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South African Association of Water Utilities

South African Association of Water Utilities. SAAWU. PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006. SAAWU COMMENTS ON THE DEPARTMENT OF WATER AFFAIRS AND FORESTRY ANNUAL REPORT FOR 2005/06 AND SERVICES RECEIVED FROM DWAF.

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South African Association of Water Utilities

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  1. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 SAAWU COMMENTS ON THE DEPARTMENT OF WATER AFFAIRS AND FORESTRY ANNUAL REPORT FOR 2005/06 AND SERVICES RECEIVED FROM DWAF

  2. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 • Presentation Structure • Introduction to SAAWU • General comments on the Department of Water Affairs and Forestry Annual Report 2005/06 • Specific Comments on relevant Programmes • SAAWU comments on services/support received from DWAF • The approach adopted in the presentationis to provide broad • comment from a water sector perspective rather than focus on the detail of the DWAF Annual Report

  3. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 INTRODUCTION TO SAAWU The South African Association of Water Utilities is a Section 21 Company that was established in March 2001. The primary objective of SAAWU is to build a united association of public sector water utilities that is able to optimally co-ordinate, mobilise and utilise the collective skills and capacity of its member organisations to support municipal authorities in the provision of sustainable, efficient and affordable water services to all the people of South Africa.

  4. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 • INTRODUCTION TO SAAWU • The primary nature of the activities of SAAWU are directed serving the needs of our members and are focused on: • Advocacy • Coordination • Facilitation • Provision of products and services • Communication and information sharing

  5. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 CURRENTSAAWU MEMBERS (22 Organisations) Albany Coast Water . Amatola Water. Bloem Water . Bushbuck Ridge Water City of Cape Town . Sedibeng Water Ikangala Water . Kalahari East/West Water Pelladrift Water Lepelle Northern Water Magalies Water . Mhlathuze Water Midvaal Water . Namakwa Water Botshelo Water . Overberg Water Rand Water . Uthukela Water Umgeni Water . Johannesburg Water National Community Water and Sanitation Training Institute Trans Caledon Tunnel Authority

  6. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 • Strategic Relevance of Regional Water Utilities • The majority of the SAAWU members are regional water service provider institutions (water boards and municipal entities) • The key strategic relevance of theregionalwater utilities in South Africa should be recognised. This strategic relevance is directly related to all forms of socio-economic development in that: • Approximately 80% of the Gross Domestic Product of South Africa (GDP) takes place in the service areas of these water utilities. • Approximately 60% of the population of South Africa is resident in the service areas of these water utilities

  7. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 • SAAWU INTERACTIONS WITH DWAF • SAAWU has substantial interactions with DWAF on an ongoing basis. • These interactions are typically related to the following: • The development of sector policy • The development of strategies for the implementation of key sector initiatives/policies • The development of effective administrative systems and processes • The implementation of specific projects

  8. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 • SAAWU INTERACTIONS WITH DWAF • Responses to specific sector/institutional challenges. • Improved communication and interaction with utilities • Scheduled and ad hoc meetings • The “ethos” that underpins the SAAWU/DWAF relationship is one of constructive collaboration and partnering.

  9. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY: 17 October 2006 • The DWAF Annual Report 2005/06 • SAAWU wishes to congratulate DWAF on a comprehensive Annual Report and acknowledges the significant achievements of the Department during the reporting period. • SAAWU comments are limited to the Programmes that are specifically relevant to our member organisations, these being: • Programme 1: Water Resource Management • Programme 2: Water Services

  10. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY: 17 October 2006 • General Comments on the DWAF Annual Report 2005/06 • The report highlights the need for DWAF to exercise its oversight responsibility and ensure compliance with the PFMA and WSA in particular. This requires that all water boards have an “approved” shareholders compact (Policy statement and business plan). • Steps need to be taken to ensure that the necessary appraisals of Policy statements and business plans are done timely and that compliance is achieved.

  11. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY: 17 October 2006 • General Comments on the DWAF Annual Report 2005/06 • Problems that occurred with the approval of bulk water tariffs for 2005/06 are being addressed through collaborative interactions between DWAF and SAAWU. • Un-necessary delays in the appointment of Boards that were experienced during the report period must be addressed in order to ensure good governance, compliance and continuity. • The prevailing situation with regard to the Departments ‘Qualified audit status” is noted with concern.

  12. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 • SAAWU Views On Specific Elements Of The Annual Report • Programme 2. : Water Resource Management (WRM) • Establishment of new institutions • The WRM institutions are substantial cost drivers for water services. A holistic “sector wide” approach need to be taken with regard to institutional arrangements so as to ensure that there is optimal integration of roles, functions and capacity in the sector. • The scope and functions of the National Water Resources Infrastructure Agency and the possible impact on the overall sector cost chain needs to be carefully assessed and quantified. • Ultimately it is the consumer of services who pays for these institutions.

  13. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 SAAWU Views On Specific Elements Of The Annual Report Programme 2: Water Resource Management (Cont) • Water Conservation and Demand Management/Working for Water • In a water scarce country water conservation and demand management initiatives are a critical element of the sustainability of supply of recourses. In our view this issue requires more prominence and specific targets should set and reported on. • The status of water losses at the institutional/local reticulation level needs to be assessed, quantified and appropriate interventions implemented. • The cost benefits of WCDM vs additional supply options must become the focus of decisions into the future.

  14. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 SAAWU Views On Specific Elements Of The Annual Report Programme 2: Water Resource Management (Cont) • Water Conservation and Demand Management/Working for Water (Cont) • DWAF are to be congratulated on what has been achieved on the working for water programme. SAAWU members fully support this initiative, its objectives and related benefits

  15. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 SAAWU Views On Specific Elements Of The Annual Report Programme 2: Water Resource Management (Cont) • Charging for water • As part of the Water pricing Strategy there is an urgent requirement for formal raw water supply contracts (quality, cost and assurance of supply) between DWAF and water utilities. • This critical “business interface” between DWAF and water service provider utilities needs to be formalised and regulated in order to enable effective contracting of services throughout the supply chain.

  16. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 SAAWU Views On Specific Elements Of The Annual Report Programme 2: Water Resource Management (Cont) • Protection of water resources • The are very serious concerns regarding the deterioration of the quality of raw water available for abstraction and treatment. • The capacity of water service authorities and providers to effectively manage waste water treatment activities and the impact this has on the quality of raw water and the costs of purification is a serious cause for concern. • These concerns also extend to the capacity of the Department to monitor and effectively regulate the quality of sewage and effluent discharges and enforce compliance.

  17. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 • SAAWU Views On Specific Elements Of The Annual Report • Programme 3: Water Services • Municipal water tariffs • The report is vague on the tariff issue “this may be due to”. As the sector regulator DWAF should have a definitive explanation for the fact that domestic and commercial water tariffs were increased above CPI. • Comparisons between increases in raw water, bulk water and retail water prices would be most useful.

  18. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 • SAAWU Views On Specific Elements Of The Annual Report • Programme 3: Water Services • The lack of capacity of Water Service Authorities to effectively deliver, expand and improve the standards, levels and access to water services is emphasized on a number of places in this report and a number of the challenges highlighted are directly related to this. • This is clearly a critical focus area for the sector and the alignment of the identified challenges with the Key Focus Areas in the report and the local government support strategy should be indicated. • More quantitative and qualitative targets should be set for the activities/issues in the Key Focus Areas.

  19. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 • SAAWU Views On Specific Elements Of The Annual Report • Programme 3: Water Services • Water and sanitation service provision backlogs should be a key driver of institutional reform initiatives to ensure that institutional reform is undertaken in a manner that contributes to sector targets being met. • SAAWU members are engaged in a wide range of initiatives at the local, regional and national level to leverage capacity to provide support directly to municipalities in water service delivery. • The extent of this support is currently being quantified and initiatives taken to extend and expand the support. All SAAWU members have committed themselves to supporting local government water service delivery objectives.

  20. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 • Programme 3: Water Services (Cont) • SAAWU would like to complement DWAF on the collaborative and inclusive approach that they have taken in the development of the Institutional Reform Strategy, the Regulatory Strategy and the Draft Water Service Bill. • This approach will ultimately enhance the quality of the strategies, result in a higher level of stakeholder acceptance and enhance the prospects for more effective implementation. • The complexity of the Institutional Reform initiative and the risks of unintended consequences require careful assessment and measured decisions.

  21. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 • Programme 3: Water Services (Cont) • SAAWU is fully supportive of a strong regulatory regime for the sector. Finalising an appropriate regulatory strategy (taking into account the potential conflicts of interests of DWAF) and building the capacity of the regulatory function should therefore be a priority. • As the sector leader DWAF will need to ensure that institutional reform processes and related initiatives are conducted and managed strictly and objectively in accordance with the principles and criteria set out in the Strategic Framework and the draft Institutional Reform Strategy.

  22. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 • Programme 3: Water Services (Cont) • DWAF will need to take a decisive leadership position in situations where local transitional processes (such as section 78 processes) potentially impact on regional service provider arrangements and activities. • Appropriate contracts for water services with municipalities remains a problem. Due to section 78 processes and institutional reform uncertainties many municipalities are reluctant to enter into appropriate term contracts with utilities. This often has a negative impact on service delivery and DWAF as the sector leader should provide direction. • SAAWU/SALGA model bulk water contract.

  23. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 • SAAWU Comments on Services/Support Received From DWAF • SAAWU continues to receive substantial support from DWAF on a number of key projects that it has initiated for the benefit of its members, DWAF and the sector at large. Examples are: • - The water utilities benchmarking initiative • - The project for the “Twinning” of water utilities in order to build institutional capacity • - Key training projects such as governance training for non executive board members

  24. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 • SAAWU Comments on Services/Support Received From DWAF • This support is greatly appreciated as it enhances the capacity of SAAWU to make a positive contribution to its members and the sector as a whole. • SAAWU will seek to extend and expand the support it receives from DWAF in appropriate ways to enhance the capacity of its members to make the maximum contribution to socio-economic development, service delivery and rural development.

  25. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 SAAWU is committed to working with DWAF, its members and all other sector stakeholders in order to ensure that all entities collaborate more effectively and work optimally to ensure that sector targets can be met and the quality of lives of all South Africans improved.

  26. South African Association of Water Utilities SAAWU PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE OF WATER AFFAIRS AND FORESTRY : 17 October 2006 Thank you for your time

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