Regional Bulk Infrastructure Grant / Programme (RBIG) Grant and Policy Workshop with Water Boards 30 April 2010

Purpose of the grant Distinguish between direct service delivery of reticulation schemes that MIG is targeting Water availability & scarcity (Link Water Resource Strategy and planning) Benefit of scale Integrated management (multi users) Institutional aspects & arrangement (ownership, implementation, O&M) Socio-Economic development Financial issues (Viability & funding) Implementation options Sustainable management (water resources, O & M)

Bulk Infrastructure Program Drivers Basic Services Basic supply Wet sanitation Housing Integrated Solution Economic Development Growth Business Industrial Service Quality Drinking water Wastewater Water losses Interruptions Flagship projects Olifants Sedibeng Political priorities Sustainable & Asset management Condition Replacement Refurbishment

Conditions for the grant Only for regional bulk infrastructure Only for social component No duplication (only co-funding) Implementation readiness Confirmed need & solution (Feasibility) Technical Water resources Environmental & legislative Governance e.g. IDP Institutional arrangement in place Implementation O&M (Sustained management) Ownership Financing confirmed: Social & Economic component.

Special grant conditions as per DoRA DWA must ensure appropriate involvement Role players must understand implications Agreement prior to implementation to be reached on: Ownership Implementation Operation & Maintenance Social & Economic component funding Total business planning.

Structure of policy document INTRODUCTION BACKGROUND PURPOSE OF THE PROGRAMME OVERVIEW OF THE PROGRAMME MANAGEMENT OF RBIG FUNDING MANAGEMENT OF INFRASTRUCTURE DEVELOPMENT OVERSIGHT OF OPERATION AND MAINTENANCE OF REGIONAL BULK INFRASTRUCTURE ACCOUNTABILITY, INTEGRATION, TRANSPARENCY LEGISLATION AND REGULATIONS RESPONSIBILITIES

Objectives of the policy Identify all regional bulk project requirements, through appropriate planning processes. Assist with the implementation of infrastructure projects and where necessary assist in the funding of projects through RBIG Ensure that existing regional bulk infrastructure is properly operated and maintained. Facilitate the development of institutional arrangements and capacity to ensure the implementation and effective operations and maintenance of regional bulk infrastructure.

Ch 3, Purpose of the programme

Ch4 : Overview; 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

WS an integrated process Water Services Water Resources Local Government Water, sewerage and effluent infrastructure Environmental Social Management Institutional arrangements Financial arrangements Customer Bulk supply infrastructure Reticulation Sanitation Services Water Resource

Ch 5: Management of Grant 5.1 Governance of RBIG 5.2 Project identification and project selection 5.3 Funding Processes

Governance

Rules for implementation projects All infrastructure developed must be owned by a relevant WSI or a water board. The need for, and choice of, a regional bulk solution must be confirmed and accepted. Projects must be “implementation ready”.    There must be available co-funding for the portion of the water to be supplied that is not for social users.   Projects must provide for realistic longer-term development scenarios and “total needs”  Projects must be environmentally acceptable (approved EIA and environmental management plan). Standard agreements between all key role players must be signed.

Criteria General criteria (screening) Prioritization criteria Other specific criteria include: Social criteria: Economic criteria Technical criteria Institutional criteria Financial criteria Legal criteria Sustainability criteria

Project identification

Grant Funding allocation process Consolidate all provincial project lists into a national list Determine the national cost allocation per province according to the following key allocation guidelines. According to cost allocation per province identify the priority projects that can be funded from the provincial lists. Convene the overview committee consisting of DWA, COGTA, NT and SALGA, and review the list of projects and funding allocation. Submit overview committee recommendations for approval by DWA: Minister

Ch 6: Funding 6.1 Funding options 6.2 Factors affecting funding options 6.3 Support on funding options by DWA

Ch 6.1 Funding options Funding from lending institutions. Funding from WSA budget: The financially strong WSA must consider funding regional bulk projects through their own budgets generated from providing water services to their consumers. Raising bonds Funding by Water boards Where applicable WSA must consider the opportunity of allowing water boards to develop and fund regional bulk infrastructure. Private sector co-funding: WSA must ensure that they obtain private sector co-funding for the component of water use by them Private -Public partnership with consumers: Join development of schemes with large consumers (i.e. mines) Private – Public Partnership with private water utilities

Factors Affecting Funding Issues Financing Social Economic Viability Funding availability Borrowing capacity Etc.

Funding & Financial Management Financing, Planning & Organizing Own funding Loan funding Cost recovery Institutional O&M grants Equitable Share Tariffs Costing Viability Funding & Financial management Co-funding Grant funding (MIG) Grant funding (BIG) Grant funding (BIG) Other

Ch 7: Management of all infrastructure development 7.1 Planning process 7.2 Planning by Water Boards 7.3 Support of projects not funded by RBIG 7.4 Monitoring

Ch 8:Oversight of Operation and Maintenance 8.1 Monitoring 8.2 Support on Operation and Maintenance

Ch 9:Accountability, Integration, Transparency 9.1 Integration requirements within DWA 9.2 Integration with other government dept 9.3 Integration with MIG and other stakeholders 23 23

10, LEGISLATION AND REGULATIONS 10.1 Legislative provisions 10.2 Proposed regulatory policies for the management of bulk

11, Responsibilities 11.1 DWA management structure 11.2 Specific roles and responsibilities 25

The End