1. Department of Water Affairs and Forestry SELECT COMMITTEE INTERGOVERNMENTAL FISCAL REVIEW CHAPTER 10:WATER & SANITATION 6 September 2004

2. Department of Water Affairs and Forestry PURPOSE provide insight into government finances for policy makers, policy analysts, representatives etc “support Parliament in debating and overseeing budgets and plans for essential services”

3. Department of Water Affairs and Forestry OVERVIEW Backlogs and size of the sectorBacklogs and size of the sector What is the WS sector?What is the WS sector? assets R 102 billionassets R 102 billion annual turnover R 12 billionannual turnover R 12 billion municipalities are responsible for water supply and sanitation at local levelmunicipalities are responsible for water supply and sanitation at local level

4. Department of Water Affairs and Forestry Water Supply Perspective (Census 2001 updated to Mar 2004) Total population : 47.4million 31.5 m (66%) 5.5 m (12%) 6 m (13%) 4.4 m (9%) Perspective 1: People to be brought up to a bare minimum supply I.e. safe source but still lacking quality Perspective 2: Total people to be brought to within 200m. Perspective 3: Total people to be brought up to in-house/yard connections. 4.4 m (9%) 10.4 m (22%) 15.9 m (34%) Water in house or in yard Standpipes less than 200m Standpipes further than 200m + boreholes Unacceptable River, pool, dam, stream Note : These figures reflect access to infrastructure, not necessarily effective services e.g water quality, flow & sustainability

5. Department of Water Affairs and Forestry Sanitation Perspective (Census 2001 updated to Mar 2004) Total population : 47.4million 26.1 m 55%4.2m 9 % 17.1m36% Perspective 1: Total people to be brought to VIP. Perspective 2: Total people to be brought up to flush toilet level of service. 17.1 m (36%) 21.3 m (45%) Flush toilet (connected to sewer systems or septic tank) VIP Unacceptable None, pit latrine, buckets, chemical (1.8 m people using buckets ) Note : These figures reflect access to infrastructure, not necessarily effective services

6. Department of Water Affairs and Forestry Sanitation Backlog +- 17 million people lack access to basic sanitation.+- 17 million people lack access to basic sanitation. 11.7% of schools have no access to adequate sanitation11.7% of schools have no access to adequate sanitation 15% of clinics lack access basic sanitation15% of clinics lack access basic sanitation 400 000 households still use bucket sanitation.400 000 households still use bucket sanitation.

7. Department of Water Affairs and Forestry Sanitation Challenges 300 000 people to be served this year300 000 people to be served this year Backlog to be cleared by 2010Backlog to be cleared by 2010 All schools to be served by March 2005All schools to be served by March 2005 All buckets eradicated by 2006All buckets eradicated by 2006 Budget allocated to municipalities through MIG.Budget allocated to municipalities through MIG.

8. Department of Water Affairs and Forestry Overview of recent reforms Mention the Strategic Framework for Water Services as a comprehensive policy framework for water servicesMention the Strategic Framework for Water Services as a comprehensive policy framework for water services list the set of goals as in the SFFWSlist the set of goals as in the SFFWS institutional reform (not mentioned)institutional reform (not mentioned) regulatory strategy (not mentioned)regulatory strategy (not mentioned) MIG (mentioned)MIG (mentioned)

9. Department of Water Affairs and Forestry Important trends in expenditure and budgets Table 10.2: Total WS budget decrease from (03/04) R 2608 million to R 1334 million in 04/05.Table 10.2: Total WS budget decrease from (03/04) R 2608 million to R 1334 million in 04/05. Table 10.3: Capital expenditure on DWAF budget down from R 1102 million in 03/04 to R 160 million in 04/05 and zero by 2006/07Table 10.3: Capital expenditure on DWAF budget down from R 1102 million in 03/04 to R 160 million in 04/05 and zero by 2006/07 Table 10.4: Municipal Infrastructure Grant (MIG) is R 4 400 million in 04/05.Table 10.4: Municipal Infrastructure Grant (MIG) is R 4 400 million in 04/05. Table 10.4: Water and Sanitation allocation is R 2 300 million of this.Table 10.4: Water and Sanitation allocation is R 2 300 million of this.

10. Department of Water Affairs and Forestry Important trends (2) Important trends (2) DWAF’s operating support will be phased out as schemes are transferred to municipalitiesDWAF’s operating support will be phased out as schemes are transferred to municipalities Move of capital funds from DWAF to municipalitiesMove of capital funds from DWAF to municipalities MIG allocations are made in terms of a formula, based on backlogs,powers and functions and poverty.MIG allocations are made in terms of a formula, based on backlogs,powers and functions and poverty. Significant allocations to Water and sanitation but…...Significant allocations to Water and sanitation but…...

11. Department of Water Affairs and Forestry Important Issues/Comments Important Issues/Comments Budget still inadequate to erase backlogs on time especially sanitation and in light of demands on higher levels of sanitationBudget still inadequate to erase backlogs on time especially sanitation and in light of demands on higher levels of sanitation corresponding operational grant (Equitable share) to cover running expenses for all this new infrastructure is a growing concern.corresponding operational grant (Equitable share) to cover running expenses for all this new infrastructure is a growing concern. Disputes about backlog figures between some municipalities and national governmentDisputes about backlog figures between some municipalities and national government

12. Department of Water Affairs and Forestry The MIG and DWAF’s new role Funds for basic services directly allocated to municipalities.Funds for basic services directly allocated to municipalities. Interim phase in periodInterim phase in period MIG is a conditional grantMIG is a conditional grant DWAF negotiated set of sector conditionsDWAF negotiated set of sector conditions Planning very important-DWAF to guide and support processPlanning very important-DWAF to guide and support process

13. Department of Water Affairs and Forestry MIG and DWAF’s new role (2) Ensure that government’s objectives are met.Ensure that government’s objectives are met. Monitor and regulate against national policy and conditionsMonitor and regulate against national policy and conditions Share information and intervene where necessaryShare information and intervene where necessary Report progress to Cabinet.Report progress to Cabinet.

14. Department of Water Affairs and Forestry Important trends in expenditure and budgets (2) Table 10.5: Bulk of money is in the metrosTable 10.5: Bulk of money is in the metros Table 10.6: There are 4 water boards that seems to have problems with financial viability I.e. where operating expenditure exceeds income.Table 10.6: There are 4 water boards that seems to have problems with financial viability I.e. where operating expenditure exceeds income. Table 10.7: Interesting facts about employees in the sector----please note that DWAF’s figures is not correctly reflected--it excludes all operating staff in provinces.Table 10.7: Interesting facts about employees in the sector----please note that DWAF’s figures is not correctly reflected--it excludes all operating staff in provinces. Page 138: Staff to be transferred is from WS function to LG and not WR function.Page 138: Staff to be transferred is from WS function to LG and not WR function.

15. Department of Water Affairs and Forestry Conclusions Reforms are important but will take time. (Institutional and regulatory reforms)Reforms are important but will take time. (Institutional and regulatory reforms) Agree on huge challenges for transfers.Agree on huge challenges for transfers. MIG on its own will not speed up delivery unless there is the capacity to spend money well and effectivelyMIG on its own will not speed up delivery unless there is the capacity to spend money well and effectively Support strategies (and actions) to LG crucialSupport strategies (and actions) to LG crucial Sustainability and operations importantSustainability and operations important Monitoring and reporting on progress keyMonitoring and reporting on progress key

16. Department of Water Affairs and Forestry The END Thank you