1. Water Sector response to ASGISA IMC Department of Water Affairs and Forestry June 2008

2. 2 Content Background Drinking water quality Water services infrastructure Water resources infrastructure Compliance and enforcement of the NWA Regulation and compliance in water services Raw water quality Water conservation and demand management Skills crisis Conclusion

3. 3 Background 9th May: DWAF presentation to ASGISA IMC DWAF to report back on various issues raised by the IMC Key issues raised by IMC relate to: –Water infrastructure and universal access, including water for electricity generation –Compliance and enforcement –Water quality (raw water and drinking water) –Water conservation and demand management and –Skills and human resources “A Response to the Immediate Challenges facing the Water Sector” –Provides response to issues raised by IMC –Deals with issues that require immediate intervention in water services sector and water resources sector Request came while DWAF was drafting a Strategic Framework on Water for Sustainable Growth and Development –Will follow this Response to the Immediate Challenges facing the Water Sector –Will outline strategic response of sector to ensuring water supports growth and development –Will deal with issues in Immediate Challenges document and other longer term issues and opportunities –Will be available for comment in October 2008 and presented at Cabinet Lekgotla in January 2009. In parallel, work will begin on revising the National Water Resources Strategy (NWRS) –Provides framework for protection, use, development, conservation, management and control of water resources –NWRS must be revised and completed by January 2010.

4. 4 Drinking water quality Challenge: Under-budgeted and under-resourced function in many municipalities Poor water quality impacts on people’s lives, particularly those with compromised immune systems Monitoring and reporting improving but still inadequate Many rural water schemes and small schemes not monitored at all

5. 5 Drinking water quality Response: DWAF and DPLG to investigate options and processes for placing water services functions under administration –where a Water Services Authority is unable to perform these functions effectively –particularly where human lives are put at risk due to non-performance and –where a quick response is needed. Regulation of water services includes regulation of drinking water quality –action will be taken against Water Services Authorities where it does not meet standards. Where appropriate, Water Boards to –assist in monitoring drinking water quality –assist DWAF to audit the results submitted by municipalities on drinking water quality, or –Act as WSP on behalf of a WSA. DWAF will put in place an urgent programme to build capacity in regional offices to support municipalities in drinking water quality management. DWAF and National Treasury to further investigate ways to incentivise good municipal asset management and sufficient budgeting for drinking water quality management and monitoring.

6. 6 Water services infrastructure Challenge Aging, poorly maintained infrastructure leading to increased failures Lack of investment in maintenance and refurbishment Poorly managed waste water and sewage infrastructure leading to high pollution levels, sewage spills Many VIPs now full leaving households without functioning toilets Bulk infrastructure not sufficient for increased demand (sanitation and water) FBW not sufficient for AIDS affected and vulnerable households

7. 7 Water services infrastructure Response DWAF and NT to investigate funding for bulk water services infrastructure and refurbishment of water services infrastructure to catch up on backlog of O&M and refurbishment. –total additional requirement is estimated at around R3.7-billion per year DWAF to investigate, with DPLG and NT, measures / incentives to ensure that –O&M is planned and budgeted for in all new and existing services, and –WSPs commit a minimum percentage of value of infrastructure to annual O&M DWAF, DPLG and NT to review funding arrangements for free basic services through Equitable Share, including feasibility of ring-fencing part of Equitable Share to support sustainable water services.

8. 8 Water services infrastructure Response cont: DWAF to establish task team to review current approaches to basic sanitation improvement, including –advisability of providing further funding to permanent VIP structures; –MIG conditionalities to ensure bulk infrastructure is sufficient for new networked sanitation services. DWAF, with SALGA, to –develop strategy for dealing with full VIPs and –review appropriate technology for communities previously served with VIPs. DWAF to finalise and implement the National Infrastructure Asset Management Strategy DWAF, with SALGA, to review quantity of water allocated under Free Basic Water (FBW) and the mechanisms for providing/funding FBW, including to HIV and AIDS affected households and other vulnerable groups. DWAF to finalise Free Basic Sanitation Strategy and submit to Cabinet

9. 9 Water resources infrastructure Challenge Asset management systems need upgrading Decisions to be made on augmentation options for major cities where demand is high relative to supply (Cape Town, Gauteng, Port Elizabeth) New infrastructure needed urgently to serve Eskom and SASOL

10. 10 Water resources infrastructure Response –Establishment of National Water Resources Infrastructure Agency (NWRIA) to be fast-tracked to support the provision of sustainable and reliable infrastructure to strategic water users eg Eskom and Sasol, and support economic growth and development across the country. –DWAF to complete National Water Resources Infrastructure Action Plan with regard to infrastructure that serves Eskom by end June 2008. –DWAF to complete and implement the review of Government Water Scheme operation and maintenance systems and procedures –Decision on new infrastructure to augment water supply to Gauteng to be taken in 2009 –Further feasibility studies to be completed before a decision can be made for Cape Town’s augmentation needs.

11. 11 Compliance and enforcement under the National Water Act Challenge: High levels of unlawful water abstraction in some areas, particularly the Vaal Unlawful effluent discharge leading to high levels of pollution Illegal dam construction

12. 12 Compliance and enforcement under the National Water Act Response DWAF to ensure sufficient funding for development of a strong Compliance, Monitoring and Enforcement function to –Prevent and control unlawful raw water use and pollution –Take action against around 300 illegal water users in the Vaal illegal water use = around 290 million m3 per annum= approx 8.5 million households using 100 litres per day = almost entire yield of Mohale dam in Lesotho Highlands Water Project. DWAF to discuss with National Treasury and Asset Forfeiture Unit possibility of retaining assets seized during action against illegal water users. National Environmental Management Act to be amended to give powers to appoint DWAF officials as Environmental Management Inspectors so that they are empowered to take compliance action under both NEMA and the National Water Act.

13. 13 Regulation and compliance in water services Challenge: Poor regulation of WSAs and WSPs resulting in –Drinking water quality problems –Interruptions in supply –Low maintenance levels –Failing waste water treatment infrastructure

14. 14 Regulation and compliance in water services Response DWAF to determine appropriate institutional arrangements for water services regulation, including –institutional arrangements for national regulator –revision of Water Services Authority (WSA) and Water Services Provider (WSP) functions to take into account de facto lack of separation of functions between the two. DWAF to strengthen drinking water quality regulation by end of September 2008 through strengthening of current capacity.

15. 15 Raw Water Quality Challenge: Poor maintenance and operation of WWTW leading to high levels of pollution Pollution from industry, mines and agriculture

16. 16 Raw Water Quality Response Phased implementation of Waste Discharge Charge System to begin in Upper Olifants, Upper Vaal and Crocodile Marico water management areas in 2009. Directives to be issued by Minister –to municipalities to rehabilitate Waste Water Treatment Works where severe problems have been identified –during Enforcement Week in October 2008 –action to be taken against municipalities that do not comply with directives Infrastructure Asset Management plans to be developed for all waste water treatment works and other municipal water services infrastructure.

17. 17 Water conservation and demand management Challenge: High levels of water wastage in water services and agriculture in particular; Results in –High costs for municipalities –Early need for augmentation of supply

18. 18 Water conservation and demand management Response DWAF, through MTEF, DBSA, Land Bank and Commercial Banks, to establish effective mechanisms for funding Water Conservation and Water Demand Management (WC/WDM) DWAF, with other stakeholders, including SALGA, municipalities, and SAAWU to –develop national programme for WC/WDM in key metropolitan and agricultural areas, –investigate options for funding and resourcing this programme including finding sufficient technical skills to support the programme. Regulations for WC/WDM to be completed by December 2008.

19. 19 Response to the skills crisis in the water sector Challenge: Shortage of technical skills in water sector – engineering – finance – technical and artisan Continuing drain of skills from the sector Large number of institutions in the water sector requiring skilled staff

20. 20 Civil engineering capacity in the municipal sector DPLG 2008

21. 21 Civil Engineering Staff in Local Government in 2005

22. 22 Response to the skills crisis in the water sector Response Review of designation of municipalities as WSPs and potential for creating regional WSPs to be conducted, with focus on areas of poor water services provision. Review of MFMA to be discussed with DPLG and National Treasury re bringing in greater private sector capacity for management and delivery of services. DWAF to discuss with DPLG and relevant departments on legislative requirements for national government to intervene in water services functions in municipalities that are unable to provide an effective service. DWAF to continue to drive development and implementation of a comprehensive sector skills response strategy (Vision for Capacity Building and Training 2025) DPSA to speed up review of salaries and conditions of service for engineers, technicians and scarce occupational classes in water sector. DWAF to examine how to bring private sector expertise back into the Department and how to build capacity in a dedicated fashion. DWAF to investigate absorption of people with theoretical training as Process Controllers into municipalities for internships and hands on training DWAF, with DBSA and other partners, to build on current programme of placing engineers in municipalities, and to increase deployment.

23. 23 Conclusion Government must recognize crucial role of water supply and sanitation in achieving ASGISA goals Concerted action is needed from all spheres of government to avoid potential failure in water sector Government must invest significantly in water sector to avoid potential water crises and to ensure water management supports ASGISA growth targets Current investment in water sector across all spheres of government is below what it should be –Current investment is around 1.2% of GDP –Benchmark level for water resources and water services investment in a country of the economic status of South Africa should be around 2-3%. Some of this investment must be found through improved revenue management There is need for substantial injection of fund from fiscus for next decade at least –must be carefully targeted and monitored –conditions attached to ensure that it does not create perverse incentives but sets up virtuous cycle of good asset management.

24. 24 Thank you