REPORT ON CURRENT DROUGHT RELIEF INITIATIVES TO THE PORTFOLIO COMMITTEE ON WATER AFFAIRS AND FORESTRY

The 2002/03 summer rainy season was relatively dry, with most of the northern and eastern parts of the country receiving substantially less than the normal rainfall (Please see the attached figure). Accordingly the Department's dams were almost 20% lower on average at that stage than after the previous (2001/02) summer rainy season. Since the middle of 2003, restrictions were selectively imposed on large water users such as the irrigated agriculture in highly stressed catchments, for example in the upper reaches of the Olifants River in Mpumalanga.

During July/August 2003 the Department started preparations to request additional funds for emergency water provision in the most affected areas. These initiatives, which were eventually co-ordinated at the national level by the National Disaster Management Centre, culminated in the Treasury Committee allocating a total amount of R250 million for disaster relief in the Adjustment Estimates Budget. Of this, an amount of approximately R153 million was reflected on the Department's budget as conditional grants to municipalities for purposes of emergency water provision.

At the time when the the Department requested additional funds for emergency water provision, the summer rainy season was still ahead, with indications from meteorologists that a more or less normal rainy season could be expected. Based on the extremely low levels of the dams in specific areas, the Department was convinced that the requested funds would still be necessary, even when normal rains should fall, because flood conditions were required to fill the dams in these areas. Decision makers were alerted to the fact that should the intensity of the drought escalate, additional funds would be required for emergency water provision over and above the first round of requests.

As is evident from the diagram of the present summer rainy season from July 2003 till December 2003, prospects for a normal season looked equally bleak by the end of that period. Therefore, towards the end of December 2003, national departments again launched initiatives to review drought conditions and to request more funds for drought relief. These initiatives culminated in a memorandum to the Cabinet, co-ordinated by the National Disaster Management Centre. The allocation of a further amount of R250 million towards drought relief to the relevant line-function departments during the current (2003/04) financial year was supported by the Cabinet, as well as a possible additional R500 million during the next financial year, starting on 1 April 2004. The latter amount is subject to a review of drought conditions envisaged for March 2004.

The review in March 2004 will shed light on the impact of the rains from January. So far, from the response of the major dams, especially in the very stressed areas, it is obvious that although welcome relief has been experienced by farming communities, inflows into these dams were negligible thus far. Thus, if the rains of the past month are not followed up by further good downpours, the water crises in these areas will escalate. Members of the Portfolio Committee should take note that if adequate remedial steps are not taken timeously "hot spots" with substantial populations could be at risk. Emergency water schemes are currently targetted for nodes such as Kroonstad in the Free State, and the Western Highveld and White River areas in Mpumalanga. In addition, works to increase the capacity of the link between the Jericho and Morgenstond Dams will be undertaken to maintain assurance in the Usutu-Vaal System.

-2-

As conditional grants, the R153,039 million allocated to the Department of Water Affairs and Forestry for emergency water provision in the Adjustment Estimates Budget (Oct/Nov 2003), has to be gazetted to specific municipalities. To retain adequate flexibility with respect to the unpredictability of the drought, the Department only gazetted an amount of R109,055 million to 36 municipalities during December 2003, with the intention to continuously monitor the development of drought conditions and then to do a further round of allocation early during 2004. Information on the 1^st and proposed 2^nd round of allocation is contained in the attached Table.

With respect to the further allocation of R250 million for drought relief supported by the Cabinet with regard to the current (2003/04) financial year, an amount of R125 million is earmarked to the Department for emergency water provision. The latter amount is constituted of R100 million for domestic purposes, R20 million for stock-drinking water to be provided in collaboration with the Department of Agriculture and R5 million to enhance the security of water systems. A proposed breakdown of these three allocations is also reflected in the attached Table.

There are a number of issues which need to be resolved in respect of this allocation of R125 million, which have also been discussed with the National Treasury on 27 January 2004, namely:

• While the Cabinet has supported the allocation, tabling the necessary Bills in Parliament, will only be completed in March 2004. We expect the National Treasury to issue a letter shortly enabling the Department of Water Affairs and Forestry's Director-General, as accounting officer, to proceed ahead of this in the light of the current emergency.
• Since some of this year's normal capital funds may not be spent, inter alia, due to actions taken with regard to drought relief, an option is to reschedule R125 million of this CAPEX funds to be utilised for the proposed emergency water provision initiatives, of which more than 90% are of a capital nature. The National Treasury provide guidelines with regard to this.

• Funds earmarked for regional schemes, serving more than one local authority, cannot be allocated as conditional grants to municipalities, but will be for the Department's own budget. Of the R100 million allocated towards domestic water, at least 50% fall into this category.

• The R20 million earmarked for stock-drinking purposes will be gazetted towards the relevant municipalities as conditional grants. This will enable all relevant departments to have access to the funds, especially in Limpopo, where the stock-drinking funds of the Department of Agriculture have been depleted.
• According to meteorological predictions it seems unlikely that the current drought will be substantially broken before the winter. Extraordinary measures to ensure water availability will consequently continue into the winter and additional funds in this respect will be required early in the 2004/05 financial year. Preliminary estimates as reflected in the Table indicate an additional funding requirement of R343 million for the next (2004/05) financial year in respect of emergency water provision. This amount will be revised during a fundamental review of drought conditions during March 2004.

Capital projects to be initiated during the current financial year and which will only be completed in the 2004/05 financial year, will in most cases have to be fully funded during the current financial year, because the relevant municipalities are entering into the necessary contracts and will not do so if adequate funds are not available at the time of contracting. This is helped by the fact that the financial year end of municipalities is only at the end of June, that is three months after that of National Government.