1. Water Services Bulk Infrastructure Programme January 2008

2. Introduction Infrastructure required to connect water resources over vast distances with internal bulk and reticulation systems Vast = Macro/Regional scale.

3. Policies / Conditions Policies and conditions will be revised under the following categories –Criteria for project proposals –Criteria for project approval –Conditions for funding –Project Management processes Accounting process & responsibility Project implementation Monitoring –Sustainability conditions –Process to reallocate funds –Consequences for Failure to comply with agreements.

4. Other Policy documents Water resource development Regional bulk infrastructure Internal bulk infrastructure Bucket eradication programme Other program alignment Asset management Financial, social, economic, environmental & institutional issues Master bulk infrastructure framework Costing & funding requirements.

5. Special DoRA conditions DWAF must ensure appropriate involvement Role players must understand implications Agreement prior to implementation to be reached on: –Ownership –Implementation –Operation & Maintenance –Social & Economic component funding ( Viability, Funding availability, Borrowing capacity, Etc. )

6. Funding Allocation: –07/08 … R300 million –08/09 … R450 million –09/10 … R650 million NB: Fund small compared to MIG: –8.6% of annual MIG…relative small impact Fund transferred to DWAF as schedule 7 grant (Grant in kind) Grant split: –R7m/a for regional management –R39-50m/a for planning & feasibility studies –Remainder for implementation.

7. Purpose Distinguish between direct service delivery of reticulation schemes that MIG is targeting Water availability & scarcity (Link Water Resource Strategy and planning) Benefit of scale Integrated management (multi users) Institutional aspects & arrangement (ownership, implementation, O&M) Socio-Economic development Financial issues (Viability & funding) Implementation options Sustainable management (water resources, O & M)

8. 3. Development and revision of policy 8. Approval of Feasibility studies for future proje cts 6. Monitoring of implementation of projects approved Overview of programme functions 2. Programme Management 1. Programme Governance 9. Business case for internal bulk 7. Strategic support of projects 4.Evaluation process of project proposals 5.Project approval agreements

9. Milestones to Date Feb’07-Programme Initiation Policy Mar’07-Announcement Apr’07-DoRA Draft May’07-List of Projects submitted Jun’07-Review of Project Lists Jul’07-Revised Project Lists submitted Sep’07-DoRA gazetted Oct’07-Implementation commenced

10. Project Management Structure Programme Manager (Sibusiso Mthembu) National Coordinator (George Constantinides) (Supported by D vd Boon) Regional Coordinator (DWAF Northern Cape) Implementing Agent Waterboards PSPs DWAF Municipalities Regional Coordinator (DWAF Gauteng) Implementing Agent Waterboards PSPs DWAF Municipalities Regional Coordinator (DWAF Mpumalanga) Implementing Agent Waterboards PSPs DWAF Municipalities Regional Coordinator (DWAF Eastern Cape) Implementing Agent Waterboards PSPs DWAF Municipalities Specialist Support Contract/ Legal (RW) Finance (Magalies) M&E (DWAF) Institutional (DWAF) Linkages DWAF Regions NT DPLG SALGA Include 9 Provinces

11. Project approval / agreements Letters informing benefiting Municipalities –NB: grant-in-kind; not default transfer Project profiles DoRA compliance: formal agreements on –Ownership –Implementation arrangements –Operations & maintenance –Financial management (financing & cost recovery) –Effective water use –Asset management –(Expert team support – format, agreements, authorization?)

12. Monitoring of implementation Monitoring of projects /programme: Implementation action plan with monthly deliverables & cash flow Implementation arrangements Oversight Monthly reporting per region (certification payments and BAS) Reporting of programme DWAF management, Cash flows, status report NT, DoRA financial expenditure report (as from Jan 08) NT, Information / reporting system IRM ?

13. Strategic Support Identify projects, nomination & prioritization Developing Project proposals Populating the Information system (to be developed) Monitoring & reporting Expenditure forecasts Reallocation of budgets

14. Feasibility studies Regional coordination Guidelines, checklist and tools Water services planning mentoring (training, modular development) Provincial planning task team NB: Comprehensive plan –Total services –Water resources –Appropriate solutions (Technical) –Institutional –Financial –Impact & outcome –Validation & Adjudication Expert teams Other programs alignment (Housing, MIG, etc).

15. Business case for Internal Bulk Municipalities highlighted the need Recognized that there is gap between Regional Bulk and reticulation. Motivation for internal bulk is similar to that of regional bulk, (I.e should not be through MIG because it does not supply directly to consumers. ) Currently collecting information on potential projects Business case to be completed by end March 2008

16. KWAZULU NATAL Budget Allocation 2007/08 Infrastructure ImplementationR 69.0 million Implementation ReadinessR 4.0 million Management SupportR 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%) Progress satisfactory and budget will be spend by end March 2008 PROGRESS TODATE

17. NORTH WEST Budget Allocation 2007/08 Infrastructure ImplementationR 20.0 million Implementation ReadinessR 3.0 million Management SupportR 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 Progress satisfactory, R 20 million (86%) already transferred (R 13.0 million actual expenditure)

18. NORTHERN CAPE Budget Allocation 2007/08 Infrastructure ImplementationR 5.1 million Implementation ReadinessR 2.3 million Management SupportR 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 million certified for payment by end December (51%) R 3.6 million paid through BAS by end December (47%) Progress satisfactory and budget will be spend

19. WESTERN CAPE Budget Allocation 2007/08 Infrastructure ImplementationR 0.0 million Implementation ReadinessR 3.6 million Management SupportR 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

20. LIMPOPO Budget Allocation 2007/08 Infrastructure ImplementationR 72.3 million Implementation ReadinessR 8.55 million Management SupportR 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

21. EASTERN CAPE Budget Allocation 2007/08 Infrastructure ImplementationR 28.8 million Implementation ReadinessR 10.8 million Management SupportR 0.25 million Project Status 7 Infrastructure projects all in implementation phase 16 Implementation readiness project, Municipalities started with development of feasibilities R 4.7 mill certified for payment end December (12%) R 22.9 mill of work completed and to be submitted (57%) Program started slow, general progress satisfactory and budget will be spend by end March 2008

22. GAUTENG Budget Allocation 2007/08 Infrastructure ImplementationR 0.0 million Implementation ReadinessR 1.5 million Management SupportR 0.25 million Project Status 0 Infrastructure projects 1 Implementation readiness project PSP appointed Progress satisfactory, R 1.1 million spent on feasibility (63%), budget will be spend by end March 2008

23. FREE STATE Budget Allocation 2007/08 Infrastructure ImplementationR 28.62 million Implementation ReadinessR 1.4 million Management SupportR 0.0 million Project Status 3 Infrastructure projects Discussion with Ninham Shand, Jagersfontein project. Intervention in place. R 16 mill will be spend. Discussion with Ngwathe Municipality. Intervention in place and R 4.8 mill will be spend. 3 Implementation readiness projects PSP appointed in November 2007 Progress average, funds will be spend by end March 2008, needs close monitoring

24. MPUMALANGA Budget Allocation 2007/08 Infrastructure ImplementationR 29.95 million Implementation ReadinessR 2.58 million Management SupportR 0.25 million Project Status 4 Infrastructure projects Kabokweni project funded by MIG and R 6 mil reallocated to Mbombela Stadium project. Management funds (R 3.3 mil) 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%) Progress slow, needs support and close monitoring

25. Total spend to date /Projections R49,8 BAS (Basic Accounting System), end Dec 2008 Projection R 126 end Jan 2008 Projection R 207 end Feb 2008 Projection R 300 end Mar 2008

26. Key Challenges-Regional level Municipalities slow in procuring PSP’s for feasibility study development Required agreements not yet in place Slow submission of invoices on work completed Inadequate capacity for adequate project management Ownership of project and O & M for infrastructure that is shared between local authorities.

27. Key Challenges- National level Delay in the start of implementation threatening the ability to utilize the budget Limited budget Inability to take firm action against municipalities that are not performing Sustainability of programme – Will it continue after 3 years ? Inter Departmental politics between DPLG, DWAF and NT Multiple reporting interface with National Treasury

28. Conclusions Programme structure is now well established Implementation of projects could only start after Sep 2007 due to the planning process Allocation of funds for the first 3 years is almost complete Implementation of projects in current financial year will meet targets /goals in all provinces R30 million may need to be re-allocated Reporting processes to NT are currently been urgently addressed.

29. THANKS