Water Issues 4 October 2011

VIS : Service Delivery during implementation of summit resolutions and strategy development Sufficient short and medium term planning exists for ongoing water and electrical infrastructure development in priority areas. Hence, the work envisaged in strategy formulation / crystallization does not imply a break in current momentum of infrastructure development through the Water Affairs Regional Bulk Grant, the Municipal Infrastructure Grant, the CoGTA Massification Programme, the Eskom Bulk Capital Programme and the Integrated National Electrification Programme 2

Progressive service delivery achievements since 2005 (major services)

Backlog eradication costs (current backlogs at 2011 prices)

Umkhanyakude District Municipality WSA’s 14 Water Service Authorities : 10 District Municipalities 3 Local Municipalities (Msunduzi, Umhlatuze, Newcastle) Ethekwini Metro 5

Water backlogs Darkest shades = Highest Backlogs 6

Backlog eradication at current rate of delivery

Water backlog will be eradicated by 2020 Sanitation backlog will be eradicated by 2023 Electricity / Energy backlog will be eradicated by Backlog eradication at current rate of delivery

Blue Drop Green drop

Capacity : Engineers / Technologists / Technicians Pr Eng Pr Tech Eng Pr Techni Eng

Capacity : Engineers / Technologists / Technicians

99.3% 100.7%100% 96.5% 99.6% 97.3% 93.2% 91.7% 94.7% 95.99% 95.02% 95.3% 90.56% Infrastructure grants : utilization of funds (provincial)

Overview of KZN performance on MIG for the 2010/2011 financial year Umkhanyakude :R 106,74 million under-expenditure ; spent % of their allocation Uthungulu:R 27,59 million under-expenditure ; spent 79,38 % of their allocation KwaDukuza:R 15,19 million under-expenditure ; spent % of their allocation Umhlabuyalingana:R 13,75 million under-expenditure ; spent % of their allocation Uthukela:R 11,53 million under-expenditure ; spent % of their allocation Umuziwabantu:R 5,52 million under-expenditure ; spent % of their allocation Okhahlamba:R 4,38 million under-expenditure ; spent % of their allocation Main contributors

CoGTA MASSIFICATION PROGRAMME 55 projects (all districts) Water – 43 Sanitation – 12 Almost beneficiaries over MTEF

MASSIFICATION

Locality

Water purification plant programme

19 Water Purification Plant sites

Site 3 : Richmond – Embuthweni, looking south Re-inforced concrete plinth

Current major programmes Municipal Infrastructure Grant implementation(R 8,2 billion) CoGTA Massification fund(R 393,9 million) Water purification plants(R 21 million) Universal Access Planning – Umkhanyakude pilot(R 1,2 million) CoGTA Operation & Maintenance programme(R 7,45 million) Capacity building(Internal) Infrastructure at voting stations (short term)(Internal) Specific support programmes (as and when)(Internal) (Greytown, Umhlabuyalingana projects, Vulamehlo, Umkhanyakude water, Ezakheni / Ladysmith, Ilembe water, Middeldrift) (Msunduzi, Umhlabuyalingana, Nongoma, Mtubatuba, Nkandla, Impendle, Indaka, eDumbe, Umdoni, Mkhambathini, Hibiscus Coast, Kwadukuza, Mpofana) Alternative technology utilization(Internal) 23 * Funding allocation as per current MTEF plus 2013/14 extrapolated

24

District Overview Uthukela District

Water Service Authorities : Uthukela DM Electricity distributors : Emnambithi, Umtshezi, Eskom Access : Water – 71.2 % of households Sanitation % Electricity – 71.3 % Free Basic Water - 59 % Infrastructure planning :“poor”“fair”“good” Technical capacity Technical director - yes Engineer - no Technologists/Technicians – 3 technicians (0 registered) Repairs and maintenance : Expenditure 2009/10 - 2,48 % of the value of their non-current assets (norm 2%) District Overview Uthukela District

Backlog eradication cost Water and sanitationR million ElectricityR million Available funding (MTEF) Water and sanitationR million ElectricityR million Funding shortfalls : Water and sanitationR million Electricity :R million

District Overview Uthukela District Capital grant utilization : Satisfactory, decline in 2010 / 2011 MIG 2007 / % MIG 2008 / % MIG 2009 / % MIG 2010 / % Future commitment of MIG : Less than satisfactory MIG 2011 / % MIG 2012 / %

District Overview Uthukela District CoGTA Massification allocations

District Overview Uthukela District Bulk electricity projects Name of the Sub Station MunicipalityAmount allocated MathondwaneeMnambithiR MandabeniImbabazaneR TotalR

District Overview Umzinyathi District

Water Service Authorities : Umzinyathi DM Electricity distributors : Endumeni, uMvoti, Eskom Access : Water % of households Sanitation % Electricity % Free Basic Water - 79 % Free Basic Sanitation - 59 % Infrastructure planning :“poor”“fair”“good” Technical capacity Technical director - yes Engineer - no Technologists/Technicians - 1 technologists, 4 technicians (2 registered) Repairs and maintenance Could not be assessed District Overview Umzinyathi District

Backlog eradication cost Water and sanitationR million ElectricityR million Available funding (MTEF) Water and sanitationR million ElectricityR million Funding shortfalls : Water and sanitationR million Electricity :R million

District Overview Umzinyathi District Capital grant utilization : Good MIG 2007 / 2008 – % MIG 2008 / % MIG 2009 / % MIG 2010 / % Future commitment of MIG : Satisfactory MIG 2011 / % MIG 2012 / %

District Overview Umzinyathi District CoGTA Massification allocations

District Overview Umzinyathi District Bulk electricity projects Name of Sub StationMunicipalityAmount PomeroyMsingaR (Dept of Energy) Msinga R Dept of Enegry) NondweniNqutuR (NERSA) Mt EliasUmvotiR (Nersa) TotalR

District Overview Amajuba District

Water Service Authorities : Amajuba DM and Newcastle LM Electricity distributors : Newcastle, Emadlangeni, Eskom Access : Water - district, excluding Newcastle - 75 % of households Water - Newcastle - 84 % Sanitation - district, excluding Newcastle % Sanitation - Newcastle - 93 % Electricity – 84.5 % Free Basic Water - 84 % Infrastructure planning :“poor”“fair”“good” Technical capacity Technical director - no Engineer - no Technicians – 2 technologists & 3 technicians Repairs and maintenance : Expenditure 2009/ % of the value of their non-current assets (norm 2%) District Overview Amajuba District

District Overview – Amajuba District Backlog eradication cost Water and sanitation : Newcastle municipalityR million Other 2 local municipalitiesR million Total (water & sanitation)R million Electricity :R million Available funding (MTEF) Water and sanitation : Newcastle municipality R million Other 2 local municipalitiesR million Total (water & sanitation) R million ElectricityR million Funding shortfalls : Water and sanitation : Newcastle municipalityR million Other 2 local municipalitiesR million Total (water & sanitation)R million Electricity :R million

District Overview Amajuba District Capital grant utilization : Improved MIG 2007 / % MIG 2008 / % MIG 2009 / % MIG 2010 / % Future commitment of MIG : Satisfactory MIG 2011 / % MIG 2012 / %

District Overview Amajuba District CoGTA Massification allocations

District Overview Umkhanyakude District

Water Service Authorities : Umkhanyakude DM Electricity distributors : Umkhanyakude DM, Eskom Access : Water – 63.5 % of households Sanitation – 65.6 % Electricity – 12.1 % Free Basic Water - 80 % Infrastructure planning :“poor”“fair”“good” Technical capacity Technical director - yes Engineer – 1 (not registered) Technologists/Technicians – 4 technicians (0 registered) Repairs and maintenance : Could not be assessed District Overview Umkhanyakude District

Backlog eradication cost Water and sanitationR million ElectricityR million Available funding (MTEF) Water and sanitationR million ElectricityR million Funding shortfalls : Water and sanitationR million Electricity :R million

District Overview Umkhanyakude District Capital grant utilization : Poor MIG 2007 / % MIG 2008 / % MIG 2009 / % MIG 2010 / % Future commitment of MIG : Less than satisfactory MIG 2011 / % MIG 2012 / %

District Overview Umkhanyakude District CoGTA Massification allocations

District Overview Umkhanyakude District Bulk electricity projects Mtubatuba to Hluhluwe HlabisaR (Nersa) Hlabisa R (Eskom) IngwavumaJoziniR (Dept of Energy) NondabuyaJoziniR MbazwaneUmhlabuyalinganaR (Dept of Energy) ManguziUmhlabuyalinganaR (Dept of Energy) TotalR

MIG expenditure & commitment levels

As at 31 March 2011, 86.21% of households in the Province have access to potable water. Extrapolating unit costs for household water provision for both bulk and distribution, and given the still existing backlog (approximately households), 100% is only achievable by 2020 / 2021 at a cost of R billion. In respect of sanitation, as at 31 March 2011, 80.47% of households in the Province have a basic sanitation facility. Extrapolating unit costs for household basic sanitation, and given the still existing backlog (at least approximately households), 100% is only achievable beyond 2020 (± 2023) at a cost of R billion. Backlog eradication status in kwazulu natal

78.7 % of households in the Province have a sanitation facility, implying a backlog of 21.3 %. The highest backlogs exist in Uthungulu, Umkhanyakude and Umgungundlovu. Backlogs in the Amajuba district, outside of Newcastle, are also significant % of households in the Province now have access to electricity, implying a backlog of 24.1 %. The highest backlogs exist in Umkhanyakude, Umzinyathi and Sisonke. Overall Assessment

All 14 Water Service Authorities have Water Service Development Plans, which are reviewed regularly. None of them yet indicate the timeframes and costs of getting water to every household in their area of jurisdiction. Zululand and Uthungulu’s plans are good. Overall Assessment

– Sector Departments, in particular the Departments of Water Affairs, Energy and Human Settlements, need to intensify their sector support to municipalities. In terms of the Constitution, National Government Departments have as much responsibility in providing support and building municipal capacity as Provincial Government has. Overall Assessment

Finance Generally, the pace of delivery is as good as can be expected given the available resources. The costs to eradicate backlogs across the Province are : WaterR 21,986 billion SanitationR 4,900 billion ElectricityR 8,911 billion R 35,797 billion Overall Assessment

Utilization of MIG funds is good. Only Umhlabuyalingana and Mtubatuba municipalities have not expended all their funding up to 2009 / Overall Assessment

Technical capacity Technical capacity is of major concern. Only 11 municipalities have a registered professional engineer – Ethekwini, Ugu, Umgeni, Msunduzi, Mkhambathini, Emnambithi, Newcastle, Ulundi, Abaqulusi, Ilembe and Sisonke. From information received 27 municipalities have technical directors / managers Four municipalities have no technical capacity whatsoever (engineers, technologists, technicians). These are uPhongolo, Nqutu, Endumeni and Okhahlamba. Overall Assessment

Operation and maintenance The generally accepted international norm is that a municipality should spend approximately 2% of the asset value on repairs / preventative maintenance per annum. An analysis of the 2009 / 2010 Annual Financial Statements was conducted to determine municipal expenditure on Repairs and Maintenance as a percentage of the value of Non- current assets. Overall Assessment

31 municipalities spent more than 2 % on O & M. This is believed to be distorted (artificially high) as the values of the infrastructure assets ( water infrastructure, roads et cetera ) may not be correctly and comprehensively determined. Municipalities need to confirm that the asset values are comprehensive and credible. Ten municipalities spend less than 1 % of their reported asset values on repairs and maintenance : Vulamehlo, Umzumbe, Msunduzi, Mkhambathini, Ulundi, Big 5 False Bay, Hlabisa, uMhlatuze, Ingwe, KwaSani It is anticipated that, with credible asset values determined, the number of municipalities spending less than 1 % will increase substantially. Overall Assessment

While significant progress has been made in eradication of service delivery backlogs, the pace of delivery is too slow to achieve universal access to water, sanitation and electricity by This is not an indictment of municipalities, who have generally made optimal use of available capital grant funding, but is due to the enormity of the task. The information upon which universal access targets were based, at a National level, may have been misleading, as the targets are optimistic in the extreme. Challenges

The major factors threatening achievement of targets remain : shortfalls in funding – approximately R 21 billion for water, sanitation and electricity alone. Increases in grant funding, municipal revenue collection and private and international funding is imperative. technical capacity – i.e. adequate human resources with appropriate technical skills. the available capacity of the construction industry, particularly contractors, labour and material. Challenges

settlement patterns – community dispersion has an enormous impact on service delivery costs. The question of whether services are extended to the remotest, isolated settlements / homesteads has to be addressed. maintenance of infrastructure – subsidization of infrastructure through the introduction of a conditional grant to assist municipalities with maintenance is imperative. Should the inadequacy of correct operation and maintenance persist, serious problems are on the horizon. Challenges

planning – particularly water planning needs more attention : water resource planning, bulk infrastructure planning and distribution planning. Sector departments will have to intensify their efforts in water resource and bulk infrastructure planning as well as in supporting municipal planning. Challenges

lack of the sector Plans that will inform the development of the comprehensive Infrastructure plans. Co-ordination between housing developments and infrastructure development, particularly water and sanitation provision, needs to improve. While it is accepted that Human Settlements have housing delivery targets to meet, housing plans are not adequately co-ordinated with Water Service Authorities, in particular. Water Service Authorities are hence not always able to include infrastructure developments to support housing development in their planning. education – technical capacity enhancement requires a far greater pool of school leavers with good capabilities in mathematics and physical science, to enable successful tertiary education in technical fields. Challenges

conservation and efficiency – intensification of the education of communities in efficient use of resources and in water and energy conservation is imperative. Government’s Free Basic Services (FBS) commitment to economically disadvantaged communities (indigent) continues to have a limited impact due to the enormous backlogs in infrastructure. Some re-engineering of Free Basic Services policy vis-a-vis the Equitable share funding mechanism is necessary. In current policy, and in the absence of a specific, conditional grant as alluded to above, Free Basic Services and Operation and Maintenance are competing against each other for Equitable Share funding. Challenges

Government’s Free Basic Services (FBS) commitment to economically disadvantaged communities (indigent) continues to have a limited impact due to the enormous backlogs in infrastructure. Some re-engineering of Free Basic Services policy vis-a-vis the Equitable share funding mechanism is necessary. In current policy, and in the absence of a specific, conditional grant as alluded to above, Free Basic Services and Operation and Maintenance are competing against each other for Equitable Share funding. Deficiencies in municipal reporting continues to preclude comprehensive assessment of Free Basic Service provision. Challenges

Sanitation is mooted for inclusion in the portfolio of Human Settlements. It may be that the impact of such a move is not fully understood. Sanitation is not only required within new housing developments. Furthermore, the removal, treatment and disposal of sewerage / waste water forms part of the sanitation package. Challenges

The inclusion of water-borne sanitation systems, establishment of sewerage treatment works and the operation and maintenance of sewerage disposal systems / works in the portfolio of Human Settlements needs to be clarified. Whether the full extent of the sanitation function is appreciated needs to be confirmed. Challenges

The allocation of Powers and Functions needs review. Simply stated : Is the existence of 14 Water Service Authorities in KwaZulu-Natal appropriate ? Is the existence of 25 municipal electricity distribution license holders appropriate ? Challenges

Secondly, the electricity distribution industry restructuring process in it’s current form, is terminating at the end of March This will leave a vacuum in the structuring. Rationalization, however, remains necessary. Furthermore, when Powers and Functions were allocated in 2003, the electricity functions was not allocated. The “status quo” was maintained, pending establishment of Regional Electricity Distributors (REDs). A change in “status quo” implies that the allocation of the electricity function needs to be addressed. Challenges

Solutions The Project Management Units will be deployed in each district to unlock blockages and speed up service delivery. Infrastructure Development Fora for each district (District municipality and the family of local municipalities) need to be established in those districts where such fora currently do not exist. These fora are to deal, primarily, with infrastructure development planning and co-ordination.

– The intensity of support to municipalities in the implementation of the MIG programme must continue, and be enhanced. Appropriate resource allocations for this purpose must be approved. The level of support to municipalities in implementation of the INEP must be enhanced. – The development of strategies to deal with the enormous costs of taking services to the remotest homesteads is necessary. Some form of “centralization” of services may be necessary. Solutions

The provisions of the Division of Revenue Act regarding re-allocation of MIG funds from poor performing municipalities to good performers must be implemented. In previous financial years, unspent MIG funds (Nationally) have been lost to the programme and returned to the National fiscus while many KwaZulu-Natal municipalities have exhausted their MIG funds three quarters of the way through the financial year. Re-allocation of funds from poor performers across the country would be utilized in KwaZulu-Natal. Solutions

Cabinet Lekgotla The quantification of the backlogs needs more focus to be able to reach the targets set by the Province [Provincial and Municipal Infrastructure Planning and Development] UAP pilot and roll-out ; water reconciliation studies ; electricity UAP Municipalities need to indicate current projects and strategy of job creation which must include targeted figures, budgetary allocations and time frames MIG and Massification indicators ; labour intensive projects (balance between job creation through labour intensive construction methodologies and backlog eradication timeframes) Provide intensive intervention support in delivery of infrastructure in Mkhanyakude, Mzinyathi, uThukela and Amajuba. Procure services of the Interventionist support teamsframes. Treasury to guarantee the provision of financial resources for Interventionist Team. Funding to be secured from Treasury in Adjustment Estimates ; Constitution of teams / costing and scope

Cabinet Lekgotla COGTA to intensify its support programme for the monitoring of the Municipal Infrastructure Grant Projects 23 municipalities identified ; Monitoring limited by available capacity ; recruitment / resourcing processes underway COGTA has to set aside budget for bursaries to assist with the recruitment of Technical Skills To be assessed in 2010 / 2011 Adjustment Estimates and in future years Intensify the involvement of COGTA in the District Planning Shared Services so that the District and Local Municipalities are provided with the necessary support Ongoing Roll out of all the District Forums in all districts 4 functioning ; balance by year end

Cabinet Lekgotla Establish a Provincial Committee comprising COGTA, Department of Human Settlements, Department of Water, Department of Energy and Eskom to coordinate the provision of housing with the necessary services. Review of housing programme to ensure services are available before housing developments commence To be established ; Human Settlements to take responsibility ? District Mayors to verify that all areas are captured and the electricity islands are dealt with. COGTA to distribute information for verification purposes. Verify inclusion of these projects in the IDP formulation. Completely deal with all the electricity islands by 2015 Eskom being engaged to verify existing information prior to distribution Implementing the provisions of the Division of Revenue Act for the municipalities that are not spending their allocation. CoGTA to initiate discussions Already raised at several forums ; meeting being arranged with National Treasury to address this and DCoG reporting. By end September 2011

Cabinet Lekgotla Increase the scope and impact for Massification funding. For allocation purposes, use the information collected the reconciliation studies conducted. Sufficient projects already identified to support request for increase in Massification budget. Funding initiative prepared ; To be included (again) in budget submissions for 2012 / 2013 Provide funding for alignment of District Plans to ensure an integrated Provincial Water Service Plan. Source additional funding for district water planning Both Massification and MIG planning projects approved and underway ; support to DWA assessment of needs Donor Funding e.g. ORIO Loan funding, DBSA and other financial institutions, Water Boards (offer by Umgeni Water) to be investigated. Own funding through reduction of non- revenue water services Prelim. Investigations underway ; some high priority areas under scrutiny e.g Ezakheni

Cabinet Lekgotla Cabinet to support the initiative by the Department of Water Affairs to review the institutional arrangements of the Water Institutions (Water Boards, Catchment Management Agencies and the water users) and streamlining of the WSA’s Support / input being provided Investigate the introduction of the conditional grant for maintenance. This should run concurrently with revenue enhancement programmes Already raised at several forums ; meeting being arranged with National Treasury to address. By end September 2011 Upgrade of Msunduzi Bulk Electricity Supply - COGTA to approach Department of Energy for funding R 100 million DBSA loan approved ; Sufficiency ?

Cabinet Lekgotla Department of Energy, Eskom and COGTA to embark on an education campaign on the use of alternative sources of energy. The Education programmes should include the process of accessing the alternative energy. Department of Energy to provide funding for the education campaign To be followed up with Dept. Energy Eskom / Department of Water Affairs / Department of Energy to forward a list of all water and energy projects that are blocked due to Environmental Impact Assessment delays Formal request for info being prepared COGTA to facilitate the engagement process with Department of Agriculture and Environmental Affairs to discuss the EIA blockages. Department of Energy, ESKOM and Department of Water to be invited to the meeting to present their cases and report to Cabinet To be expedited based on information re blockages

Cabinet Lekgotla COGTA in consultation with ESKOM, Department of Water and Department of Energy to initiate a process putting the backlog in a GIS Services providers to be sourced COGTA, in consultation with the Department of Energy and ESKOM, to prepare a guideline document on the Carbon Emission credits programme Discussions initiated Department of Education to develop a strategy and implement a curriculum to improve Mathematics and Science from the Foundation level To be monitored closely

Cabinet Lekgotla Establish a Provincial Planning Team comprising of Planning Commission, Departments that deal with Infrastructure issues. These Departments are COGTA, Water Department, Department of Human Settlements, Department of Education, Department of Health, Department of Energy, Eskom, Department of Transport and the Department of Economic Development. Planning for new towns should be an all- inclusive process which includes COGTA, Department of Economic Development and Tourism Ready to participate

ISSUES & NCOP ASSISTANCE Implementation of MIG re-allocation provision in DoRA Co-ordination – particularly housing Infrastructure Development Forum Planning and prioritization for full commitment of MIG Water and waste water management Water sources – planning and development Conservation and drastic reduction of water losses Operation and maintenance – introduce grant financing MISA / Project Management Units – Provincial co-ordination ! “Over-reporting” – relieving municipal burden

WATER SERVICES most significant strategies receiving attention Development of single provincial water plan DWA reconciliation studies, CoGTA UAP pilot and roll-out, Massification and Umzimkhulu grants, Review WSDPs, Councillor orientation Design new financial models – capital and maintenance Support being procured, CoGTA O & M programme, demand side management, revenue enhancement, Enhancment of RBIG to be addressed, DCoG BIF Introduce programmes to increase technical skills and capacity Education strategy necessary, Bursaries, funding for deployees Enhance management efficiencies Strategy development, provision of management support Enhance conservation and efficient use of water DWA and WSA conservation programmes Planning for sufficient water supply for economic development Strategy to be tailored around PGDS / PSEDS, District GDSs Optimize mobilization / utilization of grants Intense support being provided, monthly monitoring, Councillor orientation 85

WATER SERVICES most significant strategies receiving attention Improve cost recovery frameworks to optimize Free Basic Water provision and maintenance of infrastructure Further strategies on revenue enhancement, reconciliation between bulk purchases and income from sale of services Improve enforcement through regulation and bylaws Strategies necessary Review institutional framework for enhanced co-ordination DWA review of institutional arrangements underway, to be addressed by strategy, IGR arrangements under review 86

87

MIG metre MIG 1 please. Province to collect 3 metre MIG 1 + Impl. Plan + 3 metre MIG metre MIG 1 + Impl. Plan + 3 metre Annual Provincial survey. Target and achievement on MIG MIS (please) and 3 metre MIG 1 + Impl. Plan + 3 metre Existing information sources (Implementation plan – monthly)