1. STANDING COMMITTEE ON APPROPRIATIONS Presentation by Nthabiseng Fundakubi Acting Chief Operating Officer 11 February 2014 1 Challenges and Opportunities in Overall Water Management and Water Services Delivery

2. Presentation Outline Introduction Challenges and opportunities in overall water infrastructure and water services delivery Measures to streamline institutional arrangements( coordination and alignment of all water sector partners) for effective delivery of water services thus value for money Measures to ensuring funding allocation earmarked for water projects is spent 2

3. Introduction Local Government has the constitutional responsibility to ensure service delivery and Water Services Authorities (WSAs) in particular are required to plan, ensure access to and regulate the provision of water services (water supply and sanitation) within their area of jurisdiction. DWA on the other hand, has a responsibility to provide support and Regulate the use of water. Local Government is also a water resource user and their activities have a major impact on water resources and its management. 3

4. Introduction continued The Minister of Water Affairs is mandated through the National Water Act, 1998 to be the custodian of water resources so as to ensure that water is managed in an equitable, effective and sustainable manner. There is therefore a need to manage the whole water value chain. 4

5. Challenges in overall water infrastructure and water services delivery Lack of integrated Planning leading to lack of alignment within the water supply service delivery chain. Lack of funds to replace all the ageing infrastructure Unsustainable, unaffordable operating and maintenance (O & M ) costs Resistance to the use of Water Boards by some weak WSA 5

6. Challenges in overall water infrastructure and water services delivery (Continued) Significant high unit cost for rural water supply particularly in KZN Demographics: Scattered and informal settlements over vast distances and over difficult terrain Complex sector and governance framework Skills and capability Historic water management model and approach 6

7. 1759 Municipal Water Schemes Major coverage but O&M challenges 7 institutional & management implications ( 152 WSAs) platform to inform: new development functionality / O&M asset management institutional arrangements

8. Extensive Water Services Infrastructure Bulk pipelines > 35,000 km Reticulation >200,000 km 8 Extensive spatial coverage (urban + rural) major O&M implication (institutional, HR + Governance)

9. Water Management Challenges Water is a complex resource: – Complex climate dependant, complex runoff system and complex harnessing processes – need expert management. – Highly variable (temporal) in space, and time! 70% of time run- off is below average, and then we have floods Centrality of and respect for water: – Lack of respect and appreciation is reflected in terms of the way water is wasted, abused, polluted, prioritized and funded – Limited prioritization in sector planning and management e.g. IDPs – Lack of sector response and commitment 9

10. Water Management Challenges (continued) Ensuring water security for growth and development – Fresh water balance at its limit in most Water Management Areas – Limited dam development opportunities – Challenge lies in funding, appropriate technology, affordability/viability, effective programme management and discipline, as well as timely implementation and sustainable management – Leads to major risks if not implemented in time 10

11. Water Management Challenges (continued) Water wastage – Water losses of 38% (municipal average) in terms of water resource, infrastructure development and revenue loss perspective Resource protection and water quality management – Habitat destruction and pollution (municipalities and industry) with major health, social, environmental and economic risks 11

12. Water funding and lack of financial management – Inadequate financial management and discipline (tariff setting, cost recovery) – Lack of accountability in terms of use of equitable share – Poor implementation performance by local government (under spending and delivery) – Water resources not ring fenced – Debt management – Services viability and affordability (rural areas) Water Management Challenges (continued) 12

13. – Improved planning (integrated & business) and regulation – Application of business management principles and approach; – Stretching water, infrastructure and money paradigm shift: water loss management, resource optimization (re-use, systems operational management); – Sector mobilization, integrated governance and sector accountability; – Improved institutional framework; and – Focus on skills, capacity and capability development – National Water Resource Strategy: implementation Measures to streamline institutional arrangements and Actions 13

14. Measures to streamline institutional arrangements and Actions (Continued) Water Reconciliation Strategies for 12 key growth centres: – sector involvement – Strengthen demand and conservation management Development of water investment framework – Present available funding less than 50% Development of financing model: from appropriate solutions, financial discipline, self financing and cost recovery, to cross subsidization, grants and to investment funding Infrastructure asset management and lifecycle management: focus on operations and maintenance 14

15. NSDP: Key demand centres (Water Reconciliation Studies) 15

16. Collaboration with Private Sector (Social responsibility);  Engage in Water Sector Partnership on funding of projects and capacity building and Improved partnership with associated Departments, and Provincial Governments Improved municipal water financial management through engagement with National Treasury on changing the funding model ; Application of and focus on life cycle management; Focus on source to tap to source (integration) approach; Measures to streamline institutional arrangements and Actions (Continued) 16

17. The DWA has adopted a philosophy called “source to tap” in addressing these challenges, which encourages partnerships and integrated planning between all stakeholders and all spheres of government involved in water management or delivery. This means that each water service delivery project will focus on the following value chain components or attempt to understand how each component contributes and result in water availability at the endpoint. Sourc e BDS WTWBDS Reser voirs Reticul ation networ k TAP Reticul ation networ k Industr y / Mines Measures to streamline institutional arrangements and Actions (Continued) 17

18. Improved planning through integrated infrastructure master plans (Outcome 9 actions); Improved project and programme governance (outcome action and PMU establishment); Commit to sustainable universal access to Water Supply Services (extended programme); Improved regulation; Establishment of regional water utilities; and Addressing water security through dedicate programmes (30% of municipalities at present at risk). Measures to streamline institutional arrangements and Actions (Continued) 18

19. Integrated planning and governance (inter–departmental, provincial and sector collaboration): – Outcome management structures(Ministerial & Technical Implementation Committees) Political Intervention – -Troika between Ministers of Dept of Water Affairs, Department of Cooperative Governance and Traditional Affairs and Department of Human Settlement -MOUs signed between Ministers and the Premiers Sector Agreements (DBSA, CSIR) SIPS : 1 on 1 and SIP 18 Responding to National Development Plan National Water Resource Strategy roll-out Measures to streamline institutional arrangements and Actions (Continued) 19

20. Establishment of Programme Management Unit; Sector mobilization and accountability ; Integrated catchment management; – Establish 9 Catchment management agencies – Catchment forums Establishment of regional water utilities; National Water Infrastructure Agency; and Implementing value chain (source to tap to outcome to source to impact) approach and model. Measures to streamline institutional arrangements and Actions (Continued) 20

21. Measures to ensuring funding allocation earmarked for water projects is spent Water Boards to take over projects that are not performing To speed up implementation in the coming financial year, options of developing a supply side plan on material and equipment are being considered Withholding of MWIG transfers if the Department is not satisfied with the performance of projects being implemented Leadership from the Premiers on monitoring progress of water projects during the Premier Coordinating Forums(PCF) assisting in expenditure and delivery on the ground Review funding model 21

22. REGIONSCHEDULE 5BSCHEDULE 6B 2014/152015/162016/172014/152015/162016/17 EASTERN CAPE157 979269 922253 27683 707179 921220 403 FREE STATE00054 41084 68089 168 KWAZULU NATAL263 622861 781777 43747 020103 775229 678 LIMPOPO27 37951 69854 438190 471453 266477 289 MPUMALANGA21 000108 726114 488103 151378 005398 039 NORTHERN CAPE64 17087 713102 363000 NORTH WEST00046 06792 08296 962 TOTAL: MWIG INFRASTRUCTURE534 1501 379 8401 302 002524 8261 291 7291 511 545 GOODS & SERVICE000000 GRAND TOTAL: MWIG INFRASTRUCTURE 534 1501 380 2051 302 002524 8261 291 7291 511 545 22 BUDGET ALLOCATION MWIG 2014 MTES ALLOCATIONS

23. TOTAL ACIP ALLOCATIONS PER CATEGORY Accelerated Community Water SupplyR 60 836 Water Conservation and Demand ManagementR 93 761 Wastewater refurbishmentR 90 773 National Office Programme Management & ContingenciesR 1 588 TOTALR 246 959 TOTAL ALLOCATIONS PER REGION Western CapeR 17 819 Northern CapeR 31 470 Eastern CapeR 37 523 Free StateR 33 680 Kwa-Zulu NatalR 28 500 MpumalangaR 20 912 LimpopoR 34 872 North WestR 32 594 GautengR 8 000 National OfficeR 1 588 TOTALR 246 959 23 BUDGET ALLOCATION (CONTINUED)

24. 24 BUDGET ALLOCATION (CONTINUED) REGIONAL BULK INFRASTRUCTURE PROGRAMME: 2014 MTEF BUDGET ALLOCATION Region DWA Project Cost Budget Allocation 2013/14 Proposed Budget Allocation 2014/15 Proposed Budget Allocation 2015/16 Proposed Budget Allocation 2016/17 EASTERN CAPE 3 686 565 781590 156 497985 952 0001 157 000 0001 115 386 000 FREE STATE 2 776 300 000217 900 000308 646 000381 654 000392 000 000 GAUTENG 614 456 125211 200 000337 900 000355 000 000440 000 000 KWAZULU NATAL 6 389 279 939595 263 2751 178 150 0001 333 200 0001 228 000 000 LIMPOPO 3 672 340 820642 521 725749 299 000841 667 000945 217 000 MPUMALANGA 2 426 019 853129 352 752226 300 000234 000 000285 447 000 NORTHERN CAPE 3 288 904 224340 965 429310 749 000339 299 000419 030 000 NORTH WEST 2 689 232 660377 734 243349 450 000426 600 000593 522 000 WESTERN CAPE 806 011 534169 203 079134 150 000153 234 000205 000 000 HEAD OFFICE 072 041 00075 416 00093 110 000104 295 000 TOTAL 26 349 110 9363 346 338 0004 656 012 0005 314 764 0005 727 897 000

25. 25 Measures to put in place to minimize under spending Enhanced planned; Improved accountability on the implementation agents; Reprioritize projects for quicker completion; Strengthen control on reporting mechanism; Support municipalities especially in assisting with fast tracking implementation of projects as well as complying to the provision of DORA, MFMA and PFMA. GOING FORWARD

26. 26 ENABLERS TO IMPROVE SERVICE DELIVERY Early warning strategy  Established Emergency Response Team supported by appropriate technology Communication with stakeholders (Internal and External)  Blitz  Whatsapp  Information System and Customer Care Utilisation of retired engineers  Consultation with the database of Public Works Expanded Public Works Programme  Utilization of the Environmental Monitors Building of capacity within DWA to effectively support municipalities

27. Conclusion Infrastructure is a critical part of water and water services management, and must receive the highest priority attention However, water management also includes water governance, programme management and enabling actions (skills, coordination, information, research and knowledge). These must also be funded appropriately Extended attention must be given to life cycle management, service quality and viability Funding of environmental and social business requires special solutions (non economic development) DWA has initiated various actions to address and improve services delivery 27

28. THANK YOU 28