MASIBAMBANE CO-ORDINATING COMMITTEE MEETING PROGRESS REPORT ON THE RURAL HOUSEHOLD INFRASTRUCTURE PROGRAMME (RHIP) 22 nd JUNE 2012 MASIBAMBANE CO-ORDINATING COMMITTEE MEETING PROGRESS REPORT ON THE RURAL HOUSEHOLD INFRASTRUCTURE PROGRAMME (RHIP) 22 nd JUNE 2012

2 PRESENTATION OUTLINE RHIP Overview RHIP Objectives Progress per Province – 2010/11 Challenges – 2010/11 Progress per Province – 2011/12 Financial Performance – 2011/12 Job Creation – 2011/12 Health and Hygiene – 2011/12 Challenges – 2011/12 Way Forward – 2012/13 & 2013/14

3 RHIP OVERVIEW The RHIP is a special four year programme to provide basic sanitation (and water) to rural communities. It has been allocated a total budget of R1.2 billion. The budget is allocated to the NDHS as a Schedule 7 Grant - NDHS appoints IAs & enters into SLAs with WSAs. The budget split over the MTEF is: −2010/11: R100 million; −2011/12: R231,5 million; −2012/13: R479,5 million and −2013/14: R389 million.

4 RHIP OBJECTIVES To support municipalities to address rural basic sanitation (and water supply) backlogs. To improve the quality of life in rural communities. To contribute to the rural development priority of government. To contribute to job creation and Local Economic Development. To contribute towards meeting the sanitation (and water supply) MDG targets of South Africa. To accelerate delivery of sanitation (and water supply) to meet the 2014 target.

5 PROGRESS PER PROVINCE /11 Province Allocation: 2010/2011 (R’000) Number of Benefiting Municipalities Target Number of VIP Toilets VIP Toilets completed at 31 March 2012 % Completion Eastern Cape R18,00052, % Free State R3, % Limpopo R27,00093,6003,37694% KwaZulu-Natal R27,00073, % Mpumalanga R4, % Northern Cape R3, % North West R6, % National Prog. Management R12,000 Grand Total R100, ,87611,65298%

6 CHALLENGES /11 Programme started in Oct 2010 (procurement delays). Some WSAs did not fully grasp the nature of Schedule 7 Grant and delayed signing SLAs with NDHS as they wanted to implement the programme themselves. Excessive rainfall was experienced during December 2010 and January 2011 which caused delays. Implementing Agents struggled to source building material and have it delivered on site on time. Some contractors struggled with difficult ground conditions i.e. hard rock and high water table.

Progress Per Province – 2011/12 Province Allocation: 2011/2012 (R’000) Number of Benefitting Municipalitie s Estimated Target Number of Toilets Total Pits Constructe d at 30 th April 2012 Total Toilets Completed at 30 th April 2012 % Scope of work under constructio n at 30 th April 2012 Eastern Cape R65, ,462 7,475 6, % Free State R10, ,297 1,220 1, % KwaZulu- Natal R48, ,967 7,369 6, % Limpopo R68, ,864 4,909 3, % Mpumalanga R8, , % Northern Cape R8, % North West R28, ,551 2,979 2, % Grand Total R ,686 25,493 22, % Draft and Confidential7

8 FINANCIAL PERFORMANCE /12 Province 2011/12 Allocation & 2010/11 Rollover Provisional Expenditure at 31 March 2012 Work in Progress KwaZulu-NatalR80,487,091R63,207,997R17, 279,094 Eastern CapeR65,000,000R55,868,072R9,131,928 LimpopoR54,552,091R26,688,032R27,864,059 North WestR30,063,533R22,711,497R7,352,036 Free StateR12,924,676R8,548,344R4,376,332 MpumalangaR10,086,447R7,943,553R2,142,894 Northern Cape R4,394,162R2,298,425R2,095,737 Grand TotalR257,508,000R187,265,920R70,242,080

9 JOB CREATION /12 Province No of Benefiting Municipalities Estimated Target No. of VIP Toilets Jobs Created as at 31 May 2012 Eastern Cape137,4621,372 Free State31, KwaZulu-Natal157,9671,254 Limpopo125, Mpumalanga21, Northern Cape North West73, Grand Total5327,6864,726

10 HEALTH & HYGIENE /12 Province No of Benefiting Municipalities Estimated Target No. of VIP Toilets H&H Visits (x3) as at 31 May 2012 Eastern Cape137,462 7,462 (3 rd visits) Free State31,297 1,297 (2 nd visits) KwaZulu-Natal157,967 2,742 (3 rd ) & 5,225 (2 nd ) Limpopo125,864 1,014 (3 rd ) & 4,850 (2 nd ) Mpumalanga21, (3 rd ) & 519 (2 nd ) Northern Cape (3 rd visits) North West73,551 2,300 (3 rd ) & 1,251 (2 nd ) Grand Total5327,686 14,544 (3 rd ) & 13,142 (2 nd )

11 CHALLENGES /12 The 2 appointed Implementing Agents (Mvula Trust and IDT) were not sufficient to implement such a programme at scale and achieve the outcomes set. The existing SLAs between the NDHS and the Programme Management Support PSP (Maxima Global/TranSpace) on one hand and Mvula Trust and IDT on the other were not consistent with each other. The process of handling claims of the Implementing Agents needed to be restructured to assist them with improved cash-flow management.

12 CHALLENGES /12 cont… The recovery plans submitted in Sept 2011 by the 2 Implementing Agents were too optimistic. The IAs ability to procure building materials from suppliers in large quantities posed a serious challenge to the outcomes of the programme. The scope of work approved for the IDT was at high risk of not being completed by end of the 2011/12 financial year. In December 2011 NDHS re-allocated 7,098 units from IDT and negotiated with Mvula Trust to complete these units by the end of the 2011/12 financial year.

13 WAY FORWARD /13 & 2013/14 NDHS has reduced the previously budgeted allocations of IDT and Mvula Trust to a total of +/-60% of the 2012/13 budget (in line with NDHS Portfolio Committee recommendations). NDHS is currently in process of putting the +/- 40% balance of the 2012/13 budget to tender for additional Implementing Agents to be added to the programme. The SLA of the Programme Management Support PSP is to be aligned to the performance of the IAs. In 2012/13 both machinery & manual labour will be used in difficult ground conditions where needed.

14 THANK YOU