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Briefing on Budget Vote No.37

Presentation to the Select Committee on Land and Environmental Affairs (NCOP). Briefing on Budget Vote No.37. Presentation by Mr Onesmus Ayaya Chief Finance Officer 04 May 2010. EXPENDITURE TRENDS - MEA. 2. EXPENDITURE OUTCOME FOR END 31 March 2010. 3.

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Briefing on Budget Vote No.37

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  1. Presentation to the Select Committee on Land and Environmental Affairs (NCOP) Briefing on Budget Vote No.37 Presentation byMr Onesmus AyayaChief Finance Officer04 May 2010

  2. EXPENDITURE TRENDS - MEA 2

  3. EXPENDITURE OUTCOME FOR END 31 March 2010 3

  4. EXPENDITURE OUTCOME FOR END 31March 2010 4

  5. Reason for under/over spending The over expenditure on Programme 1: Administration relates to Theft and Losses incurred by the Department which includes staff debts, write-offs in respect of water and irrigation board loans Unfilled vacant posts throughout the department contributed to under – expenditure, it is anticipated approximately R113 million will not be spend in this current financial year Late submission of invoices in respect of services already rendered such as Fleet management Services (Phakisa) and IT Services (Arriva.) Direct transfers to municipalities in respect of Water Services Operating Subsidy could not be transferred to municipalities as result of non-compliance with DORA. An amount of R23,3 million was withhold in terms of DORA due to municipalities failure to submit proper expenditure and close-out report. months. Delays in finalising contractual agreement between DWA and service providers in respect Accelerated Community Infrastructure Projects. 5

  6. 2010/11: KEY PROGRAMMES Post government reconfiguration: reorganised Programme structure is as follows: Administration Water management National water resources infrastructure Regional management Water sector regulation 6

  7. MAIN ACCOUNT ALLOCATION (INCLUDING EARMARKED FUNDING) 7

  8. EARMARKED FUNDING 8

  9. UN-EARMARKED FUNDING 9

  10. DONOR FUNDING 10

  11. COMBINED BUDGET (EXCHEQUER & DONOR FUNDING) 11

  12. REQUEST FOR ADDITIONAL FUNDING – 2010/11 12

  13. Regional Bulk Infrastructure Grant (RBIG) 13

  14. Introduction Regional Bulk Infrastructure Programme Grant mechanism established in 2007 to supplement the financing for the development of regional bulk water infrastructure and regional bulk sanitation collection as well as regional water and waste water treatment works (social component only) Budget Allocation (2010 MTEF) R4.42 billion Estimated R60 billion investment required 14

  15. SONA (Extracts) • In addition, we will work to improve the effectiveness of local government, infrastructure development and human settlements • We are not a water rich country. • Yet we still lose a lot of water through leaking pipes and inadequate infrastructure. • We will be putting in place measures to reduce our water loss by half by 2014. • This government will ensure that our environmental assets and natural resources are well protected, and are continually enhanced. 15

  16. How does RBIG respond to SONA • Support and assist WSA with Bulk infrastructure operations and maintenance • Ensure that WC/WDM is effectively addressed before approving RBIG projects • Ensure adequate O & M, and asset management measures are part of the new RBIG projects • Promote where possible WC/WDM related RBIG projects i.e. Wastewater recycling (re-use) 16

  17. RBIG Policy Aim: This fund aims to support Government’s development targets (e.g. eradication of basic water supply and basic sanitation backlogs) as well as socio economic priorities such as the 2010 Soccer World Cup, enablement of growth and development initiatives as well as addressing specific water risks (e.g. water availability, water quality and environmental challenges). Responsibility: DWA is responsible and accountable for the management of this specific-purpose Water Services Regional Bulk Infrastructure Grant. Accountability: The transfer from National Treasury to DWA will take place as per DoRA and bi-lateral arrangements. Assessment / Allocation: The fund is project focused and each case is assessed and selected on merit. It is not formula based and not generically allocated. Co-funding; While this fund must enable economic development, the proportional capital cost for higher levels of domestic, commercial and industrial uses must be obtained from suitable co-funding or financing mechanisms 17

  18. Policy – Definition of Regional bulk • The infrastructure required to connect the water resource, on a macro or sub regional scale (over vast distances), with internal bulk and reticulation systems or any bulk supply infrastructure that may have a significant impact on water resources in terms of quantity and quality. • “Macro” is defined as infrastructure serving extensive areas across multi-municipal boundaries • “Sub-regional” is defined as large regional bulk infrastructure serving numerous communities over a large area normally within a specific district or local municipal area • Over “vast distances” is considered as any distances greater than 5 km • Bulk infrastructure that has a “significant impact on water resources” includes: • Any bulk scheme that is designed for maximum demand of 5 Ml/day or more • Any waste water treatment plant that discharges into a fresh water resource system • Any water treatment plant that is designed for a maximum demand of more than 2 Ml/day 18

  19. Project Criteria • Funding is only allocated for implementation once the Projects is “implementation ready”. • Projects must be aligned with regional and national water resource development strategies, including compliance to WC/WDM. • Projects must provide for realistic longer-term development scenarios and “total needs” • Projects must have stakeholder involvement and commitment. • Projects must be environmentally acceptable (approved EIA and environmental Management plan). 19

  20. Implementation Readiness • Comprehensive feasibility planning must be undertaken; • Prove socio-economic benefit; • Financial viability; • Illustrate sustainability • Technical acceptability; • Institutional arrangements; • Agreement , commitments for both implementation and sustainable operation; • Projects must be environmentally acceptable; • A financing plan must be in place, • Compliance to water conservation measures; • Acceptable asset management plans and systems; • Completed Environmental Impact Assessment, and • Water licenses 20

  21. Budget allocation Previous financial years 2007/08 and 2008/09 • 2007/08 R 300.0 million • 2008/09 R 444.7 million • 2009/10 R 616.8 million 2010/11 MTEF Allocation • 2010/11 R 893.0 million (Including the R54 mil Limpopo drought relief funding) • 2011/12 R 1675.3 million • 2012/13 R 1849.2 million 21

  22. Progress to date The total projects implemented since the start of the programme are as follows: • 107 projects were started since 07/08 financial year; • 50 implementation projects have been initiated and are in construction, design or tender phase • 32 construction, • 18 design / tender phase • 57 feasibility / implementation ready studies underway (budget for implementation approximately R3 billion) • 9 projects have been completed • New projects can be funded from 2012/13 22

  23. Projects completed The projects completed to date are as follows: 2007/08 • Chris Hani Tsomo RDP2 BWS • Delmas Phase 1 Emergency • Thaba Chweu BWS 2008/09 • Delmas Phase 2 • Maqwassi Hills RWS 2009/10 • Mbhashe North BWS • Mathulini BWS • Greater Mthonjaneni BWS Phase 1 • Van Wyksvlei Interim Solution 23

  24. Projects completed in next Quarter Projects to be completed in the next quarter • Mthatha Bulk Water Intervention • Jagersfontein BWS • Groblersdal Lukau BWS • Van Der Kloof/Petrusville BWS 24

  25. Jobs created • RBIG has created 3,448 jobs, • This equates to 188,825 person days. 25

  26. Project Challenges & Risks • Transfer of funds • Misuse of funds by Municipalities • Many projects were not ready and were given funding • Non-Dora compliance (eg Roll over requests from NT) • Inadequate capacity by municipalities to manage implementation • Delays in implementation of projects and expenditure • High escalation costs • Approval process not followed • Sustainability of projects once completed (commitments by Municipalities to perform O&M) • Lack of Co-funding by WSA 26

  27. Refocusing our approach • DWA to take greater/direct control for implementing new RBIG projects utilising: • Project management capacity from DWA: Regional and National Offices • Utilising the capacity of Water Boards • Utilising DWA construction • Where feasible new assets to be transferred to Water Boards • Focus on sustainability of projects and Operations and maintenance 27

  28. 2010 RBIG MTEF ALLOCATIONS 28

  29. Total Needs Assessment as at Dec 08 29

  30. New Priorities (2010) Broadening access from under-utilised and single purpose dams (Taung and Jozini); Desalination Strategy and roll-out Acid Mine Drainage Namakwa Water - refurbishment 30

  31. Water Services Operating Subsidy 2010/11 31

  32. Drought Relief MTEF Allocation 32

  33. Working for Water Allocation 33

  34. Working on Fire Allocation 34

  35. WTE Augmentation – Actual (2009/10) 35

  36. Augmentation to WTE MTEF Allocation 36

  37. Thank you 37

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