1. Select Committee on Finance Water Services Operating and Transfer Subsidy 10 May Department of Water Affairs and Forestry
Jabulani Sindane : DG
Trevor Balzer: Acting CFO
Richard Machaba : Manager National Transfers

2. Contents
Progress 2005/06 : Water Services Operating and Transfer Subsidy
Revised Allocations 2005/06 and Expenditure
Earmarked Funds : Vote /07
Water Services Operating and Transfer Subsidy 2006/07
2006 to 2009 Allocations by Province
General

3. PROGRESS 2005/06 : WATER SERVICES OPERATING AND TRANSFER SUBSIDY
Progress to date:
Behind our target, were able to conclude majority of transfer agreements by the target date of 31 March 2006 (39 agreements, 70%) .
Some municipalities, particularly those with weak administrative and technical capacity, where special arrangements will have to be made, provision built into agreements;
Progress can be summarised as follows (to 30 April 2006) :
43 (out of 58) agreements signed (74%);
1841 staff transferred (23%);
3584 staff seconded (44%);
246 schemes with a total asset value of approximating R4.979 billion transferred (72%), and
Refurbishment total expenditure R362 million (43%).

4. Revised Operating & Transfer Subsidy 20005/06
O&M
Refurb
Total
Region
Gazette
Revised
Western Cape
5,616
5,516
760
6,376
6,276
Northern Cape
17,284
11,399
12,376
10,682
29,660
22,081
Eastern Cape
79,992
74,489
6,772
4,800
86,764
79,289
Free State
17,677
10,202
27,879
KwaZulu Natal
22,438
22,554
12,505
17,488
34,943
40,042
Mpumalanga
119,653
117,921
11,184
11,984
130,837
129,905
Limpopo
476,036
482,804
34,555
36,558
510,591
519,362
North West
69,270
21,931
21,377
91,201
90,647
Gauteng
12,803
3,380
6,150
16,183
18,953
820,769
814,433
113,665
120,001
934,434

5. DWAF OPERATING SUBSIDY: OPERATION AND MAINTENANCE EXPENDITURE AS AT 31 MARCH /2006 (Not audited)

6. DWAF OPERATING SUBSIDY: REFURBISHMENT 31 MARCH 2006 - 2005/2006 (Not Audited)

7. Earmarked Funds : Vote 34 2006/07 (Funds may not be used for other purposes than those specified)
Activity
2006/07 (R,000)
Devolution of funds from Public Works
97 303
Working for Water
Working on Fire
44 000
Water services operating subsidy (National)
Conditional grant to Local Government
TOTAL

8. WATER SERVICES OPERATING AND TRANSFER SUBSIDY
Division of Revenue Act 2006:
Allocations for 2006/07 reflected in:
Schedule 6 – Specific Purpose Recurrent Grant allocation, R500 million (where transfer agreements have been concluded)
Schedule 7 – Allocation in kind to Municipalities for designated programmes, R490,5 million (where transfer agreements are still under negotiation and staff still on the payroll of the DWAF ).

9. WATER SERVICES OPERATING AND TRANSFER SUBSIDY
SCHEDULE
2006/07
2007/08
2008/09
Schedule 6
Schedule 7
TOTAL

10. 2006 to 2009 DoRA Allocations for OPERATION AND MAINTENANCE, HR AND REFURBISHMERNT (By Province)
Region
2006/07
2007/08
2008/09
Western Cape (1%)
6,550
4,341
4,899
Northern Cape (2%)
20,451
17,808
13,244
Eastern Cape (9%)
83,930
85,821
108,904
Free State (3%)
26,615
19,862
27,351
KwaZulu Natal (4%)
37,160
41,880
44,547
Mpumalanga (17%)
172,063
169,836
175,153
Limpopo (54%)
530,573
567,601
599,722
North West (9%)
96,571
113,565
129,386
Gauteng (1%)
16,587
19,611
27,794
Total
990,500
1,040,025
1,131,000

11. 2006 to 2009 DoRA Allocations for REFURBISHMERNT (By Province)
Region
2006/07
2007/08
2008/09
Western Cape (1%)
700
Northern Cape (4%)
8,368
5,000
436
Eastern Cape (6%)
2,279
2,086
18,256
Free State (2%)
7,877
KwaZulu Natal (12%)
12,179
15,400
18,000
Mpumalanga (6%)
8,166
3,994
11,602
Limpopo (40%)
39,042
70,364
39,562
North West (24%)
23,145
35,733
29,708
Gauteng (5%)
2,184
3,658
11,000
Total
103,940
136,235
128,564

12. GENERAL
Specific provision made in Section 13 of the DoRA to adjust allocations to Municipalities once transfer agreements are concluded and staff transfers concluded.
Date for conclusion of transfer agreements 31 March 2006, 43 Agreements have now been concluded, 12 of the remaining 15 should be concluded by 30 June 2006 (7 in circulation and 3 95% complete).
Transfer of staff, budgets and schemes to municipalities by 31 March 2007
Some schemes (in excess of R100 million in value) will require parliamentary approval before transfer
Conditional Grants will be incorporated into Local Government equitable share from 2008/09 onwards, final breakout 2011/12.
Important condition for transfers : Necessary capacity must be in place in the receiving institution for the implementation of the conditional grant (NT and DPLG will have to assist in this regard).

13. “Some for all forever”