ATC210524: Report of the Portfolio Committee on Human Settlements, Water and Sanitation on Budget Vote 41, Strategic Plan and Annual Performance Plan of the Department Of Water and Sanitation, Dated 21 May 2021

Human Settlements, Water and Sanitation

REPORT OF THE PORTFOLIO COMMITTEE ON HUMAN SETTLEMENTS, WATER AND SANITATION ON BUDGET VOTE 41, STRATEGIC PLAN AND ANNUAL PERFORMANCE PLAN OF THE DEPARTMENT OF WATER AND SANITATION, DATED 21 MAY 2021

The Portfolio Committee on Human Settlements, Water and Sanitation (hereinafter the Portfolio Committee) met with the Department of Water and Sanitation (the Department) and Entities (Water Research Commission, Trans-Caledon Tunnel Authority, Breede-Gouritz and Inkomati-Usuthu Catchment Management Agencies) undertaking work on its behalf on 11 and 14 May to receive briefings on Budget Vote 41, Strategic Plan and Annual Performance Plans, and reports as follows:

1.         Introduction

The Department of Water and Sanitation’s mandate is set out in the National Water Act, 1998 and the Water Services Act, 1997.  The Department’s legislative mandate ensures that the country’s water resources are protected, managed, used, developed, conserved, and controlled by regulating and supporting effective water supply and sanitation delivery. This is done according to the requirements of water-related policies and legislation that are critical in delivering on people’s right to have sufficient food and water, grow the economy, and eradicate poverty.

The Department of Water and Sanitation operates two financial accounts: The Main Account and the Water Trading Entity. The Main Account is funded from the fiscus (Vote 41), and the Water Trading Entity account mainly receives voted amounts from the Main Account toward implementing infrastructure and generating revenue through bulk water sales. The Department of Water and Sanitation delineates its expenditure from its previous four (4) programmes to three programmes in the financial year under review - Administration, Water Resources Management and Water Services Management.

 

2.         Alignment of Government Outcomes to Defined Departmental Outcomes

The importance of water as a catalyst for economic growth, alleviating poverty and addressing inequities to fulfil the developmental agenda set for South Africa has found meaning in many initiatives of respective departments and entities.  The management of national water resources contributes towards achieving South Africa's growth, development and socio-economic priorities equitably and sustainably, and it supports the achievement and attainment of an inclusive, sustainable and equitable economy.  Overcoming poverty and inequality in South Africa demands improvements in water resource management and sanitation services enhancement.

In response to the imperatives set by the government in the National Development Plan (NDP) and National Water Act of 1998, two of the seven priorities, as adopted by the government for the 2019 – 2024 administration, addresses the importance of secure and equitable access to water and sanitation as catalysts for socio-economic development and ensuring the right of access to sufficient food and water. Priority 2: Economic Transformation and Job Creation and Priority 5: Spatial Integration, Human Settlements and Local Government are key priorities influencing the Department of Water and Sanitation and its Entities.  The water and sanitation sector has three key outcomes to achieve the impacts highlighted in the table below[1]:

Outcome 1: Water Security – Contribution to GDP growth by increasing infrastructure investment by both public and private sectors
Water Security: Increase infrastructure investment by public and private sectors – 8 per cent public and 15 per cent public contribution.	Diversify the water mix through the implementation of the Water and Sanitation Master Plan. Additional gauging stations developed by 2024, and existing stations maintained and refurbished. Reduce delays in water use licences – 3-12 months depending on complexity.
Outcome 2:Improved Ecological Infrastructure – Natural resources are managed, and sectors and municipalities can respond to the impact of climate change
Management, maintenance and restoration of ecosystems. Adapt to climate change's impact by managing water resources that are protected, used, developed, conserved and controlled sustainably. Compliance monitoring of water users in various sectors with water use licences. River eco-status monitoring implemented. The strategy implemented for Acid Mine Drainage mitigation.	Water resource classes and resource quality objectives by 2024. Main stem rivers monitored for implementation of resource. (a new indicator of 70). Ten (10) Directed Measures (that is, classification, resource quality objectives and the reserve) by 2024. Mine water/wastewater management plans implemented (a new indicator of 3). Investigate non-compliance cases.
Outcome 3: Access to Basic Services – Improved access to safe drinking water and access to adequate sanitation and hygiene to 90% and ensuring that of wastewater treatment works are operational
Progressively reduce inequalities and improve people's health, dignity, and prosperity by improving access to reliable and quality basic services. Water Services Authorities supported to develop and implement Municipal Priority Action Plans. Eradication of Bucket Sanitation System. Refurbishment projects to address the functionality component of the Water Services Authorities’ implementation of plans. Assess water treatment works for compliance with Blue Drop Regulatory requirements. Wastewater treatment works assessed for compliance with Green Drop Regulatory requirements. Review current water legislation. Feasibility studies for rehabilitation of new dams.	An approved National Sanitation Integrated Plan implemented – two (2) implementation reports per annum. Percentage of Water Service Authorities to receive acceptable scores on functional assessment of the Mussa. Annual assessment of all Water Service Authorities and 100 per cent five-year municipal Priority Action Plans developed annually in the Water Service Authorities falling in the priority districts. The number of refurbishment projects to address the functionality component of the WSA reliability implementation plans – 693. The number of water treatment works assessed for compliance with Blue Drop Regulatory requirements – 1 010 every 2 years – alternating with Green Drop assessments. 963 wastewater treatment works assessed with Green Drop Regulator requirement, every 2 years alternating with Blue Drop assessments. 693 non-compliant water systems monitored. 371 annually. 585 non-compliant wastewater systems monitored against the regulatory standards – 260 annually. Development of 371 annual District Municipalities Five-Year Reliability Plans. Eradication of bucket sanitation system in formal areas – 40 000. Annual target of 52 249. Review Regulatory Framework on Water Ownership and Governance (Water Rights, Water Allocation and Water Use) by 2024. The number of dams rehabilitated projects and new dams constructed – 9 dam rehabilitation projects implemented in the IGR impact zones by 2024. 9 provincial plans implemented in support of the Integrated Water Resource Plan. 52 projects implemented by 2024 of new water sources to be expanded (seawater, desalination), underground water (aquifers).  Effective water use (Re-use, recycle and purification and Water Harvesting.

 

2.1        Summary of Water and Sanitation National Priorities for 2019 – 2024aligned to programme targets

 

Over the mediumterm, the Department will focus on regulating and managing water resources and providing integrated and sustainable water services management, infrastructure planning and development. The national priorities for the water and sanitation sector identified in the National Water and Sanitation Master Plan focus onWater and Sanitation Management and Improving Water Quality. On Water and Sanitation Management, the intention is to reduce water demand[2], increase supply; protect and restore ecological infrastructure; improve raw water quality; regulate water and sanitation; manage effective water and sanitation services, and redistribute water and sanitation services.  On Improving Raw Water Quality: manage data and information; create effective and efficient institutions; enhance strategic water partnerships; amend legislation; ensure financial sustainability; enhance strategic water partnerships, and build human capacity for action.[3]

To attain the broad objectives related to water resources management and water services management, the Department defined the following objectives within each of its programmes, summarised as follows:

2.1.1     Programme 2: Water Resources Management

The objectives over the medium-term to achieve outcomes over five yearscomprise the following:

• Effectively manage water demand and supply by reviewing six water resource monitoring programmes by March 2024.
• Maintaining six water information systems on an ongoing basis.
• Effectively manage water and sanitation services by implementing and monitoring progress on the priorities of the water and sanitation master plan on an ongoing basis.
• Ensure the effective and sustainable management of water resources by distributing and monitoring funds transferred to the Water Trading Entity for the design, construction, commissioning and rehabilitation of bulk raw water infrastructure and dam safety on an ongoing basis.
• Create an enabling environment for water's economic and social regulation by establishing an independent economic regulator, implementing pricing regulations for water services, and finalising the gazetting and monitoring of the raw water pricing strategy by March 2024.
• Strengthen oversight by implementing monitoring programmes for drinking water, wastewater and mine water quality and implementing mitigation measures in catchments with the potential for acid mine drainage by March 2024.
• Ensure the protection of water resources by coordinating and monitoring compliance with standard, licence conditions and regulations across all sectors on an ongoing basis.
• Ensure the effective enforcement of compliance with water legislation by monitoring water use through conducting investigations and providing legal support in cases of unlawful water use on an ongoing basis

2.1.2     Programme 3: Water Services Management

The objectives over the medium-term to achieve outcomes over five years comprise the following:

 

• Enhance water use efficiency and water quality management by assessing eight large water systems for water losses by March 2024.
• Ensure adequate water availability through the development and management of infrastructure for water resources, and enhance the provision of sustainable and reliable water supply and sanitation by implementing 20 large regional bulk infrastructure projects over the medium term, transferring funds and monitoring the performance of municipalities on the regional bulk and water services infrastructure grants in terms of the annual Division of Revenue Act.

2.2        Revisions to the Strategic Plan

 

The Department highlighted in its presentation that due to budget constraints and the impact of COVID-19, the following revisions were made to the Strategic Plan:

 

• Revised indicator[4]of 5 on annual Municipal Strategic Self-Assessment (MuSSA) reports on water services authorities’ performance in providing water and sanitation services.
• Revised indicator of 396 on an average number of water users in various sectors monitored for compliance with water use licences per year.

 

3.         Budget Allocations over the Medium-Term Framework aligned to Performance           Targets for the 2021/22 financial year

 

Over the medium-term, the Department will focus on regulating and managing water resources; and providing integrated and sustainable water services management, infrastructure planning and development.  Expenditure is expected to increase at an average annual rate of 2 per cent, from R17 billion in 2020/21 to R18 billion in 2023/24. Cabinet approved reductions on the Department’s baseline amounting to R1.3 billion over the Medium-Term Expenditure Framework period, mainly on the compensation of employees, which is expected to decrease at an annual average rate of 2.3 per cent, from R1.9 billion in 2020/21 to R1.7 billion in 2023/24.  The table below provides an overview of expenditure over the medium-term:

 

Programme	Medium-Term Expenditure Estimates
Rand (thousand)	2021/22	2022/23	2023/24
Administration	1 950 914	1 972 498	1 980 973
Water Resource Management	3 538 027	3 567 644	3 662 356
Water Services Management	11 925 777	11 421 139	11 899 446
Total	16 910 080	17 439 588	18 035 399
Economic Classification	Medium-Term Expenditure Estimates
Rand (thousand)	2021/22	2022/23	2023/24
Compensation of employees	1 805 225	1 787 000	1 741 701
Goods and services	1 691 190	1 755 782	1 799 409
Transfers and subsidies	9 214 139	9 476 225	9 880 730
Payment of capital assets	4 199 526	4 420 581	4 613 559
Total	16 910 080	17 439 588	18 035 399

Source: Presentation by the Department of Water and Sanitation, 11 May 2021

 

Transfers and subsidies account for 54.5 per cent (28.6 billion) of the Department’s expenditure, increasing at an average annual rate of 3.8 per cent, from R8.8 billion in 2020/21 to R9.9 billion in 2023/24.  The remaining expenditure over the same period is on payments for capital assets (R13.2 billion) and goods and services (R5.2 billion).[5]

3.1        Programme 1: Administration

 

The purpose of this programme is to provide strategic leadership, management and support services to the Department. The programme also develops and promotes international relations on water resources management with neighbouring countries. This programme is allocated 11.5 per cent of the overall departmental budget, translating to R1.95 billion in the 2021/22 financial year.The table below provides an overview of the targeted outputs for this programme:

 

Outcomes	Outputs	Output indicator	2021/22
Effective, efficient and development-oriented Department	Financial recovery and turnaround plan implemented	% implementation of the financial recovery and turnaround plan % expenditure on an annual budget Number of debtor days	90%   100% 120 days
	Targeted procurement supporting SMMEs	% procurement budget spent on QSEs and EMEs (a) Women (b) Youth (c) People with disabilities	15%   40% 30% 7%
	Annual international relations implemented	% implementation of the 2021/22 annual international relations programme	75%

Source: Presentation by the Department of Water and Sanitation, 11 May 2021

 

3.2        Programme 2: Water Resources Management

 

The purpose of this programme is to ensure that the country’s water resources are protected, used, developed, conserved, managed and controlled sustainably for the benefit of all people and the environment. This is done by creating a knowledge base and implementing effective policies, procedures and integrated planning strategies for water resources. This Programme, which constitutes 20.9 per cent of the overall departmental budget, is allocated R3.53 billion in the 2021/22 financial year, up from R3.37 in 2020/21.The table below provides an overview of the targeted outputs for this programme for the 2021/22 financial year:

 

Outcomes	Outputs	Output Indicator	2021/22
Ecological infrastructure protected and restored	Water resource classes and resource quality objectives determined and monitored	Number of river systems with water resource classes and determining resource quality objectives Number of river systems monitored for the implementation of resource directed measures   Number of rivers in which river eco-status monitoring programme is implemented	Implementation plan – (Thukela) 2 – Inkomati-Usuthu and Berg-Olifants 81
Water demand reduced, and water supply increased             Water demand reduced, and water supply increased.	Integrated water resources plans/measures developed Number of reconciliation strategies completed Number of operating rules and specialist strategies completed	Water and sanitation master plan updated     Number of reconciliation strategies completed Number of operating rules and specialist strategy studies completed     Number of climate change updates for risk and vulnerability assessments	Annual update of the master plan 2 – Integrated Vaal and Western Cape   8 2 – Pongola-Mzimkhulu and Berg-Olifants and Breede-Gouritz   1 inception report
Water demand reduced, and water supply increased	7 water resources monitoring programmes and 6 information systems reviewed and maintained   Gauging stations refurbished to improve management decisions	Number of water resource monitoring programmes reviewed and maintained Number of water and sanitation information systems maintained National digitised integrated water and sanitation monitoring system implemented	4   6     Design/Solution/architecture
Water demand reduced, and water supply increased	Gauging stations refurbished to improve management decisions	Number of gauging stations/weirs constructed	1 (Lindley)
Water demand reduced, and water supply increased	Maintenance plans implemented                   Adherence to water supply management	% scheduled maintenance projects completed % unscheduled maintenance projects completed Number of dam safety projects evaluations completed Number of dam safety rehabilitation projects completed Number of kilometres of conveyance systems rehabilitated   % adherence to water supply agreements	50%   Approximately 20%   20   2 – Bloemhof and Mthatha Dam 4 km       80%
Enhanced regulation of the water and sanitation sector	Water resource regulatory prescripts developed and monitored	National Water Act Amendment Bill developed National Water Resource Strategy Edition 3 developed Raw water charges developed % of applications of water use authorisations finalised with regulation period Number of water users monitored for compliance Number of reported non-compliance cases investigated	Draft 1 of the Bill for public consultation NWRS-3 for approval   2022/23 raw water charges 80%     324   80%
Water distributed for transformation     Water distributed for transformation	Streamlined water resources management institutional arrangements	Performance of water resource institutions evaluated against their performance plans Number of catchment agencies gazette for establishment National water infrastructure agency gazetted for establishment Number of irrigation boards transformed into water user associations Water economic regulator gazette for establishment	Annual performance and quarterly reports for 4 entities 2   Draft legislation for the establishment of an agency Transformation report of 5 Irrigation Boards into Water User Associations Second draft business cases

Source: Presentation by the Department of Water and Sanitation, 11 May 2021

 

3.3        Programme 3: Water Services Management

 

This programme aims to develop, rehabilitate and refurbish the raw water resources and water services infrastructure to meet the socio-economic and environmental needs of South Africa. This is the priority Programme of the Department, as it receives the highest allocation of the entire departmental budget. Briefly, this programme receives R11.4 billion in the 2021/22 financial year, which constitutes 67.5 per cent of the overall departmental budget. However, this programme reflects a nominal rand decrease of R384.6 million compared to the 2020/21 financial year.The table below provides an overview of the targeted outputs for this programme for the 2021/22 financial year:

Outcomes	Outputs	Output indicator	2021/22
Water demand reduced, and water supply increased	Water conservation and water demand strategies developed for water sectors   8 large water supply systems assessed for water losses   Regional bulk infrastructure projects implemented	4 frameworks for WDWCM   Number of large water supply systems assessed for water losses Number of feasibility studies for water and wastewater services projects completed Number of implementation readiness studies for water and wastewater projects completed	2   8   5   1 inception report
Water demand reduced, and water supply increased	Regional bulk infrastructure projects implemented       Water services infrastructure grant projects implemented	Number of regional bulk infrastructure project phases under construction Number of regional bulk infrastructure project phases completed   Number of water services infrastructure projects under construction Number of water services infrastructure grants projects completed Number of intervention projects under implementation	113   18     173   46   1
Water and sanitation services managed effectively	District municipalities five-year reliability plans WSAs assessed for water services performance	Number of district municipalities with developed 5-year water and sanitation reliability plans Annual MuSSA reports   Annual Municipal Priority Action Plan developed	5 District Municipalities   1 national MuSSA 1 national MPAP
Enhance regulation of the water and sanitation sector	Water services regulatory prescripts developed	Water Services Amendment Bill developed     National Sanitation Integrated Plan       National Faecal sludge management strategy Bulk water tariffs developed	Draft Water Services Amendment Bill Draft National Sanitation Integrated Plan Draft national strategy 2022/23 bulk tariffs
Enhance regulation of the water and sanitation sector	Water supply systems monitored for compliance	Number of water supply systems assessed for compliance with the Blue Drop Regulatory requirements Number of identified non-compliant water supply systems monitored against regulatory requirements	0     328
Water distributed for transformation	Streamlined water services management institutional arrangement	Number of regional water utilities gazetted for establishment	0 (draft due diligence for Magalies and Amatola)

 

 

 

3.4        Notes on the Water Trading Entity and Regional Bulk and Water Services Infrastructure          Grant

 

3.4.1     Water Trading Entity

 

The Water Trading Entity was established in 1983 and was converted into a trading entity in terms of the Public Finance Management Act, 1999 in 2008.  The entity’s primary role is to manage water infrastructure and resources and sell raw water.  Over the medium-term, the entity will continue to focus on maintaining existing water resource infrastructure, supporting the long-term sustainability of water resources, and supplying bulk water to strategic users such as large industrial companies to stimulate and support economic development.

 

Expenditure is expected to increase at an average annual rate of 6.7 per cent, from R14.1 billion in 2020/21 to R17.2 billion in 2023/24.  This is mainly driven by the Entity continuing with constructing the Mokolo-Crocodile River water augmentation project, raising the Tzaneen and Hazelmere dams, and the Umdloti River development project.  Revenue is expected to increase at an average annual rate of 7.7 per cent, from R16.2 billion in 2020/21 to R20.2 billion in 2023/24.  Revenue funds the Trans-Caledon Tunnel Authority for financing debt repayment for raw water infrastructure construed by the authority on behalf of the Water Trading Entity.  Revenue from the sale of raw water constitutes R47.7 billion over the same period.  Transfer from the Department is expected to amount to R7.3 billion over the MTEF period.[6]

 

The selected performance indicators in respect of the Water Trading Entity for the 2021/22 financial year relate to the following:

 

• The number of days for the collection of outstanding debt per year – 100 days.
• Percentage of total maintenance budget spent on asset refurbishment and betterment against budget per year – 100 per cent.
• The number of raw water projects completed per year – 1.
• Percentage of water users validated within catchment management area per year – 100 per cent.
• The number of rivers where the monitoring programme has been implemented per year –71.
• Percentage planned maintenance projects completed per year as per the approved asset management plan – 80 per cent.
• Percentage of unscheduled maintenance projects completed per year as a proportion of planned maintenance projects – approximately 20 per cent.
• The number of dam safety rehabilitation projects completed per year – 6.

3.4.2     Overview of 2021/22 Regional Bulk and Water Services Infrastructure Grants

 

For the 2021/22 financial year, the total provincial allocations of the direct and indirect grant associated with the Regional Bulk Infrastructure Grant and Water Services Infrastructure Grant comprise the following:

 

• Regional Bulk Infrastructure Grant: Eastern Cape – R833 544 million, Free State – 1.1 billion, Gauteng – R437 million, Kwazulu-Natal – R238 million, Limpopo – R1 billion, Mpumalanga – R743 million, Northern Cape – R155 million, North West – R800 million and Western Cape – R27 million.
• Water Services Infrastructure Grant: Eastern Cape – R572 million, Free State – R467 million, Gauteng – R206 million, Kwazulu-Natal – R897 million, Limpopo – R603 million, Mpumalanga – R721 million, Northern Cape – R284 million, North-West R516 million and Western Cape – R129 million.

 

4.         Overview of the plans and budgets of entities supporting the work of the        Department

 

4.1        Catchment Management Agencies

 

4.1.1     Breede-Gouritz Catchment Management Agency

 

The Breede-Gouritz Catchment Management Agency was established in terms of the National Water Act, 1998.  The agency plays an essential role in protecting, using, developing, conserving, managing and cooperatively controlling water resources within the boundaries of the Breede-Gouritz catchment area.  Over the medium term, the agency’s strategic objective is to continue providing water resources management activities to support economic development and social well-being.  To achieve this, the agency will continue conserving and maintaining ecosystems, promoting tourism and encouraging residential developments within its water management area.

 

Expenditure is expected to increase at an average rate of 9.9 per cent, from R68.3 million in 2020/21 to R77.7 million in 2021/22 to R90.7 million in 2023/24.  This is mainly due to employee compensation, which increases at an average rate of 10.4 per cent, from R44.8 million in 2020/21 to R60.3 million in 2023/24.  The agency derives its revenue mainly through water resources management charges collected by the Department and transferred to the agency.[7]

 

 

4.1.2     Inkomati-Usuthu Catchment Management Agency

 

The Inkomati-Usuthu Catchment Management Agency was established in 2004 in terms of the National Water Act, 1998.  The agency plays a crucial role in the use, protection and development of water resources in the Inkomati-Usuthu water management area. It aims to ensure that water is used and managed to support equitable and sustainable socio-economic transformation and development.  Over the medium-term, the agency’s focus will remain on meeting water demand for the domestic, agriculture, and commercial sectors by processing water use licence applications and ensuring that water quality in the area remains high.

 

Expenditure is expected to increase at an average annual rate of 5.4 per cent, from R156.8 million in 2020/21 to R165.9 million in 2021/22 to R183.5 million in 2023/24. Transfers from the Department account for 68.7 per cent of the agency’s revenue, while the remainder is derived from water use licence fees.

 

4.1.3     Trans-Caledon Tunnel Authority

 

The Trans-Caledon Tunnel Authority was established in 1986 as a specialised liability management entity, deriving its mandate from the National Water Act, 1998.  It is responsible for financing and implementing bulk raw water infrastructure development and providing treasury management services to the Department of Water and Sanitation.  The authority plays a vital role in providing financial advisory services such as structuring and raising project finance, managing debt and setting tariffs, project implementation services, and other technical support to the Department and Water Boards.  Over the medium-term, the authority will continue planning and implementing Phase 2 of the Lesotho-Highlands Water Project, Phase 2 of the Mokolo-Crocodile River augmentation project and providing a short-term solution to acid mine drainage in Gauteng.

 

Expenditure is expected to increase at an average annual rate of 29.9 per cent, from R3.7 billion in 2020/21 to R8.2 billion in 2023/24, mainly due to the escalation of construction activities.  The authority’s main cost drivers remain planning and implementation to increase water supply in the Vaal River System through Phase 2 of the Lesotho Highlands Water Project, providing a short-term treatment solution to acid mine drainage in Gauteng and Phase 2A of the Mokolo-Crocodile River water augmentation project. Revenue is expected to increase at an average rate of 38.9 per cent, from R3.6 billion in 2020/21 to R9.7 billion in 2023/24, mainly driven by management fees claimed from the Water Trading Entity.[8]

 

4.1.3.1  Planned activities for the 2021/22 financial year

 

The planned activities for the 2021/22 financial year by the Trans-Caledon Tunnel Authority entail the following (reflected in the table below):

Objectives	Planned Activity
Implement capital projects in accordance with the timelines agreed with the Department (9%).	1.1 For the MCWAP phases 2A, it planned to have an approved contract by the BAC within 8 months of BAC approval of the pre-qualified tenderers (3%). 1.2 For the uMkhomazi Water Project, it planned to issue the first PSP tender document by February 2022 (3%). 1.3 For the BRVAS water project, it planned the issuance of the design and built tender documents by June 2022.
Operations and maintenance of designated projects in accordance with the departmental specifications (16%0	2.1 Western Basin: Winze 18 Shaft.  From 1st April 2021 – 31st March 2022, the water level exceeds 3m below the shaft collar (2%). 2.2 Central Basin: South West Vertical Shaft.  The water level on 31 March 2022 to be at or below the level recorded on 31 March 2021 (2%). 2.3 Eastern Basin: Grootvlei No 3 Shaft. The water level on the 31st of March 2022 to be 10 m or more significant, below the level recorded on 31 March 2021 (2%). 2.4 90% or greater of the water samples taken in the Western Basin are compliant with the parameters set out in the DWS letter of 23 September 2020 (2%). 2.5 90% or greater of the water samples taken in the Central Basin are compliant with the parameters set out in the DWS letter of 23 September 2020 (2%). 2.6 90% or greater of the water samples taken in the Eastern Basin are compliant with the parameters set out in the DWS letter of 23 September 2020 (2%). 2.7 Implement scheduled annual operation and maintenance plan and limit unscheduled outages to ensure 100% annual scheduled volume (2%). 2.8 The issuance of PSP Tender Documents for the required 2024 tunnel outage by March 2022 (2%).
Raise funding for implementation of infrastructure and manage debt within the approved borrowing limit (20%).	3.1 MCWAP: Funding is available to enable construction to commence according to the Project Plan (see Objective 1: MCWAP-phase 2A) (2%). 3.2 VRS: Funding is available to enable construction to commence according to the Project Plan for LHWP-2 – provided that the government guarantees have been approved (2%). 3.3 VRS: Funding is available to enable redemption of maturing debt on 28 May 2021 – provided government guarantees have been approved (2%). 3.4 uMkhomazi Water Project: Funding is available to enable project implementation activities for 2021-22 according to the project plan (2%). 3.5 Debt managed within the borrowing limits and all payment obligations are met for the following projects: VRS (2%), BWP (2%), VRESAP (2%), KWSAP (2%), MMTS-phase 2 (2%), MCWAP (2%).
Effective control of corporate expenditure to match project workload (5%)	4.1 10% Deviation from the approved budget quarterly due to operational efficiencies that do not compromise deliverables. 4.2 10% Deviation from the approved annual budget of planned expenditure.
Engage proactively to resolve project matters and advance institutional realignment (5%).	5.1 90-100% resolution of critical project matters by the 31st of March 2022: 5.1.1 UMkhomazi Borrowing Limit Approval (1%). 5.1.2 BRVAS Borrowing Limit (1%). 5.1.3 DWS settling Outstanding Payments (1%). 5.2 90-100% achievement against the TCTA Plan by 31 March 2022.
Coordinate and monitor the efficient implementation of the projects within SIP-3 and SIP-18 (5%).	6.1 An average effectiveness rating of 3, on SIP’s coordination and monitoring annually (Satisfactory feedback from key partners on the effectiveness of coordination and monitoring with input based on the adequacy of reports on the programme’s progress, quality of quarterly ProjectTechnical Forums, and timeliness of engagements toaddress and escalate challenges).
Enhance the internal control environment, risk management and supply chain management system (25%).	7.1 An unqualified audit opinion (for the current financial year). 7.2 90-100% of action plans to address reported audit findings implemented by the due date. 7.3 90-100% implementation of Actions Plans in the strategic risk register by the due date. 7.4 90-100% achievement against the procurement plan.
Implement the ICT Strategic Plan and ERP system (5%).	8.1 100% Implementation of Core elements of a responsive ERP solution ready for go-live by the 30th of September 2021. 8.2 Digitisation Strategy and Plan completed and approved by 31st of October 2021.
Position itself as a thought leader in critical aspects of water security (5%).	9.1 Three business-relevant papers written and submitted per annum.
Support and facilitate the development of capable employees who can build the desired organisational culture and climate, ensuring the business strategy is finalised.	10.1 90 – 100% achievement against the PMCP in year 1 (2.5%) (2021-2022 Strategic Priorities: 10.1.1 Leadership Effectiveness. 10.1.2. Performance Management). 10.2 Feedback rating of 3 out of 5 (Satisfactory feedback from employees attending the PCMP) (2.5%).

Source: Presentation by the trans-Caledon Tunnel Authority, 14 May 2021

 

4.1.3.2  Overview of risks for TCTA as a public entity

 

The TCTA identified the following risks as a public entity to challenges posed:

 

• To raise funding requires guarantees from National Treasury to pay the recurring debt for major water projects.Reduced funders’ appetite for lending to SOEs and generally tight lending conditions.
• Debt management: municipalities’ ability to pay water tariffs, ensuring that tariffs are affordable and sustainable to assure the viability of water sector institutions, tighter regulatory approval conditions for borrowings reduce flexibility to deal with unforeseen liquidity challenges.
• Project implementation: Delays in environmental authorisations by DEFF and challenges in agreeing on funding models with project beneficiaries and obtaining their commitment to sign offtake agreements contribute to delays in raising funding.
• Directed projects on hold:Phase 2B of the Olifants River Water Resources Development Project: TCTA is waiting for the DWS to decide on an alternative funding strategy proposed by TCTA in collaboration with DBSA.
• AMD-LTS: TCTA has requested the Minister to suspend the Directive following DWS’ decision to review technical solution options for the project.
• Kriel Project: the directive requires TCTA to assist the DWS with project management and procurement of long-lead items. TCTA is still awaiting the transfer of funds from the DWS for this project to be completed.

 

4.1.4     Water Research Commission

 

The Water Research Commission was established in terms of the Water Research Act, 1971.  It is mandated to research the water sector by determining needs and priorities for research, promoting coordination, cooperation and communication in the area of water research development, stimulating and funding water research, promoting the effective transfer of information and technology, and enhancing knowledge and building capacity in the water sector.  Over the medium-term, the commission will continue to drive research and improve understanding within the water sector.

 

Expenditure is expected to increase at an average annual rate of 7.3 per cent, from R320.6 million in 2020/21 to R396.4 million in 2023/24.  Spending on research and development, and innovation and impact, account for 53.6 per cent of the commission’s expenditure over the medium-term. Revenue is expected to increase at an average annual rate of 7.3 per cent, from R320.6 million in 2020/21 to R396.4 million in 2023/24.  Revenue is mainly derived from the water research levy, which accounts for 81.9 per cent (R892.3 million) of the commission’s revenue over the medium-term.[9]The planned activities for the 2021/22 financial year by the Water Research Commission entail the following (reflected in the table below):

Water quality	Supporting the development of standards for water use efficiency and water safety in buildings. Development and testing of a rapid molecular method to detect pathogens. The large-scale multiple-barrier treatment system for the removal of multi-drug resistant pathogens from water sources in sub-Saharan Africa. A combination of chemical analysis and stakeholders’ participation in solving the Hennops river pollution in Gauteng. Real-time water sensing as alert systems.
Water security	The socio-technical dimensions of and solutions to non-revenue water in Ethekwini Municipality and South Africa. Development of a national risk-based decision support tool to assess fitness for reuse. Integrating water quality – health impacts into an Integrated Water Resources Management Decision-Support System for early warning. Scenario building for future water management in South Africa.
Food security	Transformative approaches in managing human waste and wastewater by reframing nutrient recovery from innovative sanitation technologies as integrated farming and food systems components. Direct urine capture for use as a fertiliser. Determining water use, water use efficiency and nutritional water productivity of Moringa under varying crop management practices. The utilisation of geothermal spring water for tilapia aquaculture to promote food security and skills development.
Energy security	Synthesis and application of highly porous three-dimensional graphene macrostructure for capacitive deionisation and solar-based desalination of saline water. The water, energy, food nexus to support climate change adaptation in South Africa. Demonstrating the WEF nexus integration model in Mpumalanga using quantitative and qualitative research methods to inform policy development for achieving sustainability.
Sanitation	Offering integrated wastewater modelling support to municipalities. The customisation and pilot production of bio nanomaterial technology for large scale wastewater treatment. Advancing circular economy in the water sector, utilising biochar from sludge treatment in a novel technology for wastewater effluent recovery and reuse. Microbiome of VIP latrines.

Source: Presentation by the Water Research Commission, 14 May 2021

 

5.         Observations and Recommendations

 

5.1        Department of Water and Sanitation

 

5.1.1     Alignment of Provincial and Local Water Master Plans to National Master Plan

 

On the above issue of alignment of provincial and local water master plans to the national master plan,the municipalities and district municipalities had a legal obligation under the Water Services Act tosubmit these to the Department. The role of the Department of Cooperative Governance and Traditional Affairs in this process is also crucial.

 

5.1.1.1  The Portfolio Committee recommends that the Minister, through the Department and Entities, provide quarterly briefings on the number of provinces and local municipalities that abide by the provisions of the Water Services Act in submitting provincial and local water plans.

 

5.1.2     Establishment of an Independent Economic Regulator for Water Services

 

Critics of water tariffs determinations by the Department of Water and Sanitation, water boards and municipalities, have for many years argued that the current ‘ad hoc’ approach by water institutions is unsustainable. The South African Local Government Association (SALGA), in particular, has come out strongly in favour of an independent economic regulator to regulate all aspects of tariffs across the entire water value chain. SALGA further argued that it was in the country's best interests to establish an independent economic regulator, ensuring fair, transparent and accountable processes.

 

In a joint meeting of the Portfolio Committee on COGTA and Human Settlements, Water and Sanitation, on 2 June 202 and 28 July 2020, with SALGA, Members agreed with the proposal of the Department of Water and Sanitation of undertaking a process toward establishing the economic regulator by using an incubation system to realise its objectives.   The Department's 2021/22 Annual Performance Plan highlights the phased approach to establishing an independent regulator, and Members agreed to track progress on this outcome.

 

5.1.2.1  The Portfolio Committee recommends that the Minister, through the Department and Entities, provide the scope of work, with reasonable and defined times for incubation (3 months), as per the Portfolio Committee submission at two meetings on 2 June 2020 and 28 July 2020 on establishing the independent economic regulator of water services in South Africa.The details of departmental submission should include:  how it would extend the scope to both water and sanitation, bulk and retail water and sanitation, including pit-emptying, water services to households, commerce, institutions and industry, regulation of water services in the municipal context, with a specific focus on pricing and investments, and not only on price structures.

 

5.1.3     Establishment of a National Water Resources Infrastructure Agency

 

The 2021 State of the Nation Address reiterated the urgency of establishing a Nation Water Resources Infrastructure Agency, which was mooted for a number of years.  The Agency will place under single management the development and operation of the systems that are crucial for the country’s water resources security, as well as building new water resources infrastructure, operating existing dams and maintain transmissions canals and pipelines, currently undertaken by the Department of Water and Sanitation and the Trans-Caledon Tunnel Authority. 

 

5.1.3.1  The Portfolio Committee recommends that the Minister, through the Department and Entities, provide the modalities, scope of work, and timeframes to establish the agency within six (6) months.

 

5.1.4     Revisions in the 2021/22 budget structure from 4 to 3 programmes in the current year

 

Members of the Portfolio Committee required more information on the re-alignment of the budget structure to improve internal controls and efficiencies to achieving delivery of water services within the entire water value chain, which in its previous form did not support the management of the implementation of the mandated water resource and water supply and sanitation services functions in the country.

 

5.1.4.1  The Portfolio Committee recommends that the Minister, through the Department, as per Ministerial instruction on July 2019, provide details on its revised functional and budget organisation structure, with specific information on the development of the service delivery model, mapping of business purposes, standard operating procedures, service standards, a concise delivery charter and the service delivery improvement plan, highlighted in the Revised Strategic Plan.

 

5.1.5     Lengthy administration processing of licences

 

Members of the Portfolio Committee requested concrete timeframes on the presidential pronouncement on 1 April 2021 of reducing the process of finalising and issuing water licences from 300 days to 90 days.

 

5.1.5.1  The Portfolio Committee recommends that the Minister, through the Department and Entities, provide progress reports every quarter on systems to fast-track the processing of licences.

 

5.1.6     Achievement of targets versus 100 per cent spend of budget

 

Members of the Portfolio Committee complained that the Department needed to progressively work on ensuring that weaknesses in attaining targets but budget spend of 100 per cent are inconsistent and therefore should be continuously assessed. Members further pointed out that the financial recovery plan had achieved certain milestones, but the Department still faced weaknesses in mitigating fruitless and wasteful expenditure.

 

5.1.6.1  The Portfolio Committee recommends that the Minister, through the Department and Entities, provide progress reports every quarter on checks and balances within the internal control unit to mitigate risks associated with non-attainment of targets and fruitless and wasteful expenditure.

 

5.1.7     Incorporation of accruals and payables into budget and number and nature of litigation         cases in the Department and Entities

 

Members of the Portfolio Committee required clarity on whether the payment of past accruals and payables were highlighted in Budget Vote 41 and the number and nature of litigation cases in the Department and Entities.

 

5.1.7.1  The Portfolio Committee recommends that the Minister, through the Department and Entities, provide quarterly progress reports on accruals and payments and reduce these in each financial year.  Details of litigation cases per annum should be made available to the Portfolio Committee.

 

5.1.8     Variations in allocations of the RBIG and WSIG to respective provinces, specifically   Western Cape

 

Members of the Portfolio Committee required more information on the low allocation of the two grants to the Western Cape.  Although the Department provided an explanation on the previously historically disadvantaged areas being prioritised, Members were concerned that business plans submitted to the Department did not seriously address the needs and requirements of small and rural municipalities.

 

5.1.8.1  The Portfolio Committee recommends that the Minister, through the Department and Entities, analyse the submitted business plans and quantify municipalities’ in all provinces that do not factor RBIG and WSIG grants for small and rural municipalities.  Disaggregating data from business plans will provide a more realistic ‘picture’ of current and future needs in rural and small areas. 

 

5.1.9     Appointment of key personnel, that of the Director-General and Chief Financial Officer

 

It was unacceptable that the Department has not seen the urgency of appointing the Director-General and Chief Financial Officer to these positions.  The lack of continuity of the Department's work, specifically on service delivery, is particularly affected if there are continuous acting positions of crucial positions in the Department.

 

5.1.9.1  The Portfolio Committee recommends that the Minister, through the Department, prioritise the filling of key positions within six (6) months of tabling the committee report in the ATC.

 

5.1.10   Amendments to the relevant pieces of water legislation – the National Water Act, Water          Services Act and Water Research Act within a specific timeframe

 

The National Water Act, 1998, is the primary legal tool dealing with the protection, conservation, development and management of water resources within South Africa.  The Water Services Act, 1997, was enacted in 1997, giving meaning to the local government's constitutional provisions for ensuring service provision.  The Water Research Act was promulgated in 1971 and amended in 1996. 

 

While the National Water Act provides for the progressive realisation of the right to access sufficient water, there is a need to review it to ensure that: there is equity in water allocation, water management is improved, and the regulatory processes are streamlined. There is a need to review and update the Water Services Act to align it with: the Strategic Framework for Water Services, the significantly revised local government legislation which came into effect after this Act, including the Municipal Systems Act, 2000.[10]

 

Members of the Portfolio Committee maintained that the delay in amending these pieces of legislation, impact on work of the Department-specific to the following: The Water Allocation Reform programme has been lagging, and this resulted in redress and equity not effectively achieved, the establishment of water management institutions have been delayed, the issuing of water use authorisation has been a long and complex process as delegations to pro-Catchment Management Agencies have not been completed, recognition of the importance of Water User Associations due to a lack of transformation of irrigation boards, and the enforcement of the National Water Act is also weakened in that it does not specify the penalty to people or government entities that pollute water resources. 

 

It was important for the Department to address all the challenges concerningimplementing water legislation to ensure that the objectives of reform, decentralisation and service delivery are achieved through proper consultation with internal and external stakeholders.

 

5.1.10.1            The Portfolio Committee recommends that the Minister, through the Department and Entities, urgently identify the areas/sections in the water legislation that need to be reviewed, analyse the effects of the intended/proposed review and formulate a policy document that will stipulate what the Department intends to achieve by reviewing the legislation.  The Portfolio Committee expects a progress report within three (3) months.

 

5.1.11   Investigation into the construction of illegal dams, which compromise water provision to      downstream users

 

Members of the Portfolio Committee argued that more stringent measures should be taken against the construction of illegal dams.  This should be in the form of demolishing all illegal dams within six (6) months and punitive measures such as taking away the water use licences of those infringing the law. Furthermore, illegal dam construction is not prioritised in the Annual Performance Plan, nor does the APP detail consequence management against transgressions of the legislation.

 

5.1.11.1            The Portfolio Committee recommends that the Minister, through the Department and Entities, identify verified water bodies to ascertain if the water use right is legal or not through GIS software and satellite imagery.  If the user is in contravention of the National Water Act, the charges against the transgressor must be enforced.  A progress report on the number of unverified water bodies contravening the NWA and action taken must be submitted to the Portfolio Committee within one (1) month of this report being ATC’ed.

 

5.1.12   Infrastructure development in the country, with a specific focus on uMzimvubu Dam

 

Members of the Portfolio Committee raised serious concerns about the slow pace of the construction of the uMzimvubu Dam and required more details on the stages of the project to date.

 

5.1.12.1            The Portfolio Committee recommends that progress reports be provided on the different stages of work on the uMzimvubu Dam every quarter.  

 

5.1.13   Dysfunctional wastewater treatment works, and water supply works leading to pollution

 

Members of the Portfolio Committee reiterated their previous instruction to the Department and Entities that the deteriorating state of municipal wastewater and sewage treatment management in South Africa contributes significantly to pollution problems and exacerbates environmental and health problems. More emphasis should be placed on consequence management against polluters at all levels of the water value chain.

 

5.1.13.1            The Portfolio Committee recommends that the Minister, through the Department and Entities, working together with all three spheres of government, and optimally using the parameters of the District Development Model, work out short (3 months)medium and long-term (6 months) solutions to facilitate the action on pollution challenges in the country.

 

 

 

5.2        Water Research Commission

 

5.2.1     Exorbitant costs of chemicals imported by suppliers and bought by water boards and            municipalities

 

Members of the Portfolio Committee observed that the exorbitant costs of chemicals imported by suppliers and bought by water boards and municipalities require critical engagement by the Department, more research by the Water Research Commission and other stakeholders in manufacturing locally made chemicals.

 

5.2.1.1  The Portfolio Committee recommends that the Minister, through the Department and Entities, work out strategies with the respective departments such as Trade and Industry to ensure the development of chemicals in South Africa within 6 months.

 

5.3        Trans-Caledon Tunnel Authority

 

5.3.1     Progress on remedial action by TCTA on audit findings on the Lesotho Highlands Water        Project

 

Members requested further information on audit findings and remedial actions taken by TCTA on their 2018/19 qualified opinion.

 

5.3.1.1  The Portfolio Committee recommends that the Minister, through the TCTA, provide this information to the Committee within 3 months.

 

5.4        Catchment Management Agencies

 

5.4.1     Common concerns raised to agencies

 

Members posed general questions to the two Catchment Management Agencies on the value add the agencies provide to the Department in assisting with validation and verification in their catchment areas; challenges posed with the slow pace of issuing of water licences; risks envisaged by the agencies in future sustainability operations and transformation of irrigation boards to water user associations as per the provisions of the National Water Act.

 

5.4.1     The Portfolio Committee recommends that the Minister, through the Department and Entities, provide progress reports with timeframes on challenges on transforming irrigation boards to water user associations.

 

The Economic Freedom Fighters(EFF) abstained from adopting the report.

 

 

 

Report to be considered.

 

 

 

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[1]Information sourced from the Medium-Term Strategic Framework, 2019 – 2014, Department: Panning, Monitoring and Evaluation.

[2]South Africa’s water resources are limited and, in global terms, scarce. The demand for water is growing due to the following factors: a high population growth rate, a developing economy, and the urgent need to supply water services to millions of people without water services. Reducing water leaks and preventing water from being wasted in agriculture and industrial sectors could significantly increase available potable water supplies in South Africa. Water demand management or reducing demand on current water sources aims to increase water efficiency through both wise use and reduction. It involves the application of selected incentives to promote efficient and equitable use of water.

[3]Department of Water and Sanitation – Revised Strategic Plan for the Fiscal Years 2020/21 to 2024/25.

[4] The previous unit of measurement has been revised from number of water services authorities to finalisation of the MuSSA reports.

[5]National Treasury, Estimates of National Expenditure 2021, Vote 41: Water and Sanitation.

[6]National Treasury, Estimates of National Expenditure 2021/22: Budget Vote 41: Water and Sanitation.

[7]National Treasury, Estimates of National Expenditure 2021/22: Budget Vote 41: Water and Sanitation.

[8]National Treasury, Estimates of National Expenditure 2021/22: Budget Vote 41: Water and Sanitation.

[9]National Treasury, Estimates of National Expenditure 2021/22: Budget Vote 41: Water and Sanitation.

[10]Parliament of the Republic of South Africa, Presentation by the Department of Water to the Portfolio Committee on Water and Environment, January 2011.