PRESENTATION TO THE PORTFOLIO COMMITTEE ON WATER AFFAIRS AND FORESTRY

WATER SERVICES AMENDMENT BILL

6 OCTOBER 2004


Water Boards are creatures of stature

Their primary activity is to provide water services to other water institutions (section 29 of the Water Services Act (WSA)

Water Boards are enabled to perform other activities (ancillary activities) subject to compliance with the WSA

The ancillary activities may include:
- consulting services (engineering, scientific, environmental)
- infrastructure development - utility management
- training and capacity building - accepting industrial effluent
- catchment management services
- providing water and sanitation services

The ancillary activities are ringfenced

They bolster Water Boards' revenue They reduce marginal costs to regulated business This enables Water Boards to contain the tariff increase for the benefit of the consumers

They enable Water Boards to respond accordingly the water policies of government

Sections 28(l)(c) and 29 of the WSA indicate that that the Activities of Water Boards are territorially restricted (confined to service areas)

Water Boards do not have powers to undertake transnational operations

The amendment seeks to change this

There are difficulties with the Bill as it now stands

The proposed amendment seeks to grant the Minister of Water Affairs and Forestry in consultation with the Minister of Finance powers to authorise Water Boards to perform activities outside the boarders of the Republic of South Africa (section 30(4)) It reads as follows: "The Minister may, in consultation with the Minister of Finance, authorise a Water Board to perform an activity outside the boarders of the Republic."

Our preference: a legislation effectively granting powers directly to Water Boards to perform ancillary activities outside South Africa

Such powers may be exercised subject to guidelines determined by the Minister in consultation with the Minister of Finance and other Ministers

Our proposal: section 30 (4) be amended to read as follows: "a water board is authorised to perform activities outside the boarders of the Republic of South Africa subject to guidelines and parameters determined by the Minister in terms of section 30(3)"

The guidelines contemplated in section 30(3) will be determined in advance and may be amended from time to time by the Minister in consultation with the other three Ministers

The Legislature also has to expressly deal with the issue of the area in which Water Boards can perform ancillary activities in South Africa In terms of section 29 the Water Boards are confined to their respective service areas

This is in respect of the primary activities

The WSA is silent as to where ancillary activities may be performed

A distinction should be drawn between primary and ancillary activities of the Water Board

The primary activities should be performed within the service areas which may be extended on application to the Minister (section 28(l)(c) )

The Water Boards be enabled to perform ancillary activities anywhere in the South Africa

This will require an addition of the following subsection to section 30:

"(5) A water board may perform its other activities outside its service area in the Republic of South Africa."

THANK YOU