1 Delivery Mechanisms and Scoping Joint Response Team - DWAF, SALGA, NT and dplg Using Section 78

2 Purpose of this presentation The purpose of this presentation is to:  Provide a broad overview of what delivery mechanisms is all about  Highlight the importance of assessing different options to find the right delivery mechanism  Emphasise the need for macro scoping before starting the S78 process

3 Before starting with delivery mechanisms – let’s start with water services What makes water services so challenging? Water is politically and emotionally highly charged People have strong values and opions linked to water because of its relations to life and livelihood Sanitation is highly personal – linked to dignity Water is a resource – subject to resource constraints Technical constraints may limit operational efficiencies Water services requires multi dimensional capacity Water has a social and an economic value

4 What is delivery mechanisms all about? Every municipality faces challenges related to: Improving efficiency and effectiveness Ensuring access through expanding infrastructure Reducing costs Providing free basic services and ensuring financial sustainability Addressing problems related to remote rural areas Delivery mechanisms is about solving service delivery challenges and problems It is about finding the best mechanism to address specific challenges and problems It is about improving the delivery of services

5 A Municipality must know its service delivery challenges before starting any process to decide delivery mechanisms What targets must be met? What are the challenges we face? What service improvements must be made? What investment is needed?

6 Finding the right delivery mechanism means investigating options The success of a delivery mechanism depends on how well it fits the local context within which it has to deliver services A delivery mechanism has to be carefully designed so that it: addresses existing and future services delivery challenges meets the needs of local circumstances, and brings the right capacity to deliver the services

7 What is a Section 78 Assessment? A Section 78 assessment is a process required by the Municipal Systems Act to assess potential service delivery mechanisms for the provision of a municipal service Section 78 assessments are only required when certain legislated circumstances occur. This legislative circumstances are referred to as “triggers” It is a strategic decision-making process which takes place BEFORE implementing the chosen service delivery mechanism

8 S78 helps us to assess different options and motivate the right option Internal? External Option 1? External Option 3? External Option 2? Combination of options

9 What is the ideal we are trying to achieve for water supply? The WSP supplies water to the consumer for household use litres are provided as free basic water Subsidies built into the tariff are delivered successfully The size of the bill above FBW is related to consumption patters of the household Bills are delivered to each household and paid by each household (for higher levels of service) Water is available 24 hours a day with no service interruptions (so that the consumer does not have to store the water) The water is of a high quality (meets quality standards – so that the consumer does not have to treat the water) The standard of service improves over time sustainably

10 How do we achieve our ideal, or close to our ideal, in our municipal area? What are the challenges of our area? What problems do we need to address? What special conditions does our WSP need to address to provide sustainable, affordable, efficient and effective water services? Sustainable water services provision? What is the most appropriate WSP for this area? Is more than one WSP needed?

11 Before you start assessing mechanims you need to know: The area where the services will be provided The needs that the mechanism should be designed to address The different service delivery mechanisms (options) ? ?

12 Are you assessing a service delivery mechanism for the whole municipality area?

13 Or are you assessing a service delivery mechanism for part of the municipality area?

14 It may even be necessary to look at a cross boundary service delivery mechanism. The Institutional Reform process may be relevant for some WSAs in this regard.

15 The need for MACRO Scoping These questions about the geographical area for the section 78 assessment form part of a MACRO SCOPING exercise Before a municipality can start its section 78 process it needs to address the big (MACRO) questions Macro Scoping also assists the municipality to prepare the Terms of Reference (ToR) for the section 78 assessment In fact, the macro level strategic decisions must be taken before preparing the ToR in order to provide parameters for a Section 78 Assessment

16 These issues are requirements of Section 11 of the WSA with states: “In ensuring access to water services, a WSA must take into account..: Macro Scoping must look at: Alternative ways of providing access to water services The need to achieve benefit of scale The requirements of equity The need for regional efficiency The need for lower costs The availability of resources from neighboring WSAs

17 Cross boundary infrastructure provides opportunities to look at multi-jurisdictional water services provider arrangements Macro Scoping: Cross boundary infrastructure

18 If the water resources are outside the muncipality’s boundary, arrangements to access water from schemes in neighbouring municipalities may be an option. This impacts on options for service delivery mechanisms. Macro Scoping: Water Resources No water resource

19 Macro Scoping: Regional Efficiencies Regional efficiencies may be achieved through delivery options for more than one municipal area – especially where there are existing WSPs with capacity to serve large areas.

20 Macro scoping: More than one delivery mechanism It may be necessary to have more than one delivery mechanism in the municipal area. For example where there are remote rural areas, difficult topology, and where there are different service delivery needs / challenges Mountain range Remote rural area Shared infrastructure Existing regional institutional capacity Remote rural areas Dense urban and peri-urban area

21 You need to know your area! Financial issues Water resource issues HR issues Infrastructure issues Capacity issues Legal issues Operation and maintenance issues Consumer issues Levels of service Backlogs Economies of scale Institutional issues

22 From Macro Scoping to a Terms of Reference Information from the IDP and WSDP will assist in gaining the macro picture Once the municipality has a high level picture (helicopter view) of the infrastructure, water resource, financial and institutional issues it can prepare the Terms of Reference for the section 78 assessment Macro Scoping Terms of Reference Section 78 Assessment

23 Status Quo and Needs Analysis Report Terms of Reference Status Quo and Needs Analysis Macro Scoping Internal Assessment section 78(1) Implement Internal Mechanism S78 Process External Assessment and Feasibility Study section 78 (3) 5 5 Implement External Mechanism 6 TRIGGERSTRIGGERS S78 (4) decision S78 (2) decision

24 Modules to Follow Module 2: Internal Delivery Mechanisms Module 3: External Delivery Mechanisms Module 4: Decision making process THANK YOU