Business Case for the Pongola to Umzimkulu CMA D: WMI Governance

Why develop a business case? There are effectively two streams of work required in order to establish a CMA. CMA National Water Act Public Entity Public Finance Management Act Proposal Govt Gazette Business Case PFMA Schedules (3A) Minister Joint Evaluation Panel Approval from AG to open an account

Requirements of a Business Case The business case will therefore be built around the following themes (capturing these elements): Motivation for the entity Corporate form of the entity Functions of the CMA Organisational considerations Financial arrangements Institutional and governance arrangements Mechanisms for Regulation and Oversight Change management Risk management Implementation plan Various addenda may be developed on specific issues, such as remuneration, performance management and contracts.

Description of the Pongola-Umzimkulu WMA Location Topography Climate Socio-Economic Dynamics Water Availability and Requirements Key Water Challenges

Description of the Pongola-Umzimkulu WMA Location Topography Climate Socio-Economic Dynamics Water Availability and Requirements Key Water Challenges

Description of the Pongola-Umzimkulu WMA Location Topography Climate Socio-Economic Dynamics Water Availability and Requirements Key Water Challenges

Description of the Pongola-Umzimkulu WMA Location Topography Climate Socio-Economic Dynamics Water Availability and Requirements Key Water Challenges

Strategic motivation Water as a finite resource IWRM Hydro boundaries Subsidiarity Development & empowerment Viability Framework for CMA Establishment Evolution of the CMA Legitimacy Consolidation Responsible Authority

Corporate Form Legal nature of CMA Service Delivery Entity PFMA, Schedule 3A A case for devolution Stakeholder engagement Ring-fencing risk Access to skills, specialists Appropriate corporate form Public Service including:  National Government Agencies  Provincial Government Agencies Public Entities including:  Stewardship and Research Entities  Service Delivery Entities  Regulatory and Statutory Advisory Entities Government Enterprises including:  Statutory Corporations and Financial Intermediaries  State Owned Companies  Subsidiary Companies of public entities  State Interest Companies Public Interest Institutions including:  Education, Welfare, Recreation Institutions and Professional Bodies

Legal Process Introduction Legal requirements Amendment of the boundaries of the water management area Disestablishment of the Thukela and Usuthu-Mhlatuze CMA Amending of the water management area and name of the Pongola- Umzimkulu CMA

Functions of the CMA Introduction Delegation and assignment Delegation of functions Phased transfer of functions Phase 1: Developing relationships and legitimacy Phase 2: Build capacity and consolidate Phase 3: Fully functional and responsible authority Considerations for the delegation process Implications for DWA structure and functions

Functions of the CMA Phase 1: Developing relationships and legitimacy Involvement in water use registration and verification of water use Advising and supporting licence applicants on the licensing process and requirements Advising DWA on water use authorisations and licenses Checking of water use against licence conditions and informing DWA of the results where compliance enforcement is required. Validation of information submitted for registration. Phase 2: Build capacity and consolidate Resource Directed Measures Water Resources Monitoring Disaster Management Water Conservation and Demand Management Operating of Waterworks general authorisations and limited authorisation functions Institutional Oversight Phase 3: Fully functional and responsible authority Water Use Authorisation and Licensing Compulsory Licensing Issuing of Directives

Organisational Arrangements Proposed functional structure of the Pongola-Umzimkulu CMA

Organisational Requirements Staffing requirements Human resource considerations Mechanisms for Regulation and Oversight Change management Internal change management Rebranding and stakeholder engagement strategy

Organisational Requirements Staffing requirements Human resource considerations Mechanisms for Regulation and Oversight Change management Internal change management Rebranding and stakeholder engagement strategy Yr0 Yr1 Yr2 Yr3 Yr4 Yr5 Southern Central Northern Total Staff in Year 5 = 140

Organisational Requirements Staffing requirements Human resource considerations Mechanisms for Regulation and Oversight Change management Internal change management Rebranding and stakeholder engagement strategy

Financial Arrangements Sources of Finance Flow of capital Financial systems arrangements Financial analysis

Institutional and governance arrangements Corporate Governance Principles CMA Governing Board Board membership Process for appointment of board Governance Committee Structures Appointment of CEO

Risk & Risk Management Complexity of the project Spheres of Government Stakeholder acceptability Delegation of powers and functions Financial management Climate change and natural disasters Human resources Organisational technologies

Implementation Considerations Institutional establishment WMA boundaries Ring fencing revenue Development of the Business Case Stakeholder engagement Establishment of the CMA Organisational development Appoint the Governing Board Establish initial systems Appoint CEO Transfer and appoint staff

Implementation Considerations Operationalisation Develop first Business Plan Transfer of seed funds Delegation of functions Oversight and monitoring Stakeholder engagement and capacity building Establish and implement engagement plan Establish and implement capacity building and support programme

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