Bucket Eradication & War on Leaks: DWS & Rand Water inputs; with the Minister

Meeting report

The Chairperson said the Committee made it very clear at the beginning of the 2018/19 financial year that this budget was an ‘election budget’, i.e. that service delivery was a priority. The experiences of the past few years did not attest to that. The Department, when appearing before the Committee, did not give the real story and officials have not been held to account, because it was illegal to lie to Parliament.  He talked to the difficulties some rural communities had to endure over the December holidays because of water shortages and ideally there should be complete cooperation with the Department of Cooperative Governance and Traditional Affairs (COGTA) on service delivery issues.  He referred to the unmonitored tariff structures and said communities are at the mercy of municipalities.

The Bucket Eradication Programme (BEP) has a budget of approximately R579 million and there was an expectation that the money would be spent before year end and the programme would be concluded. The War on Leaks Programme dated back to 2015 and it “zigzagged” since its inception.  Initially the programme featured nowhere in the Department’s Annual Performance Plan (APP), then it moved to Programme 1 and was currently under Programme 3. There were questions on where the budget for the programme will be from and the Committee needed assurance that the project will also be concluded.  He said he met with two companies that indicated that they had the technologies to detect leakages and are keen to train the water engineers. Mining houses are equally very keen to assist, but were also clear that they would not be giving monies to municipalities.

The Chairperson welcomed the Minister, Mr Gugile Nkwinti.

War on Leaks

Ms Ndileka Mohapi, Chief Director, DWS, said it was determined that water losses cost the country closed to R7.2 billion with a 37% average loss of water in 2012. In some rural municipalities with aged and dilapidated infrastructure losses could be as high as 80%. Slide 4 of the presentation indicated a map of water losses in 2015 and it showed the municipalities where losses averaged above 50% are mostly rural areas.

The objective of the project was to train and develop 15 000 unemployed youth citizens to be water agents, artisans and plumbers. The aim was to embed a water conservation culture and advocacy across all municipalities, communities and households through stakeholder and communication campaigns. Water boards were consulted to solicit their input in the strategic approach for addressing the high water losses. The planned project was to be funded with the revenue collected, but this has since been changed by National Treasury.

An advert was sent out in 2015 to recruit the 3 000 learners for the phase 1 intake. In 2016 letters were written to all the Premiers inviting them to be partners in the project and 7 467 learners were recruited for phase 2 in July 2016 in consultation with the provinces.  Slides 12-15 outlined the status of the learners under each of the qualifications with workplace learning placement at 92%. Slides 16-17 talked to the budget allocations to Rand Water and the Energy and Water Sector Education and Training Authority (EWSETA) that was approximately R2.1 billion each over five years.

A technical task team has been established to look into the permanent placement of the learners that have completed their training. The task team has been engaging the South African National Defence Force (SANDF), the Water Research Commission (WRC), directorates within DWS, and investigating the possibilities of addressing leakages in government buildings in partnership with the Department of Public Works (DPW).

Discussion

Mr D Mnguni (ANC) referred to municipalities that run similar projects and he asked what was done to ensure alignment and to avoid duplication. He asked how much the budget was and where the budget was located. He said he tried to make contact with Ms Mohapi in early January with no success when learners contacted MPs to enquire about unpaid stipends in December. He asked what the plan on placement was when these learners were being trained, because Members of the Committee are being approached by learners. He asked where the private partnerships are, because the Committee did indicate to the Department after its Rustenburg visit about possible assistance.

The Chairperson reminded Members that EWSETA submitted an apology for the meeting and said it would have been good if the Department’s submission could have been augmented by the SETA and Rand Water (present in the meeting).

Ms Tshidi Hashatse, Chairperson, Rand Water, said Rand Water sent its submission to the Department and assumed that it would have been incorporated, but would be happy to supplement answers where needed.

Dr D Kabini (ANC) said it was a good programme, but delivery and output was problematic. The Department cannot keep training people without the necessary research that showed where these learners would be placed. He referred to the non-payment asked for clarity around the difficulty in paying people for the work they have done.  

Ms M Khawula (EFF) asked if the plastic taps were reparable and how much a steel tap costs. People are unemployed and have to buy these expensive taps. People did not benefit from the artisans – people were being trained with no prospects for permanent employment. These artisans are not used properly, because leaks are wrongly fixed and people ended up owing up to R25 000 in water bills. She asked why these artisans are not being permanently employed. She also thanked Mr Mnguni for highlighting the non-payment of the artisans based in Durban. Meter readers just guessed or estimated the reading and these meters are also leaking. Why are these meter readings at night? Different bills are issued for the same house and she asked why the municipalities are not being involved.

Mr R Hugo (DA) asked if the Department still owed implementing agents such as Rand Water and EWSETA. He asked if this programme should still reside with DWS, because of the issues of irregular and wasteful expenditure raised by the Auditor-General (AG). It seemed the project veered off its objectives of placing artisans at municipalities and he asked if the project should not be moved to COGTA.

The Chairperson asked if there were terms connected to the training, because artisans can be poached. He asked whether the estimated R7.2 billion loss has changed and whether the Department had a current figure. He asked for more clarity on the modelling of the funding for such a project and whether the initial plan of revenue collection talked to the work done in terms of targeted minimising water losses. He referred to the trade tests and asked if that person would be a ‘free agent’ after passing and what the future plans were in terms of budget.

Ms. Nthabiseng Fundakubi, COO, DWS, admitted that there was a delay in payment of stipends in December, but all payments are currently up to date. Going forward, the team was committed to completing the project with students achieving the agreed upon qualifications. The projected budget for this financial year was R572.6 million. The programme moved to Programme 3 with the intention that the budget will come from operations and maintenance. There was a discussion between DWS and Rand Water and Treasury was consulted and referred DWS to COGTA. Initially funding was earmarked to come from surplus revenue, but Treasury advised that it could not be done.

 On the involvement of municipalities, Ms Mohapi replied that communications during phase 2 tried to correct that through the provinces. Provinces identified the municipalities in need of assistance. It was already picked up during phase 1 when trying to place learners that some municipalities did not want to take the learners because they were not from that particular area. Unfortunately there have been challenges despite changing the approach. The aim was now to involve the Municipal Infrastructure Support Agent (MISA) and COGTA. Some municipalities did not even have the resources such as vehicles to take learners to the problem areas where the leaks are and some problem areas are way beyond the scope of this project.

Steel taps cost about R100 and plastic approximately R66 and it was unlikely that plastic taps can be fixed and should be replaced. Ms Khawula raised issues related to operations at municipal level. In some instances municipalities have not been upfront in indicating that they have been training learners on leaks. These were picked up on TV because it was labelled as processes of the Department. DWS was not in a position to account on solo initiatives by municipalities.  

Ms Mohapi apologised and said she did not have Mr Mnguni’s telephone number and was not avoiding members. She said she did not answer numbers she did not know because of some of the abusive language people have used. In terms of planning, she said phase 3 cannot continue in the same way as the previous phases. DPW was the custodian of most government buildings and the private companies would come up with the technologies that would assist in detecting leakages and assist in training learners; and engagement with mining houses are invited.

DWS Acting CFO said on the funding of the programme, the Department during the budget speech last year indicated accruals and payables to the value of R2 billion that included ‘War on Leaks’ invoices. The commitment during that budget process was that the Department would reprioritise the budget in order to meet its obligations. The biggest challenge was that the programme started when there were already multi-year commitments made. DWS approached Parliament via Treasury requesting virements and Parliament approved R405 million to be moved from Programmes 1, 2 and 4. Treasury however did not recommend the virement of savings (projected at R140 million). The programme was moved to Programme 3 (Infrastructure) where the bulk of the budget was earmarked and funds could not be unlocked to augment the deficit after applying the virements resulting in over spending on goods and services under Programme 3. There was correspondence between DWS and Treasury on how the commitments should be dealt with. Payments are in the process of being approved, but there are inherent challenges that the budget surplus was locked in some of the grants.  The Department was reviewing its priorities for the 2019/20 financial year to make provision for the required R245 million to conclude the phases.

The Chairperson said it was essentially an unfunded mandate.

Ms N Bilankulu (ANC) said Ms Mohapi’s explanation that if she did not know a telephone number she did not respond did not sit well with her. She occupied a high position and rejected calls regardless of the urgency of matters. She said she also tried to contact officials in December with no response. She asked why the Department preferred plastic taps that are not repairable – there was a R34 difference between steel taps that lasted longer and plastic taps that had to be replaced often.

Ms Khawula referred to an area in ILanga where the taps are always leaking; there was no water, but there was a dam nearby. This has been happening since 2017 and she asked where these artisans were to fix the taps and pipes. In ward 100 in Section K in Umlazi pipes are leaking and people have no water. In ward 54 she has been reporting this and there was also an open manhole and even though it has been repaired it has never been closed. These artisans did this intentionally so that they can be called to do the job over and over.   

Mr Mnguni said he wanted to hear from Rand Water. He referred to the conditions of recruitment and said MPs are being approached when the Department did not honour those conditions.

Ms Tshidi Hashatse, Chairperson, Rand Water, said a number of the questions talked to the needs analysis of the programme. She referred to the water losses and the cost to the fiscus and said it was in part caused by a lack of skills in the sector; as well as vacant critical positions. Other causes included aging infrastructure, the condition of infrastructure, the lack of maintenance of   infrastructure, and the operational problems at municipal level.  Most of the water losses happened in the municipal system. The need was overwhelming and leaks needed to be addressed through skills. Many of the municipalities where the losses are the worst also head the least technical capability.  If water losses are mapped throughout the country, it showed that the phase 2 recruitment targeted learners from areas with the most water losses. Unfortunately most municipalities where the need was greatest are unable to place learners for work place based training citing a lack of resources. The long term plan was that those municipalities would employ qualified learners eventually to capacitate departments with technical capabilities.  The participation of COGTA with the municipalities was critical to solve this issue.

She said there were some problems with paying stipends towards the end of last year, because Rand Water also struggled to get payments. At some point Rand Water had to make payments on behalf of the Department  and Rand Water was currently owed just over R200 million. The technical task team was set up to address the placement issues.

Mr Sipho Masande, CEO, Rand Water, said Rand Water’s role included that of stakeholder engagement and has engaged COGTA and the municipalities extensively to ensure placement. He explained that Rand Water was not able to make payments, because it was also not being paid and had to “rob Peter to pay Paul” to pay students and service providers. There has been engagement with Treasury to see if the debt owed to Rand Water can be offset with the raw water tariff Rand Water paid the Department – awaiting feedback from Treasury.

The Chairperson asked what it would take for the Department to engage with COGTA.

The Minister said after the meeting between officials and Treasury, this matter was discussed with the National Treasury Director-General. He said the DG was opposed to budgeted funds for vacant posts being used for this project and he agreed. He said he had already asked the Department for a briefing on the vacant posts, because it was clear at SCOPA that there was money to fill posts, but it was not happening. It was also agreed that the programme could not be stopped, because over R2 billion had already been spent and it would be deemed fruitless and wasteful expenditure. It was established that it should be regularised for the next financial year and a joint memorandum should be drafted to formalise the agreement. The aim was to not compromise Treasury, because a joint technical team was established with Treasury to correct all the financial problems. The approval of the memorandum by Cabinet was awaited on how the money would be spent.

He said some Members are asking the Department to do things that, in terms of the model and the law did not belong to the Department. Leaking pipes and taps are the responsibility of water services authorities which are municipalities – local or district. DWS was the custodian of water and was responsible for bulk infrastructure. The reticulation and distribution are the responsibilities of municipalities in terms of the delivery model.  This was the reason there will be a meeting with water service authorities the coming Friday to get support that, although it would take time to amend the Water Services Act, DWS should be allowed to work with municipalities. Regional Bulk Infrastructure Grants from Treasury went straight to municipalities and the Department did not even have the authority to make them account for the money. It was a big challenge in terms of the model of water services delivery.  DWS did have some authority in terms of Schedule 6B and that can be leveraged and used, but an agreement with these authorities was the main approach the Department was adopting. This happened in Giyani where an agreement with the District Municipality to work together to build the pipeline and reservoir. He said he has proposed to the President in writing to be allowed to extend the definition of ‘bulk’ to include bulk pipeline, reservoir and waste water treatment works.

Rand Water gave Emfuleni four technical people to operate and maintain its infrastructure. It did not last and those people were not there now. As a result operations and maintenance at Emfuleni was “dololo”. It was a big case for ‘War on Leaks’ and this will be discussed on Friday to reach an agreement to get the trainees to do the work sorely needed. COGTA will have a big role and the President announced in the House the establishment of an intergovernmental rapid response technical team during the SONA. It was a DWS proposal in order to deal with the model weaknesses. The Department also proposed that MISA should be the financial manager in terms if the Regional Bulk Infrastructure Grants and MISA proposed that the Department of Public Service and Administration (DPSA) would be ideal as project manager. This was what was now happenening in Giyani where the construction unit was being used with the intention of continuing to use the unit as to save costs and to be able to run expansive projects across the country rather than a few municipalities. The water boards will have a big role to play as implementing agents.

Mr Basson said even before the Minister became responsible for water and sanitation, the Committee had had numerous discussions with the Department. This project did not fit with water and sanitation and should be managed, controlled and implemented by COGTA. DWS had no influence in terms of municipal infrastructure, but COGTA did. There was no evidence that the R2 billion spent on trainees brought down water losses from R7 billion to a lower amount – it might even have increased. Even if those people are eventually placed they will sit in municipal offices doing nothing, because municipalities did not have the money to fix infrastructure. COGTA should be making money available and ensure it goes to infrastructure to rectify water reticulation. This was a political decision by the previous President just before the elections. He asked if the training should not be stopped and rather use the money for placement and ensures the infrastructure can be fixed. For the last three financial years COGTA had R15 billion in unspent budget and it was a losing battle if the infrastructure cannot be fixed. As an example he said in Madibeng a new plant was being built where water losses were reported at 70% to the previous Minister, but 70% of the additional 20 mega litres are also going down the drain, because the infrastructure was rotten. This was a countrywide problem. Government did well with the training, but people are not being utilised.

The Chairperson said mining houses said, during the Rustenburg visit, they would not be assisting in the building of any new plants, but they will assist in maintain infrastructure by saving on loss of water. They would also not be giving money, but would bring engineers. A cellphone network provider and a beverage company have indicated on their ability and willingness to train water engineers and could even assist with early detection of infrastructure leaks. That could mean a remodelling of the business proposition. COGTA has a programme that talked to 10% of every municipal budget based on maintenance. He said he had a letter from a service provider that mentioned maintenance and repair of operational water infrastructure throughout the country. He mentioned partners such as COGTA, DPW and the private sector the Department should be involved in.

The Minister said the Department made a concession before the House that the programme was introduced incorrectly and the R2.6 billion spent should never have happened according to the model.  The programme was there and there was only one group to finalise the training and the programme will conclude. DWS agreed with Members, but had to take ‘the reality on the ground’ into consideration. The President has publically announced on the principle of involving the private sector. He said he had been approached during the investment period by private companies led by the Black Business Council (BBC) and they preferred DPSA as the programme manager. COGTA has a team of technical professional as did the Department and that team was working on the document presented to the Minister as a proposal from private sector companies where they also mentioned their preference to DPSA as the project manager. He said he approached COGTA Minister, Mr Zweli Mkhize to lead the programme and confirmed that he was working closely with the COGTA Minister. Private sector companies trusted DPSA because of its longstanding history of infrastructure development and that was why the proposal included that and MISA as the financial manager and DPSA the construction manager.

The Chairperson said it was a work in progress and the Committee expected to get periodical reports.

Bucket Eradication

Mr Andre van der Walt, Chief Director: Sanitation, DWS, said BEP targeted four provinces (Eastern Cape, North West, Free State and Northern Cape), i.e. 52 000 households with the highest backlogs in using bucket toilets in formalised areas. He gave a comprehensive overview of the status of the remaining projects, the technical challenges and plans going forward (see presentation attached).

Most of the work will be done in the Free State with an estimated budget of R348 million to complete the project in the province; with an estimated budget of R40 million for the Northern Cape for bulk infrastructure. The budget for the remaining internal reticulation was estimated at R58 million for both provinces.  If Treasury was satisfied with the Department’s commitment to the project, a request for budget rollover will be considered.

Discussion

The Chairperson expressed hope that the goal post will no longer be shifted with this project. Sanitation was dignity and he said the only people affected by bucket toilets are African people.

Mr Basson said he wanted to congratulate the Minister for using the construction unit that has been doing nothing for the last few years and if it was done right, it would save the country a lot of money.

Dr Kabini asked if the model the Minister mentioned was applicable to this project. If so, he suggested it should be used.

The Minister confirmed that it was and he said it was important to get the steering committee from the communities going, because community involvement was critical for the model. It was not easy to do in terms of the 51%, 30% and 19% budget policy speech and therefore professional service providers should come in where there was a shortage in capacity. The steering committee should be a community-based oversight committee. Part of the work being done in Clanwilliam had an initial budget of R300 million, but the operating budget was R175 million – almost a 50% reduction and the Department was guardedly excited about the progress being made. He mentioned that 33 people have just been employed there and another 80 could have been employed already if procurement processes were faster.

Dr Kabini asked why these processes were so slow.

The Minister said he met with his team a couple of days ago to address this. He outlined the seven steps of the procurement process and said he wanted to ensure for future that if there was a delay in any level of the value chain, it would be clear where the blockages were, because it killed progress. Not everyone in the Department was happy with the revitalisation of the construction unit – wanting to outsource instead.

Mr Basson agreed that people in the Department made commitments prior to the Minister’s appointment that construction would die and the work would be outsourced.  He asked that the Minister really address these blockages.

The Chairperson also referred to the slow processes and said a water use license took 300 days with no responses as to why the process took that long.

The Minister said he was establishing a water use licence application committee to be chaired by the Deputy President and all provinces will submit to that committee. The committee will not only look at the numbers, but at transformation as well focusing on emerging farmers.

The Committee Secretary said the Presidency has approached the Committees of Water and Sanitation; Agriculture; and Rural Development and Land Reform to  participate in a roundtable discussion the following Wednesday. The details of that session will be communicated during the course of the day.

The meeting was adjourned.