1. 1 Presentation to the Portfolio Committee: Water & Environment Presentation by Ms Nobubele Ngele Acting Director-General 24 February 2010

2. 2 Outline Section A: Overview of the department Section B: Overview of the strategic plan - Main Exchequer Account (MEA) Section C: Overview of the strategic plan – Water Trading Entity (WTE) Section D: Budget of the department

3. 3 Overview of the department Section A

4. 4 Constitutional context The constitution Addresses the rights of individuals to access basic water and sanitation; Sets out the institutional framework for provision of services; Gives municipalities executive authority and the right to administer the provision of water services within their areas of jurisdiction; Gives national and provincial government – the authority to regulate the effective performance of local government in terms of water services; – the obligation to support and strengthen the capacity of local government to provide services.

5. 5 DWA mandate Water sector leader by: Regulating the sector nationally Developing national policy, norms & standards and guidelines Providing targeted support to municipalities (where necessary) in line with the regulatory function Information management

6. 6 Vision “A dynamic, people-centred Department, leading the effective management of the nation’s water resources, to meet the needs of current and future generations.”

7. 7 Mission “The Department of Water Affairs makes a positive impact on our country and its people as custodians of our water resources, and as innovative and committed partners in the drive for sustainable development. We are service and delivery oriented. We strive to get it right the first time, every time, on time – ensuring that our citizens are provided with water services they deserve. We lead our sector and enable our partners with knowledge and capacity to ensure that all water services are delivered. We are committed to innovation and use cutting-edge technology as a catalyst of positive change, connecting our people and enabling them to work anywhere anytime. We are a Department with heart that values our investment in our people. We provide them with a caring and trusting environment that encourages personal development, and is a breeding ground for talent.”

8. 8 Values Transparency:we fulfil our mandate in an ethical and open manner Respect: we respect each other as well as our clients and the needs of our citizens Excellence:we are leaders and innovators in our sector, who get it right on time every time Everyone:we are a caring employer who, through teamwork, serves South Africa’s people

9. 9 Overview of the strategic plan of the Main Exchequer Account (MEA) Section B

10. 10 Alignment to government priorities MTSF priorityOutcomesDWA priority 2. Massive programme to build economic and social infrastructure 6. An efficient, competitive and responsive economic infrastructure network 1. Contribution to economic and social development 9. Sustainable resource management and use 10. Protect and enhance our environmental assets and natural resources 2. Ensuring sustainable and equitable water resources management 3. A comprehensive rural development strategy linked to land and agrarian reform and food security 7. Vibrant, equitable, sustainable rural communities contributing towards food security for all 3. Promoting rural development

11. 11 Alignment to government priorities MTSF priorityOutcomesDWA priority 7. Build cohesive, caring and sustainable communities 9. Responsive, accountable, effective and efficient local government system 4. Effective support to local government 8. Pursue regional development, African advancement and enhanced international cooperation 11. Create a better South Africa, a better Africa and a better world 5. Contribution to global relations 10. Build a developmental state including improving of public services and strengthening democratic institutions 12. An efficient, effective and development oriented public service and an empowered, fair and inclusive citizenship 6. Improving the department’s capacity to deliver services

12. 12 Organisational structure Office of the Director-General (COO) Corporate services Finance Policy & Regulation Regions International Relations National Water Resources Infrastructure

13. 13 Contribution to effective economic growth and social development Strategic priority 1

14. 14 Strategic objective: Effective creation of decent employment through infrastructure delivery OutputIndicatorBaselinePerformance target for 2010/2011 Creation of decent employment through regional bulk programme Number of decent jobs created 59081105

15. 15 Strategic objective: Ensure the provision of regional bulk water OutputIndicatorBaselinePerformance target for 2010/2011 Implementation of the regional bulk scheme to support access to water and sanitation programmes Number of bulk infrastructure schemes implemented per year 4554

16. 16 Strategic objective: Development, maintenance and rehabilitation bulk water infrastructure OutputIndicatorBaselinePerformance target for 2010/2011 Rehabilitation and refurbishment of the transferred water services schemes Number of transferred schemes refurbished 1000130 Number of staff transferred 52001000

17. 17 Strategic objective: Ensure strategies and feasibility plans exist to reconcile water requirements and availability OutputIndicatorBaselinePerformance target for 2010/2011 Strategies and feasibility plans exist to reconcile water requirements and availability Number of strategies and feasibility plans completed Reconciliation strategies completed in 3 areas 2 strategies and 1 plan produced Implementation of the desalination and recycling strategies Finalised desalination strategy Desalination and Recycling Strategy concept note developed Desalination Strategy finalised and approved

18. 18 Strategic objective: Ensure effective implementation of pricing strategy and funding model OutputIndicatorBaselinePerformance target for 2010/2011 Reviewing the pricing strategy and infrastructure funding model Percentage implementation of the milestones in the pricing strategy “ As-Is” situation analysis of water pricing and funding model has been done 80% Implementation of the milestones in the pricing strategy and funding model

19. 19 Contribution to rural development, food security and land reform Strategic priority 2

20. 20 Strategic objective: Create sustainable rural livelihoods OutputIndicatorBaselinePerformance target for 2010/2011 Implementation of the rain water harvesting programme Number of additional rainwater harvesting tanks distributed for food production 5005 000 Provision of adequate support to poorly resourced farmers No of job opportunities created by Working for Water (WfW) per year 28 00033 300 Implementation of the natural resource management programmes to support EPWP No of job opportunities created by Working on Fire (WoF) per year 1 6692 221

21. 21 Ensuring sustainable and equitable water resources management Strategic priority 3

22. 22 Strategic objective: Improve equity in water services and management OutputIndicatorBaselinePerformance target for 2010/2011 Amendment of the water-related legislations Water Services Amendment Bill gazetted for consultation First draft completed of the Amendment Bill Updated Draft Amendment Bill and submitted to Cabinet National Water Amendment Bill gazetted for consultation First draft completed of the Amendment Bill Updated Draft Amendment Bill and submitted to Cabinet

23. 23 Strategic objective: Ensure sustainable water use OutputIndicatorBaselinePerformance target for 2010/2011 Improve water use efficiency Revised National Water resources Strategy in place 1ST edition NWRS (2004) 2nd edition- NWRS gazetted for public consultation

24. 24 Strategic objective: Protection and improvement of water quality OutputIndicatorBaselinePerformance target for 2010/2011 Implementation of the Compliance Monitoring (CM) Programmes Number of notices issued2935 Number of directives issued 2325 Number of cases successfully addressed 4045

25. 25 Effective support to local government Strategic priority 4

26. 26 Strategic objective: Implementation of the Local Government Turnaround Strategy OutputIndicatorBaselinePerformance target for 2010/2011 Effective Support Provided to all municipalities Number of prioritised municipalities supported 1020 Number of IDPs and WSDPs revised 169 Total number of municipalities supported in water conservation/ water demand management 804

27. 27 Contribute to global relations Strategic priority 5

28. 28 Strategic objective: Strategic leadership and engagements of the department in multilateral forums OutputIndicatorBaselinePerformance target for 2010/2011 Provide effective leadership of AMCOW and strategic multilateral forums Effective function of AMCOW secretariat South Africa as current Chair of AMCOW for the next two years Strengthening all organs of AMCOW.

29. 29 Strategic objective: Forging strategic relationships with countries in Africa and the world (North- South, South-South) OutputIndicatorBaselinePerformance target for 2010/2011 Supporting Post Conflict and Reconstruction and Development (PCRD) countries to move away from their status Number of bilateral co- operation agreements with African countries implemented 2 agreements in place Engagement of 4 Africa bilateral countries- (PCRD) Sharing knowledge and expertise on water related issues 2 multilateral agreement in place Two {Engagement on multilateral relations with India, Brazil and South Africa (IBSA)}

30. 30 Improve the department’s capacity to deliver quality services Strategic priority 6

31. 31 Strategic objective: Improved public understanding and appreciation of the value of water by all South Africans OutputIndicatorBaselinePerformance target for 2010/2011 Implementation of Public Education and Awareness Plan Number of public education Awareness interventions implemented as per the plan 4 interventions

32. 32 Strategic objective: Development of appropriate skills to address the sector needs OutputIndicatorBaselinePerformance target for 2010/2011 Development of graduate trainees for placement into permanent positions through the learning Academy Percentage of graduate trainees developed and into permanent positions Nil30% of the 2007 intake Number of learnerships implemented 86100 learnerships Number of internships implemented 12850 internships

33. 33 Top 5 budget drivers Infrastructure development and maintenance Regional bulk infrastructure Working for Water Maintenance of transferred water schemes Integrated planning and water resource monitoring

34. 34 Success drivers Strong business planning orientation Performance management Working in a coherent, coordinated and integrated fashion Right expertise Building capability for the current and long term (strategy to deal with the aging work force)

35. 35 Thank you Next are presentations on Strategic plan of the WTE Budget implication for Main and WTE

36. 36 Overview of the strategic plan of the Water Trading Entity (WTE) Section C

37. 37 Contribution to effective economic growth and social development Strategic priority 1

38. 38 Strategic objective: Build, operate and maintain infrastructure OutputIndicatorBaselinePerformance target for 2010/2011 Implementation of new bulk water infrastructure to meet social water needs, economic growth and development Percentage completion of the project as per project plan De Hoop Dam 44% complete De Hoop Dam 73% complete Percentage completion of the project as per project plan Nandoni Water Treatment Works 95% complete Nandoni Water Treatment Works 100% complete Percentage completion of the project as per project plan Nandoni Distribution 38% complete Nandoni Distribution 51 % complete

39. 39 OutputIndicatorBaselinePerformance target for 2010/2011 Implementation of new bulk water infrastructure to meet social water needs, economic growth and development Percentage completion on construction of Nandoni water distribution network and water treatment works (WTW) 96%100% Percentage completion of the project as per project plan Inyaka WTW 62% complete Inyaka WTW 81% complete Inyaka WTW 62% complete Inyaka WTW 81% complete Percentage completion on construction of Inyaka WTW 59%84% Strategic objective: Build, operate and maintain infrastructure

40. 40 OutputIndicatorBaselinePerformance target for 2010/2011 Implementation of new bulk water infrastructure to meet social water needs, economic growth and development Percentage completion of the project as per project plan Hluhluwe Regional Water Scheme 67% complete Hluhluwe Regional Water Scheme 87% complete Percentage completion on construction of Hluhluwe regional water scheme 61%90% Percentage completion of the project as per project plan Mdloti River Development (Raising of Hazelmere dam) 5% complete Mdloti River Development (Raising of Hazelmere Dam) 40% complete Strategic objective: Build, operate and maintain infrastructure

41. 41 OutputIndicatorBaselinePerformance target for 2010/2011 Percentage completion of the project as per project plan Groot Letaba RWRP (Nwamitwa Dam and raising of Tzaneen Dam ) 5% complete Groot Letaba RWRP (Nwamitwa Dam and raising of Tzaneen Dam) 10%complete Percentage completion of the project as per project plan Olifantsdoring RWRP (Raising of Clanwilliam Dam) 0% complete Olifantsdoring RWRP (Raising of Clanwilliam Dam) 5 % complete Strategic objective: Build, operate and maintain infrastructure

42. 42 OutputIndicatorBaselinePerformance target for 2010/2011 Rehabilitation of Dams to meet Dam Safety Requirements Percentage expenditure and number of dams in Construction Phase. 12% budget expenditure on planned projects (22 dams) 21% budget expenditure on planned projects (29 Dams) Supply of Water to users Percentage level of assurance of supply 100% compliance to levels of assurance of supply for different user group 100% Level of assurance of supply for different user group Strategic objective: Build, operate and maintain infrastructure

43. 43 OutputIndicatorBaselinePerformance target for 2010/2011 Maintenance of infrastructure as per maintenance plan and procedures required to ensure infrastructure availability. Percentage infrastructure availability 70% availability80% availability Maintain infrastructure according to maintenance plan 65% Planned work completed 70% Strategic objective: Build, operate and maintain infrastructure

44. 44 OutputIndicatorBaselinePerformance target for 2010/2011 Resources Management Plans (RMPs) developed Existing RMPs implemented Number of RMPs completed NilCompile RMP implementation Action plan for NWRI only Number of existing RMPs implemented NilRMP operational within 12 months Strategic objective: Build, operate and maintain infrastructure

45. 45 OutputIndicatorBaselinePerformance target for 2010/2011 Water schemes rehabilitated and refurbished % of infrastructure that meets the original design requirements 50% of Infrastructure meet original design requirements 60% Strategic objective: Build, operate and maintain infrastructure

46. 46 OutputIndicatorBaselinePerformance target for 2010/2011 Dam safety rehabilitation programme Number of dams rehabilitated 24 dams rehabilitated 0 dams rehabilitated Number of dams under construction 7 dams under construction 1 dam under construction Number of dams in design phase 14 dams in design phase 1 dam Strategic objective: Build, operate and maintain infrastructure

47. 47 OutputIndicatorBaselinePerformanc e target for 2010/2011 Strategy for the conversion of single to multi-purpose dams developed Nil plan (with budget for conversion of single to multi-purpose dams developed Approved strategy Creation of decent jobs and ensures appropriate training of employees Number of decent jobs created 4368220 Strategic objective: Build, operate and maintain infrastructure

48. 48 OutputIndicatorBaselinePerformance target for 2010/2011 Budget spendon BEE and SMMEs Percentage of contract value awarded to SMMEs and BEE enterprises BBBEE Strategy approved 50% Strategic objective: Build, operate and maintain infrastructure

49. 49 Budget of the department Section D

50. 50 Funding streams: 2010/11 – 2012/13 The strategic plan will be funded from the main exchequer account Water use charges will be from water users The other funding comes from DONOR funds: – These funds are minimal; are – Used where there are funding gaps as per funding agreements between the donor and SA government

51. 51 Expenditure outcome for end 31 January 2010 ProgrammeAdjusted budget 2009/10 Actual 2009/10 R’ 000 % spentAvailable budget Administration812 541536 97166%275 570 Water resource management 4 121 0033 053 63674%1 067 367 Water services2 840 4581 928 70068%911 758 Total7 774 0025 519 30771%2 254 695

52. 52 Expenditure outcome for end 31 January 2010 Economic classification ProgrammeAdjusted Budget 2009/10 2009/10 Actual % spent Available Budget Compensation of Employees 1,050,660769,95373%280,707 Goods and Services2,183,7121,304,93860%878,774 Interest and Rent on land-92-(92) Theft and Losses-2,480-(2,480) Transfers and Subsidies4,402,6413,335,61976%1,067,022 Payments for Capital Assets 136,989106,22576%30,764 Total7,774,0025,519,30771%2,254,695

53. 53 Key programmes Post government reconfiguration: reorganised Programme structure is as follows: 1.Administration 2.Water management 3.National water resources infrastructure 4.Regional management 5.Water sector regulation

54. 54 Programme2010/2011 R’ 000 2011/2012 R’ 000 2012/2013 R’ 000 Administration884 205902 119947 829 Water management 364 749386 574405 853 National water resources infrastructure 2 241 4182 520 1772 739 959 Regional management 4 329 0135 077 3185 320 451 Water sector regulation 177 207204 019214 140 Total allocation7 996 5929 090 2079 628 232 Main account allocation (including earmarked funding)

55. 55 Earmarked funding Description of Earmarked Projects2010/11 R’000 Learning Academy20 000 Property Management - Rental of Buildings156 000 Additional Capacity – Human Resources7 000 Working for Water668 583 Working on Fire207 923 Masibambane200 000 Bulk infrastructure893 000 Water Services Operating Subsidy807 682 Construction of Water Services Scheme191 942 Compliance Monitoring & Enforcement5 000 Total5 446 905

56. 56 Un-earmarked funding Economic classification2010/11 (R ’000) Compensation of Employees 917 528 Goods and Services1 246 288 Transfers of subsidies287 008 Payment for Capital98 863 Total2 549 687

57. 57 Donor funding Description of items2010/2011 R’ 000 2011/2012 R’ 000 2012/2013 R’ 000 Water and sanitation services 350 334-- Water and sanitation programme 52 460 - Upgrading of hydrometric equipment in Lesotho --- Community water supply and sanitation 7-- Twinning arrangements with Dutch water boards --- Total402 79452 460-

58. 58 Combined Budget (Exchequer & Donor Funding)

59. 59 Request for Additional Funding – 2010/11 Description of Budget BidsAmount Requested R ’ 000 Amount Approved R ’ 000 Difference R ’ 000 Water Conservation and Demand Management60 0000(60 000 ) Rainwater Harvesting Programme51 7000(51 700) Natural Resource Management (WfW)200 000102 573(97 427) Funding for Deputy Minister8 7333 200(5 533) Olifants River Water Resource Development Project306 0000(306 000) Refurbishment of Infrastructure1 000 0000(1 000 000) Regional Bulk Infrastructure1 354 00054 000(1 300 000) Upgrading and expansion of the National Water Resource Monitoring Networks 17 0000(17 000) Emergency Project to address the water crisis at Giyani 98 0000(98 000) Mzimvubu River Catchment6 0000(6 000) Compensation of Employees adjustment65 559

60. 60 Water Trading Entity Statement of financial performance 2009/10 R’ 000 2010/11 R’ 000 2011/12 R’ 000 2012/13 R’ 000 Revenue1,748,5241,949,1232,240,9222,420,196 Other Revenue137,143147,211157,644167,983 Transfer Received219,835258,741292,577307,653 Total revenue2,105,5022,355,0752,691,1432,895,832 Expenses Compensation of employees717,457774,854836, 428903,789 Goods and services938 0951 013 9841 077 4431 141 855 Depreciation1 635 1271 790 2391, 958 3632 146 049 Interest, dividends and rent on land 70 00060 000 64 800 Total expenses3,360,6793,639,0773,932,6484,256,494 Surplus / (Deficit)(1,255,177 )(1,284,001)(1,241,505)(1,360,662) Capital payments1,886,6391,685,4361,906,1752,091,637 Refurbishment and betterment programme 525,101556,607590,004625,404

61. 61 Conclusion The process of reviewing the funding model and the pricing strategy is underway. Various meetings were held with the affected stakeholder during 2009 to obtain a buy in from this process. Capital budget is not enough to cover the existing backlogs on the maintenance of infrastructure assets. WTE is unable to build reserves to build new infrastructure assets due to the exemption of ROA and capping of tariffs ( limited to 10% plus PPI).

62. 62 Thank you