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TRANSFER PROGRAMME

TRANSFER PROGRAMME. PORT FOLIO COMMITTEE MEETING 30 April 2002. Table of Contents. Context National Perspective The Division of Revenue Framework Conditions Target for 2002/2003. Context. DEPT OF WATER AFFAIRS AND FORESTRY :

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TRANSFER PROGRAMME

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  1. TRANSFER PROGRAMME PORT FOLIO COMMITTEEMEETING30 April 2002 Department of Water Affairs and Forestry

  2. Table of Contents • Context • National Perspective • The Division of Revenue Framework • Conditions • Target for 2002/2003 Department of Water Affairs and Forestry

  3. Context • DEPT OF WATER AFFAIRS AND FORESTRY : • Managing a large number of water services schemes many of which were transferred from the former Homeland Administrations to the Department in 1994. • Since 1994 has continued to fund the operation and maintenance of these schemes as an interim measure until transfers can be effected to appropriate institutions. • Interim Water services provider (WSP) for 334 water services schemes, as well as a substantial number of water services projects completed since 1994. • In the order of 9456 members of staff attached to the 334 schemes Department of Water Affairs and Forestry

  4. National Perspective • BUDGET : For operations and maintenance of these schemes has been included in the Division of Revenue Act (Act 5 of 2002) for the 2002/03 financial year as a conditional grant. • DoRA : Also includes a prescribed framework for the transfer of funds. • PROGRAMME : The Department has initiated a 3 year programme, commencing from 1 April 2002, to transfer all water services schemes and projects to Local Government. In terms of this programme, staff, assets and operating budgets will be transferred to Local Government. Department of Water Affairs and Forestry

  5. National Perspective: Total Count of SchemesTable 1 Department of Water Affairs and Forestry

  6. National Perspective : Scheme PersonnelTable 2 Department of Water Affairs and Forestry

  7. The Division of Revenue • GRANT IN KIND : During the 2001/02 financial year, the water services operating subsidy (DWAF augmentation of the Water Trading Account) was treated as a “grant-in-kind”. • CONDITIONAL GRANT : As a result of reforms to grant funding from 2002/03, the Water Services Operating Subsidy will be converted into a conditional grant up to the year 2004/05. • EQUITABLE SHARE : The Conditional Grant is scheduled for consolidation into the “core” Local Government equitable share from the year 2005/06 onwards. Department of Water Affairs and Forestry

  8. The Division of Revenue • OPERATING SUBSIDY : On a National level, the operating subsidy for the MTEF is as follows: 2002/03 R650 687 000 2003/04 R720 436 000 2004/05 R768 334 000 • NATIONAL TREASURY : Has made limited funds available for the 2002/03 and 2003/04 financial years for the rehabilitation of dilapidated water services infrastructure. • MUNICIPAL INFRASTRUCTURE GRANT : Broad agreement reached with NT on using the Municipal Infrastructure Grant (Capital programme) to leverage and support the Asset Transfer Programme. Department of Water Affairs and Forestry

  9. O&M Budget for DWAF SchemesTable 4 Department of Water Affairs and Forestry

  10. The Division of Revenue MEASURABLE OUTPUTS for 2002 will include: • Operation of water services schemes : Ongoing operation of water services schemes owned and/or operated by the department. • Revenue Collection : Improved revenue collection by 10%. • Billing System : Develop and implement an appropriate billing system to support municipalities with cost recovery systems, including credit control and indigent policies. • Assessment : Functional and financial assessment of all schemes – by June 2002. Department of Water Affairs and Forestry

  11. The Division of Revenue MEASURABLE OUTPUTS for 2002 will include : • Water Service Provider agreements : Water Service Authority/Water Service Provider agreements (including provision for the payment of services) in place by 30 September 2002 • WSDP’s and IDP’s : Ongoing support to local government to complete their WSDP’s as input to their operating plans, budgets and IDP’s • Transfers 2002 : Successful transfer of 10% (34) of the schemes to municipalities and or water boards in 2002/03 • Reward/Incentive System : Develop and implement, by 1 July 2002, an appropriate reward/incentive system for those municipalities who take early transfer of schemes. Department of Water Affairs and Forestry

  12. Conditions • Operating Budgets : By 1 April 2003, operating budgets will fall away unless there is a formal water service provision agreement between the department and the relevant municipality. • Operating Costs : Operating costs will be recovered from the municipalities and if necessary the interception of the equitable share where appropriate. • Appropriate Support : CBO’s, NGO’s and Water Boards will also recover operating costs from municipalities with DWAF, DPLG and National Treasury providing them with appropriate support in this regard. Department of Water Affairs and Forestry

  13. Conditions The grant will be used to facilitate the transfer of schemes and will be converted into a conditional grant in terms of the following programme: • 2002/03 – transfer agreements in place by 30 June 2002, schemes transferred with the remaining 3 year operating budget. • 2003/04 – transfer agreements in place by 30 June 2003, schemes transferred with the remaining 2 year operating budget. • 2004/05 – transfer agreements in place by 30 June 2004, schemes transferred with the remaining operating budget. • 2005/06 - Operating “conditional grants” for water schemes transferred to municipalities will be included in the equitable share allocation administered by DPLG. Department of Water Affairs and Forestry

  14. Target for 2002/2003 • 34 Schemes Transferred • 300 Water service provider agreements by 30 September 2002 • 1000 Staff Transferred • Functional and financial assessment by 30 June 2002 • 10% Improvement in cost recovery Department of Water Affairs and Forestry

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