ATC220318: Report of the Select Committee on Co-Operative Governance and Traditional Affairs, Water, Sanitation and Human Settlements on the Directive in terms of Section 63 of the Water Service Act 108 of 1997 to Umhlathuze Water, Dated 15 March 2022

NCOP Cooperative Governance & Traditional Affairs, Water and Sanitation and Human Settlements

Report of the Select Committee on Co-Operative Governance and Traditional Affairs, Water, Sanitation and Human Settlements on the Directive in terms of Section 63 of the Water Service Act 108 of 1997 to Umhlathuze Water, Dated 15 March 2022

 

1.       Introduction and Overview

 

1.1      The Select Committee on Co-operative Governance and Traditional Affairs, Water, Sanitation and Human Settlements, having considered the request by the National Council of Provinces (NCOP) to consider and report on the Directive issued by the Department of Water and Sanitation in terms of Section 63 of the Water Service act 108 of 1997 to uMhlathuze Water, reports as follows:

1.2      In terms of NCOP Rule 101, the Office of the Chairperson of the NCOP referred the directive by the Minister of the Department of Water and Sanitation to the Select Committee (CoGTA) for consideration and reporting. On 11 March 2022, the Select Committee had virtual meeting with the Minister, Deputy Minister and Senior Officials of the Department of Water and Sanitation.       

1.3      The main objective of the virtual meeting was to interact with the Department of Water and sanitation in order solicit opinion on the legislative, procedural and substantive matters related to the invocation of the directive in terms of section 63 of the Water Service Act, (Act 108 of 1997) to uMhlathuze Water Board.

 

2.       Briefing by the Department of Water and Sanitation on the Directive Issued in terms of Section 63 of the Water Service Act to uMhlathuze Water Board  

 

2.1      The Department of Water and Sanitation briefed the Select Committee on the legislative, procedural and substantive matters related to the directive to uMhlathuze Water Board. The presentation focused on the background, stakeholder’s engagement, recovery programmes and progress related to the implementation of the directive.

 

3.       Background

 

3.1      The Minister for Water and Sanitation, had a working session in October 2021 to assess the state of water in the Province; through amongst others engagements, with WSAs and Province. UMkhanyakude District Municipality made presentation on the state of water. The Department of Water and Sanitation noted that -61% of population still receives water via community stand pipes, and a lot more don’t have water. The District Municipality did not have a call centre and they took up to three months, before they know when people don’t have water.

3.2   The District Municipality failed to reconcile water balance, due to lack of water meters everywhere and enough readers where they have meters, water supply projects have been halted without cause. Further, drought relief boreholes are not functional but commissioned, and there are rampant illegal connections in Jozini (area of dam wall). There is no metering despite being procured in Jozini area, and Jozini water treatment is already operating at 75%, compared to 25%.

3.3      The Municipality did not have maintenance since 2018, and there was a thriving secondary private water market to unserved unspent MIG and WSIG of R83 million backlog. Since a significant percentage of people were unserved and exceeding the national norms and standards in 2014/15, the Department of Water and Sanitation attempted to intervene, but the process was stalled by the parties not agreeing.

3.4      There is no effective performance on WSA function, where water supply has collapsed. There is very little adherence to norms and standards or self-assessment tools. The necessary information systems needed for asset care are not in place. There is no human capital to run a WSA and where there are, it is not suitable for the asset base and spread (own admission in 2015). There is no billing and a threat of an uncontrolled debt spiral which further exposes water trading entity and uMhlathuze Water to a collections risk. In addition, the Municipality was under administration.

4.       Directive to uMhlathuze Water to Undertake Management, Operations and Maintenance of Water and Sanitation Infrastructure at uMkhanyakude District Municipality in Order to Restore Effective Water Service Function

4.1      On 3 February 2022, the Minister of Water and Sanitation notified the uMkhanyakude District Municipality, the Minister of the Department of Cooperative Governance and Traditional Affairs and the NCOP of the decision to issue directive to uMhlathuze Water to undertake management, operations and maintenance of water and sanitation infrastructure at uMkhanyakude District Municipality, in order to restore effective water services function.

4.2      In terms of section 63 of the Water Services Act, it states that if the Minister takes over any function of water service authority, the Minister may utilize all financial and other resource available to that water services authority relating to that function, may appoint a water service institution to perform that function or any part thereof that function, must end when the water services authority is in opposition to resume that function effectively.

 

5.       Departmental Aims of the Directives to uMhlathuze Water

 

5.1      The Department’s intention is to:

 

• Prepare or review the infrastructure implementation plan, prepare an associated business plan and implement scheduled projects to accelerate the design and implementation of bulk regional water schemes aimed at water supply and waste water schemes, as contained in the WSA’s Master plan.
• Update the business plan and associated costs to implement the reconfigured water supply scheme and associated reticulation.
• Implement the outstanding work at Jozi Water Works and associated reticulation water schemes, in order to increase the supply of water to communities.
• Prepare the required business plans and costing for the design and implementation of the required operational and information technology, to enable the WSA to monitor and operate the production and supply infrastructure of water to communities.
• Build and transfer skills to enhance technical and operational capability and capacity within the WSA, in all the aspects of the directive given.

 

6.         Development of the Departmental Recovery Programmes

 

6.1      The Department of Water and Sanitation has developed a Recovery Implementation Programme, that focuses on building institutional and stakeholders engagement, and building sustainable capacity and capability.

6.2      The implementation of the recovery programme also focuses on institutional capacity, through artisan development programme, graduate development programme, internship programme, skills and resource transfer

6.3      In terms of the implementation programme, the directive is expected to be funded from underperforming RBIG and WSIG allocations, under the management of the Department of Water and Sanitation for refurbishment and capital expenditure.

6.4      Once the business plans are jointly appraised by the Department, uMhlathuse Water, uMkhanyakude District Municipality and the Department of Cooperative Governance and Traditional Affairs, the proposal is to use a mix of RBIS, WSIG, MIG and revenue to fund the implementation of the directive in terms of section 63 of the Water Service Act.

 

7.       Observations of the Select Committee

7.1      The Select Committee has noted that in terms of legislative requirements, the Minister of the Department of Water and Sanitation has issued and communicated the directive to uMkhanyakude District Municipality, and tabled the notice of directive to the Chairperson of the NCOP and to the Minister for Cooperative Governance and Traditional Affairs, on 24 February 2022.

7.2       The Select Committee has also noted that the Department of Water and Sanitation issued the directive in terms of section 63 of the Water Service Act, 108 of 1997 in order to undertake management, operations, and maintenance of water and sanitation infrastructure at uMkhanyakude District Municipality.  

7.3       The Select Committee has further noted that the Minister for Water and Sanitation has also tabled a notice of intention to take over water and sanitation services functions for a period not exceeding five years, whilst simultaneously, assisting the Municipality to build the capacity to manage water and sanitation in the area.

7.4      The Select Committee has also noted the MEC for Cooperation Governance and Traditional Affairs in KwaZulu-Natal had invoked section 139(1)(b) of the Constitution at uMkhanyakude District Municipality in February 2021. This provincial intervention was due to the poor maintenance and operations of water and sanitation infrastructure, uneven provision of services to communities and project delays due to prolonged processes and possible fraud and corruption.

7.5      As the situation has further deteriorated since the invocation and implementation of the    section 139(1)(b) intervention, the objective of the directive in terms of section 63 of the Water Service Act, was a complete restoration of an effective water service functions of the Municipality.                                                

7.6      The Select Committee has furthermore noted that the Director-General of the Department of Water and Sanitation has been mandated to appoint a technical team composed of officials of uMhlathuze Water, Department of Water and Sanitation, Water Service Authority and Provincial Department of Cooperative Governance and Traditional Affairs, to assess progress of intervention and provide regular updates.

 7.7     The Select Committee has noted and welcomed the recovery implementation programme of the Department of Water and Sanitation, which focuses on institutional arrangement; operation and maintenance; technical services; estimated timeline in building sustainable capacity and capability; and restoration plan and exist.

 

7.8      The Select Committee has also further noted that uMkhanyakude District Municipality has communicated to the Department of Water and Sanitation an intention to declare a dispute in terms of section 42 of the Inter-Governmental Relation Framework Act.

 

8.       Recommendations of the Select Committee

         

8.1      Having interacted with the Department of Water and Sanitation on legislative, procedural and substantive matters related to the issuing of a directive in terms of section 63 of the Water Service Act, (Act 108 of 1997), the Select Committee recommends as follows:

8.1.1   The NCOP approves the directive in uMkhanyakude District Municipality in terms of section 63 of the Water Service Act, (Act 108 of 1997), for the period not exceeding five years.  

8.1.2   The Ministers of the Department of Water and Sanitation and Department of Cooperative Governance and Traditional Affairs should in the spirit of cooperative governance, ensure the deployment of qualified, skilled and competent officials in the implementation of the directive in the District Municipality.

8.1.3   The Ministers of the Department of Water and Sanitation and the Department of Cooperative Governance and Traditional Affairs should ensure the participation of Sector Departments in the implementation of the directive in the District Municipality.

8.1.4   The Minister of the Department of Water and Sanitation should table quarterly and yearly progress reports on the implementation of the directive in terms of section 63 of the Water Service Act, (108 of 1997) to the NCOP.

8.1.5   The Department of Water and Sanitation should fast track the process of business planning and costing and align the required resources with the Annual Performance Plan and budget allocation, in order to ensure effective and efficient implementation of the intervention in terms of section 63 of the Water Service Act in the District Municipality. 

8.1.6   The Select Committee on Cooperative Governance and Traditional Affairs in collaboration and cooperation with the relevant Portfolio Committee in KwaZulu-Natal Provincial Legislature, should conduct proactive oversight visits to uMkhanyakude District Municipality in order to monitor progress in respect of the implementation of the directive in terms of section 63 of the Water Service Act and section 139(1)(b) of the Constitution.

 

 Report to be considered.