1. Select Committee on Finance: DoR Bill- Public Hearing
5 March 2008
Ms Lerato Mokoena- national transfer
Mr. Onesmus Ayaya- DWAF CFO

2. Total (Including grants)allocation to DWAF: 2008/09-2011

3. Conditional Grants Bulk Infrastructure
Schools and Clinics Water & Sanitation
Bucket Eradication( previous part of MIG)
Operating Subsidy

4. Bulk Infrastructure What is Regional Bulk Infrastructure?
The infrastructure required to connect the water resource, on a macro or sub-regional scale, (over vast distances), with internal bulk and reticulation systems.
Macro is defined as large bulk infrastructure serving extensive areas across multi-municipal boundaries
“Sub-regional is defined as large bulk infrastructure serving numerous communities over a large area normally within a specific district or local municipal area.

5. Bulk Infrastructure Multi year Allocations Grant Conditions
2007/8 R300 million (Current)
2008/9 R450 million
2009/10 R650 million
2010/11 R689 million
Grant Conditions
Regional bulk Water & San infrastructure only
Only social and economic development components
Confirmed need for a bulk solution is accepted
Proven implementation readiness

6. Bulk Infrastructure Grant Conditions (continued) Output Financing plan
Co-funding needed but no duplicate funding
Infrastructure ownership resolved
Institutional commitment/agreement
Licensing, environment, WCDM, Asset Management and WSDP needs met
Output
Access to water supply will be enabled.
Proper waste water management and disposal effected.

7. BUDGET ALLOCATION Budget Allocation relatively small compared to MIG
Split of allocation for 2007/08:
Regional Management Support R 7.0 million
Implementation Readiness Projects R 39.2 million
Infrastructure Implementation Projects R million

8. Bulk Infrastructure Challenges
Cooperation between a number of stakeholders and especially LGs
Planning of these schemes is ongoing and feasibility studies done :Question asked: Does it mean that we allocation are not based on sound plans and that the department relies on thumb suck?
Use of PPPs not yet addressed, DWAF takes the lead
Funding for social and economic elements still to be acquired

9. Bulk Infrastructure Progress Targets
Discussions were held with municipal and provincial stakeholders
Policy and criteria booklet has been drafted
Document on application procedure to follow
Work on drafting a project list is underway
Targets
It is expected that the full budget for 2007/8 as allocated will be spent

10. Implementation structure

11. Province Performance: KZN
Budget Allocation 2007/08
Infrastructure Implementation R 69.0 million
Implementation Readiness R 4.0 million
Management Support R 0.25 million
Project Status
5 Infrastructure projects all in implementation phase
7 Implementation readiness projects, Municipalities already started with development of feasibilities
R 25.9 mill certified for payment by end December (35%)
R 22.2 million paid through BAS by end December (30%)
General progress satisfactory and budget will be spend by end March 2008

12. Province Performance: NW
Budget Allocation 2007/08
Infrastructure Implementation R 20.0 million
Implementation Readiness R 3.0 million
Management Support R 0.25 million
Project Status
1 Infrastructure project in implementation phase
Forms part of R 146 million project currently implemented
4 Implementation readiness projects, PSP’s appointed for 3 projects, no response from Ngaka Modiri Molema on Ratlou Local Municipality BWS
General progress satisfactory, R 20 million (86%) already transferred (R 13.0 million actual expenditure), intervention required for Ratlou Local Municipality BWS

13. Province Performance: NC
Budget Allocation 2007/08
Infrastructure Implementation R 5.1 million
Implementation Readiness R 2.3 million
Management Support R 0.25 million
Project Status
1 Infrastructure project
Phase 1 contractor on site November 2007
Phase 2 contractor on site January 2008
4 Implementation readiness projects PSP appointed
R 3.9 mill certified for payment by end December (51%)
R 3.6 million paid through BAS by end December (47%)
General progress satisfactory and budget will be spend

14. Province Performance:Limpopo
Budget Allocation 2007/08
Infrastructure Implementation R 72.3 million
Implementation Readiness R 8.55 million
Management Support R 0.0 million
Project Status
8 Infrastructure projects all in implementation phase
9 Implementation readiness projects PSP to appointed
Programme started slow, general progress average, needs close monitoring and budget will be spend by end March 2008

15. Province Performance:Gauteng
Budget Allocation 2007/08
Infrastructure Implementation R 0.0 million
Implementation Readiness R 1.5 million
Management Support R 0.25 million
Project Status
0 Infrastructure projects
1 Implementation readiness project PSP appointed
General progress satisfactory, R 1.1 million spent on feasibility (63%), budget will be spend by end March 2008

16. Province Performance: Free State
Budget Allocation 2007/08
Infrastructure Implementation R million
Implementation Readiness R 1.4 million
Management Support R 0.0 million
Project Status
3 Infrastructure projects
CD had discussion with Ninham Shand, Jagersfontein project. Intervention in place. R 16 mill will be spend.
CD had discussion with Ngwathe Municipality. Intervention in place and R 4.8 mill will be spend.
3 Implementation readiness projects PSP appointed in November 2007
General progress average, funds will be spend by end March 2008, needs close monitoring

17. Province Performance: MPUMALANGA
Budget Allocation 2007/08
Infrastructure Implementation R million
Implementation Readiness R 2.58 million
Management Support R 0.25 million
Project Status
4 Infrastructure projects
Kabokweni project funded by MIG and R 6 mill reallocated to Mbombela Stadium project.
Management funds (R 3.3 mill) reallocated to Delmas project.
Reallocation funds from other projects to Delmas
2 Implementation readiness projects PSP appointed
R 12.2 mill of work completed and to be submitted (34%)
General progress slow, needs support and close monitoring

18. Provincial Performance: WC
Budget Allocation 2007/08
Infrastructure Implementation R 0.0 million
Implementation Readiness R 3.6 million
Management Support R 0.25 million
Project Status
0 Infrastructure projects
3 Implementation readiness projects PSP appointed November 2007
Only implementation readiness projects, funds will be spend by March 2008

19. Provincial Performance:EC
Budget Allocation 2007/08
Infrastructure Implementation R 0.0 million
Implementation Readiness R 3.6 million
Management Support R 0.25 million
Project Status
0 Infrastructure projects
3 Implementation readiness projects PSP appointed November 2007
Only implementation readiness projects, funds will be spend by March 2008
Question asked: Why is the management support a small portion of the total budget allocation? Do not talk of challenges. The Department should make reference to what it is doing to addressed the challenges?

20. Water sanitation- Schools and Clinics
Purpose:
Eradicate water supply and sanitation backlogs in all clinics by 2008
All schools which were never served by 2009
Conditions:
Implementation plans submitted by end Feb 2008
Implementation plans assessed by Prov. Mangt structures
O and M plan and budget requirements of those facilities

21. Schools and Clinics Multi-year Allocation
For water and sanitation, which amounts to R665m, allocated as follows:
2007/08 R 105 million(current)
2008/09 R 210 million
2009/10 R 350 million

22. Schools and Clinics Agreed Principles: Governance & Structure
R665 m will be a top up fund to funds already available through the Prov. Infrastructure Grants.
Although funds controlled by DWAF, project planning and implementation will be a collaborative team effort between DWAF, DoE, DoH, PDE and PDH.
Nat. Gov.Structure to be operational by end March 07.
Prov Governance structures are being established. (The E. Cape structure is already functioning)
National Schools and Clinics Program Manager and support office is being established within DWAF
9 Regional Program Managers & Support Offices being established.
Schools and Clinics

23. Schools and Clinics Agreed Principles: Backlog Definition
Backlogs in the past have been classified as “facilities with no access” and “facilities with inadequate access”
In the rollout of this programme backlog definitions should be structured as follows:
No Services at all
Insufficient number of service facilities
Unacceptable technical service type
Unsustainable Service
Unacceptable condition
Unacceptable Health & Hygiene practices & management

24. Schools and Clinics Agreed Principles: Priorities
Target for eradication of water and sanitation backlogs in Clinics is Dec 2007.
Backlog can be eradicated within the available funds in 2007/08.
Thus agreed with DoE that Clinics will be prioritised initially above Schools
Within the schools backlogs, schools with no facilities will be prioritised where practical and feasible in the context of the total solution during 2008 MTEF
Individual Provinces will not be prioritised and allocations will be made pro-rata to backlogs
Schools and Clinics

25. Schools and Clinics Agreed principles : Implementation
Various Implementation models will be used. These could include:
Using existing contracts / implementing agents of Provincial Departments
Using MIG projects (municipalities) to connect schools to new water and or sanitation schemes currently being rolled out
Using various organisations as Implementing Agents on behalf of DWAF
Using contractors appointed directly by DWAF
Thus a flexible funding approach is essential.
Schools and Clinics

26. Schools and Clinics Agreed Principles: Fund Allocation
From previous slides it is clear that it won’t be possible to use a rigid; once-off; fund allocation process.
Therefore; it has been agreed with NT that the fund will classified as a Schedule 7 grant.
As clarity develops regarding the most appropriate implementation solution, funds will be allocated accordingly. The 1st order allocation was done at the end of 2007.
Schools and Clinics

27. Schools and Clinics Expected Outputs:
Provide acceptable and sustainable water and sanitation services to
All Clinics that currently have no services in the first MTEF period.
All Schools that currently have no services.
Some Schools that currently have unacceptable services, within budget constraints
Detailed project lists with clear targets for delivery will be set per province, per department and for water and sanitation. These will be distributed with the 1st order allocations.
Schools and Clinics

28. Schools and Clinics Specific Challenges
Current indications of inadequate school sanitation indicates that the problem is of such a magnitude that it cannot be resolved within the currently available budget.
As the program develops more detailed data, accurate funding requirements and motivations will be developed for consideration by Treasury.
It is essential that this opportunity be used to resolve all backlog issues in schools and clinics.
Schools and Clinics

29. Agreed Principles: Backlog data; criteria & solutions
Because of difference in definitions of the term backlog, backlog data currently available from Health and DoE not compatible.
A shared common understanding was agreed upon.
Also agreed to develop shared common criteria in respect of designs and costing models
This criteria was be applied to the agreed data sets resulting in clustering of similar solution sets within Provinces, which will guide implementation planning
The above process was applied to provide 1st order budget allocation information.
Schools and Clinics

30. Schools and Clinics Specific Challenges
Access to data remains a challenge.
DoE has embarked on a comprehensive data collection program. Reported levels of confidence in the information being gathered however varies and DWAF does not yet have access to this data.
Provincial Education Departments themselves maintain data sets of varying levels of confidence.
A complete picture can only be formed once these sets have been merged and interpreted in terms of a common shared definition set.
Schools and Clinics

31. Bucket eradication Multi-year allocation (Part of MiG:
2005/06 - R200 m
2006/07 - R400 m
2007/08 - R1bn
Targets for the MTEF
Eradication of all remaining buckets ( ) was due by Dec 2007
Question asked: It is not true that buckets have been eradicated? What does the change the service level standards (VIP Vs Water Borne) mean?

32. Bucket eradication Specific Challenges:
Community expectations (VIPs vs waterborne)
Inadequate water resource & bulk sewerage infrastructure to support waterborne sanitation
Procurement processes of municipalities (take time to appoint contractors)
Unavailability of local contractors due to many infrastructure projects underway

33. Bucket eradication progress
Province
Feb 2005 backlog
Buckets eradicated April 05 March- 06
Buckets April 06-June 06
Buckets Eradicated (July 06-Sep 06)
Buckets eradicated Oct 06-Dec 06
Buckets eradicated Jan 2007
Backlog
( as at end Jan 2007) EC
48,417
11,742
13,154
4,200
2,691
16,630 FS
127,658
16,685
8,831
5,768
1,120
6,463
88,791 GT
5,169
3,844
200
1,125
KZN
750 LP 80 MP
15,172
11,737
3,435 NW
35,189
8,220
670
3,449
2,744
232
19,874 NC
16,691
8,221
1,149
950
1,649
107
4,615 WC
3,128
927
332
223 10
1,636
Total
252,254
62,206
24,136
18,002
8,427
6,812
132,671

34. Operating Subsidy Multi year allocations Conditions
2008/9 R 1,130,507 million
2009/10 R 855,000 million
2010/11 R 570,000 million
Conditions
All receiving WSA’s to conclude formal agreements by 31 March 2008
Transfer of appropriate staff by 31 March 2008
The necessary capacity must be in place in the receiving WSA’s for implementation of the grant
DWAF to continue monitoring the implementation till 2011/12

35. Operating Subsidy Output Challenges
Operating of water services schemes and improved revenue collection
Schemes refurbished to standards outlined in the agreed policy framework and transferred
All affected staff transferred
Challenges
Finalising the staff transfers this financial year.
Formalising of refurbishment plans by WSA’s.

36. Operating Subsidy Progress 54 agreements signed (90%)
3168 staff transferred (45%)
3575 staff seconded (51%)
1701 schemes with a total asset value of
R 5,957 million transferred (91%)
Refurbishment total expenditure R 545 million (46%)

37. Operating Subsidy Targets- 2008 and after:
two outstanding agreement signed, since four are awaiting the Director-General’s signature
32 schemes transferred
3575 seconded staff transferred
Monitoring and evaluation of the work done
Comment made by presenters: refurbishment will be required after effecting the transfers
Thanks –

38. I thank you