Municipal Water Infrastructure Grant

1. Municipal Water Infrastructure Grant The National Assembly and National Council of Provinces’ committees Briefing by the Department of Water Affairs --ooO0Ooo— Date: 5 March 2013

2. Contents • Background and Overview • Implementation Readiness • Challenges and risks • Conclusion

3. 1:Background and Overview • Interim/Intermediate Water Supply Programme (IIWSP) was initiated in 2012 by the minister as a recognition of the plight of the many people without services, particularly in rural areas. • Programme will initially focus on the 24 DM with the highest backlogs and therefore merge with the existing initiative to address 2014 water backlogs (will subsequently not be limited to the 23 DM and target un-serviced areas in all WSA) • Programme is initiated by the DWA as part of its leadership role in the water sector. • The programme will facilitate solutions and where possible provide direct support and funding in areas that are not covered by existing projects.

4. Need and overall challenge for IIWSP • There is a risk that the 2014 service delivery targets for basic services to all South Africans will not be met • Akey problem identified towards this target is not necessary funds but institutional capacity and effective planning. • The IIWSP was envisaged by DWA as a “Grant – in Kind”, where the DWA together with Water Boards and other sector partners can play a more direct role in assisting the WSA in overcoming their challenges . • A key part of the envisaged approach was to deploy experts and engineers and capacitate / enable them to introduce quick solutions where possible.

5. Aim / Purpose The purpose of this programme is not to duplicate other existing programmes or initiatives but to supplement them were 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”

6. Goals / Scope Goals: • 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. • 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.

7. Supplementary Goals 1) Maximise job creation: Strong emphasis must be placed on the development of jobs for the unskilled rural people through the implementation of the strategy. This should be done by: • Ensuring labour intensive construction methods are chosen • Ensuring that the interventions selected, have job creation as one of the key selection criteria. • Ensuring the direct involvement of the communities with regard to management of the water supply interventions. • Promoting the development of women co-operatives • Promote innovation, “back to basic” , indigenous technologies and new ideas: The processes adopted must allow for innovation, the adoption of indigenous appropriate solutions and the introduction of new successful ideas. This can be achieved through: • Research • Community involvement and participation • Through a media campaign / competition requesting submission of innovative ideas from the public and private sector.

8. Objectives of IIWSP The following key objectives of the IIWSP are identified : • Facilitate and ensure adequate planning & the development of B/P for each WSA that will ensure the provision of interim, intermediate water supply for all communities. • Facilitate the involvement of various stakeholders to support the WSAs in the implementation of various interventions. • Identify secure funds and support the implementation of various interim / intermediate interventions where there are gaps in the allocation of funds from existing programmes. • Assist the relevant WSAs to accelerate the implementation of various existing projects and interventions that are aimed at providing water supply services. • Identify and where possible provide additional training and support to ensure the sustainability and effective management of the various projects implemented

9. Def. Interim /Intermediate Water Supply intervention An interim / intermediate water supply intervention is a intervention that will ensure a minimum interim water supply and can be any of the following: • New water supply infrastructure that can be subsequently upgraded to supply a minimum of basic water supply. • A temporary water supply system that does not involve fixed infrastructure belonging to the Water Service Provider (i.e. roof rain tanks, etc) • Any appropriate intervention that repairs or re-commission dysfunctional existing infrastructure or water resources to supply a minimum interim water supply. • The acceleration of planned infrastructure projects to supply basic water. • A water supply system that makes use of the most optimal existing and localized water resources and can be developed and commissioned within a period of twelve months in order to provide a minimum interim water supply. (This can include local boreholes, streams or single purpose dams been converted into multi-purpose dams )

10. Cost of Water supply (all WSA) 24 priority DM are R 21 billion

11. SCOPING Basic Water Needs 23 DM • Not accurate, still updated (ie EC, O&M 0% )

12. Categories of needs in 24 priority DMs Can be subdivided as follows: - 15% WC/WDM -13.2% refurbishment

13. Approval of MWIG by National Treasury • As part of the IIWSP , the DWA motivated to NT the approval of funds based on a holistic need assessment. • The NT had informed the DWA in Dec 2012 that a new Grant has been approved to fund the IIWSP, referred to as the Municipal Water Infrastructure Grant (MWIG) with a 4,3 Billion for the 2013 MTEF • Grant was approved as a schedule 5 Part B; Specific purpose allocations to municipalities and not as a Schedule 6 Part B : Allocations-in-kind to municipalities for designated special programmes . • The decision to make MWIG a schedule 5 instead of schedule 6, could affect the purpose, aims and performance of the IIWSP. • DWA has engaged NT to try and change the schedule but this has not been successful- The intension is to try and change it if possible during 2014.

14. Linkages between IIWSP - MWIG • IIWSP – Interim, Intermediate Water Supply Programmes – Developed by DWA • MWIG – Municipal Water Infrastructure Grant – name used by National Treasury

15. Link between IIWSP / MWIG MWIG will fund the IIWSP, IIWSP is a bigger programme that will try and secure additional funds and bridge the planning between the different Grans and programmes

16. 2: Implementation readiness • Consultation, corporate governance • Governance • Programme Management • Planning • Financial Allocation • Delivery models

17. 2.1 Meeting Minister with Mayors (24 DM) Minister met with Mayors and Provincial MECs in the 24 DM areas on the 13 August 2012 IIWSP was communicated and well received by the DM representatives Commitment to prioritise and work closely secured Some comments raised by the DM unauthorized/ illegal connections to be addressed (lack of capacity relating to monitoring and control to be looked at); Bore hole water is not preferred and is not reliable problems in connection with water sources and infrastructure that does not serve poor communities lack of funding to pay for water tankers to be addressed Lack of funding for operations ad maintenance (O&M) MIG grants not being used properly by local municipalities hampers service delivery – this must be addressed; institutional arrangements and models to cross-subsidise to address O&M to be looked at; Comments considered and taken forward in the DCoG\DWA working group

18. DCoG/ WSA/DWA Collaboration Minister of CoGTA and Minister DWA set up a joint programme in May 2012 to strengthen partnership between DWA and DCoG towards accelerating access to water services High level task team with dedicated working groups established with representatives from both DCoG and DWA and other relevant stakeholders Terms of Reference and work plan for Working Group: Accelerated water services delivery and high risk areas developed Links between the IIWSP / MWIG and broader basic water supply programme identified Membership of Working Group to be extended to Technical Directors of the 24 DMs with first meeting scheduled for 8 March 2013 Intensive planning activities lead by DWA over the last six month in direct and constant consultation with all relevant WSA

19. 2.2 Governance, tools and guidelines • MWIG Framework finalised setting out: Responsibilities; Process for approval; Purpose; Outcome and Outputs; Conditions; • Comprehensive IIWSP strategy / implementation plan developed. • Various guidelines developed • Term contracts for the procurement of bore-holes and planning PSP developed. • Business Plan templates developed. • Terms of reference for provincial co-ordination planning committees developed

20. Conditions specified in framework • All receiving municipalities will be required to conclude formal agreements with the Department of Water Affairs (DWA) prior to implementation of the project(s) DWA has standard agreements for RBIG that it will adopt for MWIG: - Apr 13 • Projects to be identified by municipalities and must form part of the Integrated Development Plan (IDP) and Water Services Development Plan (WSDP) of the relevant municipality DWA Planning progress is directly linked to WSDP process of WSA. Identification of project to be completed by March 2104, Inclusion of all projects in municipal B/P and WSDP by Sep 2013 • A technical team comprised of DWA, Department of Cooperative Governance (DCoG), Water Boards, WSA, and MISA must approve all designs and interventions of any project to be funded where the cost of the project is in excess of R20 million DWA has approved the provision of additional support from Umgeni Water, and will also make use of capacity within the infrastructure unit

21. Conditions specified in framework • Projects must have suitably approved technical reports before funds can be transferred Assessment guidelines have been developed. • DWA must be part of the adjudication panel for the appointment of contractors A workshop with guidelines will be held within DWA by Apr 2013, to train officials on key issues in assessing tenders • If a WSA is deemed not to have adequate capacity, projects must be implemented and managed by Water Boards or through alternative service providers appointed after agreement with the National Treasury Water Boards have been briefed, shareholders agreements are in the process of been changed - Jul 13

22. Conditions specified in framework • Where necessary DWA in consultation with the WSA must facilitate service level agreements for the appointment of Water Boards as service providers to operate and manage the water supply once the project is completed, on behalf of the WSA. Standard service level agreements are available • Ensure adequate consumer and community participation, involvement and education for each project Existing Communication /awareness material by DWA will be revised and made available to WSA by Apr 13 • If a project is to provide water services to rural communities consideration and priority must be given to establishing a Community Based organisation (CBO) to manage or assist with the management of the water supply after the project is completed Involvement of WRC who developed a rural water supply strategy to assist with guidelines

23. Conditions specified in framework • The WSA must ensure that the project is sustainable and remains functional after the project is completed and is supported by means of an asset management plan Feasibility and business Plan assessment guidelines include O & M plan and are available. (from RBIG) • All projects having an impact on water resources must be aligned with any relevant water resource planning study and strategy developed or adopted by DWA Water Resource Planning is required to sign off any related feasibility study

24. Additional conditions • Funds will only be transferred by the Department of Water Affairs (DWA) for work undertaken or implemented. Will be made part of agreement, specific conditions will vary from project to project • Projects must be part of an overall commitment by the Water Services Authority (WSA) on how to eradicate all water supply backlogs in their area of supply. Holistic Business plans for each WSA will be developed in conjunction with MISA and WSA, (guidelines developed, pilot is currently been developed- Sep 13 • When the Implementing Agent is a Water Board or any other service provider besides the WSA, the IA must maintain and operate the completed infrastructure on behalf of the WSA for a minimum period of two years or until the municipality has capacity and resources to manage and operate effectively and efficiently Condition included in standard agreements, to be reviewed and discussed on project by project basis, is also part of the technical evaluation criteria .

25. 2.3 Programme Management, capacity (progress) • National Task Team established • National Steering committee established • Provincial Planning committees are merging with RBIG / ACIP committees (ToR revised) • DWA National and Provincial Programme managers appointed. • Planning support contract appointed. • Additional support contract approved. (Umgeni Water) • Commitment to support from Water Boards secured (in principle )

26. Programme management unit

27. Involvement of Water Boards Commitment from Water Boards to assist in roll out of programme obtained Proposed role discussed / agreed with Water Boards Assist in developing consolidated BP for each of the 24 priority DMs Contribute to the funding of various initiatives of the Interim and Intermediate programme. Assist the DWA in the overall management of the programme Become Implementing Agents where possible . Strive to become the WSP for the operation of failing Water supply schemes particularly in rural and weak municipalities. Develop in-house capacity / expertise with regards to rural water supply / supply of water services. Shareholders agreement of Water Boards currently been modified to include programme as key performance indicator. Next step is to define direct involvement of each Water Board for the programme

28. Involvement of Water Boards (motive) The aim is to change the existing paradigm and role of Water Boards and make them more directly involved in assisting WSA and municipalities in service delivery objectives. Water Boards , are effectively an extension of government and they need to play a more proactive role in assisting the DWA and the water sector Water Boards have some water sector expertise which we need to maximise the use of . To ensure that Water Boards raise to the challenge, we need to give them adequate mandate and they need to do things differently from the past.

29. 2.4 Planning Progress Step 1 completed, Step 2 about to be completed – March 2013 29

31. Progress Planning (contd) Step 1: Each settlement has been categorised according to a specific need requirement in the following priority classes in the 24 DMs (comprehensive reports have been developed and verified with WSA): Class 1: Communities having no formal Water Infrastructure. Class 2: Communities requiring extension to existing infrastructure Class 3: Communities with Access to infrastructure but no access to water because of functionality problems. Class 4: Communities with access to infrastructure but no access to water because of source problems. Step 2: Proposed projects and actions for the short medium and long term to address specific intervention requirements for each settlement or group to be finalised end March 2013.

32. Implementation Plan

33. 2.5 Financial allocations • Budget allocations are as follows: • 2013/14 – R 602 million • 2014/15 – R 1059 million • 2015/16 – R 2671 million • Total R 4 333 million • Initial budget allocations done according to needs ( not projects) • Budget allocations are indicated and published in DORA according to WSA and according to LM. (2 lists), (see annexure A) • It is envisaged once the planning has been finalised in the next few months budget allocations will be adjusted accordingly)

34. Initial Budget summary

35. Cash flow Cash flow projections takes into account that considerable planning still needs to take place in the first few months

36. 2.6: IIWSP Implementation models /partners WSA as IA WSA as IA assisted by Key stakeholder , (i.e DWA construction, Water Board, DM) Water Boards – Through Service Level Agreements (long term) Water Boards as Implementing Agents Water User Association (particularly in farming communities) NGO DWA infrastructure unit (construction) DWA Regional office, through project management support and support through the RRU Note: WSA must always play a key role irrespective of model 36

37. 3: Challenges and risks

38. Conclusion • DWA has already carried out a lot of work in preparation for the IIWSP and MWIG. • Considerable more work needs to be done before actual construction takes place. • The greatest risk is related to the fact that MWIG is now schedule 5 but it was initially conceptualised as a schedule 6 (Grant-in kind) • It is anticipated that some projects can start implementation within the next 3 months. • DWA together with other key stakeholders is ready to start implementation of the new programme.

39. End