1. FIRST QUARTER ANALYSIS REPORT
PRESENTATION TITLE
Presented by:
Name Surname
Directorate
Date
FIRST QUARTER ANALYSIS REPORT
FOR THE
2016/17 FINANCIAL YEAR
Presented by:
Mr Sifiso Mkhize
Acting Director-General
14 September 2016

2. Part 1: Analysis of department’s performance
Preliminary fourth quarter progress report for the 2015/16 financial year
CONTENTS
Part 1: Analysis of department’s performance
Detailed analysis of Main Account
Detailed analysis of Water Trading
Part 2: Financial performance

3. Analysis of first quarter Actual performance
Main Account
Water Trading
Achieved
(100%)
Partially achieved
(50 – 99%)
Not achieved
(<50%)
Over Achieved
(>100%)
No quarterly milestones

4. Analysis per budget programme
Partially achieved
(50 – 99%)
Not achieved
(<50%)

5. Analysis per budget programme
Partially achieved
(50 – 99%)
Not achieved
(<50%)

6. Part 2: financial performance

7. Main Account Departmental Spending as at 30 June 2016
First Quarter Expenditure
Areas of underspending

8. First Quarter Expenditure for the 2016/17 financial year

9. Reasons for Over/Under-Expenditure
Projected spending: R1.900 billion
Actual Spending: R2.002 billion
Overspending: R million.
The under spending in Compensation and Employees and Goods and Services is mainly due to the following:
Vacant posts across all five programmes.
Outstanding performance bonus and pay progressions.
Outstanding salary increases for SMS.
Outstanding invoices for office accommodation and related water and lights, international travel, and for work done on various projects.
Although the Department is underspending in Compensation and Employees and Goods and Services, there were areas of overspending as follows:
Transfers and Subsidies: Payments related to employee social benefits which could not have been anticipated
Capital: previous financial year’s invoices relating to Regional Bulk Infrastructure which were paid during the current financial year.

10. Provincial and Municipal Conditional Grants
Grants and Transfers to Municipalities (R'000)
2016/17 Financial Year – 1st Quarter
Grant Allocation
 Actual Transfer
Spent By Municipality
% Spent
Regional Bulk Infrastructure Grant
              1, 850,000
                       -  0%
Water Services Infrastructure Grant
              2,844,982
Total
             4,694,982
Narratives on Conditional Grants
2016/17 Financial Year – 1st Quarter The transfers are scheduled for 2nd and 3rd quarters in line with National Treasury approved payment schedule

11. Water trading
Expenditure for augmentation funded projects Quarter 1: 2016/17
Reasons for variances Quarter 1: 2016/17

13. Reasons for Variance Quarter 1: 2016/17
The following projects have spent according to the projected Cashflows for Quarter1:
De Hoop Dam:ORWRDP (Ph 2A), ORWRDP-2C, ORWRDP-2D, ORWRDP-2E and ORWRDP-2F
GLeWAP Phase (Tzaneen Dam Raising)
Geotechnical investigations still on going to verify the ground conditions. Outstanding investigations influences the completion of the preliminary designs.
GLeWAP Phase (Nwamitwa Dam)
Geotechnical investigations still on going to verify the ground conditions, delays are due to outstanding investigations. R21 million was shifted from this project to fund ORWRDP Phase 2C.
Water Resources Project: Raising of Clanwilliam Dam
Delays in the appointment of the civil PSP. (The tender for the PSP still to be advertised). Finalisation of the bill of quantities through re-modelling of the structure. R72 million was shifted from this project to fund ORWRDP Phase 2C.
Development of Raising of Hazelmere Dam
Contractor is experiencing challenges with the installation of operational anchors, which resulted in slow progress on site.
Mzimvubu Water Projects

14. Reasons for Variance Quarter 1: 2016/17 (Cont.)
Some services were not included in the PSP contract. The Department envisaged at the feasibility stage to execute the scope internally, however, due to the limited resources and current work load constrains, it was recommended that the services which were not included in the PSP scope of work be urgently included to avoid delays. The Variation Order for the increased scope of work exceeds the threshold of R20 million as set by NT. The delay with the approval of the VO and Geotechnical investigations caused delays with the design phase / invoicing. R57 million was shifted from this project to fund ORWRDP Phase 2C.
Mokolo and Crocodile River (West) Water Augmentation Project (Phase 2A)
Water Supply Agreements to be updated and negotiated with major users based on the design capacity. The scheme capacity is under review and likely to be set between 75 and 100 mill m3/a. DWS is still to draft GTI and RID for the conveyance system. The budget was reprioritised.
Acid Mine Drainage (AMD)
The under spending is due to the fact that DWS is still waiting for invoice from TCTA for the work done.
Dam Safety Rehabilitation Programme
There are various projects under this programme which includes Nkadimeng Dam , Kalkfontein Dam , Roodekoppies Dam Hammersdale Dam and Marico-Bosveld Dam.
Underspending was as a results of amongst others:
Poor performance by the sub-contractor to deliver required rock quantities is hampering progress.
The evaluated bids were sent back for re-evaluation due to a new National Treasury policy/guideline for bid evaluations (i.e. Admin phase evaluation criteria).
The in-house design team experienced challenges during the design process

15. END