Delivery Mechanisms and Scoping

1. Delivery Mechanisms and Scoping Module 1 Using Section 78 JRT Joint Response Team - DWAF, SALGA, NT and dplg

2. Purpose of this presentation The purpose of this presentation is to: • Provide a broad overview of what delivery mechanisms is all about • Highlight the importance of assessing different options to find the right delivery mechanism • Emphasise the need for macro scoping before starting the S78 process

3. Before starting with delivery mechanisms – let’s start with water services • What makes water services so challenging? Water is a resource – subject to resource constraints Water has a social and an economic value People have strong values and opions linked to water because of its relations to life and livelihood Water is politically and emotionally highly charged Water services requires multi dimensional capacity Sanitation is highly personal – linked to dignity Technical constraints may limit operational efficiencies

4. What is delivery mechanisms all about? • Every municipality faces challenges related to: • Improving efficiency and effectiveness • Ensuring access through expanding infrastructure • Reducing costs • Providing free basic services and ensuring financial sustainability • Addressing problems related to remote rural areas • Delivery mechanisms is about solving service delivery challenges and problems • It is about finding the best mechanism to address specific challenges and problems • It is about improving the delivery of services

5. A Municipality must know its service delivery challenges before starting any process to decide delivery mechanisms What targets must be met? What are the challenges we face? What investment is needed? What service improvements must be made?

6. Finding the right delivery mechanism means investigating options • The success of a delivery mechanism depends on how well it fits the local context within which it has to deliver services • A delivery mechanism has to be carefully designed so that it: • addresses existing and future services delivery challenges • meets the needs of local circumstances, and • brings the right capacity to deliver the services

7. What is a Section 78 Assessment? • A Section 78 assessment is a process required by the Municipal Systems Act to assess potential service delivery mechanisms for the provision of a municipal service • Section 78 assessments are only required when certain legislated circumstances occur. This legislative circumstances are referred to as “triggers” • It is a strategic decision-making process which takes place BEFORE implementing the chosen service delivery mechanism

8. S78 helps us to assess different options and motivate the right option External Option 2? External Option 1? External Option 3? Combination of options Internal?

9. What is the ideal we are trying to achieve for water supply? • The WSP supplies water to the consumer for household use • 6 000 litres are provided as free basic water • Subsidies built into the tariff are delivered successfully • The size of the bill above FBW is related to consumption patters of the household • Bills are delivered to each household and paid by each household (for higher levels of service) • Water is available 24 hours a day with no service interruptions (so that the consumer does not have to store the water) • The water is of a high quality (meets quality standards – so that the consumer does not have to treat the water) • The standard of service improves over time sustainably

10. What is the most appropriate WSP for this area? Is more than one WSP needed? How do we achieve our ideal, or close to our ideal, in our municipal area? • What are the challenges of our area? • What problems do we need to address? • What special conditions does our WSP need to address to provide sustainable, affordable, efficient and effective water services? Sustainable water services provision?

11. Before you start assessing mechanims you need to know: • The area where the services will be provided • The needs that the mechanism should be designed to address • The different service delivery mechanisms (options) ? ?

12. Are you assessing a service delivery mechanism for the whole municipality area?

13. Or are you assessing a service delivery mechanism for part of the municipality area?

14. It may even be necessary to look at a cross boundary service delivery mechanism. The Institutional Reform process may be relevant for some WSAs in this regard.

15. The need for MACRO Scoping • These questions about the geographical area for the section 78 assessment form part of a MACRO SCOPING exercise • Before a municipality can start its section 78 process it needs to address the big (MACRO) questions • Macro Scoping also assists the municipality to prepare the Terms of Reference (ToR) for the section 78 assessment • In fact, the macro level strategic decisions must be taken before preparing the ToR in order to provide parameters for a Section 78 Assessment

16. Macro Scoping must look at: These issues are requirements of Section 11 of the WSA with states: “In ensuring access to water services, a WSA must take into account..: • The need for regional efficiency • The need for lower costs • The availability of resources from neighboring WSAs • Alternative ways of providing access to water services • The need to achieve benefit of scale • The requirements of equity

17. Macro Scoping: Cross boundary infrastructure Cross boundary infrastructure provides opportunities to look at multi-jurisdictional water services provider arrangements

18. Macro Scoping: Water Resources If the water resources are outside the muncipality’s boundary, arrangements to access water from schemes in neighbouring municipalities may be an option. This impacts on options for service delivery mechanisms. No water resource

19. Macro Scoping: Regional Efficiencies Regional efficiencies may be achieved through delivery options for more than one municipal area – especially where there are existing WSPs with capacity to serve large areas.

20. Macro scoping: More than one delivery mechanism Existing regional institutional capacity Dense urban and peri-urban area Shared infrastructure Mountain range It may be necessary to have more than one delivery mechanism in the municipal area. For example where there are remote rural areas, difficult topology, and where there are different service delivery needs / challenges Remote rural area Remote rural areas

21. You need to know your area! Economies of scale Financial issues Water resource issues HR issues Institutional issues Capacity issues Consumer issues Operation and maintenance issues Backlogs Infrastructure issues Levels of service Legal issues

22. IDP WSDP From Macro Scoping to a Terms of Reference • Information from the IDP and WSDP will assist in gaining the macro picture • Once the municipality has a high level picture (helicopter view) of the infrastructure, water resource, financial and institutional issues it can prepare the Terms of Reference for the section 78 assessment Terms of Reference Section 78 Assessment Macro Scoping

23. IDP WSDP S78 (2) decision S78 (4) decision 1 Macro Scoping T R I G G E R S 2 3 Status Quo and Needs Analysis Terms of Reference Status Quo and Needs Analysis Report Implement Internal Mechanism 5 Internal Assessment section 78(1) 4 S78 Process 6 External Assessment and Feasibility Study section 78 (3) Implement External Mechanism 5

24. Modules to Follow • Module 2: Internal Delivery Mechanisms • Module 3: External Delivery Mechanisms • Module 4: Decision making process THANK YOU