with significant representation from civil society and pro-poor groups assists in balancing the overwhelming demands of the existing water users.  However in maintaining this balance, it is important that the costs related to water allocated for social productive purposes (particularly redress and rural development) are covered by parliamentary appropriation in the short to medium term.  This reduces the argument of the existing users that they are covering the entire costs and provides an opportunity for DWA and the CMA to empower the beneficiaries to become commercial users and thereby be able to pay for the water that they use.

DWA plays an important role in supporting developmental users.  When developed and supported in this way, the decentralised CMA model provides a robust institutional arrangement for redress and the empowerment of those who currently do not have access to water.  This is further strengthened if DWA and the Minister (in consultation with the Board) take the political lead in the reallocation of water (and the development of new water sources for social purposes), with the CMA implementing the outcome.

Finally, CMAs must establish mechanisms for stakeholder involvement, including catchment forums and/or committees.  DWA should legally proscribe and guide this through regulations on stakeholder bodies / committees, which capture the spirit of the Act while enabling CMAs enough flexibility to adapt to local circumstances.

4.4.3.3	Relationships with other Water Institutions

There are a number of water management and service institutions established in terms of the National Water Act and Water Services Act.  There is a need for clarity on the roles and responsibilities of these institutions, with respect to the CMA, particularly for the National Water Resources Infrastructure Agency, Water User Associations, Water Boards and International Bodies (including River Commissions).  Furthermore, the appropriate relationships between these institutions must be clarified, considering core functions and their geographic coverage.

4.4.3.4	Relationship with Local Government and Water Services

SALGA has raised particular concerns regarding the relationship between DWA, CMAs and local government.  Issues of particular relevance relate to the need for 19 CMAs (as opposed to fewer CMAs or another institutional option), the nature of representation of local government (considering their multiple roles as democratically representative local sphere, water services authority, water services provider and integrated planning), as well as the cost of CMA establishment to the fiscus and local government.

Furthermore, the inter-connected nature of water resources and water service must be recognized the process of integrated planning (alignment between spatial / municipal services planning and water resources strategies), environmental management and development (land) authorization.  This requires clear requirements for cooperation and mechanisms to enable alignment in planning and decision making between local government and CMAs

4.5	Water User Associations (WUAs)

4.5.1	Capacity to facilitate transformation of Irrigation Boards

There is limited capacity within DWA, across the board to focus on the transformation of irrigation boards and also establishing WUAs. To date about 30% of irrigation boards have been transformed into WUAs since 1998. Reasons for slow pace include the following:
•	protection of existing interests and assets (irrigation infrastructure) owned by irrigation boards (fear of loss of control and ownership in future)
•	involvement of all sectors in a WUA which may dilute the influence of “primary” stakeholders (irrigators) in WUA operations
•	representation requirements – gender, race, individual users 
•	Limited financial and aftercare support: 

The main challenge with most WUAs established to support the emerging farmers is their financial and operational sustainability. Most schemes have a history of non-payment of water resource charges and limited contribution towards operation and maintenance costs for running schemes. There is limited viability of most small-scale irrigation schemes without government (Department of Agriculture) support especially on irrigation infrastructure and the production capacity is low, directly impacting on the members’ contributions towards effective running of the WUA.

4.5.2	Government Water Schemes Infrastructure

•	Ageing infrastructure that needs replacement, refurbishment and rehabilitation. 
•	Lack of clarity around liabilities for damages to infrastructure where DWA owns and the WUA operates and maintains. 
•	Capacity of WUAs to take full responsibility of water resources infrastructure, especially large schemes with big dams. Linked to these are concerns regarding costs for refurbishment, rehabilitation and replacement noting that most of the infrastructure in these schemes is dilapidating. The new WUAs would not be prepared to take over the schemes with such repair liabilities and government may not have sufficient funds to refurbish the schemes before transfer

4.6	Water boards

4.6.1	Years in existence 

Water board	Established	Age	
Amatola Water	1997	13 years	
Bloem Water	1991 	19 years	
Botshelo Water	1998 	12 years	
Bushbuckridge Water	1997	13 years	
Lepelle Northern Water	1997	13 years	
Magalies Water  	1969 	41 years	
Mhlathuze Water	1980	30 years	
Namakwa Water	1978	32 years	
Overberg Water	1993 	17 years	
Pelladrift Water	1997	13 years	
Rand Water	1904	106 years	
Sedibeng Water	1979 	31 years	
Umgeni Water	1974	36 years	

Note 1:	Ikangala Water, which served rural communities in Mpumalanga, was formally established in 1998 and disestablished in early 2009. The DWA regional office is currently providing water services to the affected communities.
Note 2:	Albany Coast Water was disestablished in 2010 and its operations merged with that of Amatola Water.

4.6.2	Term of office of board members

The details are tabulated below: 
Table 14: Term of office for board members
Water board	Appointment date	Expiry date	
Amatola Water (see note)	1 March 2010	28 February 2014	
Bloem Water	12 March 2009	28 February 2013	
Botshelo Water	2 July 2006	31 December 2010	
Bushbuckridge Water	2 February 2010	28 February 2014	
Sedibeng Water	Board dismissed; in the process of appointing a new board	
Lepelle Northern Water	1 April 2010	31 March 2014	
Magalies Water	18 June 2009	31 Mary 2013	
Mhlathuze Water	Board appointment subject to legal challenge	
Namakwa Water	30 November 2006	31 March 2011	
Overberg Water	1 September 2009	30 September 2013	
Pelladrift Water	6 August 2007	31 March 2011	
Rand Water	1 April 2009	31 March 2013	
Umgeni Water	1 July 2009	30 June 2013	

4.6.3	Areas of operations and water service level agreements

The areas of supply apply to both bulk potable water and retail water supply and not to instances where water boards provide engineering, water quality and other services to customers outside of their area of water supply.  For example, Mhlathuze Water assisted the Gert Sibande District Municipality in Mpumalanga to establish a laboratory. It further assisted Mozal Aluminium Smelter in Mozambique to establish a water quality testing capability.

There are also instances where different water boards provide services to the same Municipalities, for example Magalies Water and Rand Water provide water services to Rustenburg and Tshwane. This can sometimes lead to conflict between water boards and some have raised this as an area of concern.

Water boards do face enormous challenges, when water service agreements are not in place or where such agreements are signed for short periods.  This prevents water boards from making commitments to develop long term infrastructure as financial institutions are generally unwilling to provide long term project funding in instances where customers are unwilling to sign long term supply contracts.

Table 15: Water service level agreements
Water board	Municipalities served	State of water service agreement 	Province	Signed contracts	
Albany Coast Water	Ndlambe District Municipality (DM)	No agreement in place	Eastern Cape	 No	
Amatola Water	Amathole DM
Buffalo City Local Municipality (LM)
Ngqushwa LM
Nkonkobe LM	30 years
	Eastern Cape 	Yes	
Bloem Water	Mangaung LM
Mantsopa LM
Naledi LM
Kopanong LM
Ukhahlamba DM	Agreement in place with all customers, however, some agreements are not in line with model agreement. Bloem Water will endeavour to enter into a more acceptable agreement with consumers.	Free State	Needs revision in some instances	
Botshelo Water	Mafikeng LM
Ditsobotla LM
Rooiground Prison
Army Camp Ramathabama
NMMDM (Western Side)
NMMDM (Eastern Side)
SANAI
Agricultural College
MIDZ 	3 years
2 years	North West	The contract’s terms are not sufficient to allow Botshelo Water to finance future CAPEX needs	
Bushbuckridge Water	Bushbuckridge LM
Bohlabela DM	Interim agreement in place until such time as the S78 is completed by the municipality.	Mpumalanga	Short term contracts needs to be replaced with long term contracts	
Lepelle Northern Water	Polokwane Mun
Capricorn FM
Ba-Phalaborwa
Mogalakwena LM
Greater Letaba Mun
Greater Tzaneen Mun
Fetakgomo LM
Makhuduthamaga LM
Marble Hall Mun
Mopani DM
Lepelle Nkumpi Mun 
Sekhukhune
Politsi	Contract for Greater Sekhukhune is outstanding and Politsi is being finalized. All other contracts are long term in nature. 	Limpopo	Mostly achieved	
Magalies Water  	Rustenburg City 
Thabazimbi TLC
Moses Kotane LM
Tshwane Metro (Zeekoeigat)
Nokeng Tsa Taemane
Modimolle Mun
Bela-Bela Mun	Water service agreements ranges between 2 and 10 years.
No agreement in place with Madibeng LM, Thabazimbi LM and Rustenburg LM.	North West	The proposed CAPEX will require revised long term contracts	
Mhlatuze Water	Industrial use in Richards Bay
uMhlathuze LM	Contracts in place with all industrial users and the municipality, except for Mondi where the contract is being renewed.	Kwazulu-Natal	Good	
Namakwa Water	Nama Khoi Municipality	Water service agreement not in place.	Northern Cape	Poor	
Overberg Water	Theewaterskloof,
Hessequa: Heidelberg
Hessequa: Witsand
Hessequa: Slangriver
Kaap Agulhas	Water service agreements still needs to be signed with Theewaterskloof and Hessequa, two of the largest clients.	Western Cape	Partial success	
Pelladrift Water	Black Mountain mine and Khai-Ma Municipality (Pofadder and Pella)	Water service agreement not in place.	Northern Cape	Poor	
Rand Water	JHB Water (Pty) Ltd.
Ekurhuleni Metro Council
Tshwane Metro Mun
Emfuleni LM
Mogale City LM
Metsimaholo LM
Rustenburg LM
Govan Mbeki LM
Midvaal LM
Merafong City LM
Randfontein LM
Westonaria LM
Lesedi LM
Ngwathe LM
Kungwini LM
Delmas LM
Tshwane Metro Mun c/o Sandspruit Works Ass
Royal Bafokeng Nation
Madibeng LC c/o Sandspruit Works Ass
Thembisille LM	Majority of municipal and direct mining customers have signed bulk supply agreements. Rand Water is pursuing finalization of outstanding contracts.	Gauteng
Free State
Mpumalanga
North West	Fair	
Sedibeng Water	Matjhabeng LM, Nata LM, Maquassi Hills LM 
Dr Ruth S Mompati DM
Phokwane LM
Ga-Segonyana LM
Moshaweng LM
Kikgatlong LM
Gamagara-Khathu LM
Tsantsabane LM	Water service agreement in place with most clients.	Free State
North West
Northern Cape	Fair	
Umgeni Water	Ethekwini Mun
Msunduzi Mun
Umgungundlovu Mun
Ugu Mun
Ilembe Mun 
Sisonke Mun 
Siza Mun	Water service agreement in place for eThekwini, Llembe, Ugu, uMgungundlovu and Sisonke.  Agreement outstanding for Msunduzi.	Kwazulu-Natal	Fair	

4.6.4	Financial situation and report on surplus and deficits

Water boards’ tariffs

Water boards are required to consult with municipalities on their proposed tariff increases (Sec 42 of the MFMA) and to request National Treasury and SALGA to provide written comments on their proposed revised tariff, after which water boards are required to provide an explanation to the Minister of Water Affairs on how such comments were taken into account in arriving at a final tariff.  The Minister is then required to approve the tabling of the final proposed tariffs in Parliament.  Tariff increases must be tabled on or before 15 March, if increases are to take effect from 1 July. If the deadline is missed, special permission is required from the Minister of Finance to implement the tariff increases in the current year.  Tariff increases proposed for the new year, starting 1 July 2010, ranges from 6.2% for Umgeni to as much as 43% for Namakwa Water where cost recovery is a challenge. Often comments from SALGA and municipalities are not provided by the due date, which makes the process difficult, as deadlines are stringent. 

In the past water boards significantly under spent on their CAPEX programmes, which resulted in higher cash reserves, as, included in the tariff structure, is a component for CAPEX development. The former Minister of Water Affairs and Forestry, Ms LB Hendricks, MP recommended to the majority of water boards to curtail their tariff increases by 5% in the financial year (2009/10) on account of their under spending on CAPEX.  Notwithstanding a curtailment in tariff increases, water boards complained that many of their municipal clients did not pass over the benefits suggested by the Minister to communities.  Some have even suggested that this has caused financial challenges for themselves.

The Chief Directorate: Institutional Oversight has since closely monitored the CAPEX spending of water boards.  From the table below it can be seen that in the 2010 financial year, total under spending on the CAPEX budget was 13.4%, which is an improvement from previous years under spending which stood at approximately 15% and as much as 50% in the year prior to last year.  While the reason for this can be attributed to limited capacity and delays in meeting project deadlines, often projects had to be postponed because municipalities were unwilling to sign long term supply agreements with water boards.

Financial performance of water boards

The consolidated financial statement for 2010 reflects a return on equity of 7.81% and short term cash reserves of R3.5 billion, suggesting that water boards have sufficient liquidity to cover their short to medium term obligations. It is anticipated that these cash reserves will soon be depleted as water boards enter into contracts to upgrade their infrastructure.  In this regard, it is anticipated that Rand Water will spend approximately R5.6 billion on CAPEX over the next five years.

The consolidated income statement of water boards at year ended 30 June 2010 reflects a surplus of R911 million, compared to R1.3 billion in the previous year, this despite an increase in sales volumes of 0.1%.  The decrease in surpluses can be attributed to a 15% increase in expenditure, mainly driven by increased energy and human resource cost together with a limitation on tariff increases of 4.4%.

Rand Water contributes almost 62% to consolidated turnover, while Umgeni Water contributes just less than 18% to consolidated turnover, with the other twelve water boards contributing approximately 20%.

Amatola, Bloem Water, Lepelle and Namakwa Water incurred losses for the year, mainly as a result of bad debt write-off and impairment of asset, Namakwa Water is however insolvent and plans are in progress to disestablish this water board and consolidate it to Sedibeng Water, which will result in continuous supply in Namakwa’s service area as a result of a measure of cross-subsidisation. 

Despite a contribution to turnover of only 18%, Umgeni Water’s contribution to profit was approximately 59%.  The main reason for this is the fact that Umgeni Water’s cost of raw water is R0.19 a kiloliter, while Rand Water’s cost of raw water is R1.56. This is because Rand Water receives water from the Lesotho Highlands Water Scheme, while Umgeni Water's sources of water are from schemes built in the 1960’s and early 1970’s. The restriction in tariff increases also had an impact on Rand Water’s profitability.

Municipal debt owed to water boards

Just over 50% of the total debt of approximately R1.4 billion (at the end of September 2010) owed by municipalities to water boards is in arrears. The Chief Directorate: Water Services, together with CoGTA and National Treasury do mediate in trying to resolve problems relating to arrears and have noted some successes as a result of the negotiations, for example Bushbuckridge Municipality is paying an additional R2 million a month to address its long outstanding debt owed to the water board.

However, other measures have to be considered, as municipalities do get an equitable share from National Treasury for water services to poor communities. This unconditional grant is often used for other purposes, instead of settling water debt. National Treasury contends that in terms of DORA legislation, they are unable to pay directly to water boards. 

Some water boards are guilty of not paying their raw water debt owed to DWA.  Water boards with financial problems often settle their other debts before considering payment to DWA as DWA is unlikely to legally challenge its own institutions.  Other reasons for non-payments to DWA by water boards are because of invoicing problems where volume sold are not easily verifiable and this has lead to endless disputes on the actual amount owed. 

On a positive note, both Rand Water and Umgeni Water, the two largest water boards,   are able to effectively manage their debtors, and Umgeni Water has given assurances that its small arrears will be soon resolved.

Functioning of elected boards and fiduciary challenges

Table 16: Function of elected boards and fiduciary challenges per water board
Board	Functional	Challenges	
Rand Water	Functional	1) The former chairperson was irregularly appointed and her appointment was terminated on 1 April 2010.
 
2) The board is at odds with one of its members who have highlighted irregular activities carried out by the board. As a result of which Rand Water was requested by the former Minister to investigate the various allegations.  More than six months have passed since the request of the Minister and the findings of the investigation is still pending.
 
3) Rand Water Services (RWS) is a subsidiary of Rand Water, which has subordinated approximately R10 million of its loans to RWS in favour of other creditors, and has subsequently converted the loan to equity, this creative accounting has resulted in a tax liability of a few million rand. The CE and other board members of Rand Water do sit on the board of RWS, which enables Rand Water to discharge its oversight obligations.  However, DWA does not perform an oversight function over RWS, while the extent of Rand Water’s liability is limited. In the event of RWS failing, DWA will have to proactively strengthen its oversight role over RWS if Rand Water’s financial commitment increases to an extent that it will have a material impact on Rand Water’s business.  Certain transaction between Rand Water and Rand Water Services are deemed to be irregular and a formal investigation regarding these matters is in progress.	
Umgeni Water	Functional	1) The supply contract for Mooi-Mgeni transfer scheme must be finalized between TCTA and Umgeni Water. This may require the intervention of the Minister as the project is urgent and parties seem unable to resolve the impasse.  The main sticking point in the approval of this project is that Umgeni is unwilling to take on the risk of not payment from certain municipalities who were unwilling to sign a supply contract based on the price of the new infrastructure.  Should this scheme not go ahead there is a very real possibility of supply disruptions.

2) Umgeni Water wants to develop water infrastructure for rural communities where financing of such projects are not financially viable and have requested state support from the Bulk Infrastructure Grant (BIG). In this regard they have commenced discussions with DWA.	
Sedibeng Water	Not functional, former Minister has appointed the board of Bloem Water to act as the board of Sedibeng Water until a new board is in place	There is a strong lobby to merge Sedibeng and Bleom Water as there is a perception in the province (Free State) that service delivery will be enhanced as a result.  However before such a move is considered due consideration will have to be given to Sedibeng’s supply of retail water to the North West which is financially unviable and its supply to the Northern Cape.

Once an acceptable solution is found for supply outside the province the department could consider the merging of these two institutions.	
Lepelle Northern Water	Functional	1) Revenue collection of municipal debt is a problem and given the need to develop water infrastructure in the province, the board will have to get buy in from municipalities to pay their debt.	
Magalies Water	Functional	1) The post of the CE has recently be filled, however the CFO has been suspended because of poor performance which has resulted in the financial statements for June 2010 not been ready as yet, in terms of PFMA the due date was 30 November 2010.

2) A special purpose vehicle is being considered for a joint venture between Magalies and the local mining companies to develop a water treatment and distribution facility on a partnership basis at a cost of R1.4 billion, while the project has an in principle acceptance, Magalies had unfortunately not consulted with the department and National Treasury prior to committing to the deal.  National Treasury needs certain processes to be followed before the project is approved.  Magalies is now trying to rework the contract to meet Treasury regulations. 

3) It is significant to note that Magalies Water operates in three provinces being North West, Limpopo and Gauteng.  There appears to be a blurring of roles between Rand Water and Magalies Water working in the same supply area.  

4) The delay in issuing raw water licensing by DWA is an area of concern as there is a need for the board to supply more water to its customers, given the economic boom in Rustenburg.  The Board also stated that there has been deterioration in the quality of raw water, which is of concern.  Since Magalies draw much of its raw water from Hartbeesport Dam, this problem can only be solved once the water quality problem of the dam is solved. 	
Bloem Water	Functional	1) The Board has problems in getting municipalities to sign up to long term contracts, without which they cannot invest in long term infrastructure.  

2) With their aging infrastructure, water losses are high, but infrastructure cannot be replaced as they do not have municipal buy in for new infrastructure. 	
Mhlathuze Water	Not functional	1) The former Minister suspended the new board when it was alleged and subsequently found that the new board was improperly appointed.  However the revision of the process to appoint a new board is well underway and a replacement board should soon be in place.  The Minister’s task team has found that the process in appointing a new board at Mhlathuze Water was flawed.  This view is supported by the office of the Chief State Law Adviser in an e-mail advice issued on 23 March 2010.

2) The former CEO has taken legal action against the Minister for acting unlawfully in dismissing the board, the case is set for hearing at the end of January 2011, legal opinion suggest that Minister has a good chance of success in this matter. Legal advice also suggests that the Minister may have acted outside her powers to rescind her decision to appoint a new board at Mhlathuze Water.  	
Amatola Water	Functional	1) This board operating in the Eastern Cape trades at close to break-even levels and has a limited capacity.  However it is well managed and should be strengthen with the expansion of its supply area.  However there needs to be political buy in from municipalities to source water from Amatola.

2) The outstanding debt of R27 million owed by the Chris Hani District Municipality for engineering works done for the municipality, which lead to a qualified audit for Amatola Water last year, is a course for concern.  In an update Amatola Water stated that KPMG, on behalf of the municipality, is auditing the invoices as the municipality is disputing the extent of the debt.  The CFO of Amatola informed DWA that the KPMG audit is likely to find in favour of Amatola Water, but as a compromise, the Board may have to provide the municipality with a discount in order to finalise this matter.	
Bushbuck Ridge Water	Functional	1)	The board supplies the poor municipality of Bushbuckridge in Mpumalanga.  The municipality does not have the capacity to pay for all the water it takes and pays a fixed amount of R5 million a month while it extract water to the value of some R8 million a month.  One of the way to resolve this is to get other municipalities to also take water from Bushbuckridge, the higher volumes sold will enhance the viability of the water board.

•	In addition to its financial problem, the board also have technical capacity problem, and the former Minister has requested Rand Water to assist in turning the fortune of the water board around.  	
Botshelo Water	Functional	1) Botshelo Water alleged that they experienced ten years (1997-2007) of cumulative mismanagement due to financial, human resources and operational deficiencies, lack of internal control systems and widespread fraud.  The Board has implemented a turnaround strategy which seems to be working and is for the first time after a number of years reporting moderate surpluses, however debt collection is still a problem that may compromise the turnaround strategy.

2) Another challenge facing the Board is ageing infrastructure with limited funds for refurbishment.	
Overberg Water	Functional	1) Given that Overberg Water is a high cost producer with a declining client base, arrangements need to be put in place to ensure their long term sustainability. Overberg Water has recommended the write off of the State loan, however, in terms of Treasury Regulations this is not possible as the Water Board can, in the short term, pay off this debt.

2) The Board is of the opinion that their financial situation is in dire straits as they are faced with an operational shortfall and do not have sufficient reserves for urgently needed refurbishment of infrastructure.  

3) It does not seem that Overberg’s Water financial situation will result in an immediate crisis, but careful long-term financial planning would be required to ensure optimal cost efficiencies, this can only be achieved if the water board is able to increase its customer base, and there is a perception that the board is unpopular and that municipalities are unwilling to use the service of the board.  If this perception is true, the board is likely to fail in the medium term.  	
Namakwa Water	Not functional	1)	 Namakwa is in the process of being disestablished as it is not sustainable in its current form, its operations will be merged with Sedibeng Water to ensure service delivery to its area of supply at an acceptable cost structure.  Other problems identified are:

•	The infrastructure of the board needs to be renewed and properly maintained to ensure that they can pump water faster and cost effectively to consumers.

•	The Water Board owes DBSA R8 million for a loan. The bank threatened legal action against the water board and the department has now stepped in to pay this loan as it is required to do in terms of the Water Services Act when disestablishing a water board.

•	Because of the poor state of the infrastructure the area was left without water for two weeks in the recent past, which is unacceptable.

The above mentioned problems will be resolved with the proposed disestablishment and merge.	
Albany Coast Water	Disestablished	1) The Water Board has been disestablished and its business has been merged into that of Amatola Water after a grant of R2.47 million was provided to refurbish its infrastructure.

2) All the required processes in terms of the WSA have been complied with and the disestablishment has been approved by Minister and gazetted.	
Pelladrift Water	Non-Functional	Pelladrift Water is run by some members of the local mine and the Board needs to be reconstituted.  The circumstances of the Board however, are not the same as other boards. In order to be guided by the provisions of the WSA with regards to the appointment of boards, it should be noted that this Board does not have the same provisions, i.e. a CE. The DWA Regional head need to give assistance and guidance towards the constitution of the Board, which has for many years not had a proper board, the future of the board will remain positive for as long as the mines remain operational.  The mines currently take up 92% of the water supply and 8% is shared between communities and farms.  When the mines eventually stop operations, then the department will have to step in to supply water to these rural communities. 	

4.6.5	Assessment of the functioning of operations

Board	Operations	
Rand Water	Raw water extraction is 9% above its authorized level, DWA will have to increase authorization to ensure that Rand Water operates within the law.  Rand Water expressed concern about DWA’s poor management of the catchment, which has resulted in poor raw water quality in the Vaal River.  Despite the poor raw water quality, Rand Water has complied with potable water supply quality.  As a result of the limitation on tariff increases imposed, Rand Water experienced a loss in revenue, which will have an impact on the financing of its CAPEX program, which is estimated at R5.8 billion for the next five years.	
Umgeni Water	Umgeni Water’s raw water extraction is 7% above its authorized level, DWA will have to increase authorization to ensure that Umgeni Water operates within the law.  One of the major challenges faced by the Board is the fact that its debt level is still high and given the need to develop infrastructure, the Board will have to ensure that its cash position is strong, when borrowing money for its expansion program. Umgeni Water has approached DWA for grant funding to develop infrastructure in rural areas where cost recovery will not be possible.

The impasse between Umgeni Water and TCTA with regards to the financing model of the Mooi-Mgeni Transfer Scheme needs to be urgently resolved, which may require the intervention of the Minister.	
Sedibeng Water	The Board experiences deteriorating water quality and as a result purification costs have significantly increased.  Retail service in the North West is quite a challenge for the Board as it finds it difficult to recover cost from individual customers.	
Lepelle Northern Water	Water treatment plants are operating close to full capacity and there is a need to upgrade infrastructure.  Revenue collection is a challenge and the Board will call upon DWA’s Water Services section, CoGTA and National Treasury for assistance.  

The Board will hold discussions with DWA to co-operate in the Olifantspoort project upgrade, which is planned to supply water to un-served poor communities.	
Magalies Water	This Board also has not received a positive response from DWA with regards to its license application, which is outstanding for some time.  One of the major concerns for the Board is the deteriorating quality of raw water. Magalies Water has one of the highest water purification costs, due to the poor quality water it receives.

Due to the suspension of the CFO, the financial for June 2010 is still outstanding (due date 30 November 2010), the CE said that it will be finalized shortly but has not committed to time-lines.	
Bloem Water	Bloem Water does not have a supply agreement with Mangaung LM, there have been defaults in debt collection from Ukhahlambe and Naledi Municipalities. The pumping capacity as well as the pipeline capacity at Rustfontein Water Treatment Plant needs upgrading.	
Mhlathuze Water	This Water Board has a low profit margin and its margin for error is slim as its major customers are local industries that are in a strong position to dictate prices, especially given the fact that these industries finance the Board’s infrastructure requirements up front.	
Amatola Water	The Water Board is provided with raw water from 21 underutilised dams located in the former homelands, resulting in high raw water cost. The Water Board utilizes water in excess of its license allocation and this has to be addressed by DWA.  The Board received a qualified audit in 2009 as a result of debt under recovery from Chris Hani Municipality, which did not pay a bill of R27 million as it exceeded its budget allocation for the year. The amount due is for engineering services provided by the Board, for which the city did not have sufficient funds to pay. The benchmarking exercise suggest that the Board’s operating cost of R5.54 per kiloliter is well above the medium cost of R1.79, making Amatola Water a high cost producer.	
Bushbuckridge Water	The relationship between the Board and its customer has not been good for a number of years, in addition there seems to be an inability on the part of the Board to effectively manage its business.  It is unable to effectively account for or manage a billing system as volumes sold are forever in dispute.  The former Minister has issued a directive to Rand Water to take over the business of Bushbuckridge Water for a period of six months in the expectation to turn the business around. The newly appointed Board has a strong representation from municipalities. It is therefore anticipated that the municipalities will support the Water Board going forward. Another area that weakens the Board’s ability to operate is the fact that DWA has not transferred assets operated by the Board, but chose instead to transfer assets to the municipality which allows the water board to use the assets to supply water to them.	
Botshelo Water	The Auditor-General released the audited financial statement for 2009 late in March 2010 (well after the due date of 30 November 2009), expressing a disclaimer of opinion, due to the corrupt practices at the institutions by the previous management.  The financials for June 2010 is still outstanding.

The business was technically insolvent due to the rampant corruption and theft, criminal action is being pursued against these individuals.  The current Board appointed a new management team, which implemented a turnaround strategy that stabilised the situation and Botshelo Water is currently making moderate profits on a monthly basis, and it seems that the business is well on the road to recovery.

One of the major problems faced by the Board is that it has an extremely high raw water cost, which is negatively impacting on the Board’s viability. It is imperative for DWA to consider discounting this tariff, especially given the fact that water for Botshelo Water is sourced from old schemes, which has no financial cost.  DWA is yet to issue water abstraction licenses to the Board and raw water quality is a problem as E Coli is prevalent at abstraction points in Dinokana- and Mafikeng Water Treatment Plants.  	
Overberg Water	The Board’s major problem is the reluctance of local municipalities to sign water service agreements and some municipalities have even discontinued using the service of the Water Board.  The Board trades at close to break-even, thus leaving it very little scope to spend on development and refurbishment of infrastructure.  An acceptable solution needs to be found to ensure the long term sustainability of the Board.  	
Namakwa Water	The Board is insolvent and had a qualified audit. In order to provide a sustainable level of service, the plant needs urgent refurbishment in the amount of R150 million.  DWA has made grant funding in the amount of R44 million available to Namakwa Water over a period of three years to refurbish its infrastructure. However, the local community is in no position to absorb the required tariff. A permanent solution will be to merge the business of Namakwa Water to that of Sedibeng Water.  This will ensure that Namakwa Water benefits from the economies of scale offered by Sedibeng Water. The consultations with relevant stakeholders in terms of section 28 (1) of the Water Services Act has been completed.  The stakeholders support the disestablishment of Namakwa Water and its incorporation into Sedibeng Water. A submission has been made to the Minister to gazette the disestablishment of Namakwa Water and the extension of the service area of Sedibeng Water.  Thereafter, the assets of Namakwa Water will be transferred to Sedibeng Water.	
Albany Coast Water	Did not achieve full cost recovery and was not financially viable.  Its activities have been merged will that of Amatola Water, which will enhance its ability to sustainably supply water at acceptable prices. 	
Pelladrift Water	Supplies 90% of its water to Black Mountain mine, the life of the mine has been extended by five years. Given that the mine manages the Water Board, the sustainability of the Board is ensured for at least the medium term.  As the mine closes, DWA will have to ensure water security to the Khai-Ma Municipality, which utilizes only 10% of the water supplied by Pelladrift Water. In this regard, DWA will have to explore opportunities of merging the operations of Pelladrift Water to that of Sedibeng Water.	

4.7	Komati River Basin Water Authority (KOBWA)

The Komati Basin Water Authority (KOBWA) is a bi-national company formed in 1993 through the treaty on the Development and Utilisation of the Water Resources of the Komati River Basin signed in 1992 between the Kingdom of Swaziland and the Republic of South Africa. 

The purpose of KOBWA is to implement Phase 1 of the Komati River Basin Development Project. Phase 1 comprises the design, construction, operation and maintenance of the Driekoppies Dam in South Africa (Phase 1a) and the Maguga Dam in Swaziland (Phase 1b)
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