Water Services Bulk Infrastructure Programme January 2008

1. Water Services Bulk Infrastructure Programme January 2008

2. Introduction • Infrastructure required to connect water resources over vast distances with internal bulk and reticulation systems • Vast = Macro/Regional scale.

3. Policies / Conditions • Policies and conditions will be revised under the following categories • Criteria for project proposals • Criteria for project approval • Conditions for funding • Project Management processes • Accounting process & responsibility • Project implementation • Monitoring • Sustainability conditions • Process to reallocate funds • Consequences for Failure to comply with agreements.

4. Other Policy documents • Water resource development • Regional bulk infrastructure • Internal bulk infrastructure • Bucket eradication programme • Other program alignment • Asset management • Financial, social, economic, environmental & institutional issues • Master bulk infrastructure framework • Costing & funding requirements.

5. Special DoRA conditions • DWAF must ensure appropriate involvement • Role players must understand implications • Agreement prior to implementation to be reached on: • Ownership • Implementation • Operation & Maintenance • Social & Economic component funding (Viability, Funding availability, Borrowing capacity, Etc.)

6. Funding • Allocation: • 07/08 … R300 million • 08/09 … R450 million • 09/10 … R650 million • NB: Fund small compared to MIG: • 8.6% of annual MIG…relative small impact • Fund transferred to DWAF as schedule 7 grant (Grant in kind) • Grant split: • R7m/a for regional management • R39-50m/a for planning & feasibility studies • Remainder for implementation.

7. Purpose • Distinguish between direct service delivery of • reticulation schemes that MIG is targeting • Water availability & scarcity (Link Water Resource Strategy and planning) • Benefit of scale • Integrated management (multi users) • Institutional aspects & arrangement (ownership, implementation, O&M) • Socio-Economic development • Financial issues (Viability & funding) • Implementation options • Sustainable management (water resources, O & M)

8. Overview of programme functions 1. Programme Governance 3. Development and revision of policy 4.Evaluation process of project proposals 5.Project approval agreements 6. Monitoring of implementation of projects approved 7. Strategic support of projects 8. Approval of Feasibility studies for future projects 9.Business case for internal bulk 2. Programme Management

9. Milestones to Date • Feb’07 - Programme Initiation Policy • Mar’07 - Announcement • Apr’07 - DoRA Draft • May’07 - List of Projects submitted • Jun’07 - Review of Project Lists • Jul’07 - Revised Project Lists submitted • Sep’07 - DoRA gazetted • Oct’07 - Implementation commenced

10. Project Management Structure Include 9 Provinces

11. Project approval / agreements • Letters informing benefiting Municipalities • NB: grant-in-kind; not default transfer • Project profiles • DoRA compliance: formal agreements on • Ownership • Implementation arrangements • Operations & maintenance • Financial management (financing & cost recovery) • Effective water use • Asset management • (Expert team support – format, agreements, authorization?)

12. Monitoring of implementation Monitoring of projects /programme: • Implementation action plan with monthly deliverables & cash flow • Implementation arrangements • Oversight • Monthly reporting per region (certification payments and BAS) Reporting of programme • DWAF management, Cash flows, status report • NT, DoRA financial expenditure report (as from Jan 08) • NT, Information / reporting system IRM ?

13. Strategic Support • Identify projects, nomination & prioritization • Developing Project proposals • Populating the Information system (to be developed) • Monitoring & reporting • Expenditure forecasts • Reallocation of budgets

14. Feasibility studies • Regional coordination • Guidelines, checklist and tools • Water services planning mentoring (training, modular development) • Provincial planning task team • NB: Comprehensive plan • Total services • Water resources • Appropriate solutions (Technical) • Institutional • Financial • Impact & outcome • Validation & Adjudication • Expert teams • Other programs alignment (Housing, MIG, etc).

15. Business case for Internal Bulk • Municipalities highlighted the need • Recognized that there is gap between Regional Bulk and reticulation. • Motivation for internal bulk is similar to that of regional bulk, (I.e should not be through MIG because it does not supply directly to consumers. ) • Currently collecting information on potential projects • Business case to be completed by end March 2008

16. KWAZULU NATAL PROGRESS TODATE • Budget Allocation 2007/08 • Infrastructure Implementation R 69.0 million • Implementation Readiness R 4.0 million • Management Support R 0.25 million • Project Status • 5 Infrastructure projects all in implementation phase • 7 Implementation readiness projects, Municipalities already started with development of feasibilities • R 25.9 mill certified for payment by end December (35%) • R 22.2 million paid through BAS by end December (30%) • Progress satisfactory and budget will be spend by end March 2008

17. NORTH WEST • Budget Allocation 2007/08 • Infrastructure Implementation R 20.0 million • Implementation Readiness R 3.0 million • Management Support R 0.25 million • Project Status • 1 Infrastructure project in implementation phase • Forms part of R 146 million project currently implemented • 4 Implementation readiness projects, PSP’s appointed for 3 projects • Progress satisfactory, R 20 million (86%) already transferred (R 13.0 million actual expenditure)

18. NORTHERN CAPE • Budget Allocation 2007/08 • Infrastructure Implementation R 5.1 million • Implementation Readiness R 2.3 million • Management Support R 0.25 million • Project Status • 1 Infrastructure project • Phase 1 contractor on site November 2007 • Phase 2 contractor on site January 2008 • 4 Implementation readiness projects PSP appointed • R 3.9 million certified for payment by end December (51%) • R 3.6 million paid through BAS by end December (47%) • Progress satisfactory and budget will be spend

19. WESTERN CAPE • Budget Allocation 2007/08 • Infrastructure Implementation R 0.0 million • Implementation Readiness R 3.6 million • Management Support R 0.25 million • Project Status • 0 Infrastructure projects • 3 Implementation readiness projects PSP appointed November 2007 • Only implementation readiness projects, funds will be spend by March 2008

20. LIMPOPO • Budget Allocation 2007/08 • Infrastructure Implementation R 72.3 million • Implementation Readiness R 8.55 million • Management Support R 0.0 million • Project Status • 8 Infrastructure projects all in implementation phase • 9 Implementation readiness projects PSP to appointed • Programme started slow, general progress average, needs close monitoring and budget will be spend by end March 2008

21. EASTERN CAPE • Budget Allocation 2007/08 • Infrastructure Implementation R 28.8 million • Implementation Readiness R 10.8 million • Management Support R 0.25 million • Project Status • 7 Infrastructure projects all in implementation phase • 16 Implementation readiness project, Municipalities started with development of feasibilities • R 4.7 mill certified for payment end December (12%) • R 22.9 mill of work completed and to be submitted (57%) • Program started slow, general progress satisfactory and budget will be spend by end March 2008

22. GAUTENG • Budget Allocation 2007/08 • Infrastructure Implementation R 0.0 million • Implementation Readiness R 1.5 million • Management Support R 0.25 million • Project Status • 0 Infrastructure projects • 1 Implementation readiness project PSP appointed • Progress satisfactory, R 1.1 million spent on feasibility (63%), budget will be spend by end March 2008

23. FREE STATE • Budget Allocation 2007/08 • Infrastructure Implementation R 28.62 million • Implementation Readiness R 1.4 million • Management Support R 0.0 million • Project Status • 3 Infrastructure projects • Discussion with Ninham Shand, Jagersfontein project. Intervention in place. R 16 mill will be spend. • Discussion with Ngwathe Municipality. Intervention in place and R 4.8 mill will be spend. • 3 Implementation readiness projects PSP appointed in November 2007 • Progress average, funds will be spend by end March 2008, needs close monitoring

24. MPUMALANGA • Budget Allocation 2007/08 • Infrastructure Implementation R 29.95 million • Implementation Readiness R 2.58 million • Management Support R 0.25 million • Project Status • 4 Infrastructure projects • Kabokweni project funded by MIG and R 6 mil reallocated to Mbombela Stadium project. • Management funds (R 3.3 mil) reallocated to Delmas project. • (Reallocation funds from other projects to Delmas) • 2 Implementation readiness projects PSP appointed • R 12.2 mill of work completed and to be submitted (34%) • Progress slow, needs support and close monitoring

25. Total spend to date /Projections • R49,8 BAS (Basic Accounting System), end Dec 2008 • Projection R 126 end Jan 2008 • Projection R 207 end Feb 2008 • Projection R 300 end Mar 2008

26. Key Challenges-Regional level • Municipalities slow in procuring PSP’s for feasibility study development • Required agreements not yet in place • Slow submission of invoices on work completed • Inadequate capacity for adequate project management • Ownership of project and O & M for infrastructure that is shared between local authorities.

27. Key Challenges- National level • Delay in the start of implementation threatening the ability to utilize the budget • Limited budget • Inability to take firm action against municipalities that are not performing • Sustainability of programme – Will it continue after 3 years ? • Inter Departmental politics between DPLG, DWAF and NT • Multiple reporting interface with National Treasury

28. Conclusions • Programme structure is now well established • Implementation of projects could only start after Sep 2007 due to the planning process • Allocation of funds for the first 3 years is almost complete • Implementation of projects in current financial year will meet targets /goals in all provinces • R30 million may need to be re-allocated • Reporting processes to NT are currently been urgently addressed.

29. THANKS