Outline

1. 2008 Local Government Budgets and Expenditure Review 2003/04 – 2009/1011 November 2008Ms. T Mbassa

2. Outline • Overview of the Water Sector • Water Resources Management • Institutional Arrangements for Water Services • Access to Water and Sanitation • Municipal and municipal entity budget • Challenges of service delivery • DWAF Interventions and Support • Conclusion

3. Transition to… • Restructuring • Decentralisation • Policy framework • Addressing WS & S backlog • Transfers • Building sector • LG Support • The FUTURE • Sector Leadership • Policy and strategy development • Water Security • Partnerships • Regulation • Information Past Focus Nationally driven CWSS Inheritance & running of ex-Bantustan schemes Transformation Building WS capacity & development paradigm in DWAF DWAF in transition

4. Overview on Composition of the Water Sector • DWAF as the custodian views water in its totality (water-cycle) i.e. source, utilization and discharge • The sector has always been classified in two main subsectors, i.e Water Resources management and Water Services delivery • DWAF has taken a firm position shift towards Regulation which has emerged as a strong component of the sector. For this DWAF has developed a water regulatory framework focusing on the entire water value chain. • Consequently, support provided to Municipalities will shift from implementation towards ensuring compliance with national norms and standards

5. DWAF High Level Objectives • Ensuring management, protection, allocation of water resources i.e. ensure water security to meet social, economic and environmental needs of the country • Ensure development of effective water institutions to manage water resources • To support local government in performing its constitutional mandate of providing water and sanitation to communities • To ensure regulation of the sector

6. Management of Water Resources CURRENT STORAGE • SA had good runoff in recent years • Country’s dams at 81% • Limpopo, NW and EC around 70%, other areas above 80% • Isolated very low storages – serious at Middle Letaba for domestic needs • 13 years of good runoff - a drought period could happen at any time

7. NATIONAL WATER RESOURCE INFRASTRUCTURE – Towards ensuring Water Security • Progress on major projects • Berg Water Project • All work substantially completed during the year • Olifants River Water Resources Development Project: Phase 2A – De Hoop Dam • Construction commenced • Road making, site clearing, foundation excavation - done • Olifants River Water Resources Development Project: Phase 2B – 2H – Bulk Distribution Works • Directive to appoint TCTA as implementing agent compiled • Draft record of implementation decisions (RID) compiled and circulated • Phase 2H: Assessment of the status of the pipeline is being done; valuation to follow

8. NATIONAL WATER RESOURCE INFRASTRUCTURE – Towards Water Security • Progress on major projects (cont) • Nandoni Regional Water Treatment Works • Civil structures of the water treatment works completed • Civil work on three pump stations completed • Construction of a reservoir at Valdezia commenced • Construction of reservoir NR6 completed to roof level • Inyaka Water Treatment Works • Phase 2 civil work completed to the extent that mechanical contractor are allowed • Second command reservoir completed • Hluhluwe Regional Water Scheme • Water on the water treatment works, pump stations and bulk distribution pipelines commenced • Dam Safety Rehabilitation Project • Project involves work on 160 dams countrywide • Work on seven dams commenced

9. Management of Water Resources Water Quality • The Drinking Water Quality Management System (DWQMS) being utilised to monitor the quality of drinking water within WSAs, • A high-level assessment of the status of wastewater treatment works has commenced • DWAF conducting spot checks on drinking water quality (particularly on municipalities that have been identified as “hot-spots”) • As part of the enforcement protocol, DWAF is working with the targeted municipalities in improving their compliance through dedicated action plans that are monitored

10. Management of Water Resources Water Quality • Incentive driven regulation Blue & Green Drop Certification initiative launched in September at the Municipal Indaba of awarding WSAs with Blue and/or Green drop certificates to reflect the confidence that DWAF has on their drinking and waste water • Blue drop status awarded to those complying with 95% criteria on drinking water quality management. • Green drop status awarded to those complying with 90% criteria on key selected indicators on waste water quality management. • A red drop (water) & purple drop (wastewater) will be introduced & issues to WSAs for fail to comply with regulatory requirements

11. Planned Interventions to address water resources management challenges • Unlawful water use reached critical dimensions eg, Vaal system, urgent action will be taken to eradicate • Desalination of seawater is final option for coastal cities, detailed investigations will be done • Inland cities don’t have luxury of desalination of seawater – inland water must be reserved for inland use • Resources supplying metropolitan areas under stress – no further allocation for irrigation from these resources. Water may have to be moved from irrigation to urban over the long term

12. Role of Local Government (LG)Management of Water Resources • Report lacks emphasis on role of LG in water resources management and its associated financial implications • User role. use water effectively, optimize local resources and appreciate the scarcity value of water (including reuse). • Resource Impactor. With all its activities municipalities have major impacts on run-off, supply strategies, water quality, environment and health, including managing conflict with downstream users which implies focused remedial actions. • Service provider. access to basic services and water services quality such as drinking water quality, waste water management and sustainable service delivery. Strong need to separate Water Service Authority (WSA) function and Water Service Provider Role to allow local regulation • Water manager. accountable and should manage the domestic side of the water chapter, for example effective use, urban rivers, disaster management, resource protection, stormwater etc. • Strategic planning partners. municipalities must not only facilitate integrated planning but also enable effective application and coordination during IDP processes.

13. Planned Interventions to address water resources management challenges • WC/WDM must be implemented as a matter of urgency in all metropolitan areas – if not, water restrictions will be inevitable • Use of treated effluent is a huge potential resource – coastal cities discharges into ocean, but even in Vaal system direct re-use is imminent • Groundwater resource must be developed more extensively, even for metros in specific cases • Further surface water resource development and interbasin transfers will also be required

14. Institutional Arrangements Water Sector:CMAs In establishing CMAs DWAF, in consultation with sector partners, is • realised the need to be clear of what core drivers and the institutional enablers are. (If not careful the enablers become the drivers￫ dysfunctionality)• The core drivers are those principles that we need to achieve through the institutional reform process. (Core drivers +Enablers =Institutional Model ￫ Rollout Plan) • From the engagement with various stakeholders a model emerged where Water Management Areas is grouped to a maximum of 9 • DWAF is confident that the Model will : • enable development and strengthening of relationships between the various water institutions. • enable the development of regional water utilities to ensure “wall to wall" coverage of water services authorities • Provide for the delegation of Water User Associations to CMAs and Regional Water Utilities as sub catchment management entities

16. Institutional Arrangements Water Sector: Water Boards • DWAF intends to reconfigure Water Boards and their boundaries and convert them to Provincial boundary aligned Regional Water Utilities. • This will give effect to the much discussed regionalization of management of regional bulk water schemes for the benefit of all stakeholders concerned, whilst at the same time ensuring a wall to wall coverage of Provinces and Municipalities by effective, capacitated water services institutions. • In addition to bulk supply their role will be extended to reticulation and also sanitation ( subject to legal opinion).

17. Water Services

18. Access to Basic Services 18

19. Access to Basic Services: Regional Bulk Infrastructure Programme (Omitted) 19 DWAF has been tasked to manage the Regional Bulk Infrastructure Fund for Water Services(2007/8) DWAF also act as an intermediary to facilitate integrated planning and implementation through the involvement of all stakeholders . The amount of R1, 4 billion has been allocated to the programme by the National Treasury to be spent over three years starting in 2007/2008. There is a confirmed demand for bulk infrastructure and support. Based on the challenges and demands for funding (up to R60b), it is clear that the existing fund is far from being sufficient and additional funding is urgently required

20. Access to Basic Services: Water services to Schools and Clinics • National Treasury set aside R950 million for Electricity, Water and Sanitation backlog eradication in schools and clinics • Special funding to Top-up Existing Provincial Infrastructure Grants :- not to replace • DWAF and DME to implement the program on behalf of DoE and DoH. • 30% of R950m (i.e. R285m) allocated to DME • 70% of R950m (i.e. R665m) allocated to DWAF for water and sanitation backlog eradication in schools and clinics. • R105m in 2007/8, • R210m in 2008/9, • R350m in 2009/10 • Estimated provincial water services budget R(650) • Existing MTEF (R570m) and estimated (R650) provincial and donor grants leaves total shortfall of R2.6 b

21. Access to Basic Services: Water services to Schools and Clinics • Eradicated backlog and met the 2007 clinic delivery Target! • 91 clinics supplied with basic water and 254 upgraded to basic level • 110 clinics served with basic sanitation and 244 upgraded to basic level • 69 schools served with basic water and 51 with basic sanitation • 2268 schools reached with Health and Hygiene Education programme

22. Access to Basic Services: Water • Although much has been achieved during the review period the lack of Infrastructure Asset Management strategies which leads to deteriorating infrastructure at municipalities remains a serious national concern. • Funding made available should cover the total value chain in all infrastructure delivery programmes. • O&M not adequately prioritised under the unconditionalequitable share grant

23. Factors influencing insufficient provision of the water services function • Lack of programme management capacity at municipal level • Shortage of technical and financial skills in the sector • Misalignment with NSDF, PGDPs, IDPs, etc • Lack of prioritisation of operation and maintenance of capital assets • Lack of credible information to support planning • Lack of bulk infrastructure • High staff turnover in the municipalities resulting to dependency hands-on provided • High unit costs across the delivery chain leading to insufficient funding to address the overall backlogs

24. DWAF interventions and support • DWAF, in partnership with DPLG and SALGA, considered deployment of expertise to municipalities as a strategic priority and as captured in DPLG’s 5yr Local Government Strategic Agenda and in DWAF ‘s 5 year and Local government Water Sector support plan. • The following direct deployment initiatives are underway through; • DBSA (Siyenza Manje programme ) • SAICE (Energys programme led by DPLG AND FUNDED BY Masibambambe through DWAF • SAICE (deployment of engineers in support of project consolidate) • Deployment of engineers under DWAF Sanitation programme and Various TAC contracts etc • DWAF appointed Operation Gijima team hands on support to support municipalities on sanitation master planning

25. DWAF interventions and support • The culture of planning is ongoing for water and sanitation is being promoted by means of funding and providing technical support in the development of WSDP and alignment with IDP processes. More hands on support and DWAF visibility during IDP processes has been strengthened. Further support has been provided in development of feasibility studies, technical reports, designing water services projects, technology choice. Continuous interaction throughout the project cycle is maintained during implementation and Project management, Monitoring and evaluation and information management.

26. The Municipal Indaba • DWAF hosted a municipal indaba in September 2008 which was triggered by the firm policy shift to perform its regulatory role in response to the: • unfortunate incidents of infant mortality and outbreaks of waterborne diseases, in various parts of the country, which are directly and indirectly linked to drinking water quality, • the serious challenges faced by municipalities on asset management and ageing infrastructure • The aim of the Municipal Indaba was therefore to; • provide a platform to sensitize municipalities on the regulatory aspect and • to allow dialogue between the three spheres of government on how to address key water sector issues affecting municipalities.

27. Municipal Indaba Outcomes • Objectives: • Sensitise Municipalities on DWAF’s position on Local Government Support and Regulatory Role • Identify challenges faced by Municipalities and agree on solutions by three spheres of Government • Focus Areas • Regulatory Functions and Systems • Skills • Financing • Infrastructure Asset Management (IAM) • Integrated Water Resources Reconciliation Strategy (IWRRS) • Sanitation Access and O&M • Sharing International and local experiences on Water for Growth and Development • Two Key Outcomes : • Declaration • Programme Of Action

28. POA: Efforts to be directed to…. • Skills: Develop proper workplace skills plans and coordinated capacity building interventions involving HR experts; explore Inter-municipal twinning and intergovernmental secondments. • IWRRS: Integrated planning and respond to climate change; Promote groundwater use, rainwater harvesting, Water conservation; Water reuse, knowledge transfer amongst municipalities • Regulation: DWAF Finalise regulation model (external/Internal), WSA to conduct local level regulation, Provincial regulatory role identified and conducted, reliable M&E systems, priorities should be linked with risks assessments; Support will respond municipal action plans for compliance; Findings from current White paper review will be implemented • Infrastructure Asset Management: Enabling IAM strategy, framework, and programme supported by the enforcement of existing policies; Secure resources funding/human (skilled); Incentives for best performance

29. POA: Efforts to be directed to…. • Finance: Recognise asymmetry across municipalities and respond to different and special funding needs; Appropriate and Separate funds for O&M and service delivery; Fastback Municipal revenue enhancement programmes; Review Institutional arrangements eg One stop shop for all government funding application forms to reduce bureaucracy; Ensure Financial Sustainability eg improve Financial management systems, explore alternative funds and apply credit rating to allow borrowing; • Sanitation: Mobilise national fund to deal with full pits; Immediate Health and Hygiene (H&H) intervention in Bucket eradication programme; H&H must be part of Municipal performance regulation; Ring-fence sanitation budget within MIG service delivery and O&M , Explore other technology vs VIP latrines, No manual pit emptying, Review Sanitation policy to address issues listed in POA

30. Municipal Indaba : Way Forward • DWAF,SALGA and DPLG to establish core group to drive Implementation POA and Declaration • To Interrogate POA and translate to implementation plans • Plan singed of by DGs/CEO to be approved by sector partners • DWAF to avail all Indaba material on website • Agree Monitoring mechanism to ensure implementation • Ensure Departments of Housing and Health are brought on board

31. Lessons Learnt 31 The support required by municipalities goes beyond social infrastructure and the current need to accelerate water services delivery. More support is required on planning and implementation of bulk infrastructure to ensure that the available infrastructure meet the demand of ASGISA. There is critical need to address the development of solid capacity at a regional and municipal level for the long term. This requires the development of a long term plan for capacity building across the three levels of government. There is a need to broaden and strengthen the current partnerships with professional service providers and sector partners in order to increase the national resource pool allowing for rapid deployments.

32. Lessons Learnt Coordination effort at the dplg should be enhanced to avoid duplicating deployments in other municipalities whilst others are without assistance. Establish linkages with national capacity building programmes such as the Learning Academy, SETAS, SAQA and JIPSA initiatives. Enhancement of funding mechanisms is required as current funding trends will not allow meeting of targets Water boards are able to generate surplus and mechanisms to enhance sector to deliver on water services

33. Thank you