1. STANDING COMMITTEE ON APROPRIATIONS PROGRESS ON MUNICIPAL WATER INFRASTRCTURE GRANT (MWIG) Presented by: Ms L Mokoena Date: 13 September 2013

2. Contents 1.Background and Overview 2.Progress – National Programme Management 3.Progress – Provincial Programme Management 4.List of projects, analysis and examples 5.Challenges 6.Conclusion 2

3. 1:Background and Overview a.Interim/Intermediate Water Supply Programme (IIWSP) was initiated in 2012 by the Minister as a recognition of the plight of many people without services, particularly in rural areas. b.The programme will initially focus on the 24 DM with the highest backlogs and therefore merge with the existing initiative to address the 2014 water backlogs. c.The programme is initiated by the DWA as part of its leadership role in the water sector. d.The programme will facilitate solutions and where possible, provide direct support and funding in areas that are not covered by existing projects. 3

4. Aim / Purpose The purpose of this programme is not to duplicate other existing programmes or initiatives, but to supplement them where there are gaps and to also provide some short –term and quick win solutions. The programme also envisages addressing functionality related problems and not only addressing new infrastructure requirements. The programme is part of the new paradigm promoted by the DWA: “Source to tap – tap to source” 4

5. 5 Alignment and Integration of programmes /Grants

6. Goals / Scope Goals: 1.All communities living in settlements greater than 50 households must receive a minimum interim water supply before 30 June 2015, either through a permanent water supply scheme or an interim or intermediate water supply intervention. 2.In addition to the Interim, Intermediate, Intermediate Water supply interventions, facilitate a solution to the “hot-spot” areas related to water service delivery challenges in the 24 priority DMs before 30 June 2015. 6

7. Implementation Strategy 7

8. Implementation framework 2013/14 8

9. Implementation framework for 2014/15 projects 9

10. 2: Progress – National Programme Management a.Various templates compiled (Business Plans, reporting templates, standard agreements) b.Implementation framework document developed c.DoRA requirements met (submission of payment schedule) d.Additional capacity established (MWIG manager in each region appointed and MWIG manager in HO) e.Reporting to National Treasury f.Support of Regional offices with processes. g.Consultation with stakeholders (additional consultation): – 30 Aug, Backlog working committee Collaboration meeting /workshop – 3 Sep; MIG quarterly workshop – Aug, seven Provincial workshops with municipalities, Water Boards and other key stakeholders 10

11. Governance, tools and guidelines a.MWIG Framework finalised setting out: Responsibilities; Process for approval; Purpose; Outcome and Outputs; Conditions; b.Comprehensive IIWSP strategy / implementation plan developed. c.Various guidelines developed d.Term contracts for the procurement of bore-holes and planning PSP developed. e.Business Plan templates developed. f.Terms of reference for provincial co-ordination planning committees developed g.Standard Funding agreements developed 11

12. Payment schedules 1.Payment schedules had to be submitted before the project B/P were finalised. 2.Summary of Payment schedules are as follows R'000 DateECFSKZLPMPNCNW Total per province TOTAL AUGUST 14 552 5 240 43 974 10 147 17 892 9 929 4 870 106 604 TOTAL OCTOBER 45 220 10 398 143 859 22 322 44 735 6 442 11 874 284 850 TOTAL JANUARY 27 006 5 157 79 630 61 004 26 841 - 11 873 211 511 GRAND TOTAL 86 778 20 795 267 463 93 473 89 468 16 371 28 617 602 965 12

13. 3: Progress – Provincial Programme Management a.95% of all required agreements between DWA and municipalities signed b.100% of all business plans for 2013/14 submitted. c.95% of all business plans for 2013/14 approved. d.1st Payment schedule released e.A number of municipalities have agreed to the use of Water Boards as implementing agents: a.All projects in the Free State b.Nzo District Municipality in the Eastern Cape c.Bushbuckridge in Mpumalanga 13

14. Payment schedules Progress 1.1 st Transfer completed 2.A error occurred in KZN where some of the allocations where to LM and not to the DM. 3.After consultation with NT, consensus was reached and adjustments were made. 14

15. Provincial Workshops 1.Seven Provincial workshops were held during June / July (last held on 26 July in Bloem.) 2.Workshops targeted all WSA benefiting from MWIG 3.Purpose of workshops were: 1.Explain legal framework 2.Discuss Roles and responsibilities 3.Describe implementation plan and processes 4.Aim: Ensure compliance of DoRA requirements and build a partnership approach 5.Workshops well attended (95% of WSA attended 23/24) & well received 15

16. Workshops: Key observations 1.Concern that public / consumers will reject interim/intermediate solutions 2.Concern regarding moving target of backlogs 3.More than 70% WSA do-not want localised solutions and prefer regional schemes. 4.Most complained about conditions and requirements of MWIG 5.Most indicated that funding is not enough and will not achieve objectives. 6.Lack of funding of O & M is a big treat to service delivery 7.Lack of revenue connection /financial management is a big threat to delivery 8.Limited use of Water Boards, WSA choose not to use them (FS exception) 9.WSA outside 24 DM, raising need to expand Grant to include them 10.A number of LM unhappy with performance of WSA 11.Planning in most WSA is poor 12.More than 75% of WSA indicated they would use term contracts developed by DWA. 16

17. General Outcomes of Workshops 1.Commitment and Support of programme 2.Better understanding of programme objectives 3.Improved relationships 4.Deadlines for processes emphasised /agreed 5.Agreement to urgently look at policy regarding rural water supply 17

18. 5: Example and analysis of projects PER PROVINCEDistrict Municipalities (Action List Settlements) District Municipalities (MWIG Projects Per DM) District Municipalities (MWIG Projects classification) EASTERN CAPEOR TamboOR Tambo KWAZULUNATAL LIMPOPOVhembe Sekhukhune Vhembe Sekhukhune Vhembe Sekhukhune 18

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22. Example type 4: Interim, Intermediate There is a planned MIG or RBIG project but such projects will only be completed at some point in the future - beyond 2017. In such instances the proposed MWIG projects will either provide interim or intermediate solutions. An interim solution could be the provision of bore holes or even a more temporary measure such as rain tanks. An intermediate solution could be a solution that provides part of the infrastructure that will provide water but not to basic standards. Such infrastructure can subsequently be upgraded to provide full basic water services when money becomes available through MIG. Example type 5: Acceleration of MIG A project which has been defined / designed and approved by MIG but no money is available to implement. This will be limited to projects that are not very big and where economically viable to supply basic water instead of intermediate( per HH cost is below R 6000) 22

23. 6: Key Challenges / Risks Key challenges to MWIG and providing some water to all 1.Significant unit cost for rural water supply particularly in KZN 2.Resistance/rejection to rudimentary localised solutions and the use of Community based organisations 3.Moving target, new backlogs. 4.Resistance to the use of Water Boards by some weak WSA 5.Need for similar interventions outside the 24 DMs. 6.Lack of revenue connection /financial management (and governance) of financial management in WSA threatens sustainability of interventions 23

24. Examples of projects submitted to MWIG Gadiboe (NC): Cost = R6,539,420 and HH = 149 therefore cost per HH = R44,185 GaRuele (NC): Cost = R6,952,772 and HH = 110 therefore cost per HH = R63,207 Drieloop (NC): Cost = R6,980,489 and HH = 34 therefore cost per HH = R205,308 ????? Kwakulu Rural Water Supply Programme (KZN): Cost = 19 500 000, HH = 445therefor cost per HH = R 43 820 24

25. Greatest challenge: cost of rural water supply particularly in KZN KZN indicated that the infrastructure cost for water supply is more than R 32 billion. Current averages for basic water supply in KZN are more than R35 000 per household This is due to the topography, location of water resources and the low density of populations. The cost estimate for an interim, intermediate water solution for the entire province will cost up to R 7 billion (the above figures have only be compiled after the MWIG motivation was submitted) Approximately 50% of the national backlogs in the 24 priority DMs are in KZN. The high unit cost of rural water supply are not unique to KZN and also apply in other regions such as Northern Cape Unless alternative options are adopted or extra funds allocated, KZN will cause the failure of MWIG to achieve the aim of some water for all 25

26. Conclusion 1.DWA has already carried out a lot of work in preparation for the implementation of MWIG. 2.A number of projects have started and the first transfer has been made. 3.The unit cost and funding requirements for a number of the projects proposed are significant higher than anticipated 4.Considering the slow cash flow projections and limited budget in the 1 st year, there are no significant problems envisaged for the 1 st year and DWA is confident that the Programme will be implemented effectively 26

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