DEPARTMENT OF WATER AFFAIRS AND FORESTRY

PRESENTATION TO THE SELECT COMMITTEE ON LAND AND ENVIRONMENTAL AFFAIRS

14 November 2006

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Presentation Outline

• Introduction by DG

• Programme 1: Administration

• Programme 2: Water Resource Management

• Programme 3: Water Services

• Programme 4: Forestry

PROGRAMME 1: ADMINISTRATION

CORPORATE SERVICES AND FINANCE

Programme 1: Administration

Corporate Services

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Highlights

• Creation of a Forestry Branch and Gender and Disability Directorate

• Implementation of the RSA/Cuba secondment agreement

• Implemented a learnership program (water services)

• 8% improvement on appointment of women in decision making positions

• Improved IT platform• HR root cause analysis• Draft bill on establishment of NWIA• Reviewed internal governance structures

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Challenges

• Strengthening the implementation of a turnaround strategy for HR

• Building capability of the department deliver

• Increase public awareness and understanding of the work of DWAF

• Finalization of transfer programme to Water Services Authorities

• Development and implementation of transformation strategies/plans

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Department-wide performance improvement plan

• Implementation of normative performance standards

• Quarterly Branch performance reports• Mechanisms for effective implementation

of performance management and development system

• Interventions in place for building a team organisation

• Leadership and management development programme in place

Programme 1: Administration

Finance

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• Expenditure 2005/06 financial year Total Expenditure : R9 010 077 000 Exchequer : R3 889 150 000 (Including FDA of

R172 062 000) Trading Accounts : R5 292 989 000

• Spending Head Office and 9 Regional Offices in 4 programmes

Administration: R278 378 000 WRM: R1 613 594 000 WS: R1 524 895 000 Forestry: R420 919 000

Trading Accounts Equipment Account: R78 148 000 Water Trading Account: R5 214 841 000

• Spending level 2004/05 = 99% spending level 2005/06 = 94.4% spending level

Annual Financial Statements

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• Vote 34 Exchequer Account Qualification: (a) Asset management, (b)

Independent checks and reconciliation (c) BAS and PERSAL reconciliation (d) Commitments.

Emphasis of Matter: (a) Monitoring, (b) Performance information.

Water Trading accountDisclaimer of audit opinionQualifications in respect of : (a) Financial

statements, and (b) Non adherence to accounting framework.

Emphasis of matter in respect of; (a) Lack of Policy framework, (b) Performance information.

Reports of Auditor General on Financial Statements

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Reports of Auditor General on Financial Statements

Equipment Trading accountDisclaimer of audit opinionQualifications in respect of: (a) Financial

statements, (b) inadequate monitoring, (c) Fixed assets.

Emphasis of matter in respect of: (a) General Computer controls for CEMS, (b) Performance information, (c) Inadequate monitoring.

National Forest Recreation and Access TrustUnqualified auditEmphasis of matter in respect of

operation of National Forest Recreation Trust.

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Finance Management Improvement Plan

• Restructuring, separation of the Trading and Main account activities• on-going engagement with Office of Accountant General (OAG) to

implement programme of support• national accounting firm contracted to provide temporary resources in

DWAF to improve financial management while recruiting suitable staff • implementation of SAP as preferred Enterprise Resource Planning (ERP)

system to support trading activities. – system went live on 4 October 2006– implement accrual accounting for trading activities and comply with

section 40(1) of PFMA• extensive training programme for staff

– computer literacy, – accrual accounting – application of SAP in DWAF

• Implementing asset management strategy – Compliance with National Treasury’s requirements, including

Generally Accepted Accounting Practice (GAAP). – include re-valuation of DWAF’s fixed assets;

• Build on successes achieved by Audit Steering Committee – members from DWAF and Office of Auditor-General, – will oversee and monitor progress on 2006/07 audit

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Budget 2005/06Programm

e

Initial Appropriation

Additional Appropriation

Final

Appropriation

Final Expenditure

Admin 272491 87583 369873 278378

Water Resources

1506657

125388 1613594

1503464

Water Services

1405075

122899 1524895

1510998

Forestry 373189 42354 423944 420919

Total 3557412

378224 3935636

3717058

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Budget 2005/06 Expenditure (31 March 2006)

Programme Final Appropriation

Expenditure Roll Overs to 2006/07

% Utilised (including roll

overs)

Admin 369873 278378 72962 95%Water Resources

1613594 1503464 100246 99.4%

Water Services

1524895 1510998 99.1%

Forestry 423944 420919 99.3%Theft and Losses

3330 3329 99.9%

Total 3935636 3717058 173208 98.8%

% Utilised 94.4% 4.4% 98.8%

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Water Trading Account Income Statement Analysis

2006 2005 2004

Actual Budget Actual Budget Actual Budget

Revenue

Non-Tax revenue 3,067,879 2,538,000 2,469,012 2,491,408 2,372,769 1,947,361

Sale of goods and services 3,066,456 2,536,608 2,464,319 2,488,645 2,370,138 1,947,361

Interest 1,423 1,392 4,693 2,763 2,631  

Transfers received 1,608,065 628,777 1,356,017 1,544,612 1,360,928 1,825,573

Total revenue 4,675,944 3,166,777 3,825,029 4,036,020 3,733,697 3,772,934

Expenses

Current Expenses 4,802,118 3,050,117 6,905,602 5,233,389 4,558,366 3,357,213

Compensation of Employees 701,240 300,463 727,409 730,635 695,843 626,387

Goods and Services 2,877,094 2,225,101 4,932,929 3,504,040 2,911,368 2,423,685

Depreciation 1,223,753 524,522 1,245,235 713,385 679,414  

Other Expenditure   285,255 271,671 307,141

Interest and dividends 31 31 29 74 70  

Transfers and subsidies 412,754 419,755 436,225 425,813 147,343

Total expenses 5,214,872 3,469,872 7,341,827 5,233,389 4,984,179 3,504,556

Surplus / (Deficit) -538,928 -303,095 -3,516,798 -1,197,369 -1,250,482 268,378

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Equipment Trading Account Income Statement Analysis

2006 2005 2004

Actual Budget Actual Budget Actual Budget

Revenue

Non-Tax revenue 77,526 55,798 67,170 53,506 50,958 48,384

Sale of goods and services 77,502 55,798 67,158 53,477 50,930 48,384

Interest 24   12 29 28  

Transfers received 3,034 2,660 2,535 2,535 2,500

Total revenue 80,560 58,458 69,705 56,041 53,458 48,384

Expenses

Current Expenses 78,148 52,825 37,321 48,070 45,781 8,203

Compensation of Employees 0 0 0 0 0  

Goods and Services 70,865 43,869 29,827 14,793 14,089 8,203

Depreciation 7,283 8,956 7,494 33,277 31,692  

Other Expenditure   0 0  

Interest and dividends 0 0   0 0  

Transfers and subsidies 0 0

Total expenses 78,148 52,825 37,321 48,070 45,781 8,203

Surplus / (Deficit) 2,412 5,633 32,384 7,971 7,677 40,181

Programme 2

Water Resources ManagementWater Resources Management

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Context• Improved rainfall compared with 2004/05,

mainly due to above-average falls during the last four or five months. Most areas (except south-western Cape and northern KZ-N) received average or above-average rainfall

• Continued restrictions on water use necessary in many areas

• Ongoing support to municipalities’ drought relief activities

• Water stored in all major dams increased from ±67% of total full supply capacity in March 2005 to ±90% in March 2006

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• Water Allocation ReformProgramme launched; public consultation on approach completed; draft regional implementation plans largely completed and aligned with DoA and DLA programmes;Challenge: speed up programme

• Authorisation of water use254 licences issuedChallenges: shortening licensing time and making application easier; ensuring BBBEE fully integrated into licence procedures

•Working for WaterTargets exceeded (881 000 ha), 2 million person days of employment and 11 150 employment opportunities created (103% of planned: 54% women, 18% youth, 1% disabled)

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Assistance to resource poor farmers – some examples

• Eastern Cape– Rehabilitation of irrigation schemes

• Zanyokwe R100 000 (586ha)• Keiskammahoek R20 000 (819ha)• Shiloh R13 million (420 ha)• Qamata R1.2 million (1959ha)• Tyefu R1 million (694ha)

• Northern Cape– Recommendations for use of 4000ha of

water in Lower Orange WMA– R6.9 million subsidies for O&M for 440

resource poor farmers

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Assistance to resource poor farmers – some examples

• KZN– 47 resource poor farmers in Impala received

subsidies for pumping costs, canal costs, capital subsidies

• W Cape– Lutouw equity project– Subsidies provided (Ceres Koekedouw, Lutoux)– HDIs to benefit from new infrastructure eg raising of

Clanwilliam Dam, Osplaas Dam in Hex Valley– 20ha purchased by LORWUA for use by resource

poor farmers• 10 rainwater tanks completed , 58 in progress in 26

villages in Limpopo, FS, KZN and EC provinces• Challenges: closer alignment with local and provincial

government

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• Water Use EfficiencyVarious water use efficiency projects with municipalitiesCOWEP implemented in various places in Northern Cape, Mpumalanga; North West and Limpopo

• Catchment Management Agencies3 CMAs established (Breede, Crocodile-West/Marico, Mvoti-Mzimkulu), 4 proposals gazetted for comment (Usutu-Mhlathuze, Thukela, Gouritz, Olifants/Doorn)Inkomati CMA Governing Board, CEO appointed; Business Plan submitted

• Capacitation of StakeholdersStakeholders involved in consultation processesEducation and awareness programmes in schools for efficient use of water

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• Water User Associations2 new WUAs established 7 irrigation boards transformed

• Transfer of O&M responsibilities to WUAs Transfer process continued for Boegoeberg, Vaalharts, Sand-vet and Lower Olifants River WUAs

• Water Resources MonitoringData collected from all networks. Microbial, Eutrophication and River Health networks expanded

• Shared Watercourse InstitutionsEstablishment of Limpopo Basin Commission awaiting ratification by basin states; First Ministerial meeting for Orange-Senqu Basin Commission held.

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• Co-operation and RelationshipsParticipated in AMCOW ministerial and technical meetingsSADC Regional Water Strategy and Acton Plan developed, SA appointed as Implementing Agent for SADC HYCOS Agreements in place/ being developed with China, Cuba, Netherlands, Russian Federation, Algeria and TanzaniaCoordination of SA Water Sector tsunami relief and reconstruction work in The Maldives and Sri Lanka

• Global Participation UNESCO Regional International Hydrological Programme – SA elected to Council

• Overseas Development AssistanceAssistance from EU, UK DfID, France, Belgium (Flanders), Switzerland, Norway, Ireland and China

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Annual review and oversight of entities (05/06)

• Evaluation of audited financial statements– Bloem Water (shortfall on pension), – Botshelo (property removed from balance sheet)– Umgeni Water (water services assets reflected in their books)– Forensic investigations where weakness identified – Bloem Water; Bushbuckridge, Ikangala and Botshelo

• Delays in appointment of Sedibeng and Lepelle Boards• Not fully compliant with PFMA

– eg must supply Executing Authority with quarterly reports – only 2 fully compliant 

• Not fully compliant with MFMA – eg problems with tariff process this year – not supplying monthly reports to Treasury

• For 2006/07 to 2010/11 period – all water boards submitted shareholders compacts on time

DWAF– four water boards, (Mhlathuze, Bushbuckridge, Overberg and

Lepelle) requested to amend shareholders compacts

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Oversight of WRC/TCTA

• DWAF developing oversight framework TCTA and WRC to submit corporate plans and budgets in compliance with PFMA

• TCTA– Performing well– Excellent international credit rating – Operates on the basis of directives from

Minister – aligned with strategic objectives of DWAF and government

• WRC– Discussions held with DWAF on closer

collaboration and alignment

Programme 2 – WRM Continued

NATIONAL WATER RESOURCES INFRASTRUCTURE BRANCH

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BERG RIVER WATER PROJECT

PLANNED:• Continue with construction

ACHIEVED:•Franschhoek First Policy rolled out:

Employment;Procurement; andTraining maximised for local communities.

•EMP implementation continued:

Socio-economic strategies;Design guidelines;Environmental specifications;River monitoring programme; andEnvironmental monitoring.

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BERG RIVER WATER PROJECTACHIEVED (cont.):

•Socio-economic strategies:Public participation;Compensation & mitigation;Employment, training & procurement;Social monitoring; andSustainable utilisation Plan.

•Construction progress:Advanced works (access roads, village works, housing) substantially complete;Rockfill placement – 70% complete;Intake tower – 65% complete;Spillway – 30% complete; andSupplement - 52% complete.-Impounding of reservoir by June 2007.

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Raising of Flag Boshielo DamPLANNED:• Commissioning of raised dam

ACHIEVED:

•Construction - 94% complete.

Completion delayed by spillage after heavy late summer rain.

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ORWRDP 2A: De Hoop Dam

PLANNED:• Finalise detailed planning and design for

commencement of construction.

ACHIEVED:

•Planning of dam complete;

•Land valuation – 80% complete;

•Draft EMP’s – 80% complete;

•R555 design – 95% complete;

•Dam tender design – 85% complete;

Artist’s impression: Proposed De Hoop Dam

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VRESAP• Projected expenditure (R million)

– Actual cost to date : 607,626– Total Project Cost : 2 491,200 – The project fully funded from financial

markets.

Achieved:– Supply and install steel pipes - 60%

complete;– Supply and install mechanical, electrical

and civil structures - 60% complete

Project to be completed by October 2007

Programme 3

Water Services

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Strategic objectives

• Ensure basic water supply and sanitation (1)• Ensure effective delivery of WS (2)• Ensure effective WS institutions through(3)• Effective transfers of DWAF WS schemes to

appropriate institutions (4)– Effective operation & management

• Support WS in Africa (5)– Achieve Africa MDG & WSSD targets

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Basic Water and Sanitation Supply- Achievements in 2005/06

Water• During the year under review, a further 1 million people

were served with water, lowering the backlog to 3,3 million people without basic water supply and another 4,9 million with basic water service below the RDP standard.

• There has been an overall improvement in access to services from 59% to 93% since 1994. 83% of the population now have access to basic services at RDP level.

Sanitation• 800 000 people have received basic sanitation, leaving

the backlog at 15,3 million people without access to basic sanitation facilities

• Since 1994, access to sanitation in the sector improved from 49% to 69%

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Basic Water and Sanitation SupplyBucket eradication programme• 35 108 buckets were replaced

Water and sanitation supply to schools and clinics• 2688 schools still do not have an acceptable water supply, but

299 schools have received water during the year under review• 293 received sanitation facilities• 2100 clinics lack acceptable basic water supply• 281 clinics are still without sanitation. Free State, Gauteng ,

Northern Cape and Western Cape have no backlogs in clinic sanitation.

Free Basic Water and Free Basic Sanitation• 80% of population with infrastructure has access to free basic

water, an improvement of 5% from the 2004/05 financial year.• The free basic sanitation programme has not started yet, and a

policy is being developed in this regard.

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Challenges• Capacity constraints, especially technical and programme

management skills in WSAs.• Sustainability of infrastructure and ongoing service delivery is

at risk as WSAs are focussing primarily on new infrastructure, neglecting operation and maintenance

• Poor communication and cooperation at all spheres of government down to community level, e.g. lack of alignment between housing development and other infrastructure programmes

• Inadequate funding in MIG to address bulk infrastructure• Poor cost recovery, lack of clarity on indigent policy and

inability to cross subsidize due to poor financial administration• Delivery of water and sanitation to schools and clinics has also

been slow• Capacity and financial constraints of Departments of DoE and

DoH to enable them to deliver services to schools and clinics• Lack of infrastructure, leading to the poorest of the poor not

gaining access to Free Basic Water

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Challenges• No political voice for DWAF as a sector leader at

provincial level. Therefore strengthen relationships with Premier & MEC for local government.

• Protocols at provincial level.

• Current collaboration platforms focus on WS: there is now a need to include WR – boundaries

• Need for a Provincial Water Sector Plan – bringing everybody together.

N.B. Lack of integrated water management at WSA level; the need to look very strategically at the role of water services in economic growth and development, and alignment with other programmes

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Support to Local Government-Our Approach

• First strengthen the governance functions• Link the functions to the WS challenges - WS

Development Plans (WSDPs) as part of the municipal Integrated Development Plans (IDPs)

• Coordinate initiatives whilst moving to a needs driven, institutionally based support approach (WSCBBP)

– Placements in municipalities (on diminishing funding scale)

– Transfers and support– Sustainability audits – WSDP and FBW support– Regional Information Centres - access to

information and planning data

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Support Programmes

• Summits were held in all nine provinces, leading to a highly successful National Water Summit.

• Emanating from the summits, provinces are being supported in drafting (or improving) their Water Sector Plans,

• Training programmes for councilors were developed and implemented after the local government elections

• DWAF provided support and funding to certain municipalities for water demand management and water conservation however, more work still needs to be done in this regard

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Support ProgrammesFree Basic Services• Data verification, formulation of indigent registers and FBS

policies• Under-capacitated provinces continued received support on

implementation of FBW, especially in Limpopo and Eastern Cape

Bucket eradication Programme

• Municipalities assisted with bucket eradication strategies• Specialist teams (21 engineers), with a focus on bucket

eradication, have been deployed to municipalities through the National Sanitation Programme. In Free State alone, 7 engineers deployed. Provinces with greatest cahellnges, FS, EC and NW

MIG programme and provisions• MIG project planning support to accelerate implementation -

particularly with respect to improving the quality of MIG technical reports prior to submission

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Support ProgrammesWater Services Development Plans• WSDP support being provided to WSAs, mainly to

improve alignment with the IDP and implementation. • Focus also on supporting Provinces with PGDSWSA and WSP capacity building (WSCBBPs)• Funding and capacity made available for WSAs and

WSPs to identify and address their critical functional areas

WSA Checklists• Assessment of support requirements relating to legal

compliance and regulatory capacityTransfer programme• Support regarding transfer capacity requirements

scoping, refurbishment and O and MSection 78 assessments• S78 assessments and the implementation of relevant

service delivery mechanisms for the water sector

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Support ProgrammesProject Consolidate• DWAF regional offices have specific Project

Consolidate plans to support LG. • Support includes secondment of DWAF

officials, learners, appointment of services providers and facilitating sharing of lessons and skills between municipalities.

One Stop Shop concept• The One Stop Shop concept was developed

and piloted in North West- to be rolled out to other provinces

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Transfers

Achievements• 46 transfer agreements concluded. Two

agreements, Rustenburg and Mokopane, still outstanding

• 332 water schemes transferred

Planned interventions• Transfers to be part of branch Regions• A plan to resolve challenges around staff

transfers, targeting mainly EC and Limpopo, to be developed

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SECTOR COLLABORATIONPLANNED ACHIEVED NOT

ACHIEVEDPLAN OF ACTION

Formalize intergovernmental relations with Local Government at provincial level – 9 regions

All regions have initiated the process

IGR excellent in FS, NC, MPU.

WC- major challenges

EC and Limpopo need to revive collaboration and mobilize political support

Need to support regions engage MEC’s & formalise reporting to the Premier’s Coordinating Committee

9 Provincial water sector plans

8 regions developed provincial water plans except for MP.

FS developed the 5 year plan for LG

Formalise collaboration with DOE through 2020 Vision programme

7 regions signed collaboration documents with DOE

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Planned strategic interventions for the next year

• Development of an action plan, together with DPLG and municipalities, to speed up delivery in both water and sanitation

• Scale up capacity of DWAF to support LG through the restructuring process

• Mobilisation and building of capacity in the whole sector• Strengthen intergovernmental relations and improve on

communication• Finalise the Free Basic Sanitation policy and finalisation

of guidelines for provisioning of FBW to communities without infrastructure

• Hands on support and involvement in provisioning of water and sanitation to schools and clinics

• Development of a comprehensive development and support approach for water services providers (via WSAs)

Programme 4

Forestry

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• Draft Forest Sector charter initiated with working groups for sub-sectors

• Challenges– New round of negotiations required once new codes

released from DTI (expected end October 2006)– Funding of Forest Enterprise Development

GROWTH OF SECTORChallenges

– Mitigating market failures in long rotation timber– Leverage SAFCOL resource (KLF = 30% of country’s

sawtimber)– Protection/ expansion of remaining resource– Review of W Cape exit strategy

Transformation And Growth Of Sector

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• 39 bee-keeping projects running countrywide

• 5 community owned ornamental and medicinal plant nurseries supported

• Provided training in business management, marketing and technical aspects of enterprise training to beekeepers and medicinal nursery people

• R1.6m spent on supplying material, infrastructure, and training – funded by DANIDA

• R2m funding secured through NDA for beekeeping. None spent yet.

• Enterprise development reflected in PGDS/P of Limpopo and EC

Forest Enterprise Development

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Sustainable Management Of Plantations

• 4 workshops held to assist small growers and assist with license applications for afforestation

• Research project initiated to assess small growers livelihoods and choices

• Linked growers with buyers in Vhembe district• Facilitated linking of land reform beneficiaries with

forestry management company in Mpumalanga TWK• Firewood harvesters in indigenous forests in Port St

Johns area organised to ensure sustainability and commercialisation of enterprise

Management of DWAF plantations:• TUP, fire and theft many times industry equivalent • 5575 ha burned; • TUP 7291 ha (reduction from 8416 ha) = 15%

(industry norm is 3-4%)

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Payment Of Lease Rentals

Payment of lease rentals to land reform beneficiaries not achieved

Challenges: • Identification of beneficiaries by DLA• Negative impacts on forests (fires)• Leveraging R70m for development

BLYDE EXIT STRATEGY IMPLEMENTED• Exit being implemented• Challenges: Manage job losses

TRANSFER OF MANZENGWENYA – MBAZWANA

Transfer of estates to land claimants not achievedChallenges: Obtain agreement with tribal authority and

communitiesMaintain plantations effectively until transfer

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International Development And Co-operation

• UNFF attended; Africa group led by SA• African Forest Law Enforcement and Governance

initiative supported• Congo Basin Partnership supported• Management of cross border fires not achieved

due to non-availability of neighbouring countries for cross border fires strategies

• FAO international code of best practice for planted forests co-drafted

• World Forests Report supported • Russian and Chinese agreements signed• CBD report submitted

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Afforestation Promoted

• Forestry in PGDP/S of Limpopo and EC

• Licensing process partially streamlined within DWAF

Challenges:• Funding especially for longer rotation

crops (longer investment horizon) • Forestry needs to engage more

actively with LAACs

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THE END

Thank you.

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