DEPARTMENT OF WATER AFFAIRS AND FORESTRY PRESENTATION TO THE SELECT COMMITTEE ON LAND AND ENVIRONMENTAL AFFAIRS 14 November 2006

2 Presentation Outline Introduction by DG Programme 1: Administration Programme 2: Water Resource Management Programme 3: Water Services Programme 4: Forestry

PROGRAMME 1: ADMINISTRATION CORPORATE SERVICES AND FINANCE

Programme 1: Administration Corporate Services

5 Highlights Creation of a Forestry Branch and Gender and Disability Directorate Implementation of the RSA/Cuba secondment agreement Implemented a learnership program (water services) 8% improvement on appointment of women in decision making positions Improved IT platform HR root cause analysis Draft bill on establishment of NWIA Reviewed internal governance structures

6 Challenges Strengthening the implementation of a turnaround strategy for HR Building capability of the department deliver Increase public awareness and understanding of the work of DWAF Finalization of transfer programme to Water Services Authorities Development and implementation of transformation strategies/plans

7 Department-wide performance improvement plan Implementation of normative performance standards Quarterly Branch performance reports Mechanisms for effective implementation of performance management and development system Interventions in place for building a team organisation Leadership and management development programme in place

Programme 1: Administration Finance

9 Expenditure 2005/06 financial year  Total Expenditure : R  Exchequer : R ( Including FDA of R )  Trading Accounts : R Spending  Head Office and 9 Regional Offices in 4 programmes Administration: R WRM: R WS: R Forestry: R  Trading Accounts Equipment Account: R Water Trading Account: R Spending level  2004/05 = 99% spending level  2005/06 = 94.4% spending level Annual Financial Statements

10 Vote 34 Exchequer Account Qualification: (a) Asset management, (b) Independent checks and reconciliation (c) BAS and PERSAL reconciliation (d) Commitments. Emphasis of Matter: (a) Monitoring, (b) Performance information.  Water Trading account Disclaimer of audit opinion Qualifications in respect of : (a) Financial statements, and (b) Non adherence to accounting framework. Emphasis of matter in respect of; (a) Lack of Policy framework, (b) Performance information. Reports of Auditor General on Financial Statements

11 Reports of Auditor General on Financial Statements  Equipment Trading account Disclaimer of audit opinion Qualifications in respect of: (a) Financial statements, (b) inadequate monitoring, (c) Fixed assets. Emphasis of matter in respect of: (a) General Computer controls for CEMS, (b) Performance information, (c) Inadequate monitoring.  National Forest Recreation and Access Trust  Unqualified audit  Emphasis of matter in respect of operation of National Forest Recreation Trust.

12 Finance Management Improvement Plan Restructuring, separation of the Trading and Main account activities on-going engagement with Office of Accountant General (OAG) to implement programme of support national accounting firm contracted to provide temporary resources in DWAF to improve financial management while recruiting suitable staff implementation of SAP as preferred Enterprise Resource Planning (ERP) system to support trading activities. –system went live on 4 October 2006 –implement accrual accounting for trading activities and comply with section 40(1) of PFMA extensive training programme for staff –computer literacy, –accrual accounting –application of SAP in DWAF Implementing asset management strategy –Compliance with National Treasury’s requirements, including Generally Accepted Accounting Practice (GAAP). –include re-valuation of DWAF’s fixed assets; Build on successes achieved by Audit Steering Committee –members from DWAF and Office of Auditor-General, –will oversee and monitor progress on 2006/07 audit

13 Budget 2005/06 Programm e Initial Appropriation Additional Appropriation Final Appropriation Final Expenditure Admin Water Resources Water Services Forestry Total

14 Budget 2005/06 Expenditure (31 March 2006) ProgrammeFinal Appropriation ExpenditureRoll Overs to 2006/07 % Utilised (including roll overs) Admin % Water Resources % Water Services % Forestry % Theft and Losses % Total % % Utilised 94.4%4.4%98.8%

15 Water Trading Account Income Statement Analysis ActualBudgetActualBudgetActualBudget Revenue Non-Tax revenue3,067,8792,538,0002,469,0122,491,4082,372,7691,947,361 Sale of goods and services3,066,4562,536,6082,464,3192,488,6452,370,1381,947,361 Interest1,4231,3924,6932,7632,631 Transfers received1,608,065628,7771,356,0171,544,6121,360,9281,825,573 Total revenue4,675,9443,166,7773,825,0294,036,0203,733,6973,772,934 Expenses Current Expenses4,802,1183,050,1176,905,6025,233,3894,558,3663,357,213 Compensation of Employees701,240300,463727,409730,635695,843626,387 Goods and Services2,877,0942,225,1014,932,9293,504,0402,911,3682,423,685 Depreciation1,223,753524,5221,245,235713,385679,414 Other Expenditure 285,255271,671307,141 Interest and dividends Transfers and subsidies412,754419,755436,225425,813147,343 Total expenses5,214,8723,469,8727,341,8275,233,3894,984,1793,504,556 Surplus / (Deficit)-538, ,095-3,516,798-1,197,369-1,250,482268,378

16 Equipment Trading Account Income Statement Analysis ActualBudgetActualBudgetActualBudget Revenue Non-Tax revenue77,52655,79867,17053,50650,95848,384 Sale of goods and services77,50255,79867,15853,47750,93048,384 Interest Transfers received3,0342,6602,535 2,500 Total revenue80,56058,45869,70556,04153,45848,384 Expenses Current Expenses78,14852,82537,32148,07045,7818,203 Compensation of Employees00000 Goods and Services70,86543,86929,82714,79314,0898,203 Depreciation7,2838,9567,49433,27731,692 Other Expenditure 00 Interest and dividends00 00 Transfers and subsidies00 Total expenses78,14852,82537,32148,07045,7818,203 Surplus / (Deficit)2,4125,63332,3847,9717,67740,181

Programme 2 Water Resources Management

18 Context Improved rainfall compared with 2004/05, mainly due to above-average falls during the last four or five months. Most areas (except south-western Cape and northern KZ-N) received average or above-average rainfall Continued restrictions on water use necessary in many areas Ongoing support to municipalities’ drought relief activities Water stored in all major dams increased from ±67% of total full supply capacity in March 2005 to ±90% in March 2006

19 Water Allocation Reform Programme launched; public consultation on approach completed; draft regional implementation plans largely completed and aligned with DoA and DLA programmes; Challenge: speed up programme Authorisation of water use 254 licences issued Challenges: shortening licensing time and making application easier; ensuring BBBEE fully integrated into licence procedures Working for Water Targets exceeded ( ha), 2 million person days of employment and employment opportunities created (103% of planned: 54% women, 18% youth, 1% disabled)

20 Assistance to resource poor farmers – some examples Eastern Cape –Rehabilitation of irrigation schemes Zanyokwe R (586ha) Keiskammahoek R (819ha) Shiloh R13 million (420 ha) Qamata R1.2 million (1959ha) Tyefu R1 million (694ha) Northern Cape –Recommendations for use of 4000ha of water in Lower Orange WMA –R6.9 million subsidies for O&M for 440 resource poor farmers

21 Assistance to resource poor farmers – some examples KZN –47 resource poor farmers in Impala received subsidies for pumping costs, canal costs, capital subsidies W Cape –Lutouw equity project –Subsidies provided (Ceres Koekedouw, Lutoux) –HDIs to benefit from new infrastructure eg raising of Clanwilliam Dam, Osplaas Dam in Hex Valley –20ha purchased by LORWUA for use by resource poor farmers 10 rainwater tanks completed, 58 in progress in 26 villages in Limpopo, FS, KZN and EC provinces Challenges: closer alignment with local and provincial government

22 Water Use Efficiency Various water use efficiency projects with municipalities COWEP implemented in various places in Northern Cape, Mpumalanga; North West and Limpopo Catchment Management Agencies 3 CMAs established (Breede, Crocodile-West/Marico, Mvoti-Mzimkulu), 4 proposals gazetted for comment (Usutu-Mhlathuze, Thukela, Gouritz, Olifants/Doorn) Inkomati CMA Governing Board, CEO appointed; Business Plan submitted Capacitation of Stakeholders Stakeholders involved in consultation processes Education and awareness programmes in schools for efficient use of water

23 Water User Associations 2 new WUAs established 7 irrigation boards transformed Transfer of O&M responsibilities to WUAs Transfer process continued for Boegoeberg, Vaalharts, Sand-vet and Lower Olifants River WUAs Water Resources Monitoring Data collected from all networks. Microbial, Eutrophication and River Health networks expanded Shared Watercourse Institutions Establishment of Limpopo Basin Commission awaiting ratification by basin states; First Ministerial meeting for Orange-Senqu Basin Commission held.

24 Co-operation and Relationships Participated in AMCOW ministerial and technical meetings SADC Regional Water Strategy and Acton Plan developed, SA appointed as Implementing Agent for SADC HYCOS Agreements in place/ being developed with China, Cuba, Netherlands, Russian Federation, Algeria and Tanzania Coordination of SA Water Sector tsunami relief and reconstruction work in The Maldives and Sri Lanka Global Participation UNESCO Regional International Hydrological Programme – SA elected to Council Overseas Development Assistance Assistance from EU, UK DfID, France, Belgium (Flanders), Switzerland, Norway, Ireland and China

25 Annual review and oversight of entities (05/06) Evaluation of audited financial statements –Bloem Water (shortfall on pension), –Botshelo (property removed from balance sheet) –Umgeni Water (water services assets reflected in their books) – Forensic investigations where weakness identified –Bloem Water; Bushbuckridge, Ikangala and Botshelo Delays in appointment of Sedibeng and Lepelle Boards Not fully compliant with PFMA –eg must supply Executing Authority with quarterly reports –only 2 fully compliant Not fully compliant with MFMA –eg problems with tariff process this year –not supplying monthly reports to Treasury For 2006/07 to 2010/11 period –all water boards submitted shareholders compacts on time DWAF –four water boards, (Mhlathuze, Bushbuckridge, Overberg and Lepelle) requested to amend shareholders compacts

26 Oversight of WRC/TCTA DWAF developing oversight framework TCTA and WRC to submit corporate plans and budgets in compliance with PFMA TCTA –Performing well –Excellent international credit rating –Operates on the basis of directives from Minister – aligned with strategic objectives of DWAF and government WRC –Discussions held with DWAF on closer collaboration and alignment

Programme 2 – WRM Continued NATIONAL WATER RESOURCES INFRASTRUCTURE BRANCH

28 BERG RIVER WATER PROJECT PLANNED: Continue with construction ACHIEVED: Franschhoek First Policy rolled out:   Employment;   Procurement; and   Training maximised for local communities. EMP implementation continued:   Socio-economic strategies;   Design guidelines;   Environmental specifications;   River monitoring programme; and   Environmental monitoring.

29 BERG RIVER WATER PROJECT ACHIEVED (cont.): Socio-economic strategies:   Public participation;   Compensation & mitigation;   Employment, training & procurement;   Social monitoring; and   Sustainable utilisation Plan. Construction progress:   Advanced works (access roads, village works, housing) substantially complete;   Rockfill placement – 70% complete;   Intake tower – 65% complete;   Spillway – 30% complete; and   Supplement - 52% complete. - -Impounding of reservoir by June 2007.

30 Raising of Flag Boshielo Dam PLANNED: Commissioning of raised dam ACHIEVED: Construction - 94% complete.   Completion delayed by spillage after heavy late summer rain.

31 ORWRDP 2A: De Hoop Dam PLANNED: Finalise detailed planning and design for commencement of construction. ACHIEVED: Planning of dam complete; Land valuation – 80% complete; Draft EMP’s – 80% complete; R555 design – 95% complete; Dam tender design – 85% complete; Artist’s impression: Proposed De Hoop Dam

32 VRESAP Projected expenditure (R million) –Actual cost to date: 607,626 –Total Project Cost: 2 491,200 –The project fully funded from financial markets. Achieved: –Supply and install steel pipes - 60% complete; –Supply and install mechanical, electrical and civil structures - 60% complete  Project to be completed by October 2007

Programme 3 Water Services

34 Strategic objectives Ensure basic water supply and sanitation (1) Ensure effective delivery of WS (2) Ensure effective WS institutions through(3) Effective transfers of DWAF WS schemes to appropriate institutions (4) –Effective operation & management Support WS in Africa (5) –Achieve Africa MDG & WSSD targets

35 Basic Water and Sanitation Supply- Achievements in 2005/06 Water During the year under review, a further 1 million people were served with water, lowering the backlog to 3,3 million people without basic water supply and another 4,9 million with basic water service below the RDP standard. There has been an overall improvement in access to services from 59% to 93% since % of the population now have access to basic services at RDP level. Sanitation people have received basic sanitation, leaving the backlog at 15,3 million people without access to basic sanitation facilities Since 1994, access to sanitation in the sector improved from 49% to 69%

36 Basic Water and Sanitation Supply Bucket eradication programme buckets were replaced Water and sanitation supply to schools and clinics 2688 schools still do not have an acceptable water supply, but 299 schools have received water during the year under review 293 received sanitation facilities 2100 clinics lack acceptable basic water supply 281 clinics are still without sanitation. Free State, Gauteng, Northern Cape and Western Cape have no backlogs in clinic sanitation. Free Basic Water and Free Basic Sanitation 80% of population with infrastructure has access to free basic water, an improvement of 5% from the 2004/05 financial year. The free basic sanitation programme has not started yet, and a policy is being developed in this regard.

37 Challenges Capacity constraints, especially technical and programme management skills in WSAs. Sustainability of infrastructure and ongoing service delivery is at risk as WSAs are focussing primarily on new infrastructure, neglecting operation and maintenance Poor communication and cooperation at all spheres of government down to community level, e.g. lack of alignment between housing development and other infrastructure programmes Inadequate funding in MIG to address bulk infrastructure Poor cost recovery, lack of clarity on indigent policy and inability to cross subsidize due to poor financial administration Delivery of water and sanitation to schools and clinics has also been slow Capacity and financial constraints of Departments of DoE and DoH to enable them to deliver services to schools and clinics Lack of infrastructure, leading to the poorest of the poor not gaining access to Free Basic Water

38 Challenges No political voice for DWAF as a sector leader at provincial level. Therefore strengthen relationships with Premier & MEC for local government. Protocols at provincial level. Current collaboration platforms focus on WS: there is now a need to include WR – boundaries Need for a Provincial Water Sector Plan – bringing everybody together. N.B. Lack of integrated water management at WSA level; the need to look very strategically at the role of water services in economic growth and development, and alignment with other programmes

39 Support to Local Government- Our Approach First strengthen the governance functions Link the functions to the WS challenges - WS Development Plans (WSDPs) as part of the municipal Integrated Development Plans (IDPs) Coordinate initiatives whilst moving to a needs driven, institutionally based support approach (WSCBBP) –Placements in municipalities (on diminishing funding scale) –Transfers and support –Sustainability audits –WSDP and FBW support –Regional Information Centres - access to information and planning data

40 Support Programmes Summits were held in all nine provinces, leading to a highly successful National Water Summit. Emanating from the summits, provinces are being supported in drafting (or improving) their Water Sector Plans, Training programmes for councilors were developed and implemented after the local government elections DWAF provided support and funding to certain municipalities for water demand management and water conservation however, more work still needs to be done in this regard

41 Support Programmes Free Basic Services Data verification, formulation of indigent registers and FBS policies Under-capacitated provinces continued received support on implementation of FBW, especially in Limpopo and Eastern Cape Bucket eradication Programme Municipalities assisted with bucket eradication strategies Specialist teams (21 engineers), with a focus on bucket eradication, have been deployed to municipalities through the National Sanitation Programme. In Free State alone, 7 engineers deployed. Provinces with greatest cahellnges, FS, EC and NW MIG programme and provisions MIG project planning support to accelerate implementation - particularly with respect to improving the quality of MIG technical reports prior to submission

42 Support Programmes Water Services Development Plans WSDP support being provided to WSAs, mainly to improve alignment with the IDP and implementation. Focus also on supporting Provinces with PGDS WSA and WSP capacity building (WSCBBPs) Funding and capacity made available for WSAs and WSPs to identify and address their critical functional areas WSA Checklists Assessment of support requirements relating to legal compliance and regulatory capacity Transfer programme Support regarding transfer capacity requirements scoping, refurbishment and O and M Section 78 assessments S78 assessments and the implementation of relevant service delivery mechanisms for the water sector

43 Support Programmes Project Consolidate DWAF regional offices have specific Project Consolidate plans to support LG. Support includes secondment of DWAF officials, learners, appointment of services providers and facilitating sharing of lessons and skills between municipalities. One Stop Shop concept The One Stop Shop concept was developed and piloted in North West- to be rolled out to other provinces

44 Transfers Achievements 46 transfer agreements concluded. Two agreements, Rustenburg and Mokopane, still outstanding 332 water schemes transferred Planned interventions Transfers to be part of branch Regions A plan to resolve challenges around staff transfers, targeting mainly EC and Limpopo, to be developed

45 SECTOR COLLABORATION PLANNEDACHIEVEDNOT ACHIEVED PLAN OF ACTION Formalize intergovernmenta l relations with Local Government at provincial level – 9 regions All regions have initiated the process IGR excellent in FS, NC, MPU. WC- major challenges EC and Limpopo need to revive collaboration and mobilize political support Need to support regions engage MEC’s & formalise reporting to the Premier’s Coordinating Committee 9 Provincial water sector plans 8 regions developed provincial water plans except for MP. FS developed the 5 year plan for LG Formalise collaboration with DOE through 2020 Vision programme 7 regions signed collaboration documents with DOE

46 Planned strategic interventions for the next year Development of an action plan, together with DPLG and municipalities, to speed up delivery in both water and sanitation Scale up capacity of DWAF to support LG through the restructuring process Mobilisation and building of capacity in the whole sector Strengthen intergovernmental relations and improve on communication Finalise the Free Basic Sanitation policy and finalisation of guidelines for provisioning of FBW to communities without infrastructure Hands on support and involvement in provisioning of water and sanitation to schools and clinics Development of a comprehensive development and support approach for water services providers (via WSAs)

Programme 4 Forestry

48 Draft Forest Sector charter initiated with working groups for sub-sectors Challenges –New round of negotiations required once new codes released from DTI (expected end October 2006) –Funding of Forest Enterprise Development GROWTH OF SECTOR Challenges –Mitigating market failures in long rotation timber –Leverage SAFCOL resource (KLF = 30% of country’s sawtimber) –Protection/ expansion of remaining resource –Review of W Cape exit strategy Transformation And Growth Of Sector

49 39 bee-keeping projects running countrywide 5 community owned ornamental and medicinal plant nurseries supported Provided training in business management, marketing and technical aspects of enterprise training to beekeepers and medicinal nursery people R1.6m spent on supplying material, infrastructure, and training – funded by DANIDA R2m funding secured through NDA for beekeeping. None spent yet. Enterprise development reflected in PGDS/P of Limpopo and EC Forest Enterprise Development

50 Sustainable Management Of Plantations 4 workshops held to assist small growers and assist with license applications for afforestation Research project initiated to assess small growers livelihoods and choices Linked growers with buyers in Vhembe district Facilitated linking of land reform beneficiaries with forestry management company in Mpumalanga TWK Firewood harvesters in indigenous forests in Port St Johns area organised to ensure sustainability and commercialisation of enterprise Management of DWAF plantations: TUP, fire and theft many times industry equivalent 5575 ha burned; TUP 7291 ha (reduction from 8416 ha) = 15% (industry norm is 3- 4%)

51 Payment Of Lease Rentals Payment of lease rentals to land reform beneficiaries not achieved Challenges: Identification of beneficiaries by DLA Negative impacts on forests (fires) Leveraging R70m for development BLYDE EXIT STRATEGY IMPLEMENTED Exit being implemented Challenges: Manage job losses TRANSFER OF MANZENGWENYA – MBAZWANA Transfer of estates to land claimants not achieved Challenges: Obtain agreement with tribal authority and communities Maintain plantations effectively until transfer

52 International Development And Co- operation UNFF attended; Africa group led by SA African Forest Law Enforcement and Governance initiative supported Congo Basin Partnership supported Management of cross border fires not achieved due to non-availability of neighbouring countries for cross border fires strategies FAO international code of best practice for planted forests co-drafted World Forests Report supported Russian and Chinese agreements signed CBD report submitted

53 Afforestation Promoted Forestry in PGDP/S of Limpopo and EC Licensing process partially streamlined within DWAF Challenges: Funding especially for longer rotation crops (longer investment horizon) Forestry needs to engage more actively with LAACs

54 THE END Thank you. ?