1. National Water Investment Framework & Strategy Advanced Product 2 Steering Committee Meeting & Work Session 26 January 2012

2. 1. Overarching Purpose To develop and maintain a dynamic comprehensive National Water Investment Framework/Strategy/plan 2

3. 2. Purpose of Meeting To obtain a common understanding of the purpose and drivers (mandate) as well as scope, principles and format of the product/programme To obtain guidance on product design To facilitate extended and improved information input To facilitate effective output, ownership and application

4. 3. “Drivers” for Developing an Investment Framework National Treasury requirement (national funding is conditional to submitting an Investment Framework) Legal requirement: NW Act requires a development plan Component of NWRS-2 (investment component and impementation costing) Socio-economic development & outcomes demand integrated infrastructure delivery plans ) Various programmes require special investment (e.g. Basic services, wastewater management, disaster management, asset management, demand & conservation management)

5. “Drivers” for Developing an Investment Framework ( cont) Outcomes 6,7,8,9+10 programmes demand infrastructure investment frameworks & programmes All major project developments (e.g. de Hoop Dam, water reconciliation studies) demand investment frameworks Poor track-record & challenges: under utilized dams & systems, housing with no services The application of “source-to-tap, tap to source“ management principle It is a logical business approach (appropriate planning and solutions Cabinet Lekgotla requirements Funding negotiations, need for asset mangement

6. 4. Response ? No comprehensive response and system Ad hoc products, ad hoc development Lack of co-ordination, frustration NOW: top priority, urgency, high expectations!!!!!!!!!!! Include job creation, fuctionality 6

7. Development process 1 DWA workshop 13 -14 June 2011 Development of “first order high level business case” and framework: – DBSA responsibility (as per MoU) – Quick win (based on available information –no research; no development support) – Support task team established – Product developed (As per DBSA)(August/Sept 2011) – Product incomplete 7

8. 5. First order product & perspective Based on input received as per workshop (DWA, Water Boards, TCTA, MIIF) Focus on National and Municipal infrastructure Spread sheet data base with development time frame for water resources infrastructure High level national perspective (limited spatial, institutional and project presentation) Limited timeframe Limited validation (comprehensive municipal data base) 8

9. Financial perspective: first order development Capital requirements R573 b is required over 10 years (R58b/a) R573 b is required over 10 years (R58b/a) R254 b available from present funds over 10yrs (R26b/a) R254 b available from present funds over 10yrs (R26b/a) Deficit = R319 b (investment must double to meet development and refurbishment requirements) (R32b/a) Deficit = R319 b (investment must double to meet development and refurbishment requirements) (R32b/a) Water resources bulk capital requirement = R16.2b/a vs R11b/a available Water resources bulk capital requirement = R16.2b/a vs R11b/a available Water services requires R394b over 10 years (excludes major turn around investment eg Waste water works) Water services requires R394b over 10 years (excludes major turn around investment eg Waste water works) Need to invest in dedicated programmes eg demand & conservation management Need to invest in dedicated programmes eg demand & conservation management Based on essential requirements Based on essential requirementsAction: Differentiated approach to address unique needs in rural & urban Differentiated approach to address unique needs in rural & urban Financing and tariff model to be development to identify and mobilize alternative funding Financing and tariff model to be development to identify and mobilize alternative funding Ring fencing of water services financial management to enhance self-financing and viability Ring fencing of water services financial management to enhance self-financing and viability Improve investment funding & grants (outcome 9.2 action) Improve investment funding & grants (outcome 9.2 action) Stretch existing financing through effective water use and infrastructure maintenance Stretch existing financing through effective water use and infrastructure maintenance Prevent leakage of available financing through effective financial management Prevent leakage of available financing through effective financial management

10. 6. Existing Task Team DWA, DBSA and TCTA Initial purpose was to facilitate specific component input to DBSA However: need was identified to develop a comprehensive system (“as per drivers” and mandate) Actions extended to also develop the concept, scope and format Actions initiate to develop an advanced intermediate product by March 2012 and a comprehensive dynamic system by March 2013 10

11. h 6. Framework design and approach Framework vs strategy vs plan Investment framework = Infrastructure plus business plus people plus institutional and governance Total value chain (source to tap to outcome to source) Includes outcome, technical, management, institutional and financial information and perspectives Existing,5y MTEF, 10y and longer term perspectives 11

12. h (2) 6. Framework design and approach (2) All water related sectors value chains (municipal, agriculture, energy, industry, etc.) including outcome alignment Spatial orientated and reflected Funding and financial model Strategic analysis and perspectives Prioritization and appropriate solutions (modeling) National to project level perspectives Project status, information Accessibility and deliverables 12

13. Total sector perspective 13 regional local national municipal agriculture energy industry other waste Water resource

14. Investment Framework 14 Macro WR Local WR Reg bulk Int bulk reticulation energy Agriculture supply waste Governance & management existingimpl commit ted reality future

15. Investment model 15 Value chain Development status technical financial management institutional

16. Investment Framework 16 Macro WR Local WR Reg bulk Int bulk reticulation energy Agriculture supply waste Governance & man existingimpl commit ted reality future

17. 17

18. 7. First order product: gaps Only water resources and municipal water services perspective Lack of regional and spatial perspective Still need local validation and alignment Extensive municipal information but requires strategic assessment and alignment Municipal information based on MIIF modelling Still need financing modelling and perspective Operations and maintenance, governance and programme costing not addressed Limited prioritisation and scheme alignment 18

19. 7. Development process 2 Need to develop comprehensive and functional (live) framework and system: – Major expectations (Cabinet, Minister, NT) – Concept and framework developed – Extended (intermediate) product initiated (limited time frame) – DBSA support – Comprehensive business framework well advanced and development programme 3 underway Extended task team 19

20. 7. Development process 2 Establish extended task team: – Technical theme champions – Business and governance champions/role players – Sector partners and champions – Strategic and decision making/enabling partners Consolidate and align existing programmes and initiatives 20

21. 8. Activities 21 Integrated system and data base (PSP) 1 1 Spatial information system 2 2 Financial model Strategic assessment Functional & sector output 4 4 3 3 5 5 Action 1 Action 2 Action 3 Action 4 Action 5 Action 6

22. Existing programmes and activities Macro programmes (NGP, Vision 2030, Cabinet, Outcomes 6,7,8,9,10; job creation) Sector programmes (energy, electricity, agriculture and food, municipal, mining, schools, health, environment, housing, rural development, Cabinet Lekgotla: 22 DMs plus..) National water infrastructure, water resources planning, all towns studies, reconciliation studies, bulk infrastructure programme, basic services, infrastructure asset management, Waste water systems /water supply, under utilised dams 22

23. Existing programmes and activities 2 Water quality (resource) and resource protection Governance programmes (monitoring networks, regulations, water use efficiency) NWRS 2 costing Enabling strategies and programmes: institutional, skills development, financial model and tariff strategy Feasibility studies, budgets, development plans Implementation projects MIIF, asset management plans and programmes 23

24. 9. Development examples 24

25. Large Water Resource Infrastructure Projects 25 R162 billion investment required over 10 years

26. Spatial targeting to ensure water security for main socio-economic hubs Water Reconciliation for main growth areas Legend Study Focus Areas Economic Growth Areas Economic Value of Growth Areas

27. All town study: Water resource intervention

28. 28 Developing Water Solutions for each Town by 2012 (e.g. Free State) 22 towns in Free State require immediate water resource solutions

29. 29 Regional Bulk Infrastructure

30. 30 Bulk cost perspectives & RBIP projects TypeFunding Needs Regional bulkR75b Internal supplyR60b SanitationR37b Total for 10 yrsR172 b Location of current RBIG projects Total R/10yr Annual R/a RequiredR172bR17b/a AvailableR120bR12b/a DeficitR52bR5/a

31. 31 Informal Settlements

32. Wastewater Treatment Works : Performance Rating 32 Combined Rating of: capacity exceedance effluent compliance skills deficit delivery & functionality Total WWTW = 1155 821 municipal works 14% good/excellent 56% very poor / critical

33. Mtata Dam: Communities in need 33

34. 34

35. Municipal Investment Requirements : Metros & Cities Smal & medium Towns Rural Focus on new & refurbishment Focus on backlogs & refurbishment Growth /New Backlogs Rehabilitation

36. Actual Required Municipal Water Supply Investment Requirements (bulk investment and rehabilitation are critical) R7b/a Deficit

37. Rural areas are currently not supported by bulk infra & service management: Action: develop institutional model (bulk water utilities?) develop financing model (existing schemes subsidize new schemes?) political endorsement (performance agreements)

38. Water Supply - key challenge areas & situation Issue: Access to basic water supply ( 59% of households in 1994 to 94% in 2011) Access to basic water supply ( 59% of households in 1994 to 94% in 2011) Formal backlog as per approved RDP standard (0,82 mil households = 6%) Housing related needs (2,3mil new houses with associated services) Requires major infrastructure & financial investment (R62 bil deficit) Based on available funding & implementation capacity 2014 targets cannot be met Drinking water quality Drinking water quality Only 66 of 914 water treatment works got blue-drop status (95% performance in metros & cities; 62% in other areas) Service quality Service quality While 94% of households have access to infrastructure less than 75% of households have functional services Existing infrastructure in poor state and reaching end of life resulting in regular service interruptions and customer dissatisfaction ResourceBulk Distribution Service delivery Reticulation Environment Impact Supply Chain 3

39. GROUNDWATER & WATER QUALITY CHALLENGE Scattered rural settlements Low economic development Groundwater dependent Groundwater quality challenges Limited surface water potential WATER AVAILABILITY CHALLENGE Extensive water backlogs Water stressed areas Requires large WR & bulk development (DeHoop + oth) WATER DISTRIBUTION CHALLENGE Scattered water needs Within water-rich WMA (but no access) Requires major WR & bulk developments Formal Historic Basic Water Supply Needs Main backlogs in EC, KZN, LP

40. KEY URBAN WATER SERVICES CHALLENGES Urbanization and densification Housing related “new” services needs Internal bulk infrastructure challenges with associated service quality challenges (e.g. drinking water quality, wastewater management, interruptions, effective use, loss prevention and asset management) Environmental impacts and risks (e.g. urban river quality, health and recreation) 2.3 million households (Mar 2011) informal settlements & backyard dwellers informal settlements & backyard dwellers note location differs substantially from formal backlogs indicated in blue note location differs substantially from formal backlogs indicated in blue Basic Urban Water Supply Challenges Main challenges in Metros & Cities Spatially not aligned with formal backlogs

41. Integrated delivery example: Olifants development 41

42. STRYDPOORT MOUNTAINS BURGERSFOR T DE HOOP DAM STEELPOORT TOWN MOTOTOL O MOKOPANE POLOKWANE LEBOWAKGOMO JANE FURSE ORWRDP: PROJECT AREA FLAG BOSHIELO DAM Carbonatites Google Purchase ID: 659773445422225

43. STRYDPOORT MOUNTAINS BURGERSFOR T EPSS DE HOOP DAM STEELPOORT TOWN MOTOTOL O MOKOPANE POLOKWANE LEBOWAKGOMO JANE FURSE Flag Boshielo RWS Tubatse RWS Nebo Plateau RWS Lebalelo RWSOlifantspoort South RWS Mphahele and Groothoek RWS Olifants-Sand RWS ORWRDP: WATER RESOURCES DEVELOPMENT FLAG BOSHIELO DAM LEGEND SUPPLY AREAS EXISTING BULK WATER PIPELINES ORWRDP PIPELINES ESKOM PSS INFRASTUCTURE PUMP STATIONS WATER TREATMENT RESERVOIRS MOOIHOEK Google Purchase ID: 659773445422225

44. STRYDPOORT MOUNTAINS BURGERSFOR T DE HOOP DAM STEELPOORT TOWN MOTOTOL O MOKOPANE POLOKWANE LEBOWAKGOMO JANE FURSE Flag Boshielo RWS Tubatse RWS Nebo Plateau RWS Lebalelo RWSOlifantspoort South RWS Olifants-Sand RWS ORWSDP: SUPPLY AREAS AND FEASIBILITY STUDIES FLAG BOSHIELO DAM LEGEND SUPPLY AREAS EXISTING BULK WATER PIPELINES FEASIBILITY AREAS MOOIHOEK Mphahele and Groothoek RWS Google Purchase ID: 659773445422225

45. Olifants River Steelpoort River Leolo Mountains Strydpoort Mountains Jane Furse LEGEND Study Area Phase 1 Carbonotites Flag Boshielo 2006-2010 Google Purchase ID: 659773445422225

46. DE HOOP DAM Olifants River Steelpoort River Leolo Mountains Strydpoort Mountains Jane Furse LEGEND Study Area Phase 1 Phase 2 WTW Reservoir Carbonotites Flag Boshielo 2011-2014 Google Purchase ID: 659773445422225

47. STRYDPOORT MOUNTAINS BURGERSFOR T EPSS DE HOOP DAM STEELPOORT TOWN MOTOTOL O MOKOPANE POLOKWANE LEBOWAKGOM O JANE FURSE Flag Boshielo RWS Tubatse RWS Nebo Plateau RWS Lebalelo RWSOlifantspoort South RWS Olifants-Sand RWS ORWSDP: WATER SERVICES DEVELOPMENT FLAG BOSHIELO DAM LEGEND SUPPLY AREAS EXISTING BULK WATER PIPELINES ORWRDP PIPELINES WATER SERVICES BULK PIPELINES ESKOM PSS INFRASTUCTURE PUMP STATIONS WATER TREATMENT RESERVOIRS MOOIHOEK Mphahele and Groothoek RWS Google Purchase ID: 659773445422225

48. STRYDPOORT MOUNTAINS BURGERSFOR T EPSS DE HOOP DAM STEELPOORT TOWN MOTOTOL O MOKOPANE POLOKWANE LEBOWAKGOM O JANE FURSE Flag Boshielo RWS Tubatse RWS Nebo Plateau RWS Lebalelo RWSOlifantspoort South RWS Olifants-Sand RWS ORWSDP: TOTAL WATER SERVICES DEVELOPMENT CAPITAL REQUIREMENTS FLAG BOSHIELO DAM LEGEND SUPPLY AREAS EXISTING BULK WATER PIPELINES ORWRDP PIPELINES WATER SERVICES BULK PIPELINES ESKOM PSS INFRASTUCTURE PUMP STATIONS WATER TREATMENT RESERVOIRS R 254M R 349M R 518M R 935M R 922M R 811M R 255M Mphahele and Groothoek RWS TOTAL R 5 400m Google Purchase ID: 659773445422225

49. Task Team/ Steering Committee TOR Represent sector, theme, business area with associated responsibilities and implications Provide input and advice on concept, design, output and application Facilitate sector, theme, technical and any other related information input Facilitate validation, quality control and alignment Partake in strategic analysis Establish ownership and application Provide development support 49

50. Though leadership may be hard to define, the one characteristic common to all good leaders is the ability to make things happen. Ted W Engstrom