PRESENTATION TITLE Presented by: Name Surname Directorate Date

1. BRIEFING TO THE WATER AND SANITATION PORTFOLIO COMMITTEE WATER SECTOR INSTITUTIONS STRATEGIC OBJECTIVES, TARGETS AND BUDGET PROJECTIONS 2015/16 -2017/18 DIRECTOR GENERAL’S (MS MARGARET–ANN DIEDRICKS) OPENING REMARKS 29 APRIL 2015 PRESENTATION TITLE Presented by: Name Surname Directorate Date

2. PART A POLICY AND LEGISLATIVE MANDATES

3. POLICY AND LEGISLATIVE MANDATES

4. LEGISLATIVE REQUIREMENTS FOR ENTITIES PLANNING

5. Water & Sanitation sector institutions Financial year : 1 April to 31 March Financial year : 1 Jul to 30 Jun Minister Catchment Management Agencies (Schedule 3A of the PFMA Water Boards (Schedule 3B of the PFMA) Trans Caledon Tunnel Authority (Schedule 2 of PFMA) Water Research Commission (Schedule 3A of PFMA) Breede-Gouritz Inkomati-Usutu Amatola Water Bloem Water Limpopo Pongola-Mzimkhulu Magalies Water Lepelle Water Komati Basin Water Authority (Schedule 3A of PFMA) Komati Basin Water Authority (Schedule 3A of PFMA) Komati Basin Water Authority (Schedule 3A of PFMA) Mhlathuze Water Overberg Water Berg-Olifants Doorn Olifants Rand Water Sedibeng Water Orange Tsitsikamma-Mzimvubu Vaal Umgeni Water

6. The key role of Water Sector Institutions is to support South Africa as a developmental state to deliver on Government Developmental Objectives through : Using water for promoting socio-economic developmental agenda . Reducing inequality through access to water and job creation . Leveraging additional investments for infrastructure development Enabling rural communities to use water for rural livelihoods. Promoting greater citizen participation in decision making Allowing for innovation and knowledge generation. Relevant Advantages of Water Institutions 6

7. KEY STRATEGIC FOCUS AREAS OF INSTITUTIONS Developing, financing and managing national water infrastructure (TCTA, KOBWA, WTE) SIP 1,SIP3,SIP4,SIP6,SIP 9,SIP 18 2.Managing water resources at the catchment level (CMAs) 3. Managing regional water infrastructure and supporting local government in the delivery of water services (Water Boards) 4.Managing local water resource farmers and the transformation of the water sector with respect to irrigated agriculture (WTE, Water User Associations SIP 18) 5. Providing Water Knowledge hub for South African citizens • All in line with national developmental objectives of poverty eradication, creation of jobs, equitable economic growth, sustainable development 7

8. GOVERNANCE PROTOCOL FOR ENTITIES

9. Governance protocol for entities

10. Relationship between institutions and DWS • Oversee institutional establishment; • Oversee governance (manage board appointment processes, training etc.); • Oversee shareholder compact; • Oversee business plans, quarterly performance reports and financial statements etc. Parliament Minister DWS Portfolio Committee reviews reports and plans (hearings, visits) Minister appoints boards; approves shareholder compacts, Corporate Plans & Annual Reports Public institutions report to the public and Parliament through Annual Reports and Annual Financial Statements and to the Department with quarterly performance reports TCTA CMA 1 CMA 2 Water board 1 WB 2 WB 9 WRC

11. Contribution to government outcomes 6 Efficient economicinfrastructure 9 responsive, accountable, effective & efficient local government 4 Employment & inclusive growth 10 Protected and enhanced environment and natural resources 7 Vibrant & sustainable rural communities Effective water resources management critical foundation to achieve the above outcomes

12. PART B • ENTITIES PLANS FOR 2015/16 FINANCIAL YEAR • Strategic objectives • Performance indicators • Spending focus; and • Budget allocation for 2015/16 • Jobs Creation

13. CATCHMENT MANAGEMENT AGENCIES

14. INKOMATI-USUTHU (IUCMA) AND BREEDE-GOURITZ (BGCMA) STRATEGIC OBJECTIVES • Water resource protection • Water use management • Integrated water resource planning • Stakeholder interaction and empowerment • Governance • Strategic support

15. CMA SCORE CARD Ensure effective, efficient and sustainable management of water resources in the Water Management Area Stakeholder Perspective Financial Perspective Developmental & Environmental Learning & Growth Learning and Growth 15

16. SUMMARY OF IUCMA PERFORMANCE PROGRAMME

17. SUMMARY OF BGCMA PERFORMANCE PROGRAMME

18. WATER BOARDS

19. STRATEGIC OBJECTIVES • Ensure viability and sustainability. • Stakeholder engagement. • Appropriate planning for adequate water resources. • Water demand management. • To ensure sustainable growth. • Effective and efficient communications. • Ensure compliance with legislative prescripts and policies. • Financial sustainability.

20. Selected objectives & indicators for water boards

21. WRC

22. WRC STRATEGIC INTENT • The WRC serves as SA’s water-centred knowledge hub providing the nation with knowledge for sustaining its most precious resource, water. • The WRCs strategy for knowledge creation and its research portfolio is underpinned 4 main key strategic areas: • Water resource management • Water linked ecosystem • Water use and waste management • Water utilisation in agriculture

23. TCTA

24. TCTA Strategic Objectives • Deliver to all mandates provided by the Minister, in accordance with specifications and within the agreed timelines and budget • Facilitate social transformation and build sustainable communities by providing jobs and empowerment • Operate the business projects and processes in a cost-effective manner, conscious of the imperatives of PFMA

25. TCTA Strategic Objectives cont. • Build the knowledge and capability of the organisation to generate lessons for project improvements, in pursuit of greater efficiencies in water delivery • Ensure the continuous availability of high-calibre human capital for delivering on organisational mission into the future, while remaining a value-adding agile entity.

26. TCTA contribution to government

27. Financial Model • Funding is off-Balance Sheet. • Funding relies only on implicit guarantees from Treasury (excluding Lesotho Highlands (LHWP), which is explicitly guaranteed) • All projects are ring-fenced, i.e. no cross-subsidisation is allowed • Debt repayment is funded through water tariffs, over 20 years • Costs of infrastructure reflected as asset until debt fully repaid, then handed back to DWS (LHWP – intangible asset – right of receipt of water – owned by Lesotho Highlands Development Authority)

28. Financial Model (cont….) Full cost recovery from water sold to end-users Constant tariff in real terms which increases with: Consumer Price Index annually Projects may need to increase borrowings in the first number of years after completion to maintain constant tariff Deficit is intended to ensure on-going affordability for end users; the deficit reverses after a few years, and is not related to TCTA’s feasibility as a going concern.

29. Overview of water sector entities budget Medium term budget

30. Overview of water sector staff establishment for 2016/17

31. [1]Disestablished –debt transferred to Sedibeng Water [2]Disestablished –debt transferred to Rand Water [3]Disestablished –debt transferred to Sedibeng Water Jobs created and Estimated 2014/15 and 2015/16

32. Debt owed to water boards by municipalities - end of Feb 2015

33. CONCLUSION • Water Boards have provided indicative targets and financial projections as their plans will only be submitted end of May 2015. • Cost recovery issues remain a challenge with negative impact on planning for 15/16 and beyond.