1. PROGRESS REPORT ON THE RURAL HOUSEHOLD INFRASTRUCTURE PROGRAMME (RHIP) 17 AUGUST 2012 By MR T ZULU DIRECTOR GENERAL

2. PRESENTATION OUTLINE Background RHIP Overview RHIP Objectives
Roles and Responsibilities
Progress per Province – 2010/11
Challenges – 2010/11
Progress per Province – 2011/12
Financial Performance – 2011/12
Job Creation – 2011/12
Challenges – 2011/12
Way Forward – 2012/13 & 2013/14

3. Draft and Confidential
Background
In May 2009 State President announced transfer of sanitation function from DWA to NDHS
There were other departments that were also affected by re-organisation of State e.g. Education and Minerals and Energy
The legalisation of the movement was not done and we focused on staff transfer
Staff transferred were component dealing with basic sanitation, high level of sanitation still at DWA
Draft and Confidential

4. RHIP OVERVIEW
The Rural Household Infrastructure Programme is a special four year programme to provide basic sanitation (and water) to rural communities.
It has been allocated a total budget of R1.2 billion.
The budget is allocated to the NDHS as a Schedule 7 Grant - NDHS appoints IAs & enters SLAs with WSAs.
The budget split over the MTEF is:
2010/11: R100 million;
2011/12: R231,5 million;
2012/13: R479,5 million and
2013/14: R389 million.

5. RHIP OBJECTIVES
To support municipalities to address rural basic sanitation (and water supply) backlogs.
To improve the quality of life in rural communities.
To contribute to the rural development priority of government.
To contribute to job creation and Local Economic Development.
To contribute towards meeting the sanitation (and water supply) MDG targets of South Africa.
To accelerate delivery of sanitation (and water supply) to meet the 2014 target.

6. Roles and Responsibilities of Implementing RHIP-
By nature of the grant being gazetted as Schedule 7, it means, even though it is gazetted against municipalities, it is not transferred to municipalities; it is managed by the National Department.
National Department is responsible for the identifying mechanisms of implementation being usage of Implementing Agents which could be NGOs, CBOs, Public Entities or Managing Contractors.
National Department needs to agree with municipalities on the scope of the work to be done. This is for the purpose of aligning the RHIP projects municipal IDPs. This necessitates identification of specific areas of operation up to ward level.
National Department needs to agree with municipalities on issues of operation and maintenance of the infrastructure

7. Roles and Responsibilities of Implementing RHIP (cont…) National Department and Municipalities
An agreement between the National Department and the municipalities regarding the scope of work needs to be reached; that is, identification of specific areas of operation up to ward level.
Municipalities will ensure RHIP projects appear in their IDPs.
All parties will be expected/ required to attend site meetings to monitor progress, and identify means of interventions should there be problems during the implementation.

8. PROGRESS PER PROVINCE - 2010/11
Allocation: 2010/2011
(R’000)
Number of Benefiting Municipalities
Target Number of VIP Toilets
VIP Toilets completed at 31 March 2012
% Completion
Eastern Cape
R18,000 5
2,559
100%
Free State
R3,000 1
300
Limpopo
R27,000 9
3,600
3,376
94%
KwaZulu-Natal 7
3,674
Mpumalanga
R4,000
515
Northern Cape
400
North West
R6,000 2
828
National Prog. Management
R12,000
Grand Total
R100,000 26
11,876
11,652
98%

9. CHALLENGES /11
Programme started in Oct 2010 (procurement delays).
Some WSAs did not fully grasp the nature of Schedule 7 Grant and delayed signing SLAs with NDHS as they wanted to implement the programme themselves.
Excessive rainfall was experienced during December 2010 and January 2011 which caused delays.
Implementing Agents struggled to source building material and have it delivered on site on time.
Some contractors struggled with difficult ground conditions i.e. hard rock and high water table.

10. PROGRESS PER PROVINCE - 2011/12
Allocation: 2011/2012
(R’000)
Number of Benefiting Municipalities
Number of VIP Toilets targeted
VIP Toilets completed as at 31 May 2012
% Completion
Eastern Cape
R65,000 13
7,462
7,185
96%
Free State
R10,000 3
1,297
1,198
92%
Limpopo
R48,000 12
5,864
4,081
70%
KwaZulu-Natal
R68,000 15
7,967
7,137
90%
Mpumalanga
R8,000 2
1,038
1,023
99%
Northern Cape 1
507
486
North West
R28,000 7
3,551
2,979
84%
Grand Total
R231,500 53
27,686
24,089
87%

11. FINANCIAL PERFORMANCE - 2011/12
Province
2011/12 Allocation & 2010/11 Rollover
Provisional Expenditure at
31 March 2012
Work in Progress
KwaZulu-Natal
R80,487,091
R63,207,997
R17, 279,094
Eastern Cape
R65,000,000
R55,868,072
R9,131,928
Limpopo
R54,552,091
R26,688,032
R27,864,059
North West
R30,063,533
R22,711,497
R7,352,036
Free State
R12,924,676
R8,548,344
R4,376,332
Mpumalanga
R10,086,447
R7,943,553
R2,142,894
Northern Cape
R4,394,162
R2,298,425
R2,095,737
Grand Total
R257,508,000
R187,265,920
R70,242,080

12. JOB CREATION - 2011/12 Province No of Benefiting Municipalities
Estimated Target No. of VIP Toilets
Temporary Jobs Created as at 31 May 2012
Eastern Cape 13
7,462
1,372
Free State 3
1,297
181
KwaZulu-Natal 15
7,967
1,254
Limpopo 12
5,864
867
Mpumalanga 2
1,038
324
Northern Cape 1
507 70
North West 7
3,551
658
Grand Total 53
27,686
4,726

13. CHALLENGES /12
The 2 appointed Implementing Agents (Mvula Trust and IDT) were not sufficient to implement such a programme at scale and achieve the outcomes set.
The existing SLAs between the NDHS and the Programme Management Support PSP (Maxima Global/TranSpace) on one hand and Mvula Trust and IDT on the other were not consistent with each other.
The process of handling claims of the Implementing Agents needed to be restructured to assist them with improved cash-flow management.

14. CHALLENGES /12 cont…
The recovery plans submitted in Sept 2011 by the 2 Implementing Agents were too optimistic.
The IAs ability to procure building materials from suppliers in large quantities posed a serious challenge to the outcomes of the programme.
The scope of work approved for the IDT was at high risk of not being completed by end of the 2011/12 financial year.
In December 2011 NDHS re-allocated 7,098 units from IDT and negotiated with Mvula Trust to complete these units by the end of the 2011/12 financial year.

15. MIG National Allocations
Province
2012/13 (‘000)
2013/14 (‘000)
2014/15 (‘000) EC FS GP
KZN LP MP NC NW WC
Total
Draft and Confidential

16. Operation and Maintenance
In terms of the 2012 Division of Revenue Act, within the Basic Service component of the Equitable Share, there is a breakdown of the allocation between water, sanitation and refuse removal.
These funds are for operation and maintenance which include emptying of full pits and septic tanks.
Draft and Confidential

17. WAY FORWARD /13 & 2013/14
NDHS has reduced the previously budgeted allocations of IDT and Mvula Trust to a total of +/-60% of the 2012/13 budget (in line with NDHS Portfolio Committee recommendations).
NDHS is currently in process of putting the +/- 40% balance of the 2012/13 budget to tender for additional Implementing Agents to be added to the programme.
The SLA of the Programme Management Support PSP is to be aligned to the performance of the IAs.
In 2012/13 both machinery & manual labour will be used in difficult ground conditions where needed.

18. Draft and Confidential
WAYFORWARD Cont.
Process of drafting proclamation for sanitation transfer has started
We are also negotiating with DWA in lieu of Water Services Act amendment
Seeking legal advise on implementing an Act that is managed by another Department
We need to discuss with CoGTA to synchronise planning and management of sanitation
We need to talk to National Treasury to strengthen sanitation reporting by WSAs
Draft and Confidential