Impact of SONA on the Water and Sanitation sector; with Minister

Meeting report

The Chairperson welcomed Members. He noted that they had recently attended the National Water and Sanitation Summit. The information gleaned there would assist them in holding the executive accountable in terms of decisions arising from the summit.

He asked Members to be conscious of time throughout the meeting’s proceedings.

He noted an apology from the Deputy Minister for not attending the meeting and one from Mr G Hendricks (Al Jama-ah) who said he would be departing early to attend a meeting with the Minister of Finance.

The Chairperson invited the Department of Water and Sanitation (DWS) to make its presentation.

Implications of the State of the Nation Address

Dr Sean Phillips, Director-General (DG), DWS, outlined issues raised in the State of the Nation Address (SONA) that the Department aimed to address. These were:

- Strengthening support for municipalities’ water and sanitation services. 

- Faster processing of water use licences.

- Establishment of the National Water Resources Infrastructure Agency (NWRIA).

 - Improving water quality by means of the Green Drop and Blue Drop certification programmes.

- The Umzimvubu water project. 

Strengthening support to municipalities 

Dr Phillips referred to section 10 of the Constitution which said that everyone had the right to have their dignity protected. The Department had a constitutional mandate to support municipalities in ensuring that this right was protected by making water and sanitation more readily accessible. 

There was a pressing need to develop robust intervention channels within the legislative framework to achieve the progressive realisation of the right to water and sanitation.

The Department aimed to strengthen municipal support and intervention in non-compliant municipalities to combat water pollution and maintain water and sanitation standards which were on a par with international standards.

It was important to develop fiscal mechanisms that would allow for cohesive interventions in cases where there was municipal failure. The Department aimed to develop self-sustaining water and sanitation services for indigent communities.

Past interventions had not been effective in addressing water and sanitation failures. The legal framework did allow the Minister to enact longer term water and sanitation interventions. Such interventions would also allow for private sector participation over a longer term.

The Department aimed to strengthen the role and responsibility of water boards where municipalities had failed to provide water and sanitation services. Addressing the failures would require a coordinated effort by the Department, the SA Local Government Association (SALGA), the Department of Cooperative Governance and Traditional Affairs (COGTA) and the National Treasury. 

DG Phillips stated that the Department would use its internal construction capacity to address urgent intervention needs. 

Water use licences and applications

Mr Leonardo Manus, Chief Director: Infrastructure Operations & Maintenance, DWS, reported that the Department aimed to reduce the turnover time for water use licence applications to 90 days to meet the requirements of the National Water Act. 

He provided background information on the processes involved, stating that the authorisations required scientific inquiries to ensure that all the water quality requirements had been met.

The Department was not permitted to receive incomplete applications, as full information was necessary to complete the water use assessment processes. However, there had been efforts to address a lack of capacity and develop a more uniform structure to speed up the application process.

The Department aimed to complete the processing of current applications by June. This would allow it to implement the new streamlined process with the next batch of applications.

Establishment of the National Water Resources Infrastructure Agency (NWRIA)

Dr Phillips said that the economy required the development of mega water resource infrastructure in addition to the effective operation and maintenance of existing assets.

There was a financial imperative to establish the NWRIA. The Department did not have the capacity to adequately raise funds for the mega projects, whereas the NWRIA would be better poised to raise funds. The Department was constrained in raising loan financing, but the NWRIA would be able to raise funds independently once it had developed a good credit rating.

The current value of South Africa’s water assets amounted to R93 billion. 

Dr Phillips distinguished the role of the NWRIA from that of the Trans-Caledon Tunnel Authority (TCTA). The TCTA would be responsible for inquiring and identifying where there was a need for an infrastructure project, whereas it was envisioned that the NWRIA would be responsible for raising the funds for the identified project. The NWRA would also be poised to undertake public/private partnerships.

The draft business plan had been submitted to the Treasury and needed to be approved by the Minister of Finance and the Minister of Water and Sanitation. The Department was currently in the process of meeting all the procedural requirements. 

Green Drop and Blue Drop certification programmes

Mr Manus told the committee that sanitation-related deaths in Delmas had prompted the development of a more proactive water quality assessment mechanism. The aim was to identify the risk of complacency and decreased water quality before it arose. The water safety plan was the first in the world to incorporate risk management in wastewater.

The Green Drop water report would be released on March 22 and would provide an audit report for all 995 wastewater systems assessed. The 2022 Blue Drop progress report would also be released on that date. It would cover 1 248 water supply systems.

Umzimvubu project

Mr Manus told the Committee that the Mzimvubu catchment area in the Eastern Cape was in one of the poorest regions of the country. The Department aimed to increase social upliftment in the area in tandem with the National Development Plan. The Mzivmvubu Water Project comprised two multi-purpose dams on the Tsitsa River to provide economic stimulation through irrigation and potential hydroelectric energy production.

The project involved four stages. It was anticipated that the Ntabelanga Dam would be the highest in the country with hydroelectric potential.

The Department had become involved in a payment dispute with a service provider which had been appointed in 2015. With the intervention of the Engineering Council of South Africa, it concluded an arbitration agreement to terminate the contract in 2019.

The project had been estimated to cost about R14 billion which was to be raised by the TCTA. However, the TCTA found it difficult to raise funding in the area, as there was insufficient commercial interest. This led the Minister to reimagine the implantation of the project to make it more commercially viable with the specific aim of finding alternative funding.

The project had halted due to funding difficulty, but the Department had in the meantime embarked on upgrading the roads leading to the area. 

Discussion

The Chairperson thanked the Department for their presentation.

Mr G Hendricks (Al Jama-ah) asked whether the Minister and the Department had considered the principle of zero-based budgeting, as suggested by the President. He commented that the Department seemed to be a ‘sitting duck’ when it came to providing water in drought-stricken areas. He said the Department was unprepared for a drought disaster, referring to slow intervention in the Eastern Cape’s drought-stricken regions.

Ms M Mohlala (EFF) asked a general question about the Department’s presentation. She wanted to know who had been responsible for providing information to the Office of the President, as she felt that the information in the SONA pertaining to Water and Sanitation was a repetition of the information from previous years. There was no real engagement with what had been achieved and minimal context was provided on why previous goals had not been reached. Reciting a wish list did little to address serious water concerns.

Ms Mohlala referred to social media coverage of the National Water and Sanitation Summit. She felt that there was a deafening silence on how systematic mismanagement and corruption had hindered the work of the Department. Without addressing these issues, the value of attaining targets was diminished.

Although the Department spoke about public/private partnerships and how it aimed to raise funds for its projects, the Department did not address infrastructure maintenance and how it aimed to protect and invigorate existing infrastructure.

She lamented that the Blue Drop and Green Drop projects had been used as loose terminology with no real meaning or consciousness of how the project could be used to uplift the lives of people.

She stated that more needed to be done to build ecological infrastructure reserves, highlighting the importance of the green economy in mitigating the impact of global warming, while improving the lives of citizens.

Ms G Tseke (ANC) raised a point of order, with which the Chairperson agreed, that Ms Mohlala’s comments went beyond the presentation and addressed other matters arising from the SONA. 

Ms Tseke asked the Chairperson to give Members a time limit to better allow for cohesion and so that all the Members could raise concerns arising from the presentation.

Ms Mohlala continued and referred to slide 6 of the presentation dealing with constitutional and legal imperatives. She asked which organs in the Department were responsible for implementing schedule four of the Constitution, as this was a matter of concurrent provincial and national competence. She stated that the implementation of concurrent competence through the District Development Model had been particularly weak.

She asked how the Department aimed to support municipalities to build not only their water infrastructure but also human capital to be better able to deliver water and sanitation services. Municipalities needed to be equipped to be able to improve water quality at a local level.

Referring to slide 7, she asked for more information on the tools the Department was providing to ensure that municipalities and local governments could be self-sustaining in providing water and sanitation services.

How would good governance be promoted and how extensive would private sector investment be?

She referred to slide 9 as being high-level and complex. She asked whether the Department had established workstreams with the National Treasury and SALGA on how it intended to broaden the scale and reach of the water boards to take over operations and wastewater management for the next ten years.

Ms Mohlala said she found the information provided on slide 27 puzzling. The implementation of the electronic water use licence application and authorisation system was introduced in 2017, but it appeared from the presentation that the Department employed both a manual system and an electronic system, with the dominant modus operandi being a manual system. She noted that the Department was lagging in its implementation and asked whether the Department would be able to meet its February 2022 deadline. She asked the Department to provide a quarterly update on the backlog of water use licence applications and authorisations. She also asked the Department about the number of applications the water tribunal had upheld. Some applications which had been upheld had been disputed by affected parties, such as the Centre for Environmental Rights which argued that the issuing of the Khanyisa coal power station water use authorisation was procedurally flawed as it did not factor in climate change. She asked for more information on the issuing of new licences to new mining companies, considering climate change.

Mr L Basson (DA) agreed that water boards needed to assist municipalities. However, due to the financial difficulties they faced, municipalities were unable to run water purification plants in addition to waste management, which resulted in high water losses. How would the Department assist municipalities that were financially unsustainable? How could COGTA be incorporated to help municipalities access their equitable share of the national revenue?

Concerning the Mzimvubu Project and the establishment of the NWRIA, would the Department’s debt affect the NWRIA’s fundraising for the project?.

Mr Basson raised concerns about the Blue Drop report, stating that the end result should be clean drinking water. He asked whether water users were actually being failed if their water standards were not on a par with the Blue Drop certification programme.

Ms Tseke thanked the Department for the presentation. She noted that the SONA had been clear in presenting South Africa’s progress and challenges in water and sanitation. The need for greater accountability was highlighted in the address. The Department should explore how it could recover its debts. She also highlighted the role of municipalities in providing water and sanitation for the hospitality industry.

Ms Tseke referred to the Committees’ oversight visits in the Eastern Cape and noted that most of the projects that the Committee visited were operational and had made significant progress.

Ms Mohlala raised a point of order, stating that the purpose of the meeting was to hold the executive accountable by engaging with the presentation and asking questions about the implementation of the programmes. She felt that Ms Tseke was responding on behalf of the Department and not holding it accountable.

The Chairperson stated that Ms Tseke was not out of order.

Mr M Tseki (ANC) noted that the Department aimed to take over wastewater management. However, he felt that this was premature. The Department first had to consider consequence management. 

Too many water use licence applications were not completed within the 90-day period. What was being done to address this? It was important to first find out what the underlying issues were before embarking on a new undertaking.

He asked the Department to provide more information on revenue in rural areas.

How would the NWRIA raise loan capital, given the fact that it was a new entity? He felt that it was too good to be true that the NWRIA would be better at raising funds than the TCTA.

Mr Tseki said there were still cases of water-related illness in rural areas, and when people complained to the Department, they were told to boil water.

Ms N Sihlwayi (ANC) endorsed the SONA address. She said the Department's interventions required an innovative approach to meet the Constitutional mandate, especially in making water and sanitation more available in rural areas. Current interventions had been lacking. She voiced concern about the lack of skills in the water sector. It was difficult to address the issues around water and sanitation service delivery without providing the necessary skills.

Ms Sihlwayi said there was confusion about the progress of some of the projects. She highlighted cases where the issue was not water scarcity, but rather the financial capital to make the water accessible. She asked that the Department present the challenges more clearly so that more resources could be made available where possible. She stressed the need to highlight exactly what the problems were in the implementation of the programmes.

Ms Sihlwayi cited the example of a water project in the Sarah Baartman district that was stagnant. There was no clarity on what exactly the challenges were. She highlighted the rural nature of the water programmes. Better communication and coordination were required to ensure their success. 

Ms Sihlwayi asked for further information on institutional reform and how it could culminate in actual progress on the ground. The financial model needed to be refined so that it could streamline the implementation of water infrastructure projects to meet communities' needs.

The Chairperson asked Members to cooperate and keep a level mind in engaging with matters at hand, as the issues were both administrative and political.

He noted that Mr Hendricks’s meeting with the Minister of Finance was independent of the Committee’s work. He was meeting with the Minister on his own prerogative as a representative of Al Jama-ah.

The Chairperson noted that the Committee’s commitment to eradicating the bucket system still stood. 

He said he had visited the Mzimvubu road project. The road was still far from completion. He called on the Department to involve the private sector in the construction of the road and the water infrastructure project to ensure the success of the programme. He said he had found the response provided by the Department helpful.

Responses

The Minister of Water and Sanitation, Mr Senzo Mchunu, responded to Mr Hendricks’s question on zero-based budgeting. He said this had not begun to be observed at a national level yet and the Department could only follow what was being implemented at a national level.

The Minister referred to the Committee’s observations from oversight visits that the Department was ineffective in providing services. He asked for more clarity and gave an update on a project at Butterworth, saying other municipalities in the area would also benefit from the project.

The Minister informed Members that a presidential project in Mthatha had halted because of political instability in the municipality.

He said the Department agreed with the SONA and aligned itself with meeting the water issues that were addressed. This was evident in the DG’s presentation.

An unacceptable number of corruption allegations were being investigated. The Department aimed to strengthen these investigations and see them through to completion.

The Department had embarked on filling vacant posts. It had strengthened its procurement processes and would continue to do so.

The Department would collaborate with other departments. He cited collaborations with the Department of Forestry, Fisheries and the Environment and the Department of Human Settlements. This was necessary and ongoing work. 

The Minister noted Ms Mohlala’s comments on the green economy, stating that this would be explored further.

The Department had made site visits across all nine provinces to meet stakeholders and water authorities. These included business organisations in mining and agriculture. The Department was trying to understand what the general characterisation of water services was to ensure that needs were met and grievances were heard. The current model had revealed that the issue was not a lack of water per se, but rather issues in reticulation, where dams were full, but taps in the communities were dry. Water service providers and municipalities across the provinces unanimously agreed that they lacked capacity to meet the demand for water and sanitation.

Another issue was the fact that much of the infrastructure in place was ageing, which led to water loss. Therefore, there was a need to collaborate with COGTA. The Department had recently completed a partnership in Limpopo to develop a wastewater treatment plant. Cooperation and private/public partnerships would help in solving the capacity restraints and shouldering the financial burden of the projects.

The Minister agreed with Members that there needed to be legislation to increase the mandate and reach of water boards to enable them to be more effective. The Department aimed to increase the capacity of municipalities with the aid of water boards and private sector partnerships. He agreed that the interventions in failing municipalities must be done with due care and diligence, having engaged with the municipalities to learn what the issues were. 

The Department did not intend to take over municipal responsibilities in its interventions but intended to provide support hand-in-hand with the municipalities themselves. Interventions could entail pooling resources.  

The Minister said that the Department intended to meet with officials from the Tshwane Municipality to address the problems the Hammanskraal community was facing.

The Minister reported that when the Mzimvubu project was initiated in 2013, no budget was allocated to the project until 2014, when budget allocations were provided for the road infrastructure leading to the project. He understood Members' frustration with the delayed completion of the project. The Department had begun exploring other financing options. It would provide progress reports. As matters stood, there was no financing for the project. 

The Department shared the Committee’s commitment to eradicating the bucket system. The matter would be addressed in a joint venture with the Department of Human Settlements, as the issue was closely related to the proliferation of informal settlements.

The DG, Dr Philips responded to a question by Ms Mohlala on a disconnect between the Municipal Systems Act and the Water Services Act. He said this did not prevent the Department from strengthening its interventions in municipalities. The Department aimed to work within the legislative boundaries.

He reiterated that there was a concerted effort with COGTA to address the lack of municipal capacity in delivering water and sanitation services.

The Department would like to make a separate presentation on the issue of financial sustainability in the entire value chain. It agreed that financial sustainability should be a prime focus in collaboration with the National Treasury and COGTA. The success of the NWRIA depended on revenue generation.

The NWRIA would differ from the TCTA because it would own its assets. This would be reflected on the balance sheet and give the NWRIA leverage in financing water infrastructure projects.

Mr Manus responded to questions about water quality. He said the concerns the Department had did not pertain to poisonous water, but fluctuations in the water quality. The Department aimed to ensure that there was a continuum of good water quality over the long term. There needed to be an understanding of the risks and a reactive approach to fluctuations in the water quality. It was a risk-based approach to water management to instill confidence in users.

Mr Manus stated that recent typhoid outbreaks did not appear to be water-related. The outbreaks were in geographical areas that were isolated from each other, one in the Western Cape and the other in the Northern Cape. The Department encouraged municipalities to be proactive in performing regular disinfection and monitoring the water quality.

The Committee was informed by an official of the Department that more than R3 billion had been spent on water projects in the Eastern Cape. He highlighted that the Eastern Cape was especially in need of support in the face of drought. The eco sector had not been left out and several projects spoke to green water usage. He noted Members’ concerns about the Department's debt, saying that the problem ran deeper than a culture of non-payment.

Mr Basson asked whether the construction unit would be included in the NWRIA.

Ms Mohlala thanked the Department for their responses. She complained that the Portfolio Committee had not received a proper invitation to the National Water and Sanitation Summit.

The Chairperson clarified that he had received an invitation letter from the Department and extended the invitation to Members at the beginning of the previous meeting.

The DG responded that assets would be transferred to the NWRIA over a period specified in the Bill. This would allow the construction unit to become a tool that would enable the Department to intervene where a local municipality failed. 

The Chairperson commented that the Department should consider the demographics of the construction unit to ensure that it was representative.

The Chairperson thanked Members for their participation and for being conscientious about time.

He said he was awaiting the outcome of an application to pay an oversight visit to KwaZulu-Natal and asked Members to avail themselves.

The meeting was adjourned.