National Water Resource Strategy 2012: Department of Water Affairs briefing

Meeting report

Introduction
The Acting Chairperson noted that the meeting would be a continuation of the NWRS briefing which was not completed during last week’s meeting and which covered only the overview due to time constraints. She outlined which areas of the presentation would be given at today’s meeting.

Mr Maxwell Sirenya, DWA Director-General (DG), highlighted which areas of the briefing would be presented.

Highlighting specific issues and implications
Mr Helgard Muller, DWA Acting Deputy Director-General: Regulation, began his part of the presentation by looking at equity in access to water services. He referred to the Constitution in its requirement for “access to sufficient water”, and the Water Services (WS) Act (No. 108 of 1997) and Regulations in terms of Section 9, which defined quantity, quality and assurance of supply. He said that there was impressive progress on national scale but there were problems with backlogs in remote rural, informal settlements and poor oversight and monitoring while sustainable water resources were needed to ensure equity in access to WS. The concept of direct access to water for productive uses, such as water for irrigation, business or an industry, needed to address equity in water allocation to address job creation and its contribution to poverty eradication. He added that it was not practical or possible to divide SA water resources to give every South African an equal amount of raw water.

Turning to equity in access to the benefits from the use of water resources, he referred to the concept of public sharing in the benefits of water used by other sectors such as the energy sector, which used only 2% of water but contributed 15% of the Gross Domestic Product (GDP), and poor sharing in benefits like from social grants paid through taxes.

The concept of “water neutral footprint” was receiving attention locally and internationally, but the concept did not mean that no water was used by a water user. Instead, it meant that water consumed was used as efficiently as possible and where further water efficiency gains could not be achieved, the negative impact (ecological/ social) of such use was offset by that user's mitigating other water users’ inefficiencies. Thus, there were two key activities in achieving a water neutral footprint. The first was saving (reducing the impact of water-consuming activities) and the second was offsetting (investment in water conservation or other measures to offset the adverse environmental and social consequences).

Discussion
Ms M Wenger (DA) wanted examples of successful implementations of off-setting and asked how much business actually contributed.

Ms D Tsotetsi (ANC) questioned the capacity or strategies of the Department to deal with back logs.

Mr J Skosana (ANC) was concerned about equity. He asked if the strategy came closer to what was outlined in the Constitution, particularly when looking at rural areas. He felt the Department needed to move faster in addressing equity and eradicating poverty.

Ms Wenger asked if the Department had a database of areas with infrastructure but with no water coming through.

Mr Sirenya replied that many of the concerns of the Committee would be covered later in the presentation. In response to the issue of addressing the constitutional principles, he noted the Department had a plan with the Department of Cooperative Governance and Traditional Affairs (CoGTA) to reach all areas lacking access to water within the next two years on a basic level. He added that functionality was another issue to address.

Mr Muller replied that the question on the constitution would be addressed later in the presentation. Addressing the question of off-setting, he said there was no practical example yet and only principles of the proposal were being discussed.

Mr Skosana wanted elaboration on “not practical or possible to give every South African an equal amount of raw water” in the equity in access to water resources section of the presentation.

Ms Tsotetsi proposed that the Department went through the whole presentation and Members could ask questions afterwards.

Mr Muller said that, in access to water services, the Constitution outlined that every citizen had the right to a minimum amount of water per day for their own personal use. The issue of water resources was different as it spoke to water above personal use. He said it was not always practical to provide people with water for personal or household use plus raw water for productive use.

Ms Wenger asked how the Department would encourage or give incentives to businesses to get involved in the off-setting project. She noted that during her time as mayor of a municipality she had great difficulty in getting a large business to embrace the idea of off-setting.

Mr Muller replied that he wanted details of this specific case so as to help the Department refine its policy.

The Acting Chairperson suggested that the presentation continue and Members could ask questions thereafter.

Water, Equity and Social Development
The Department explained that this area of the NWRS would give effect to the equity principle by redressing past imbalances (race and gender), contributing to Broad-Based Black Economic Empowerment, enhancing capacity development, supporting local, provincial and national planning initiatives, facilitating fair, reasonable and consistent allocations, the achievement of development objectives, to have meaningful transformation in water use, to support poverty eradication and economic development, and to help balance resource protection, equity and growth.

The Department then turned to a situation analysis, painting a picture of what the current situation was like. Large quantities of water were in the hands of non-historically disadvantaged individuals (Non-HDIs); most applications received were from non-HDIs without any indications of contribution to redress and equity; allocable water was becoming depleted without achieving equity in allocations; there were difficulties experienced by historically disadvantaged individuals (HDIs) in using water for productive purposes; the trading of water did not necessarily contribute to equity; and there was lenient legislation favouring the status quo.

On the strategy on how to move forward, the Water Allocation Reform Strategy (WARS) proposed strategic mechanisms to achieve the set targets through set-asides, general authorisations, strategic alignment with other national initiatives, compulsory licensing, partnerships and a review of the current Strategy. The success of WARS was largely dependent on collaboration with all sectors like mining, industry and agriculture.

As to improved water regulation, regulation was important to ensure the protection, use, development, conservation, management and control of water resources. The guiding principles (sustainability and equity) recognised the basic human needs of present and future generations, the need to protect water resources, the need to share some water resources with other countries, the need to promote social and economic development through the use of water, to ensure the protection of the health and interests of citizens, and to ensure the protection of citizens’ rights to basic water services. To realise these things, the regulatory function entailed authorisation, compliance monitoring and enforcement.

There were many drivers of regulation. One of them was water resources. South Africa was rated as water scarce, thus there was a need to protect the resource from threats of over- abstraction, discharges that were not compliant with the set standards, and unlawful water use. Another driver of regulation was water services which included the need to protect the health and interest of citizens, the need to protect the citizens' rights to basic water services, and the increased demand for water services, on account of, among others, population growth and migration from rural areas to cities. Another driver of regulation was economic regulation which included the protection of the interest of the consumers without compromising the sustainability of the water services institution and ensuring that tariffs throughout the value chain were fair to all citizens (equitable), affordable (viable, economically effective and promoting efficient use of resources), and allowed for the continuity of service (sustainability).

As to the situation analysis highlighting the drinking water quality, a comparison of 2009 and 2012 Blue Drop reports on the national microbiological compliance of the South African tap water measured against the South African National Standard (SANS 241) indicated an improvement. With waste water there was an improved or reduced risk rating. With water resources there were increased reports of unlawful water use, increased application for water use authorisation, which increased the need for compliance monitoring and enforcement, and capacity constraints in dealing with the demand for increased regulatory function.

On the strategy to go forward, the strengthening and continuous improvement of water services regulation by Regulatory Performance Measurement Systems (RPMS) was important. In terms of incentive-based regulation, this was the conscious use of rewards as well as penalties to encourage performance and continuous improvement. Targeted risk-based regulation was a risk-based regulation which allowed the institutions to identify and prioritise the critical risk areas within its water and waste water management and to take corrective measures to abate these.  Risk analysis was used by the regulator to identify, quantify and manage the corresponding risks according to their potential impact on the water resource and to ensure a prioritised and targeted regulation. Separating (within DWA) support from regulation was important and reference was made to cases of ailing municipalities needing support from the sector support unit of the Department (Rapid Response Unit). Other measures were interdepartmental collaboration, joint investigations with law enforcement agencies, strengthening the compliance and enforcement unit, targeting specific problem areas, promoting self-regulation, entrenching the principles of regulation, and the development of regulatory tools.

Governance Strategy and Water Sector Institutional Arrangements
Ms Thoko Sigwaza, DWA Chief Director: Institutional Oversight, noted that there was currently an ineffective arrangement of water sector institutions. Looking at the sustainable water sector institutions that would facilitate effective service delivery, she said that the overall trusteeship of the water value chain was with the Minister of Water Affairs. The Department would set policy, regulate, and provide support to water management and water service institutions. The ownership, financing, development, management and operations and maintenance of national water resources infrastructure would be strengthened. The development, financing, management, operation and maintenance of regional bulk water and waste water services would be strengthened through the consolidation of existing water boards, and the water resource management for each of the nine newly defined water management areas was strengthened through consolidating them into nine economically viable catchment management agencies (CMAs).

Looking at visions and objectives, the water user associations would facilitate the management of local water resources infrastructure by users for their mutual benefit and assist with local water resource management functions. The development and management of the four international river basins would be undertaken by trans-boundary water management institutions. Water research, information and knowledge management would contribute to improved water resource management and sustainable water service provision. Economic regulation was to be explored and, by the end of 2014, a decision would be taken around appropriate institutional design to ensure that water provision and services was provided in an efficient, fair and sustainable manner.

Ms Sigwaza turned to the management of water resources at catchment level and explained that the role of CMAs was to ensure that water resources were managed to facilitate the involvement of local communities in water resources management. The new nine Water Management Areas (WMAs) had been gazetted for public consultation on the 20 July 2012 for 90 days. The Department planned to establish all nine CMAs with one in each WMA by 2015 and the establishment of the CMAs would be prioritised based on the progress towards establishment, the state of readiness of the proto-CMAs, the water resources management challenges, and financial viability.

As to managing national water resources infrastructure, at present the Department managed most of the national water resources infrastructure while the Trans-Caledon Tunnel Authority (TCTA) financed and managed specific water projects as per Ministerial directives. These projects were financed off-budget and the investment costs were repaid through user charges. Key areas of concern were the poor financial management of the Water Trading Entity.  A draft business case had been developed for the creation of an optimal institutional model while the main advantages of this were increased accountability, transparency and improved performance.

As to the management of local water infrastructure through water user associations (WUA), she noted that the slow transformation of irrigation boards had been due to difficulties in achieving representivity targets, unresolved concerns regarding the transfer of private assets and liabilities to a wider grouping, and a lack of financial and technical resources to support new ‘developmental’ WUAs. The irrigation boards were to be transformed within 12 months to bring them within the ambit of the Amendment of the National Water Act while a transformation score-card was introduced.

Ms Sigwaza looked at the Water Research Commission (WRC) noting that the National Water Research Plan would be introduced in South Africa and led by DWA and the WRC. The review of the Water Research Act (No. 34 of 1971) was to be fast tracked for completion in six months. She concluded by looking at priority actions, which included fast tracking the establishment of CMAs in priority catchments and delegating water resource management functions, ensuring the transformation of all Irrigation Boards into Water User Associations by 2014 with a required equity transformation plan in place, delegating local water resource management functions to WUAs that had capacity to perform these functions, supporting the establishment of new WUAs as vehicles for building capacity of emerging farmers, amalgamating current water boards into a reduced number of viable regional water boards, ensuring effective management of National Water Resources Infrastructure which would develop, manage and operate DWA infrastructure through an appropriate institutional model, and developing a comprehensive regulatory and oversight framework for the National Water Research Institute (NWRI) to ensure efficient operation and financial sustainability.

Discussion
Mr G Morgan (DA) was interested in the transfer of assets and consultations with mayors and premiers and the like when looking at the amalgamation or closing down of water boards. He asked about the process and legality of expanding the range of water boards. He also asked if the Department could compel an existing municipality to take over services from a water board, particularly in terms of constitutional provisions and stipulations. He questioned the capacity of the Department to manage and regulate this process.
 
The Department replied that it was not fully capacitated, but the intention was to get graduates in science and other areas of need to help out at the Department with the day to day compliance monitoring once they were trained. This function required a high level of skills, especially in terms of regulation.

Mr Skosana asked how the Department measured water that was irrigated. He wanted to know where the Department was, practically, on the issuing of licences for irrigation. He asked how the Department determined indicators to monitor water target allocation reform interventions. He also questioned the levels of disclosure of the NWRS in terms of water footprint.

The Department replied that the licensing project was still on. The Department was developing indicators to measure the impact of water allocation reform. The Department could come back in two or three years’ time to look at what had been achieved.

Ms Tsotetsi raised a concern around situation analysis and questioned the transformation policy of the Department to change the status quo. In terms of poverty, many rural people relied on agriculture for their livelihood which, in turn, depended on water. She asked if, given the resistance to transformation, it was realistic for the Department to aim to have water boards transformed in 12 months. She asked what it would take for transformation to happen.

In terms of equity applications, the Department replied that there was no legal tool to measure the level of equity. The legislation was failing in this area but was part of the legislative review process of the Department.

Ms C Zikalala (IFP) wanted to know the water scarcity status of Bushbuckridge in Mpumalanga.

The Department replied that in terms of regulation, the Department was not confined to urban areas but looked at rural areas as well.

Ms Petunia Ramunenyiwa, DWA Regional Coordination Director: Operational Support, replied that, in terms of licensing, the Department had dealt with a number of cases from the backlog and a number of cases were awaiting authorisation before being submitted to the DG for signature. Once the figures were confirmed, she could respond better to these concerns.

Ms Sigwaza said that regional bulk provision should be the mandate of water boards at a regional level. Municipalities could do bulk where they had the capacity. She added that consultations with unions were challenging. Looking at the transfer of assets, she said that the Minister had power to transfer assets from one water board to another as long as they remained in the area of operations so that the users that have paid had benefit from that particular infrastructure. She confirmed that the Department wanted to increase the range of water boards to deal with water resources and services at a regional level. It would be more efficient if one institution were responsible for these functions instead of the multiple institutions currently the case. She said that water boards had the ability to attract and retain skills if they were given the mandate of regional bulk infrastructure. Water boards were also allowed to do secondary activities, if they entered into a contract with municipalities. The Department was not seeking constitutional changes as it would not win.

Mr Morgan had a follow up question on secondary activities and asked if the Department would like to see opportunities for secondary activities being taken up by municipalities. He asked if the Department encouraged municipalities which could not manage their waste water and sewerage functions to enter into such agreements with water boards if possible.

Mr Skosana clarified his question saying he wanted to know how the Department defined specific indicators for monitoring water allocation. He also asked about challenges at provincial level, and asked how Departmental managers linked with provincial managers and municipalities.

Ms Tsotetsi said she was not happy with the response on transformation. She asked why the Department was not employing graduates when there were so many who were unemployed. She suggested a meeting was needed with the people who handed out licences to ask if they understood transformation.

The Department replied on the development of indicators for water reform. It had a project to measure the impact of water allocation reform but how it prioritised which areas was dependant on equity. Licence applications were evaluated as they came.

Mr Skosana said that he was talking about indicators that were specifically determined for monitoring and allocations reform interventions.

Mr Muller replied that the Department distinguished between support and regulation. Proper connections and  metering were essential. Unauthorised or unlawful connections caused problems as they meant that people were taking more water than they were supposed to. The Department wanted to look into the issue of water boards taking on sewerage treatment as a secondary function.

Ms Ramunenyiwa looked at how DWA and CoGTA collaborated to aid municipalities. She noted rapid response units to assess and diagnose problems. Funding was a challenge. The Department was in partnership with the Municipality Infrastructure Support Institution to ensure there was alignment with the rapid response unit and no duplication. The Department was working on how to maximise the grants available.

Mr Muller said that, in the draft strategy, there were a number of detailed actions planned, and he referred Members to this.

Ms Eustathia Boflatos, DWA Director: Water Management Institutions and Governance (WMIG), said that there was resistance to transformation in certain areas but the Department took a strong stance against it and would issue directives where necessary. She said that it regulated and monitored to see that there was improvement in meeting targets by using more than one indicator.

Mr Sirenya said that transformation should be unpacked in another meeting.  He noted equity issues were addressed and applications favoured those who were previously disadvantaged. Looking at institutional reform issues, he added that consultations were important as was relationship management with water services providers and the Department. He said that some changes required legislative changes.

Information, Monitoring and Research
This part of the presentation was covered by Mr Mbangiseni Nepfumbada, DWA Acting Deputy Director-General: Policy and Regulation. He began by looking at the importance of monitoring and evaluation. It was indispensable for effective water management. More and more reliable information would be critical in future. It was needed to address the escalating challenges of increased water needs for growth, development and equity, complexities and uncertainty brought about by climate change, and the competing needs of different water users and aquatic ecosystems. Good information on water depended on effective monitoring systems, good data management, secure archiving and highly accessible dissemination systems.

Looking at the present situation, most hydrological datasets were still adequate, but had insufficient growth and some decline in places. There was inadequate maintenance, vandalism and theft of monitoring equipment. Many rainfall gauges had been closed down by the South African Weather Service (SAWS). There was not enough data sharing between Government departments and there was a need for more shared water information with countries in shared river basins. Also, information in the National Register of Water Use was still incomplete. Several water information systems were still “stand alone” and with limited accessibility. Resources (staff, skills, funding and equipment) for monitoring were still inadequate.

Mr Nepfumbada turned to the drivers for improved governance of water information and monitoring, He  highlighted that the scope was extensive and complex in terms of availability, distribution, quantity, quality, use of water, costs and authorisation. Monitoring happened at local, regional and national levels of Government and in the sector. Significant information needs of many stakeholders must be addressed. Many institutions were now involved in water information management and monitoring. Resources in funds, skills and manpower were limited.

Turning to the strategic approach, Mr Nepfumbada said that DWA would lead with a national plan in partnership with organs of state, water management institutions, water users, and water sector institutions to improve, facilitate and coordinate the on-going monitoring, recording, assessment and dissemination of data and information on water at all levels.

The strategic objectives were to raise awareness about the value of water information, to improve national water monitoring governance, to improve the collection of water data and information, and to rationalise data and information on water on a national scale. Other objectives included increasing efficient access to timely and related water information, improving national coverage by data and information, ensuring reliable and quality-checked data and information, increasing investment in water and related information,  and improving the use of advanced and appropriate technologies in water monitoring and information.

The next section that Mr Nepfumbada covered was research and innovation. The key issues to address were to raise awareness on the need to invest in collecting high quality water-related information in collaboration with water sector institutions; to implement a national monitoring and information management plan for the water sector, evaluated and updated every five years; to establish an integrated water information management system accessible to institutions and sector users by 2019; to ensure that high quality data and information for supporting scientific research, regulation, monitoring and compliance enforcement were made accessible to public and private institutions; and to invest in building technical expertise needed to collect, analyse the water information, and to produce reports for decision-makers in support of the “water footprint” concept. More key issues were to build a network for data collection by water users, Government, scientific institutions and members of the public, work jointly with SAWS and the Agricultural Research Council (ARC) to ensure improved investment in rainfall monitoring, develop a data sharing protocol and set national data standards, initiate the development of national and WMA-level water accounts during 2013 in preparation for NWRS Three, and to ensure the necessary resources to improve the current water monitoring infrastructure over the next five years to achieve an effective monitoring network across the country as part of the Five Year Monitoring Plan.

The motivation was that the water sector in South Africa faced urgent challenges such as the scarcity of the resource and the deterioration of the quality thereof. The situation analysis showed that publicly-funded water research and innovation (R&I) currently used the water research levy, administered by the Water Research Commission, currently approximately R150 million/annum. The total level of water-related research and innovation funding (public plus private) was higher – between R250 and R350 million per annum for the sector as a whole and most of the water research was conducted at universities, science councils, parastatals, private sector organisations, water utilities and non-governmental organisations (NGOs).

The key issues in this area were fragmentation between the water sector R&I strategy, national science and technology, the national research and development (R&D) strategy and the National System of Innovation, and reliance on international research and innovations. While there were local solutions available (sometimes outside the recognised formal sector), researchers must be trained and encouraged to contribute towards solutions for the water sector and reduce the over-reliance of water-related R&I on public funding. There was no consolidated database of R&I role-players and products. This meant that there was no other alternative but to invest in the future through the development of R&I in the water sector.

He concluded by looking at the solutions. DWA should take a lead role in directing and supporting research and innovation to address specific water sector challenges, develop a framework for monitoring and evaluation of R&I progress and uptake/use, promote innovation and technology in the private and public sector by making funds available for pilot projects, support knowledge sharing, and continue to reward outstanding achievement in various forums and the utilisation of indigenous knowledge to enhance water resource conservation and management. Other solutions were the establishment of a comprehensive inventory of water related R&I data for the South African water sector, establishing a viable funding model for the sourcing and allocation of financial resources to water sector R&I, the effective utilisation of mobile technology and satellite imagery in resource monitoring, compliance monitoring and enforcement activities, and establishing public-private partnerships to secure funding for water-related R&I.

Water sector capacity building chapter
Ms Ramunenyiwa began by outlining the background to the skills development landscape. The skills shortage and low levels of water literacy could be attributed to a fragmented approach to education, training, and public awareness. Despite the overarching positioning of the National Qualification Framework (NQF) as a design imperative, education, training, human resource and skills development had not aligned into an integrated, seamless process and skills challenges had primarily been converted into human resource management concerns, resulting in the neglect of a pipeline approach to education and training.
Looking at the skills development objectives for the water sector, skills were vital to key water sector strategic goals for ensuring sustainable and equitable water; ensuring universal access to safe and affordable water services; building, operating and maintaining infrastructure; aligned and effective institutions; and the water for growth and development goals.

After looking at strategic objectives and their time frames and mentioning the conceptual framework, she reviewed key interventions over the next five years. The first was water literacy key intervention over the next five years, specifically the roll out of the Curriculum Aligned Resource Materials for Grades R to 9 in all schools across the country (some work had started), the roll out of Curriculum Aligned Resource Materials for Grades 10 to 12 and Further Education and Training (FET) Colleges, capacitating educators on water education, developing the strategy and programme for Higher Education and Training (HET)-level water literacy, and partnering with the South African Qualifications Authority (SAQA) on water elements of education and training and a National Public Education and Awareness Drive. The interventions for FET over the next five years were to investigate the FET training sector, infrastructure and processes for water sector, establish Water-Focused FET College(s), promote FET training as a viable and credible training route for the water sector, ensure that FET College Curriculum and Training Processes were meeting sector needs and promoted, supported and strengthened the apprenticeships system.

Key interventions in the water sector/HET alignment over the next five years were to enable structured and effective dialogue between HET and the water business to narrow the gap between sector needs and graduates entering the workplace, strengthen and support the DWA Learning Academy, and engage effectively with the Department of Higher Education and Training to improve the quality of training (and trainers) for engineers, scientists, managers and socio-economic-environmental professionals across institutions of higher learning.

Key interventions over the next five years in workplace training and development were to promote dialogue and sharing among water businesses to encourage enabling environments for workplace training and development (e.g. municipalities), facilitating processes to improve mentorship in the water sector and development for occupations, focus on professionalising the sector education and training, and facilitating dialogue and programmes on retention strategies for the water sector.

Key interventions for sector intelligence over the next five years included developing comprehensive sector intelligence mechanisms to anchor education, training and skills development in the sector, developing effective mechanisms and processes for all water businesses and sector partners to provide credible information for the intelligence mechanism, and developing “State of the Water Sector Education and Training” Reports from intelligence gathered through the system. She concluded by outlining the skills demand in terms of skills and occupations identified by the water services sector and national functions to ensure coordinated responses to meet the sector skills development challenge.

Communication Strategy
Mr Mava Scott, DWA Chief Director: Communications, began by looking at the NWRS communication strategy in terms of stakeholder/community. He mentioned countrywide workshops across all provinces, awareness road-shows, multipurpose centres which covered information sessions for business and the  community, and consumer forums in partnership with the National Consumer Forum. In terms of media arrangements, there were press briefings, provincial media workshops, media partnerships,, think/opinion pieces by water experts, press club engagements, and radio campaigns through commercial and community platforms. He noted that many people, who wrote on water issues, did not read Department documents. This resulted in distorted reports. 

Mr Scott turned to marketing and advertisement. He noted the NWRS web page, which was hosted by DWA, advertorials in Independent Newspapers, sector exhibitions like seminars and conferences, knock and drop approaches through leaflets and brochures, billboards on highways and other strategic areas, and murals/wall paintings in strategic areas. Internal communications included an intranet page updated with NWRS information, an information kiosk with a customer service centre, newsflashes and blue screen messages, voice automation, lift news and notice boards.

Investment framework
This part of the presentation was covered by Mr Frederick van Zyl, DWA Director: WSPEI, who began with the development rationale. He explained that National Treasury was required to source funding. The legal requirement of the National Water Act was to facilitate integrated delivery plans (“source-to-tap-to source” approach). Socio-economic development and functional programmes required integrated investment. He said that there was a poor track-record in the sector as seen with underutilised dams, incomplete services, and functionality which required a holistic approach to infrastructure development.

Moving onto the context, he said that a total water sector approach was needed to reflect all use sectors; for alignment with outcomes and developmental goals; to address infrastructure and sustainable management, water governance and water programmes; and apply total value chain and life cycle management. He added that it included financial management and funding model; addressed existing and new infrastructure; and the development of integrated and accessible investment information and monitoring system. He then listed the water infrastructure challenges. These included the national infrastructure development and the urgent need to ensure water security; local water infrastructure development; and municipal infrastructure, namely, bulk infrastructure, services quality, and basic services. Other challenges were water use sectors like agriculture, industry, mining, energy, and environment and sustainable management, specifically, services functionality, life cycle, asset management and governance.

After mentioning the positioning of the investment framework, the total sector perspective, value chain and water supply-chain (source-to-tap-to-source), Mr Van Zyl turned to the key findings which included that, to ensure sustainable management and to avert a potential water crisis, an amount of R668 billion was required over the coming 10 years. This was an alarming conclusion but was understandable considering institutional shortcomings in the sector, the large remaining water and sanitation backlogs, and the condition of water and waste water infrastructure that was in decline. Other findings were that there was under investment in oversight and monitoring with associated implications like poor functionality, pollution and risks.

The proposed interventions were the need to double up water investment funding, and for the focus to be placed on operations and maintenance. Dedicated funding was required for priority water management and water governance programmes, waste water systems intervention, water quality management, infrastructure asset management, and demand and conservation management. He added that funding was required for social and environmental components. Also an extended focus on stretching existing infrastructure to operate within the existing economic climate was required.

Financing interventions included capital financing to increase capital funding by R29.1 billion over the next five years through increases in own funding, grants and debt financing. Water services operation and maintenance as in principle there was no need to increase operating grant finance above the current levels as per the Division of Revenue Act and required drastic revision of equitable share policy and application, investment in effective financial planning and management. Another intervention was investment in social and environmental programmes as it was accepted that investment in social and environmental goals was a high priority like in the case of investment in irrigated agriculture that supported emerging farmers. A special funding policy and model was required to address the capital and sustainable management of these programmes.

Mr Van Zyl looked at specific interventions like institutionally to establishment of National Water Resources Infrastructure Units, establishment of Catchment Management Agencies, restructuring of water boards and establishment of regional water utilities, restructuring of Water User Associations and support capacity building of mostly rural municipalities which required a collaborative effort between DWA and the Municipal Infrastructure Support Agency (MISA). Another specific intervention was Water Conservation and Demand Management (WCDM) which introduced a WCDM grant with potential savings. There was also capacity building to establish a national fund for a capacity building programme, in partnerships with private sector, water boards and civil society. An amount of R2.3 billion over the coming three years was proposed.

Looking at success factors, he highlighted appropriate additional funding allocations from the national fiscus. He also highlighted gearing up funding from other sources, like the establishment or expansion of national public entities responsible for water resource infrastructure, developments in increasing ‘own source’ funding, involvement of the private sector to facilitate access to capital, construction expertise, and capacity for the ongoing management of water systems. Strong political commitment was required for the proposed rural water supply capacity building initiative, backed by finance from the national fiscus. There was successful implementation of the currently proposed institutional reform and realignment initiative and DWA leadership and commitment to achieve performance objectives.

Mr Van Zyl explained that the risk factors were lack of political buy-in to the proposed institutional changes and funding from the fiscus, and lack of sufficient economic growth (and hence, availability of budgetary resources). This would necessitate further project prioritisation. Other risk factors were antagonism towards the private sector, ongoing neglect of community based organisations in providing services, the limits on capacity in the Department and other water sector institutions to drive the programmes, and inadequate engineering expertise.

In conclusion, Mr Van Zyl said the water and sanitation delivery was at a transition point. Increased commitment was required to address challenges within the sector, and there was a need to build effective partnerships between DWA, its Minister, National Treasury, other national departments, water sector public entities, private sector and civil society organisations. Capital investment of R29.1 billion was required. This  included R17.3 billion to be sourced from the national fiscus, plus funding of R1.8 billion for capacity building, institutional development and resource conservation.

It was necessary to acknowledge the role of partnerships with development financing institutions to address the funding gap (areas not funded through allocations from the national fiscus) and systematically prioritising and sequencing the capital project portfolio to ensure that the most critical projects were given sufficient emphasis.

Discussion
Mr Skosana said he supported the Department in getting the total data in terms of monitoring and information. Funding must be coupled with revenue collection. There must be a mechanism for sectors to pay what was due to the Department. Otherwise this would reflect negatively on the audit of the Department. He also asked about the recruitment strategy of new staff members and their retrenchment. He was concerned that the issue of experience was not taken into account when discussing skills. He was concerned that new projects were being proposed when the Department was not managing its operations on the ground effectively.
Ms Tsotetsi appreciated that the Department took indigenous knowledge and rural skills into consideration.

Ms Wenger said that municipalities were not using their equitable share for the right things. She noted that making information available, especially to municipalities, was very important. She asked why the Department was not taking into account the offering of skills by many new and retired engineers.

Ms P Bhengu (ANC) asked how many young people were being employed through the operating and maintenance of infrastructure programme so far.

Mr Van Zyl replied that the Department was busy with a tariff strategy financial model to deal with issue of value chain to make sure that people paid for their services.

Ms Ramunenyiwa could not recall the number of youth employed through the special programme but could provide the Committee with the proper number. The programme was being expanded to other areas to employ more youth. She noted there were other programmes that considered youth employment.

The Chairperson noted that the public hearings on the NWRS Two would assist the Committee and Department in getting more information from the perspective of the public.

The meeting was adjourned.