Briefing on the state of readiness and strategy to effectively spend the 2013/14 allocated

budget

29 May 2013

STANDING COMMITTEE ON APPROPRIATIONS

CONTENTS

• PROGRAMMES PER BUDGET STRUCTURE• OVERVIEW OF BUDGET ALLOCATION• ALIGNMENT OF ANNUAL PEFROMANCE PLAN WITH

HUMAN AND FINANCIAL RESOURCES• PROGRAMME OUTPUTS

2

PROGRAMMES PER BUDGET (ENE) STRUCTURE

3

Administration Water Sector Management

Water Infrastructure Management

Regional Implementation &

SupportWater Sector Regulation International Water

Cooperation

Ministry

Departmental Management

Internal audit

Corporate services

Financial Management

Office accommodation

Policy & Planning Mgt & Support

Integrated Planning

Policy & Strategy

Water Ecosystems

Water Info Mgt

Institutional Oversight

Infrastructure dev & rehabilitation

Operation of water resources

IR Mgt & Support

Africa Cooperation

Global Cooperation

Regional Mgt & Support

Water Sector Support

Institutional Establishment

Regional Bulk

Transfer of Water Schemes

Support Services

Regulation Mgt & Support

Economic & Social Regulation

Water use authorisation

Resource regulation

Compliance Monitoring

Enforcement

Water Services Projects

Integrated Catchment Mgt

Mine Water MgtSub-programmes

Programmes

Legend

Water Trading Entity

Financial Management

Integrated Catchment Mgt

OVERVIEW OF BUDGET ALLOCATION FOR THE 2013/14 FINANCIAL YEAR

4

BUDGET OVERVIEW PER PROGRAMME

5

Programme no Programme Budget Budget Percentage (R'000)

1 Administration 978 606 10%2 Water Sector Management 516 366 5%3 Water Infrastructure Management 2 565 203 25%4 Regional Implementation and Support 5 982 684 59%5 Water Sector Regulation 118 691 1%6 International Water Cooperation 25 413 0.003%

Total 10 186 963 100%

10%5%

25%59%

1%0%Administration

Water Sector Management

Water Infrastructure Management

Regional Implementation and Support

Water Sector Regulation

BUDGET OVERVIEW PER ECONOMIC CLASSIFICATION

6

Economic Classifications Budget Allocation Budget Percentage(R'000)

Compensation of employees 1 227 209 12.05%Goods and Services 1 465 114 14.38%Interest 2 013 0.02%Transfers and subsidies 3 916 370 38.45%Payments for capital assets 3 576 167 35.11%Total 10 186 873 100%

12%

14%

0%

39%

35%

Compensation of employees

Goods and Services

Interest

Transfers and subsidies

Payments for capital assets

OVERVIEW OF EARMARKED VERSUS UNEARMARKED ALLOCATION

7

Earmarked versus unearmarked Budget Allocation Budget Percentage(R'000)

Unearmaked Funds 2 723 186 27%Specifically and Exclusively Appropriated 6 439 867 63%Conditional Grants 1 023 910 10%Total 10 186 963 100%

27%

63%

10%

Unearmaked Funds

Specifically and Exclusively Appropriated

Conditional Grants

DETAILS OF EARMARKED VS. UNEARMARKED BUDGET

8

Programmes Unearmarked (voted) funds per programme

Earmarked funds per programme Total of funds per programme

Budget amount % Budget amount % Budget amount %Administration 978 606 10% 0% 978 606 10%Water Sector Management 508 473 5% 7 893 0% 516 366 5%Water Infrastructure Management - 0% 2 565 203 25% 2 565 203 25%Regional Implementation and Support 1 131 415 11% 4 851 269 48% 5 982 684 59%Water Sector Regulation 79 279 1% 39 412 0% 118 691 1%International Water Cooperation 25 413 0% 0% 25 413 0%Total 2 723 186 27% 7 463 777 73% 10 186 963 100%

10%

5%

0%

11%

1% 0% Administration

Water Sector Management

Water Infrastructure Management

Regional Implementation and Support

Water Sector Regulation

International Water Cooperation

0%0%

25%

48%

0% 0% Administration

Water Sector Management

Water Infrastructure Management

Regional Implementation and Support

Water Sector Regulation

International Water Cooperation

Unearmarked Funds Earmarked Funds

ADDITIONAL FUNDING

9

Additional Funding Budget Allocation Budget Percentage(R'000)

Regional Bulk Infrastructure 81 669 6%Compensation of Employees 54 637 4%Pilanesburg (Magalies Water) 200 000 16%Improved Condition of Services 20 331 2%Acid Mine Drainage 150 000 12%De Hoop Dam (Phase 2B and 2D) 171 000 13%Conditional Grants 602 965 47%Total 1 280 602 100%

6%4%

16%2%

12%13%

47%

Regional Bulk InfrastructureCompensation of EmployeesPilanesburg (Magalies Water)Improved Condition of ServicesAcid Mine DrainageDehoop Dam (Phase 2B and 2D)Conditional Grants

OVERVIEW OF BUDGET ALLOCATIONS

Description 2013/14R 000

Indicative figures received 9,745,679Plus: Additional Funds allocated to Baseline (details on slide 11) 677,637Plus: Additional Funds allocated to Conditional Grants: MWIG (details on slide 12) 602,965Minus: Adjustments to baseline (details on slide 13) (830,346)Funds Shifted to Department of Agriculture, Forestry and Fisheries (8,972)Total medium term allocation 10,186,963

10

ADDITIONAL FUNDS ALLOCATED TO BASELINE

Description 2013/14

R 000Regional Bulk Water Infrastructure 81,669

Compensation of employment: Reprioritisation 54,637

Pilanesburg (Magalies Water) 200,000Improved Condition of Service 20,331

Acid Mine Drainage 150,000

De Hoop Dam: Phases 2B and 2D 171,000

TOTAL 677,637

11

ADDITIONAL FUNDS ALLOCATED TO CONDITIONAL GRANTS: LOCAL GOVERNMENT

Description 2013/14

R 000

Conditional Grants to Local Government: MWIG 602,965

TOTAL 602,965

12

ADJUSTMENTS TO BASELINE

Description 2013/14

R 000

Minus: Adjustments to baseline including (830,346)

Goods and Services: Reprioritization (54,637)

Goods and Services: Savings (38,354)

Efficiency savings: WTE Infrastructure (571,000)

Decrease Indirect Grant: Water Services Subsidy Grant (166,355)

13

DETAILS OF EARMARKED FUNDSItem description 2013/14

R 000

Constructions of Water Services Projects 190 453Establishment of Regulations Branch 80 086Acid Mine Drainage 150 000Review of Regulatory and Pricing Strategy 7 893Water Services Operating Subsidy (indirect grant) 138 894Water Services Operating Subsidy (Direct grant) 420 945Municipal Water Infrastructure 602 965TOTAL 7 899 836

14

ALIGNMENT OF THE ANNUAL PERFORMANCE PLAN TO HUMAN AND FINANCIAL RESOURCES PER

PROGRAMME AND SUB-PROGRAMME

15

PROGRAMME 1: ADMINISTRATION (MAIN ACCOUNT) No Sub-programme No of APP

indicators2013/14allocation

% of allocation relative to programme allocation

Page reference in the APP

In 2013/14 In R’000

1 Ministry None 42 194 4.31% -

2 Departmental Management

3 65 099 6.65% 14 (PPI no 6 & 7)17 (PPI no 15)

3 Internal Audit 1 24 673 2.52% 14 (PPI no 12)

4 Corporate Services 7 362 145 37.01% 12 (PPI no 1-5), 16 (PPI no 13), 17 (PPI no 15)

5 Financial Management

4 141 805 14.49% 14 (PPI no 8 – 11)

6 Office accommodation*

None 342 690 35.02% -

Total 15 978 606 100%

16* means this sub-programme will be incorporated within Corporate Services during the 2014/15 financial year

Programme 2: Water Sector ManagementNo Sub-programme No of APP

indicators2013/14 allocation % allocation relative

to programme allocation

Page reference in the APP

In 2013/14 In R’000

1 Policy and Planning Management & Support

None 5 096 0.99% -

2 Integrated Planning 5 157 877 30.57% 21 (PPI no 19 – 21), 24 (PPI no 27)

3 Policy and Strategy 2 31 798 6.16% 23 (PPI no 25-26)

4 Water Ecosystem 1 39 057 7.56% 26 (PPI no 31)

5 Water Information Management 4 173 924 33.68% 19 (PPI no 16), 25 (PPI no 28 –30)

6 Institutional Oversight 4 108 614 21.03% 20 (PPI no 17-18) , 23 (PPI no 23-24)

Total 16 516 366 100% -

17

PROGRAMME 4: REGIONAL IMPLEMENTATION & SUPPORT

No Sub-programme No of APP indicators

2013/14allocation

% allocation relative to programme allocation

Page reference in the APP

In 2013/14 In R’000

1 Regional Management & Support

None 8 090 0.14% -

2 Water Sector Support 7 1 072 037 17.92% 28 (PPI no 36), 33 (PPI no 47-48), 34 (PPI no 49-52)

3 Water Use and Regulation None 295 151 4.93%

4 Institutional Establishment 5 34 019 0.57% 28 (PPI no 33-35), 30 (PPI 39-40)

5 Regional Bulk 4 3 288 338 54.96% 28 (PPI no 32), 30 (PPI no 38), 36 (PPI no 55)

18

PROGRAMME 4: REGIONAL IMPLEMENTATION & SUPPORT

No Sub-programme No of APP indicators

2013/14 allocation % allocation relative to programme allocation

Page reference in the APP

In 2013/14 In R’000

6 Transfer of WaterSchemes

1 579 976 9.69% 34 (PPI no 53)

7 Support Services None 341 900 5.71% -

8 Water Services Projects 6 190 453 3.18% 28 (PPI no 37), 30 (PPI no 41-43), 31 (PPI no 44-45)

9 Integrated Catchment Mgt 1 22 720 0.38% 36 (PPI 54)

10 Mine Water Management*

8 150 000 2.51% 36 (PPI no 56 – 59), 37 (PPI no 60-63)

Total 32 5 982 684 100%

19

* means the budget is for 2 financial years (i.e. 2012/13 and 2013/14only)

PROGRAMME 5: WATER SECTOR REGULATIONNo Sub-programme No of APP

indicators2013/14 allocation % allocation

relative to programme allocation

Page reference in the APP

In 2013/14 In R’000

1 Regulation Management & Support

None 3 567 3.01% -

2 Economic and Social Regulation 1 3 846 3.24% 43 (PPI no 66)

3 Water Use Authorisation 1 15 805 13.32% 41 (PPI no 64)

4 Drinking Water Quality & Wastewater Services

2 28 724 24.20% 42 (PPI 65), 43 (PPI 68)

5 Resource Regulation 1 47 979 40.42% 43 (PPI no 67)

6 Compliance Monitoring 1 (merged)

1 080 0.91% 43 (PPI no 69)

7 Enforcement 17 690 14.90%

Total 6 118 691 100% -

20Red means these sub-programmes functions are currently merged

PROGRAMME 6: INTERNATIONAL WATER COOPERATION

No Sub-programme No of APP indicators

2013/14 allocation

% allocation relative to programme allocation

Page reference in the APP

In 2013/14 (R’000)

1 International Relation Management & Support

None 4 538 17.86% -

2 Africa Cooperation 2 10 899 42.89% 46 (PPI no 70-71), 47 (PPI no 74)

3 Global Cooperation 3 9 976 39.26% 46 (PPI no 72-73)

Total 5 25 413 100% -

21

ALIGNMENT OF THE APP TO VARIOUS PROGRAMMES Programme 1: Administration Programme 2: Water sector mgt Programme 3: Infrastructure

22

DPSA

NT

DEA

WRC TCTA

KOBWAOutcome 4 &6

NDPSIPs

NGP

Outcome 6

NDPSIPs

IPAP

Outcome 12 IPAP

Energy DMR

COGTADAFF

MDGs MDGs

ALIGNMENT OF THE APP TO VARIOUS PROGRAMMES Programme 4: Regions Programme 5: Regulation Programme 6: International

23

Outcome 4, 6, 7, 9

& 10

NDPSIPs

IPAP

Irrigation boards ~ WUAs

CMAs

WBs as IA

Energy DMR

COGTADAFF

DEA

DRDLRDHS

Health

MDGs Outcome 10

NDP

DMR

DEA

Outcome 11

Intl commissions

DIRCO

Enhancing capacity of the Department per programme

Programme No of posts advertised (incl. SMS)

No of OSD posts advertised

Programme 1: Administration 181 4Programme 2: Water Sector Management 37 18Programme 5: Water Sector RegulationProgramme 3: Water Infrastructure Management 176 20Programme 4: Regional implementation & Support 217 48TOTAL 612 90

24

PROGRAMME PROJECTS

25

PROGRAMME 2: WATER SECTOR MANAGEMENT PROJECTS

26

PROGRAMME 2.

OUTPUTS BUDGET ALLOCATION R’000

National Integrated Information System Prototype developed

25 237

Water services information provided 5 000

2 CMAs gazetted for establishment 880

16 institutions 12 WBs)(TCTA)(WRC) (2 CMAs)

4000

PROGRAMME 2

OUTPUTS BUDGET ALLOCATION

R’000

4 Reconciliation strategies ( 1 olifants and 3 all towns)

1 538

12 reconciliation strategies updated per year to ensure water security

11 669

PROGRAMME 2

OUTPUTS BUDGET ALLOCATION

R’000

Revised Water Pricing Strategy gazetted for publication

7 800 (Earmarked)

500

Realigned water boards and water resource infrastructure institution as per

2 500

PROGRAMME 2

OUTPUTS BUDGET

ALLOCATION

R’000

PROJECT PLANS

Amended water-related legislation and strategies

1 000 Draft policy document developed

Policy document finalised

Discussion document developed

Draft National Water Bill developed

NWRS 2 gazetted and implementation plan developed

8 000

PROGRAMME 2

OUTPUTS BUDGET ALLOCATION

R’000

Draft Climate Change Strategy for Water

Sector1 000

Revised Strategic framework for water services

500

Revised Water Policy 200

PROGRAMME 2 : WATER SECTOR

MANAGEMENT

SUB PROGRAMME

BUDGET

Allocation

2013/14 (R’000)

Expenditure as at 23

May 2013 % spent

Policy and Strategy 44,529 4,176 9

Institutional Oversight 95,883 5,149 6

Water Ecosystems 39,057 4,276 11

Integrated Planning 177,516 22,349 13

Water Information Management 154,285 20,835 14

TOTAL 511,270* 56 785 11

*Note: Above total excludes an amount of R 5,096 which is for the support for the DDG Policy and Planning

PROGRAMME 4: REGIONAL IMPLEMENTATION AND SUPPORT PROJECTS

33

OVERVIEW OF PROGRESS TO DATEStatus Number CommentsProjects completed during 2012/13 5 Totalling 30 since 2007Projects in construction phase 73 73 Projects are in construction phase of which 16 will

be completed during 2013/14Projects in design / tender phase 30Projects in feasibility phase 36 Feasibility studies will be conducted on 36 projectsTOTAL OF PROJECTS SINCE INCEPTION 154

34

IMPACT FROM THE COMPLETED PROJECTS1. Water for the provision of basic services2. Water for economic growth and development3. Increase assurance of supply4. Improve quality of effluent discharge and prevent environmental pollution5. Remove water restrictions

WATER SERVICES OPERATING & TRANSFERS SUBSIDY IMPLEMENTATION READINESS ON BUDGET OF R420M

MILESTONES TIMELINES

1 1ST transfer of R107,078,000 July 2013

2 Implementation of projects July 2013-June 2014

3 Submission of monthly reports July 2013-June 2014

4 Withholding to take place during transfers July 2013-January 2014

5 2nd transfer of R188,347,000 October 2013

35

WATER SERVICES OPERATING & TRANSFERS SUBSIDY IMPLEMENTATION READINESS ON BUDGET OF R420M

MILESTONE TIMELINES

5 3rd transfer of R125,520,000 January 2014

6 Monitoring of projects July 2013-June 2014

7 Close out reports July 2013-June 2014

36

MEDIUM TERM INVESTMENT ON WATER SERVICES INFRASTRUCTURE

TYPE DEFINITION RAND THOUSAND

2013/14 2014/15 2015/16

Smallinfrastructure

Cost less than R90 million per annum and not totalling more than R250 million over the medium term

1 452 069 1 946 888 2 146 500

Large infrastructure

Cost between R90 and R 400 million per year totalling at least R250 million but less than R1 billion

1 114 517 1 579 924 1 626 354

Mega infrastructure

Cost over R400 million per year for a minimum of three years or totalling at least R 1 billion

636 811 956 084 1 098 800

TOTAL 3 203 397 4 482 896 4 871 654

37

REGIONAL BULK INFRASTRUCTURE PROGRAMMECURRENT STATUS

RBIG started the 2013/14 financial year with 73 projects in construction phase of which 16 projects will be completed during this financial year

30 Projects are in design or tender phase with a budget allocation of R 507 million. Most of these projects will start with construction during this financial year.

Current budget for 2013 MTEF

38

BUDGET ALLOCATION PER PROVINCE

Province Project cost Expenditure frominception until 31 Mar 2012

Proposed budget allocation over the medium term

2013/14 2014/15 2015/16

Eastern Cape 6 328 812 574 486 033 116 582 741 497 960 501 083 1 032 000 000Free State 1 923 034 218 342 251 155 225 100 000 285 896 000 303 654 000Gauteng 438 425 000 204 000 798 241 200 000 337 700 000 355 000 000KwaZulu-Natal 5 269 729 919 722 367 645 593 563 275 1 167 000 000 1 280 000 000

Limpopo 3 618 448 000 614 365 239 593 536 725 717 499 000 784 667 000Mpumalanga 1 181 297 000 135 673 747 137 752 752 225 000 000 234 000 000Northern Cape 3 095 303 491 149 917 582 270 400 000 309 500 000 340 500 000North West 2 275 114 000 219 392 054 390 200 000 347 000 000 388 600 000Western Cape 1 033 317 571 110 954 651 170 802 891 132 800 000 153 233 151Head Office 0 65 691 050 83 040 860 89 015 917 93 110 849TOTAL 25 163 481 773 3 050 647 038 3 288 338 000 4 571 912 000 4 964 765 00039

Regional Bulk Infrastructure Programme

DWA appointed Water Boards as the Implementing Agents (Budgets allocated for 2013/14 financial year to WB’S are R 1.277 billion)

The Water Boards have the capacity to manage the implementation of projects and will ensure that the budget allocated for 2013/14 will be spent

Projects implemented by Water Boards are within scope, cost and time (See slides of projects implemented by Water Boards )

PROJECTS IMPLEMENTED BY WATER BOARDS

Projects implemented by Construction Unit

DWA Construction Unit appointed to implement projects

Limpopo: One project, 2013/14 budget allocation R80 million Northern Cape: One project, 2013/14 budget allocation R72 million North West: Three projects, 2013/14 budget allocation R104 million

REGIONAL BULK INFRASTRUCTURE PROGRAMMEPROJECTS IMPLEMENTED BY CONSTRUCTION UNIT

DWA Construction Unit appointed to implement projects

Limpopo: One project, 2013/14 budget allocation R80 million

Northern Cape: One project, 2013/14 budget allocation R72 million

North West: Three projects, 2013/14 budget allocation R104 million

42

MWIGPROJECTS

43

PLANNING PROGRESS

44

Step 1completed,

Step 2completed

Step 4Partially completed

Need / Initial

Planning

Project identification

/classificationtechnical feasibility Funding process

Identify need

Verify need

Cluster needs into

projects

Verify projects

Prioritise projects Technical feasibility

Assessment of

feasibility

Develop

Implementation Plan

Develop project B/P

Funding allocation

Develop overall WSA

B/P

Step 1 Step 2 Step 3 Step 4

Update Information system

IMPLEMENTATION PLAN

45

2015

Apr/May/Jun Jul/Aug/Sep Oct/Nov/Dec Jan/Feb/Mar Apr/May/Jun Jul/Aug/Sep Oct/Nov/Dec Mar/Apr/May

Step 2:

Project

Implementat

ion Plans

Step 4c: B/P

of project

Step 5 c :

Procurement

20142013

New

pro

ject

iden

tifie

dQ

uick

win

rea

dy p

roje

cts

iden

tifie

d

Step 6c : Start Implementation of ready projects (accelerate existing approved)

Step 7b: start

implementation of long

Step 4: Finalise of overall

B/P of WSA

Step 5: Start Design &

Procurement for short term

Step 3 Feasibility studies

Step 6: Start Design for bigger

projects

Step 5b: Procurement for

bigger projects .

Step 7: start implementation of short term projects

FINANCIAL ALLOCATIONSa. Budget allocations are as follows: 2013/14 – R 602 million

b. Initial budget allocations done according to needs ( not projects)

c. Budget allocations are indicated and published in DORA according to WSA and according to LM (2 lists)

d. It is envisaged once the planning has been finalised in the next month (June 2013) budget allocations will be adjusted accordingly

a. It is anticipated that adjustments will be minor and budget allocation will be kept more or less the same

46

ACIP ALLOCATION : FY 13/14

Acip 2013/14 WC/WDM WWTP WATER OTHER TOTALEC 15 166 25 090 40 256

FS 11 000 19 690 3 000 33 690LP 5 280 16 810 9 195 31 285

NW 13 000 10 500 2 000 25 500MP 2 500 14 000 16 500NC 14 108 18 000 32 108WC 5 000 8 000 13 000KZN 25 000 25 000GP 12 550 12 550

Total 78 604 137 090 14 195 1 500 231 389H/O

GRAND TOTAL 231 389

PROGRAMME 5: WATER SECTOR REGULATION PROJECTS

48

PROGRAMME 5

OUTPUTS BUDGET ALLOCATION

R’000

PROJECT PLANS

810 water treatment supply systems assessed for Compliance with drinking water quality standards

5 550

Economic regulator in place Institutional option for economic regulation finalised

PROGRAMME 5

OUTPUTS BUDGET ALLOCATION

R’000

960 wastewater treatment collector systems assessed

5 500

20 mines monitored for compliance in accordance with water use licence conditions

7,5000

PROGRAMME 5

SUB PROGRAMME

BUDGET 2013/14

(R’000)

Expenditure 23

May 2013 % spent

Compliance Monitoring 1,080 216 20

Enforcement 17,690 1,114 6

Drinking Water Quality and Waste Water Services 28,724 3,484. 12

Economic and Social Regulation 3,846 0 0

Water Use Authorisation 15,805 2,299 15

Resource Regulation 47,979 5,207 11

TOTAL 115,124* 12 320 11

*Note: Above total excludes an amount of R 3,567 which is for the support for the DDG Regulation

IMPLEMENTATION OF PROJECT MANAGEMENT

UNIT

END

53