5 march 2008

5 March 20085 March 2008

Ms Lerato Mokoena- national Ms Lerato Mokoena- national

transfertransfer

Mr. Onesmus Ayaya- DWAF Mr. Onesmus Ayaya- DWAF

CFOCFO

Select Committee on Finance:

DoR Bill- Public Hearing

Total (Including grants)allocation to DWAF: 2008/09-2011

2008 MTEF 2008-09 2009-10 2010-11 R'000' R'000' R'000' 6,699,276 7,969,611 7,943,830

Conditional Grants

• Bulk Infrastructure

• Schools and Clinics Water & Sanitation

• Bucket Eradication( previous part of MIG)

• Operating Subsidy

Bulk InfrastructureWhat is Regional Bulk Infrastructure?

• The infrastructure required to connect the water resource, on a macro or sub-regional scale, (over vast distances), with internal bulk and reticulation systems.

• Macro is defined as large bulk infrastructure serving extensive areas across multi-municipal boundaries

• “Sub-regional is defined as large bulk infrastructure serving numerous communities over a large area normally within a specific district or local municipal area.

Bulk InfrastructureMulti year Allocations

• 2007/8 R300 million (Current)• 2008/9 R450 million• 2009/10 R650 million• 2010/11 R689 million

Grant Conditions• Regional bulk Water & San infrastructure only• Only social and economic development

components• Confirmed need for a bulk solution is accepted• Proven implementation readiness

Bulk InfrastructureGrant Conditions (continued)

• Financing plan• Co-funding needed but no duplicate funding• Infrastructure ownership resolved• Institutional commitment/agreement • Licensing, environment, WCDM, Asset

Management and WSDP needs metOutput• Access to water supply will be enabled.• Proper waste water management and disposal

effected.

BUDGET ALLOCATION

• Budget Allocation relatively small compared to MIG

• Split of allocation for 2007/08:– Regional Management Support R 7.0 million– Implementation Readiness Projects R 39.2 million – Infrastructure Implementation Projects R 253.8

million

Challenges• Cooperation between a number of

stakeholders and especially LGs• Planning of these schemes is ongoing and

feasibility studies done :Question asked: Does it mean that we allocation are not

based on sound plans and that the department relies on thumb suck?

• Use of PPPs not yet addressed, DWAF takes the lead

• Funding for social and economic elements still to be acquired

Bulk Infrastructure

Progress• Discussions were held with municipal and

provincial stakeholders• Policy and criteria booklet has been drafted• Document on application procedure to follow• Work on drafting a project list is underway

Targets• It is expected that the full budget for 2007/8 as

allocated will be spent

Bulk Infrastructure

Implementation structure

Programme Manager(Sibusiso Mthembu)

National Coordinator(George Constantinides)(Supported by D vd Boon)

Regional Coordinator(DWAF Northern Cape)

Regional Coordinator(DWAF Gauteng)

Specialist SupportContract/ Legal (RW)

Finance (RW)M&E (DBSA)

Institutional (DWAF)

Regional Coordinator(DWAF Mpumalanga)

Regional Coordinator(DWAF Eastern Cape)

Implementing AgentWaterboards

PSPsDWAF

Municipalities


PSPsDWAF

Municipalities


PSPsDWAF

Municipalities


PSPsDWAF

Municipalities

LinkagesDWAF Regions

DPLGSALGA

I/As

Province Performance: KZN

Budget Allocation 2007/08Infrastructure Implementation R 69.0 millionImplementation Readiness R 4.0 millionManagement Support R 0.25 million

Project Status5 Infrastructure projects all in implementation phase7 Implementation readiness projects, Municipalities already started

with development of feasibilitiesR 25.9 mill certified for payment by end December (35%)R 22.2 million paid through BAS by end December (30%)

General progress satisfactory and budget will be spend by end March 2008

Province Performance: NW

Budget Allocation 2007/08Infrastructure ImplementationR 20.0 millionImplementation Readiness R 3.0 millionManagement Support R 0.25 million

Project Status1 Infrastructure project in implementation phase

Forms part of R 146 million project currently implemented4 Implementation readiness projects, PSP’s appointed for 3

projects, no response from Ngaka Modiri Molema on Ratlou Local Municipality BWS

General progress satisfactory, R 20 million (86%) already transferred (R 13.0 million actual expenditure), intervention required for Ratlou Local Municipality BWS

Province Performance: NC


Project Status1 Infrastructure project

Phase 1 contractor on site November 2007Phase 2 contractor on site January 2008

4 Implementation readiness projects PSP appointedR 3.9 mill certified for payment by end December (51%)

R 3.6 million paid through BAS by end December (47%)General progress satisfactory and budget will be spend

Province Performance:Limpopo


Project Status8 Infrastructure projects all in implementation phase9 Implementation readiness projects PSP to appointed

Programme started slow, general progress average, needs close monitoring and budget will be spend by end March 2008

Province Performance:Gauteng


Project Status0 Infrastructure projects1 Implementation readiness project PSP appointed

General progress satisfactory, R 1.1 million spent on feasibility (63%), budget will be spend by end March 2008

Province Performance: Free State

Budget Allocation 2007/08Infrastructure Implementation R 28.62 millionImplementation Readiness R 1.4 millionManagement Support R 0.0 million

Project Status3 Infrastructure projects

CD had discussion with Ninham Shand, Jagersfontein project. Intervention in place. R 16 mill will be spend.

CD had discussion with Ngwathe Municipality. Intervention in place and R 4.8 mill will be spend.

3 Implementation readiness projects PSP appointed in November 2007General progress average, funds will be spend by end March 2008, needs

close monitoring

Province Performance: MPUMALANGA

• Budget Allocation 2007/08– Infrastructure Implementation R 29.95 million– Implementation Readiness R 2.58 million– Management Support R 0.25 million

• Project Status– 4 Infrastructure projects

• Kabokweni project funded by MIG and R 6 mill reallocated to Mbombela Stadium project.

• Management funds (R 3.3 mill) 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%)

• General progress slow, needs support and close monitoring

Provincial Performance: WC


Project Status0 Infrastructure projects3 Implementation readiness projects PSP appointed

November 2007Only implementation readiness projects, funds will be spend by

March 2008

Provincial Performance:EC


Project Status0 Infrastructure projects3 Implementation readiness projects PSP appointed

November 2007Only implementation readiness projects, funds will be spend by

March 2008 Question asked: Why is the management support a small portion of the total budget allocation? Do not talk of challenges. The Department should make reference to what

it is doing to addressed the challenges?

Water sanitation- Schools and Clinics

• Purpose:– Eradicate water supply and sanitation backlogs in all clinics

by 2008– All schools which were never served by 2009

Conditions:– Implementation plans submitted by end Feb 2008– Implementation plans assessed by Prov. Mangt structures– O and M plan and budget requirements of those facilities

Schools and ClinicsMulti-year Allocation

• For water and sanitation, which amounts to R665m, allocated as follows:

•2007/08 R 105 million(current)

•2008/09 R 210 million•2009/10 R 350 million

Agreed Principles: Governance & Structure• R665 m will be a top up fund to funds already

available through the Prov. Infrastructure Grants.• Although funds controlled by DWAF, project

planning and implementation will be a collaborative team effort between DWAF, DoE, DoH, PDE and PDH.

• Nat. Gov.Structure to be operational by end March 07.

• Prov Governance structures are being established. (The E. Cape structure is already functioning)

• National Schools and Clinics Program Manager and support office is being established within DWAF

• 9 Regional Program Managers & Support Offices being established.

Schools and Clinics

Schools and ClinicsAgreed Principles: Backlog Definition

• Backlogs in the past have been classified as “facilities with no access” and “facilities with inadequate access”

• In the rollout of this programme backlog definitions should be structured as follows:– No Services at all– Insufficient number of service facilities– Unacceptable technical service type– Unsustainable Service – Unacceptable condition– Unacceptable Health & Hygiene practices &

management

Agreed Principles: Priorities• Target for eradication of water and sanitation

backlogs in Clinics is Dec 2007. • Backlog can be eradicated within the available

funds in 2007/08.• Thus agreed with DoE that Clinics will be

prioritised initially above Schools• Within the schools backlogs, schools with no

facilities will be prioritised where practical and feasible in the context of the total solution during 2008 MTEF

• Individual Provinces will not be prioritised and allocations will be made pro-rata to backlogs

Schools and Clinics

Agreed principles : Implementation• Various Implementation models will be used.

These could include:– Using existing contracts / implementing

agents of Provincial Departments – Using MIG projects (municipalities) to connect

schools to new water and or sanitation schemes currently being rolled out

– Using various organisations as Implementing Agents on behalf of DWAF

– Using contractors appointed directly by DWAF• Thus a flexible funding approach is essential.

Schools and Clinics

Agreed Principles: Fund Allocation• From previous slides it is clear that it won’t be

possible to use a rigid; once-off; fund allocation process.

• Therefore; it has been agreed with NT that the fund will classified as a Schedule 7 grant.

• As clarity develops regarding the most appropriate implementation solution, funds will be allocated accordingly. The 1st order allocation was done at the end of 2007.

Schools and Clinics

• Expected Outputs:– Provide acceptable and sustainable water and

sanitation services to• All Clinics that currently have no services in the first

MTEF period.• All Schools that currently have no services.• Some Schools that currently have unacceptable

services, within budget constraints

• Detailed project lists with clear targets for delivery will be set per province, per department and for water and sanitation. These will be distributed with the 1st order allocations.

Schools and Clinics

Specific Challenges• Current indications of inadequate school

sanitation indicates that the problem is of such a magnitude that it cannot be resolved within the currently available budget.

• As the program develops more detailed data, accurate funding requirements and motivations will be developed for consideration by Treasury.

• It is essential that this opportunity be used to resolve all backlog issues in schools and clinics.

Schools and Clinics

Agreed Principles: Backlog data; criteria & solutions

• Because of difference in definitions of the term backlog, backlog data currently available from Health and DoE not compatible.

• A shared common understanding was agreed upon.• Also agreed to develop shared common criteria in

respect of designs and costing models • This criteria was be applied to the agreed data sets

resulting in clustering of similar solution sets within Provinces, which will guide implementation planning

• The above process was applied to provide 1st order budget allocation information.

Schools and Clinics

Specific Challenges• Access to data remains a challenge.

– DoE has embarked on a comprehensive data collection program. Reported levels of confidence in the information being gathered however varies and DWAF does not yet have access to this data.

– Provincial Education Departments themselves maintain data sets of varying levels of confidence.

– A complete picture can only be formed once these sets have been merged and interpreted in terms of a common shared definition set.

Schools and Clinics

Bucket eradicationMulti-year allocation (Part of MiG:

• 2005/06 - R200 m• 2006/07 - R400 m• 2007/08 - R1bnTargets for the MTEF• Eradication of all remaining buckets

(132 671) was due by Dec 2007• Question asked: It is not true that buckets have been eradicated? What does the

change the service level standards (VIP Vs Water Borne) mean?

Specific Challenges:• Community expectations (VIPs vs waterborne)• Inadequate water resource & bulk sewerage

infrastructure to support waterborne sanitation• Procurement processes of municipalities (take

time to appoint contractors)• Unavailability of local contractors due to many

infrastructure projects underway

Bucket eradication

Province Feb 2005 backlog

Buckets eradicated April 05 March- 06

Buckets April 06-June 06

Buckets Eradicated (July 06-Sep 06)

Buckets eradicated Oct 06-Dec 06

Buckets eradicated Jan 2007

Backlog

( as at end Jan 2007)

EC 48,417 11,742 13,154 4,200 2,691 0 16,630

FS 127,658 16,685 8,831 5,768 1,120 6,463 88,791

GT 5,169 3,844 0 200 0 0 1,125

KZN 750 750 0 0 0 0 0

LP 80 80 0 0 0 0 0

MP 15,172 11,737 0 3,435 0 0 0

NW 35,189 8,220 670 3,449 2,744 232 19,874

NC 16,691 8,221 1,149 950 1,649 107 4,615

WC 3,128 927 332 0 223 10 1,636

Total 252,254 62,206 24,136 18,002 8,427 6,812 132,671

Bucket eradication progress

Multi year allocations• 2008/9 R 1,130,507 million• 2009/10 R 855,000 million• 2010/11 R 570,000 million

Conditions• All receiving WSA’s to conclude formal agreements by

31 March 2008• Transfer of appropriate staff by 31 March 2008• The necessary capacity must be in place in the

receiving WSA’s for implementation of the grant• DWAF to continue monitoring the implementation till

2011/12

Operating Subsidy

Output• Operating of water services schemes and

improved revenue collection• Schemes refurbished to standards outlined in

the agreed policy framework and transferred• All affected staff transferred

Challenges• Finalising the staff transfers this financial year.• Formalising of refurbishment plans by WSA’s.

Operating Subsidy

Progress• 54 agreements signed (90%)• 3168 staff transferred (45%)• 3575 staff seconded (51%)• 1701 schemes with a total asset value of

R 5,957 million transferred (91%)• Refurbishment total expenditure R 545

million (46%)

Operating Subsidy

Operating Subsidy Targets- 2008 and after:

– two outstanding agreement signed, since four are awaiting the Director-General’s signature

– 32 schemes transferred– 3575 seconded staff transferred– Monitoring and evaluation of the work done

• Comment made by presenters: refurbishment will be required after effecting the transfers

» Thanks –

»I thank you

5 march 2008

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