Department of Water and Sanitation 2023/2024 Annual Performance Plan; with Ministry

Meeting report

The Department of Water and Sanitation (DWS), with the Minister in attendance, gave a presentation on its Annual Performance Plan (APP) and budget allocations over the Medium Term Expenditure Framework (MTEF) period.

Dr Sean Phillips, Director-General, DWS, listed the strategic priorities for 2023/24. These were to:

• Accelerate implementation of major projects to augment national bulk water resource infrastructure, for example, the Lesotho Highlands Phase 2, uMkhomazi and Mzimvubu projects.
• Guide the development of other water resources, including groundwater and desalination.
• Continue with establishment of the National Water Resource Infrastructure Agency (NWRIA) and strengthen the role of the DWS in regulating and supporting municipalities where water and sanitation services were deteriorating.
• Strengthen regulatory interventions to address pollution from wastewater. 
• Increase participation of private sector finance and skills in the water sector.
• Continue to improve water use licence turnaround times and promote transformation in water use.
• Guide and lead increased water use efficiency and demand and conservation management, including addressing non-revenue water at municipal level.
• Improve billing and revenue collection across the water value chain.
• Establish remaining catchment management agencies.
• Transform irrigation boards into water user associations.
• Complete the reconfiguration of water boards.

Internal priorities were to develop a new water services branch, improve infrastructure procurement and financial controls, and ensure the progress of financial misconduct disciplinary cases. 

Dr Phillips said significant progress had been made in filling senior management posts over the past financial year. All the Deputy Director-General (DDG) posts except one had been filled. The vacant post followed the dismissal of the previous incumbent and the filling of this position was on hold pending the establishment of the NWRIA.

He said the Department was allocated an amount of R72 322 billion over the MTEF. Additional allocation through the Budget Facility for Infrastructure significantly increased the departmental budget allocations to regional water and sanitation projects.

(See slide presentation for details of budget allocations and projects.)

Discussion

Mr C Smit ( DA, Limpopo) questioned the Minister about the Lepelle Northern Water Board and the Mogalakwena-Doorndraai Dam. He stated that he had written to the Minister’s predecessors, and was awaiting a response. The problem related to the electricity supply to Lepelle Water and the effect of load-shedding. When would the Department ensure that the Lepelle water pumping and processing station either got off the grid or received an alternative power supply? The line to the Doorndraai dam had not been maintained for over 30 years, and there were constant electricity interruptions. This resulted in the town of Mokopane and surrounding areas of Mogolareng not having water. There was a generator, but it did not have the capacity to pump the necessary water. Water-shedding was taking place daily.

His second question pertained to the sewage spillages in Mogalakwena, Dorps River and Rooisloot, which had been ongoing for years. The Minister of Environmental Affairs had intervened by sending some of her officials and opening criminal cases, but the dockets had disappeared. He reminded the Committee that nothing had been done for years. Living next to the river was impossible due to the stench of the sewage and he empathised with communities that breathed in the smell on a daily basis. When would the Department ensure that the problem was solved?

Mr Smit asked about the status of the Flag Boshielo water project. He said completion of this project would solve problems regarding the capacity of the town to supply surrounding mines. This would create jobs and opportunities for the people of Mogalakwena and surroundings.

His last question related to the pipeline to Mokadu that had been redone a few times, with a new line being laid each time. When would this issue be resolved and who would be held accountable for the mismanagement of funds? Communities still did not have water after funds had been spent on bulk infrastructure programmes.

Responses

The Minister of Water and Sanitation, Mr Senzo Mchunu, said he would search for the letter Mr Smit had sent, and that he was not aware of any letter being brought to his attention. The effect of disruptions in the electricity supply on the flow of water to households was regrettable. The DWS had engaged with Eskom to mitigate the effects at different levels and different places.

He repeated that the problems experienced in Mokopane had not been brought to their attention, apart from the ongoing electricity problems.

The issue of sewage spillage in Mokopane had not been brought to his attention. He mentioned that the Department had gone to Mokopane a few times during the piecing together of an agreement between Mokopane and a private mining company for a wastewater treatment plant. This was done successfully in the past year and the project was underway. The problem Mr Smit was referring to would be addressed once the wastewater plant was in operation.

The Department was under the impression that the municipalities were coping. He assured the Committee that the Department would have intervened had it become aware of these issues. 

Regarding the Flag Boshielo project, the Department had an agreement with a number of mining companies in the Lebalelo Water Association. Flag Boshielo fell on the western wing of the supply line to the mines and households. Part of the agreement with Lebalelo was to take water from De Hoop to Flag Boshielo in the west, where mines and 96 households would be supplied in the Mogalakwena to Lepelle area. This agreement was contained in a five-year plan that started with building a water station in the Sekhukhune area. The agreement was launched on 27 October 2022. A meeting was planned to evaluate six months’ worth of progress. The project cost was estimated to be R24 billion.

The Minister asked Mr Risimati Mathye, DDG: Water Services Management, to answer on the Mokadu pipeline. 

Mr Mathye explained that the Makhado pipeline took water from the Nandoni District all the way up to Mokadu, and was under construction. The project was 90 percent complete and would be completed by December 2023. The Department proposed that the Minister conduct an oversight visit later in the year to measure the progress. 

Mr Smit said he would forward the letter that he had sent to the Department to the Committee Secretary for it to be delivered to the Minister.

Ms M Dlamini (EFF, Mpumalanga) asked about the status of the Special Investigating Unit (SIU) investigation into the Giyani bulk water project. Were the officials being investigated still working within the Department? What was happening with those cases?

The Minister asked other members of the delegation to answer on his behalf as he had to leave for another meeting.

The Chairperson thanked that Minister for his attendance and his work in the North West Province.

Ms N Fundakubi, DDG: Corporate Support Services, DWS, said the SIU matter was at the court stage. The CEO of Lepelle Water Board was charged and some officials were dismissed. Civil action was taken on the contract that was implemented. The matter was set down for a hearing in October 2022 at the Polokwane High Court. The matter was postponed. 

Further discussion

Ms S Shaikh (ANC, Limpopo) referred to the support provided to assist municipalities with reticulation to villages. For the purpose of oversight, the Committee should be told which municipalities were being assisted. She thought that the fact that municipalities needed that kind of assistance would imply that there were other underlying problems.

She asked who was responsible for assessing water service authorities in terms of functionality and capacity. Did it lie with the provincial government?

Regarding the reference in the APP to water-service authorities being assessed for compliance with the requirements of the No Drop certification programme, could the Department indicate whether all water-service authorities had been assessed, and what was the outcome of the assessment?

She asked about the programme to address the bucket sanitation system in informal settlements. The target of 10 798 was positive in relation to the dignity of people. How was the backlog being addressed and what was replacing the system?

Mr Frans Moatshe, Chief Financial Officer (CFO),  DWS, said that where the Department worked with municipalities to implement projects, there was a process to assess whether they had the necessary capacity, manpower, and technical skills to carry out work assigned to them.

He referred to Giyani in the Mopani District Municipality, where a decision was taken to implement projects through indirect allocations. The Department had assessed the capacity and identified where there were needs. They worked closely with the CFO of the municipality to ensure that supply-chain processes were adhered to. On the technical side, the Department’s provincial office worked closely with the municipality’s technical unit. There was a process to establish the capacity of the implementing agent to carry out an assignment. Further assessments would normally be done through the Department of Cooperative Governance Traditional Affairs (COGTA).

Ms Iketletso Lekalake, Provincial Head, DWS, Northern Cape, said that the Northern Cape had set a target for bucket eradication in the area of Campbell, under the Siyancuma Municipality. In the previous financial year, the Department had plans to approve the nature of the technology that would be used in the area. It found that water-borne sanitation would not be feasible unless upgrades were done to the municipality’s bulk infrastructure. In the current financial year, funding had been allocated to carry out implementation of an alternative low flush system. 

Dr Tseliso Ntili, Provincial Head, DWS, Free State, informed the Committee that contractors had been appointed to eradicate 10 000 buckets by the end of the financial year.

Ms Shaikh asked that the Department respond in writing to the question about the assessment of water service authorities.

Mr Xolani Zwane, DDG: Regulation, Compliance and Monitoring, informed the Committee of the Department’s three “drop” assessment programmes. The Green Drop system looked at wastewater treatment works of municipalities, evaluating their capacity in terms of compliance with norms and standards. The Blue Drop system looked at the quality of drinking water in terms of the SANS 241 standards. The No Drop system looked at water use efficiency.

Findings relating to the Green Drop programme were released in March 2022. The Department was assisting municipalities with dealing with those findings. Municipalities that scored below 30 percent were sent letters requesting them to provide corrective action plans. The Department would evaluate whether the plans met the required standards.

In summary of the results, 62 percent of submitted action plans addressed the five key Green Drop performance areas. The Department was able to reprioritise and reroute funding and mobilise special resources to implement corrective action plans.

The Department issued notices and directives with regard to 172 critical state systems. Criminal charges were laid for persistent non-compliance.

The No Drop report showed an increase in water losses. A notable increase of 1.3 percent in the national standard per capita consumption ranged between 212 and 217 litres per capita daily.

Mr R Badenhorst (DA, Western Cape) asked about the strategic priorities of the Department.

He remarked that protests had occurred in Makanda due to water outages. How many municipalities were currently dysfunctional regarding water reticulation and sanitation services? What was being done specifically to assist those municipalities?

One of the strategic priorities was to increase participation of the private sector to assist with financing and skills in the water sector. What did this entail?

What was the turnaround time for approval of water licences? He asked the Department to provide a report per province on water-user licences.

He noted the move to transform the irrigation boards into water-user associations. He asked if the Department would consider delegating that function to provinces, which he thought to be more effective.

His last question related specifically to the Western Cape. Raising the Clanwilliam Dam wall was meant to be completed in 2018. The urgent completion of this project would effectively supply 15 000 jobs on irrigation farms. Inefficiencies and problems had marred the project. Considering the economy of the area, what was being done to fast-track this project? They could not wait five years for the wall to be raised.

Ms Portia Makhanya, Provincial Head,  DWS, Eastern Cape, said that water challenges were currently being experienced at Makanda, which had recently been hit by drought and was said to be recovering only slightly.

She elaborated that there were two supply systems. One system got water from the Orange River Government Scheme through the eastern side of Makanda. This was where the James Kleinhans treatment plant was located. Currently, 10 to 12 megalitres were being pushed through the James Kleinhans system which was more reliable. Due to demand, it was not satisfying the needs of the whole of Makanda. Other associated infrastructure was due to be completed by the end of the year. An additional ten megalitres would be added in June 2023, which should address the problem. 

On the drought-stricken western side, operational challenges were experienced. That system had been supplying seven megalitres. It was currently out of operation. The problem involved a suction valve not taking enough water to the treatment plant. Teams were on-site and there was hope that the problem would be solved. The limited supply from the James Kleinhans system had forced the rationing of water. Water would be switched off for a day or two to ensure reservoirs could rise. 

Mr Leonardo Manus, DDG: Infrastructure, Western Cape, concurred that there were inefficiencies and problems with the Clanwilliam Dam project. The inefficiencies were due to changes in the implementation model. The Minister had decided on the implementation. The procurement process was identified as a major stumbling block. A new procurement strategy was being followed, with six major bids being awarded. The Department was ready to sign agreements and place orders for the project to start. The completion date was 2028.

Legal matters had exacerbated the delays. For example, owners of adjacent land had prevented construction on the immediate site. He assured the Committee that this issue would be dealt with swiftly to ensure that the critical parts of the project were not disturbed.

The Department was engaged with the private sector in three major projects. These involved mining houses in the Olifants and Mogalakwena areas, and a project in the Northern Cape with a 56 percent private sector contribution.

Engagements with the agricultural sector were being explored in the areas of Vaalharts, Jankempdorp and Hartswater.

Mr Badenhorst reminded the Department of his questions about water-user licences.

Mr Moatshe reminded the Committee that the President had declared that water-user licences should be produced within a 90-day period. The Department began the previous year with a backlog of 1 005, which would be eradicated in June 2023. Each region was given targets, with 50 applications being left to process in the current financial year. The status of the licences would vary between regions depending on the nature of the licensing and issues of capacity. Some regions dealt with integrated licences which included mining. Where there were more challenges, the turnaround time would be longer than 90 days. There would be Improvements once the business processes had been revised. In conclusion, 70 percent of licences were being finalised with 100 percent being aimed for.

The Chairperson welcomed the presentation, saying it clearly outlined the objectives and intentions of the Department. The leadership of the Minister was commended. The Department had worked hard to ensure the boards were reconfigured. They had been characterised by problems. They were often dissolved, replaced, had court issues or litigations and so on. It was clear that the process was becoming normal.

He commended the filling of critical positions and remarked that he had previously referred to the Department as “Hollywood”, with people in acting positions and most of the senior management under suspension. For any organisation to function meaningfully and achieve objectives, there had to be stability.

The Department had been in crisis in the past and in the media for the wrong reasons relating to allegations of corruption, mismanagement and underexpenditure. The Minister inspired confidence and could help the Department achieve its objectives.

The Chairperson said he was unhappy about under expenditure by the Department, given the country's water crisis. There was no justification politically and morally for that. The Committee was not told why there was under expenditure, and could not accept Covid as the reason. The Department should tell the Committee where there were blockages and bottlenecks. This was a recurring problem. The presentation had scratched the surface of this matter in a by-the-way manner. This involved historical issues and the presentation did say precisely how they would be addressed, especially given that there was a disclaimer of audit opinion on systemic issues involving the Giyani water project.

He reminded the Department that there were issues relating to the Unemployment Insurance Fund (UIF). The Committee would want to feel comfortable that those issues were being dealt with.

There were problems of over-expenditure in the War on Leaks programme. The presentation did not state how this was to be solved. There were contingent liabilities involving litigation which amounted to millions.

He referred to the issue of accruals affecting the Water Trading Entity (WTE) which the Department had not been able to settle.

The Chairperson said the Giyani project was not the only one infested with allegations of corruption. He was not satisfied with the slow way in which the cases were being dealt with. People had stolen public funds and pillaged the resources meant to provide water. There should be a clear explanation of how those people had been dealt with. The Committee should be told exactly what the problems were and why the cases were not being finalised.

It was disheartening to see people queuing for water. The infrastructure in townships and other areas was in a terrible state and there were sewage and water spillages. Funds allocated for these issues to be fixed had been stolen and the Committee was not told how these cases were dealt with.

He said the Minister’s hard work in leadership management in the North West Province inspired confidence. He highlighted the need for innovative solutions to the problems affecting people and stated that there was no justification for the long time people had to wait. 

Water tenders were manipulated and used as a cash cow. He wanted to be assured that systems were in place to ensure this did not recur.

Mr Moatshe (CFO) apologised that the presentation did not deal with issues of financial recovery resulting from the historical challenges.

He said the Department had put together measures to deal with irregular expenditure. Training programmes and preventative measures were put in place. The significant reduction in the historic balances showed that there was greater awareness. Some of the cases had been resolved. However, the Department was dependent on the condonation processes. The Department’s irregular expenditure balance at the end of the financial year was R9.2 billion, with the WTE’s closing balance being R6.7 billion.

He agreed with the Chairperson that the investigations should be concluded to determine the losses that had been incurred and the need for consequence management. When condonation applications were submitted to National Treasury, requirements had to be complied with. He would provide a summary of the significant cases mentioned by the Chairperson that had previously been reported to the Committee.

The matter of the Giyani water service project was before court. The Department had met with the Directorate for Priority Crime Investigation (Hawks) which were still busy with the investigation. The Department had provided the Hawks with all the information requested and the SIU was currently busy with some of the work.

He referred to other irregular expenditure previously reported to the Committee regarding a desalination plant at Richards Bay. The employee who was implicated had been dismissed.

He also referred to issues where licences were procured without procedure being followed. They were investigated by the SIU and the Department, who successfully recuperated some funds. The officials implicated were being dealt with, with the help of the police.

Mr Moatshe agreed with the Chairperson that the War on Leaks programme had previously caused challenges for the Department. He explained that the projects were intended to take place in three phases. The Department did not budget for this commitment. A financial recovery plan was presented. At the time, the Minister decided to end the project at phase 2. The final phase of the project was stopped. The irregular expenditure incurred was R2.3 billion.

There was indeed a component of unauthorised expenditure related to the War on Leaks. The implementing agent, the Energy and Water Sector Education Training Authority (EWSETA), and the Department were engaging on this. The EWSETA had started on some of the phase three work, which was not in line with the agreement with the Department. The Department accepted responsibility as the principal and budget holder. Mediation with the service provider was underway. The latest report the Department had was that settlements were being proposed. The Department would be able to provide feedback once the mediation process had advanced.

The bucket eradication programme contributed to irregular expenditure, with over-expenditure in the previous financial year leading to unauthorised expenditure. Disciplinary proceedings were initiated.

Another key irregular expenditure issue was related to financial advisory services costs of R17.9 million. A disciplinary process was initiated. Officials resigned. Others were elsewhere in the public service and the hearings were managed by their new departments. The Department’s legal services were consulting the State Attorney about civil litigation in the matter.

The Department needed capacity in the forensic unit as requirements for condonation needed to be thoroughly complied with. A number of forensic investigators were added to assist with investigating all the cases. The Department would have concluded investigations by 31 March 2024 and would ensure that there were follow-ups with law enforcement agencies.

Pertaining to accruals and payments, there was an over-commitment by the Department, especially on unfunded mandates. Over the years, arrangements had to be made with some of the Department’s implementing agents. A repayment agreement had to be entered into with Rand Water, with the intention of settling their invoices with savings in the budget. Rand Water’s involvement in the War on Leaks programme concerned the payment of stipends and evaluation of learners. T

Mr Moatshe said there was an overall improvement on the management of accruals and payables. The preliminary figures that would be submitted for audit showed R298 million for accruals and payables, most of which were for invoices received at the close of financial years. The Department would continue to implement financial recovery measures to ensure they did not land in the same position again. 

Mr Moatshe asked other departmental officials to respond to the questions about investigations and disciplinary processes.

The Committee heard that in the past five years, the Department had 86 cases in which 144 officials were charged. Of those, 66 cases involving 116 officials had been finalised. The bulk of the cases involved irregular and fruitless expenditure. The cases resulted in dismissals, suspension without pay, final warnings and written warnings.

Regarding recoveries, the State Attorney was starting a process to recover. R27 million from a company that had not rendered services. An amount of R1 million had been recovered in other cases.

There were monthly meetings with the SIU to receive feedback on cases. The case involving EOH had made progress and disciplinary action was being taken.

Mr Moatshe said contingent liabilities amounted to R1.3 billion at year-end as a result of claims by various companies against the Department. Claims by the Department against other individuals and companies amounted to R3.9 billion, with the main claim of the Giyani project amounting to R3.8 billion with accumulation of interest.

The reasons for underspending were due to multiple challenges with projects. Almost all projects were implemented through municipalities and water boards. Challenges around these institutions resulted in the Department needing to deal with claims against municipalities and irregular contractors. Municipal tenders would go out, then be cancelled, then be restarted. There were interventions to work together with those municipalities.

Closing remarks

The Chairperson said the Department could not be seen to be collapsing again, considering that they were technically bankrupt and relying on bank overdrafts, which he deemed unacceptable. He added that the Department would be called in the near future to deal with certain issues such as the President informing the country that the second phase of the Lesotho Highlands project and the  Umzimvubu and Nkomazi projects were to commence. The Department would be asked about progress with the projects.

The Committee would want to engage with the Department on the establishment of the National Water Resource Infrastructure Agency. It wanted to ensure that the indicated timelines were followed in dealing with historical issues. He commended the Department for working around the clock. 

Ms Judith Tshabalala, Deputy Minister of Water and Sanitation, said the Department was committed to improving water security through projects around the country. It was committed to strengthening the Department by filling all of the top management posts and improving financial management. The Minister had stressed that the Department was delivering on this.

The DWS was dealing with the reconfiguration of water-boards and under-expenditure by them. Establishing a national water resource agency was at the top of the priority list. Other priorities were the 90-day licence authorisation process and improvement of the water value chain.

The Department needed to improve its financial management practices as they related to underspending on compensation of employees and capital assets.

Regarding water resource management, an overview by the director general recognised the need for faster planning and processes for infrastructure projects such as Clanwilliam Dam.

The Department recognised the challenges regarding water sustainability, including financial sustainability, technical competencies, and governance issues. Steps were taken to address stakeholders’ concerns and to promote safety measures.

Ms Tshabalala identified theft and damage to infrastructure as a disease in the country. Collaboration with ground-based teams was necessary to ensure the safeguarding of infrastructure.

She agreed with the Chairperson’s comments on media coverage of the Department. Communication on the good work done by the Department and dramatic areas of focus should be encouraged. The Department had a communication unit as well as a newspaper committee.

Regarding provincial collaboration, there were processes to document management agencies in different regions and the governance status of water boards and entities.

She said a strategy to enhance construction efficiency focused on addressing the key areas of procurement and project and plant management.

Accountability in procurement was important. Measures taken included the introduction of performance agreements and consequence management for non-performance.

The Deputy Minister referred to an overview of projects. This included improved management of recreational activities, the removal of water hyacinth in the Hartbeespoort Dam, water quality monitoring and revamping of infrastructure.

She recalled that the Committee had raised several issues about enforcement of regulations. Proposed amendments to the Water Services Act aimed to empower the Minister to enforce compliance and strengthen national intervention. Uniform regulatory processes would be introduced and governance and capacity of water service institutions would be strengthened. The Department would need the Committee to assist with the legislation once the Cabinet had approved the amendments.

She referred to concerns expressed by the Committee about breaches and pollution in specific provinces. Implementing service improvement plans (SIPs ) aimed to address these discrepancies and ensure staff competence. The aim was to improve the regulation, reliability and sustainability of water services.

She emphasised the work done by the Minister in the North West Province, where a task team was dealing with matters of compliance and procurement at municipalities. Issues of corruption would be dealt with and systems would be tightened. She agreed with the Chairperson that the Department had been marked by corruption.

The Department realised that it would not be possible to provide water if municipalities were dilapidated and experienced challenges in systems.

She added that the political situation on the ground required all Committee Members to be involved in the issue of water as a basic human right. Assistance was required to deal with protests about infrastructure problems and strengthen the social compact.

The meeting was adjourned.