BRIEFING TO THE WATER AND SANITATION
PORTFOLIO COMMITTEE
PRESENTATION TITLE
WATER SECTOR INSTITUTIONS
Presented by:
STRATEGIC
OBJECTIVES, TARGETS AND BUDGET
Name Surname
PROJECTIONS
Directorate
2015/16 -2017/18
Date
DIRECTOR GENERAL’S
(MS MARGARET–ANN DIEDRICKS)
OPENING REMARKS
29 APRIL 2015
PART A
POLICY AND LEGISLATIVE MANDATES
POLICY AND LEGISLATIVE MANDATES
Policy & Legislation
Description
White Paper on Water &
Sanitation, 1997
Recognised a need for water boards and public sector entities .
Water Services Act , Act No
108 0f 1997
Give Minister the powers to establish and disestablish water boards
and outline the procedure for appointing Board members.
National Water Act, Act 36 of Gives Minister the power to establish and disestablish Catchment
1998
Management Agencies and outline the procedure for appointing
board members
Strategic Framework for
Water Services
Recommended the Institutional Reforms in the sector.
Public Finance Management
Act , Act No.1 of 1999
National Public Entities listed as Schedule 3A and 3B under PFMA.
National Water Resource
Strategy-2
Chapter 8 on Water Management Institutions including plan to
establish 9 CMAs and Regional Water Utilities
Raw Water Pricing Strategy,
2007
Defines Water Resource Management functions to be charged to
users and funding framework for CMAs
National Development Plan,
2012
Regional Water Utilities , CMAs and National Infrastructure Agency
to be created .
LEGISLATIVE REQUIREMENTS FOR ENTITIES PLANNING
ENTITY
COMPLIANCE
DATE
LEGISLATION
SUBMIT TO
Water Boards
Water Boards submits
their Corporate Plan,
projected revenue and
expenditure.
31 May
PFMA Sec 52
TR 29.1
Minister and National
Treasury
TR 29.2.1
WSA: Sec 40.4
Shareholders Compact
Business Plan
TCTA
TCTA submits its
Corporate Plan and
projected of revenue,
expenditure and
borrowings
28 February
Shareholders Compact
PFMA Sec 52
TR 29.1
Minister and National
Treasury
TR 29.2.1
WRC
WRC submits its 1st and
Final draft of their
Strategic Plan
1st draft: 1 October
Final: 1 April
TR 30.1.1
TR 30.1.2
Minister and National
Treasury
CMAs
CMAs submits their 1st
and final draft of their
Annual Performance Plan
1st draft: end August
2nd draft: end
November
Final: end January
TR 30.1.1
TR 30.1.2
Minister and National
Treasury
Water & Sanitation sector institutions
Financial year : 1 Jul to 30 Jun
Minister
Catchment Management
Agencies (Schedule 3A
of the PFMA
BreedeGouritz
InkomatiUsutu
Limpopo
PongolaMzimkhulu
Berg-Olifants
Doorn
Olifants
Orange
TsitsikammaMzimvubu
Trans Caledon
Tunnel Authority
(Schedule 2 of
PFMA)
Water Research
Commission
(Schedule 3A of
PFMA)
Komati
Komati
KomatiBasin
Basin
Basin
Water
Water
WaterAuthority
Authority
Authority
(Schedule
(Schedule
(Schedule3A
3A
3Aofof
of
PFMA)
PFMA)
PFMA)
Vaal
Financial year : 1 April to 31 March
Water Boards
(Schedule 3B of
the PFMA)
Amatola Water
Bloem Water
Lepelle Water
Magalies Water
Mhlathuze
Water
Overberg
Water
Rand Water
Sedibeng
Water
Umgeni Water
The key role of Water Sector Institutions is to support South Africa
as a developmental state to deliver on Government Developmental
Objectives through :
1. Using water for promoting socio-economic developmental agenda .
2.Reducing inequality through access to water and job creation .
Relevant
Advantages of
Water Institutions
3.Leveraging additional investments for infrastructure development
4.Enabling rural communities to use water for rural livelihoods.
5.Promoting greater citizen participation in decision making
6.Allowing for innovation and knowledge generation.
6
KEY STRATEGIC FOCUS AREAS OF INSTITUTIONS
1. Developing, financing and managing national water infrastructure (TCTA, KOBWA,
WTE) SIP 1,SIP3,SIP4,SIP6,SIP 9,SIP 18
2. Managing water resources at the catchment level (CMAs)
3. Managing regional water infrastructure and supporting local government in the
delivery of water services (Water Boards)
4. Managing local water resource farmers and the transformation of the water sector
with respect to irrigated agriculture (WTE, Water User Associations SIP 18)
5. Providing Water Knowledge hub for South African citizens
All in line with national developmental objectives of poverty eradication, creation of
jobs, equitable economic growth, sustainable development
7
GOVERNANCE PROTOCOL FOR ENTITIES
List of documents submitted to the Minister
Legislation
Policy Statements
Sec 39 of Water Services Act, 1997
Shareholder Compacts
Treasury Regulation 29.2
Strategic Plans
Treasury Regulation 30.1.1
Corporate Plan & projection of revenue,
expenditure & borrowings
Sec 52 of PFMA, 1999
Treasury Regulation 29.1
Business Plans
Sec 40 of Water Services Act, 1997
Schedule 4 of National Water Act, 1998
Quarterly Reports
Treasury Regulation 29.3.1
Annual Reports
Sec 44 of Water Services Act, 1997 Sec 55(1)(d) &
65 of PFMA, 1999
Tariff Increases
Sec 42 of MFMA, 2003
Financial misconduct procedures report
Treasury Regulation 33.3.1
Materiality & Significance Framework
Treasury Regulation 28.3.1
8
Governance protocol for entities
Strategic intent
statement / DWS
strategic plan
Shareholder
compact
Corporate plan
Performance
monitoring &
evaluation
• Minister meets with Chairpersons of entities to outline the Strategic Intent which is used to articulate her vision and her
expectations of the entities.
• The DWS Strategic Plan is a guide to entities in terms of vision and strategic direction
• Minister and The Boards conclude a shareholder compact annually (Treasury Regulation 29.2) .
• Documents the mandated key performance measures and indicators to be attained by the entity in delivering the desired
outcomes and objectives as agreed between the entity Board and the Minister
• Entities submit corporate plans and budgets annually to Minister and National Treasury at least one month before the
start of financial year (PFMA Sec 52).
• Entities corporate plan must contain implementation details to attain the key performance measures and indicators
outlined in shareholder compact and desired outcomes and objectives outlined in the strategic intent statement.
•
•
•
•
Quarterly reporting
Annual Reports including financial statements submitted by end of November every year.
Tariff Submissions to Parliament by 15 March every year.
Reporting to Portfolio Committee –once a year .
9
Relationship between institutions and
DWS
Parliament
Portfolio Committee
reviews reports and
plans (hearings,
visits)
Minister
DWS
Minister appoints
boards; approves
shareholder
compacts, Corporate
Plans & Annual
Reports
(1) Oversee institutional
establishment;
(2) Oversee governance
(manage board appointment
processes, training etc.);
(3) Oversee shareholder
compact;
(4) Oversee business
plans, quarterly
performance reports and
financial statements etc.
Public institutions report to the public and Parliament through Annual Reports and
Annual Financial Statements and to the Department with quarterly performance reports
TCTA
CM
A1
CM
A2
Water
board 1
WB WB
2
9
10
WRC
Contribution to government
outcomes
6
Efficient
economic
infrastructu
re
9
responsive,
accountable,
effective &
efficient local
government
4
Employment
& inclusive
growth
Effective water resources management
critical foundation to achieve the above outcomes
11
PART B
• ENTITIES PLANS FOR 2015/16 FINANCIAL
YEAR
•
•
•
•
•
Strategic objectives
Performance indicators
Spending focus; and
Budget allocation for 2015/16
Jobs Creation
CATCHMENT MANAGEMENT AGENCIES
INKOMATI-USUTHU (IUCMA) AND BREEDEGOURITZ (BGCMA) STRATEGIC OBJECTIVES
•
•
•
•
•
•
Water resource protection
Water use management
Integrated water resource planning
Stakeholder interaction and empowerment
Governance
Strategic support
CMA SCORE CARD
Ensure effective,
efficient and sustainable
management of water resources in the Water
Management Area
Stakeholder Perspective
Advice stakeholders on protection & use of water,
ensure community participation.
Financial Perspective
Ensure collection of water use charges and Value
for money.
Developmental &
Environmental
Learning &
Growth
Water Resource Planning (CMS),
Resource Protection & Waste, Compliance
Monitoring & Enforcement,
River Systems Operations, Registration of Water Use,
Support licensing process. Establishment of Water User
Associations
Developing Human Resources ,
Sharing knowledge & creating partnerships .
15
SUMMARY OF IUCMA PERFORMANCE PROGRAMME
SUB-PROGRAMME
INDICATORS
2015/16 TARGETS
RATIONALE
Water use
management
Water use registrations finalised
Record of recommendation of water use applications
finalised
General authorisations confirmed
Audit reports completed for water use compliance
Letters sent to water use to apply for validation and
verification of water use
10 Water use registrations finalised
100% of agricultural temporary transfers
applications finalised
30% verification in Inkomati
50% validation in Usuthut
8 compliance audit reports completed
Statutory
requirement
function to be
performed in
terms of NWA
Water resource
protection
Water quality monitoring points and samples
Reaction to pollution incidents
Warning letters / directives issued for water use
contraventions
2712 samples taken to monitor water
quality
100% of pollution incidents dealt with
1 catchment monitored for river health
292 water quality inspections conducted
Integrated water
resource planning
Catchment Management Strategy
Land use planning and rezoning applications
commented on
Water quality objective report completed
Finalise integrated water quality
management framework
Institutional and
stakeholder relations
Learner awareness campaigns
Support to HDIs projects and water related forums and
WUAs and IBs
38 stakeholder empowerment workshops
conducted
20 stakeholder interactions
4 newsletters developed and circulated
Generating and
managing knowledge
(Information systems)
Effective information management
100% electronic document management
system maintained
Strategic support
Compliance to all planning and reporting prescripts
100% compliance
Governance
Compliance to governance requirements
100% compliance
SUMMARY OF BGCMA PERFORMANCE PROGRAMME
SUB-PROGRAMME
INDICATORS
2015/16 TARGETS
RATIONALE
Water use
management
Water use registrations finalised
Record of recommendation of water use applications
finalised
General authorisations confirmed
Audit reports completed for water use compliance
Letters sent to water use to apply for validation and
verification of water use
70% Water use registrations finalised
80% water use licences (record of
recommendation) finalised
100% general authorisations confirmed
60 audit reports completed
150 validation and verification letters sent
Statutory
requirement
function to be
performed in
terms of NWA
Water resource
protection
Water quality monitoring points and samples
Reaction to pollution incidents
Warning letters / directives issued for water use
contraventions
70 water resource points monitored
100% of pollution incidents dealt with
2 water quality monitoring projects
implemented
Integrated water
resource planning
Catchment Management Strategy
Land use planning and rezoning applications
commented on
Water quality objective report completed
50% Catchment Management Strategy
completed
100% land rezoning applications
commented on
2 water quality objectives reports
completed
Institutional and
stakeholder relations
Learner awareness campaigns
Support to HDIs projects and water related forums and
WUAs and IBs
300 learners reached during various water
campaigns
4 newsletters developed and circulated
10 social responsibility projects supported
18 water related forums maintained
Generating and
managing knowledge
(Information systems)
Effective information management
30% SAP implementation
100% electronic document management
system maintained
Strategic support
Compliance to all planning and reporting prescripts
100% compliance
Governance
Compliance to governance requirements
100% compliance
WATER BOARDS
STRATEGIC OBJECTIVES
• Ensure viability and sustainability.
• Stakeholder engagement.
• Appropriate planning for adequate water resources.
• Water demand management.
• To ensure sustainable growth.
• Effective and efficient communications.
• Ensure compliance with legislative prescripts and policies.
• Financial sustainability.
Selected objectives & indicators for
water boards
Performance
Objective
Alignment
Ministerial Outcomes
DWS Strategic
Plan
Outcomes
/Impact
Indicators
Measure
% compliance
1. Water Quality
Compliance
2.Non Revenue Water
MO A, OP1, Ta) & c).
MO B, OP2, Ta)
MO A, OP1, T a)
MO B,OP2, T a)
SO 2.5 & 3.4
Water quality standards met
Test results, SANS 241
SO2.2, 2.5,
2.6,&2.7
Water lost as a % of
total water produced
%
3. Reliability of supply
MO A > G
OP1, Ta), b) & c). OP2, Ta)
So1.1, 1.2&1.3
Reduced levels of
unaccounted for water
(UAW)
No unplanned interruptions
to supply exceeding 24
hours
%
4. Financial Reporting
Compliance
MO A > G
SO 6.5 & 6.6
unqualified audit report
% number of days
supply disrupted
divided by total number
of possible supply days
Annual external audit
5. Increased Access
to Services
MO A, B &D
OP1, Ta), b) & c). OP2, Ta)
SO 1.1,1.2,
1.3,2.2 and 4.1
Contribution to national
objectives
CAPEX spend /projects
20
Qualified/
Unqualified
CAPEX spend or
number of
expansion projects
WRC
WRC STRATEGIC INTENT
• The WRC serves as SA’s water-centred knowledge
hub providing the nation with knowledge for
sustaining its most precious resource, water.
• The WRCs strategy for knowledge creation and its
research portfolio is underpinned 4 main key
strategic areas:
 Water resource management
 Water linked ecosystem
Water use and waste management
Water utilisation in agriculture
TCTA
TCTA Strategic Objectives
• Deliver to all mandates provided by the
Minister, in accordance with specifications
and within the agreed timelines and
budget
• Facilitate social transformation and build
sustainable communities by providing jobs
and empowerment
• Operate the business projects and
processes in a cost-effective manner,
conscious of the imperatives of PFMA
24
TCTA Strategic Objectives cont.
• Build the knowledge and capability of the
organisation to generate lessons for
project improvements, in pursuit of
greater efficiencies in water delivery
• Ensure the continuous availability of highcalibre human capital for delivering on
organisational mission into the future,
while remaining a value-adding agile
entity.
25
TCTA contribution to government
Outcomes Government Outcomes
4
Decent employment through
inclusive economic growth
5
A Skilled and capable workforce
6
7
8
9
10
12
Department Priorities
TCTA Contribution
(1) Contribute to Economic Growth, Rural Dev,
Food Security and Land Reform (outcomes 6, 7
and 9)
-
Emphasis on job creation in all construction contracts and Providing cost
effective water infrastructure as an enabler for economic growth
Through the projects and internal training develop entrepreneurship in
small business and up-skill the workforce to enable South Africa to
compete in the world markets
Efficient, competitive and
(1) Contribute to Economic Growth, Rural Dev,
Providing a comprehensive financial and implementation package to
responsive economic
Food Security and Land Reform (outcomes 6
ensure the most cost effective solution
infrastructure network
and 7)
Support to other water sector institutions to enable them to deliver on
Vibrant, equitable and sustainable (3) Strengthening the regulation of the water sector their mandate
- (outcome 6 and 10)
rural communities with food
security for all
Sustainable human settlements
(1) Contribute to Economic Growth, Rural Dev, Provision of affordable infrastructure as well as responsible resettlement
and improved quality of
Food Security and Land Reform (outcomes
programmes inclusive of economic livelihood
household life
6, 7 and 9)
A responsive, accountable,
(4) Support local government to deliver water
effective and efficient local
services (outcome 9)
government system
Environmental assets and natural (2) To promote Sustainable and Equitable Water
resources that are well protected
Resources Management (outcome 10)
and continually enhanced
(3) Strengthening the regulation of the water sector
(outcome 6 and 10)
Support to other water sector institutions to enable them to deliver on
their mandate
An efficient, effective and
development oriented public
Comprehensive internal training programme to enable TCTA to deliver
quality products in the most efficient manner.
(6) Build capacity to deliver Quality Services
Contribute to the development of knowledge in the sector (desalination,
water reuse)
Participation in the workshops on Institutional Reform and Realignment
26
Financial Model
• Funding is off-Balance Sheet.
• Funding relies only on implicit guarantees from Treasury
(excluding Lesotho Highlands (LHWP), which is explicitly
guaranteed)
• All projects are ring-fenced, i.e. no cross-subsidisation is
allowed
• Debt repayment is funded through water tariffs, over 20
years
• Costs of infrastructure reflected as asset until debt fully
repaid, then handed back to DWS (LHWP – intangible asset
– right of receipt of water – owned by Lesotho Highlands
Development Authority)
27
Financial Model (cont….)
•
Full cost recovery from water sold to end-users
•
Constant tariff in real terms which increases with:
– Consumer Price Index annually
– Projects may need to increase borrowings in the first number of years
after completion to maintain constant tariff
•
Deficit is intended to ensure on-going affordability for end users; the
deficit reverses after a few years, and is not related to TCTA’s feasibility as
a going concern.
Overview of water sector entities
budget
Medium term budget
Rand
thousan
d
TCTA
CMAs
2014/15
2015/16
2016/17
2017/18
3 985 000
96 202
4 370 000
586479
5 836 000
624280
8 233 000
668193
280 381
311 334
258 502
270 543
WRC
Water
Boards
15 738 659 15 394 534 19 248 522 21 204 516
TOTAL
20 100 242 20 662 347 25 967 304 30 376 252
29
Overview of water sector staff
establishment for 2016/17
30
[3]
Disestablished –debt transferred to Rand Water
Disestablished –debt transferred to Sedibeng Water
Jobs created and Estimated 2014/15 and 2015/16
Entity
Jobs Created 2014/15
Estimated 2015/16
1. Amatola Water
50
1546
2. Bloem Water
716
1963
3. Lepelle Northern Water
15
120
4. Magalies Water
539
570
5. Mhlathuze Water
597
588
6. Overberg Water
6
15
7. Rand Water
8. Sedibeng Water
3556
371
8870
750
9. Umgeni Water
1847
600
10. Breede CMA
0
0
11. Inkomati CMA
15
10
12. TCTA
3242
2309
13. WRC
5
14
Total
10 959
17 355
Debt owed to water boards by municipalities - end of Feb
2015
Name of water
board
Amatola
Bloem Water
Botshelo Water
Bushbuckridge
Water
Lepelle Northern
Water
Magalies Water
Mhlathuze Water
Overberg Water
Pelladrift Water
Sedibeng Water
Rand Water
Umgeni Water
TOTAL
DEBTORS AGE
ANALYSIS
OUTSTANDI
NG
BALANCE
CURRENT
DAYS 30
DAYS 60
DAYS 90
DAYS 120+
ARREARS
24 963 541
24 208 020
755 521
0
0
0
755 521
118 306 039
191 207 118
42 533 515
7 875 274
4 322 442
7 539 436
1 412 751
6 720 622
11 745 904
5 991 714
58 291 427
163 080 072
75 772 524
183 331 844
397 868 143
20 230 683
18 396 624
16 806 660
16 806 660
325 627 516
377 637 460
369 861 590
61 688 151
26 049 776
1 885 481
673 826
1 150 481 463
941 702 148
43 465 809
26 024 391
17 988 832
1 421 738
252 875
61 443 288
915 159 923
12 742 111
7 294 854
8 060 944
62 430
217 006
65 126 903
26 390 979
12 914 141
3 038 153
0
61 630
203 945
44 926 444
151 246
8 974 774
5 410 374
0
60 915
0
48 799 706
0
291 764 755
19 920 379
0
278 768
0
930 185 122
0
326 395 781
35 663 760
8 060 944
463 743
420 951
1 089 038 175
26 542 225
206 493 547
193 090 793
13 140 137
71 465
93 261
97 891
13 402 754
3 545 704 012 1 374 326 487
172 218 462
88 851 990
117 433 759
1 792 873 314
2 171 377 525
4.86%
2.51%
3.31%
50.56%
61.24%
100.00%
38.76%
CONCLUSION
• Water Boards have provided indicative
targets and financial projections as their
plans will only be submitted end of May
2015.
• Cost recovery issues remain a challenge with
negative impact on planning for 15/16 and
beyond.