North West Human Settlements and Water & Sanitation Plan; Wastewater Treatment Plan; Water Boards; District Model with the Deputy Ministers

Meeting report

PMG missed the meeting and compiled the Report using audio obtained from a third source. PMG therefore missed the presentations but the link to them is available on the website.

Discussion

A Member was of the opinion that in preserving some of the issues raised it was important to prioritise the follow-up meeting with the IMF. She said that the meeting should be organised as a joint meeting with the Department of Cooperative Governance and Traditional Affairs (COGTA) and the Committee to brief Members on the progress made so far with regard to recommendations made in dealing with the challenges faced by the municipality. In her opinion the interaction of the Department and entities with the Committee would not yield an actual resolution to properly address the said challenges.

A Member of the ANC asked the following questions:

• ‘What is the current norm with regard to all water boards in the country’?
• ‘How are governance issues between various stakeholders addressed’?
• With regard to the directive issued by the Department of Water and Sanitation in municipalities to address water pollution, are there alternative means used by the Department to hold Municipalities accountable?
• The rejected directive given by the Minister of the Department of Human Settlement, Water and Sanitation (DHSWS) was that the Magalies Water Board should assist with the improvement of water facilities and waste management.  The said assistance was aimed at ensuring clean water for the people of Madibeng on a regular basis. ‘What was the response of the Minister after her directive was rejected’?
• In terms of the Department’s presentation, R24 750 million was allocated to Moses Kotane Local Municipality for the 2018/19 financial year, while expenditure was R15 789 657 (See page 26 of attached document). ‘On what projects was the R15 789 657 spent’?
• The same goes for the Ngaka Modiri Molema Municipality where R157 674 000 was allocated for the 2018/19 financial year to deal with the effects of drought. The presentation shows that R152 302 008 was spent, despite zero projects recorded, as well as a zero rollover. ‘Where did the money which was supposed to be made in the rollover go and why are there no projects to show for expenditure’?
• Reference was also made to the Madibeng Local Municipal contractor who was terminated due to non-performance and compliance, whereas R6 367 915 was spent on two projects. Public money had been spent and there was no compliance. The result of non-compliance was fruitless and wasteful expenditure. ‘Was the contract only terminated when there no provision for consequence management in the contract signed between the municipality and contractor to cater for deviations from the contract on the part of the contractor’?

Ms M Mohlala (EFF) wanted to know why debtor’s collection days had increased from 55 days to 85 days. In her opinion, this increase may be a sign that the quality of the company or an institution’s debtors is decreasing. It could also mean a greater risk of default.

She also referred to the raw water tariff increased by 11.5% by the Department of Water and Sanitation (DWS) (see page 18 of the Magalies presentation). This was despite the fact that tariffs had not been approved for Water Boards, pricing water strategy for bulk water tilted in favour of the DWS, and no stop-gap measures had been taken to assist water boards. She wanted to know why this was the case and how this problem would be addressed.

Lastly, she sought clarity on who pays the DWS to establishing the regional water utilities

In lending his voice to the questions raised, Mr M Mashego (ANC) said that questions were premised on the difficulty of the problems facing the municipalities. However, getting answers to the questions at the meeting would not change the status quo. He proposed a practical meeting of intervention with the municipalities and Water Boards. Resolutions would then be made at such meetings to address issues raised by MPs for practical solutions. Prior to this meeting, the Committee had met with other entities including COGTA and SALGA and resolutions were made. The question remains why the resolutions had not been implemented. The Department also needs to clarify what implications exist for a municipality that rejects the Minister’s directive. Fundamentally, there was a need for a quick intervention in the North West by moving the Portfolio Committee there to address these problems.

In responding to some of the questions raised, an official from the Sedibeng Water Board expressed support for the proposal to have a dedicated meeting where the Committee can engage with the municipalities and water boards at the same time. At such a meeting, the entities can collectively bind themselves to decisions taken. The Committee can then subsequently monitor how each party is adhering to resolutions taken, and then take the necessary actions or further resolutions when a party defaults.

He added that it should be noted however that the issues being raised were quite complex in that there were a number of leaks in the value chain from when water boards sell water to when municipalities distribute the same to consumers. Once water gets out of the bulk pipes of water boards, it disappears in the reticulation process. This results in a value chain crisis, leading to loss of jobs, and unaffordability of water for some people. Unfortunately, water is a basic amenity that cannot be stopped. It was therefore necessary to analyse and understand the processes involved in the value chain and interventions made accordingly. Discussions on what municipalities are owing to water boards have been ongoing for about 15 years. Yet, it does not seem like a permanent solution was in sight, instead the debt has continued to escalate.

Ms Mohlala interjected to object to the proposal for another meeting where the Committee would engage with the municipalities and water boards to get answers to questions asked. The entities present had an obligation to respond to the questions raised at the meeting, otherwise, it would be a waste of time to have convened with the Portfolio Committee in the first place.

Ms G Tseke (ANC) raised a point of order noting that Ms Mohlala’s interjection was only an attention seeking stunt. Along with this was the Chairperson’s clarification that the entities would respond to the questions raised as the proposal was only a suggestion for subsequent engagement with the water boards and municipalities.

Ms Mohlala retorted that it was a necessary objection for the entities to respond at the meeting. She opposed Ms Tseke and called her the actual ‘attention seeker’.

The argument between Members went on for another two minutes, where more points of orders were raised.

A Member offered to assist in clarifying issues to Ms Tseke who objected vehemently stating that she needed no assistance, and all she wanted was for the entities present to respond to questions asked.

Once order was restored, the official from Sedibeng Water Board continued with his response to questions asked, by noting that it was important for the Committee to look beyond the fact that municipalities were unable to pay their debts. Other possible instruments should be considered. Suggestions had been given through two considerations already highlighted by Sedibeng. These suggestions would be looked into in greater detail for the purpose of finding the means to assist the Committee to push the matter forward through parliamentary processes, as well as engagement with the Department.

The second issue to be looked into was Sedibeng’s debtor’s collection days which were very high, ranging between from 660 to 1000 days. The implication of this was that invoices took up to three to four years before getting paid, and that is if payment is ever made. The more the days increased, the more the likelihood of bills not getting paid.

Sedibeng had met with some of these municipalities to get a sense of the issues being faced. For instance, municipalities would expect to be given water to the value of R20 to R30 million but would only be willing to pay R5 million without making arrangements for repaying the balance or for paying off outstanding debts. It was therefore necessary to look critically at disputes when they arose. Municipalities were usually quick to go to court when disputes arise despite their understanding of the way invoices were structured and their refusal to make outstanding payments. Sedibeng had gotten to the point where it might need to stop pumping water to some of these municipalities. Though a difficult decision, it would be highly irresponsible for Sedibeng to pump water to municipalities without purifying it; and purification required electricity and chemicals which cost money.

If the board continued to battle unpaid salaries and debts of up to about R250 million, it would be at a risk of relegation and loss of assets. Officials from the Magalies Water Board also attested to this same issue when noting the risk of closure if inputs in terms of revenue from municipalities were not received by January 2021. Sedibeng water board was already at that point. In finding a way forward, Sedibeng has requested for a discussion with the Department to see if some support could be deployed to Water Boards. It was agreed that the Director General (DG) would meet with the two districts, but until then Sedibeng had to disengage contracts that were not yielding payments to prevent a financial crisis.

On the creation of original water schemes, it was noted that this was an initiative triggered by the Department and in which Sedibeng participated in the work streams. The National Department would be able to shed more light on this. In the meantime, it was an initiative with good intentions and it was imperative for the government to address the situation to ensure proper service delivery.

In responding to the questions for Magalies Water Board, an official from the Board noted that the first set of questions spoke to the Department’s presentation yet to be made to the Committee.

On the issue of debtor’s collection days from 55 to 85 days, it was clarified that this was an indication of the municipalities that were still being served by Magalies water board; but which were in a state of despair, hence their inability to pay for the services rendered in terms of the water supplied to them hence the increase in the debtor’s collection days.

According to the Public Finance Management Act (PFMA), invoices were required to be paid within 30 days. Magalies complied with this requirement when settling creditors, but was not fortunate to get its invoices paid by the municipalities within this timeframe. Payments were sometimes made after two months, and in most cases, only partial payments were received for invoices raised.

In terms of the increase in raw water tariff by an average of 11.5%, as well as the measures put in place to assist water boards who did not receive approval of bulk water tariffs charged to municipalities, it was pointed out that this formed part of an initial resolution by the Committee to engage with the inter-ministerial task team tasked with the issue of collecting the debts. There was also a need to engage the National Treasury on how to assist water boards especially since the bulk water tariff was not approved for this year which will result in a gap in the revenues of water boards.

Mr Mashego said that he appreciated the responses from the water boards. He went on to relay the request of the Committee to the Deputy Minister of Human Settlements, Water and Sanitation, Mr David Mahlobo, to facilitate a meeting where the DWS would engage with the COGTA, the Department of Finance and the Portfolio Committee for the purpose of addressing the issues raised by the water boards and coming up with solutions going forward. Although the Department was yet to address the Committee, reports from the water boards already showed that residents of the North West Province were facing a crisis of water circulation and water services. The proposed meeting could be held physically in the North West province, virtually or any other physical venue where all stakeholders would be present. At such meeting, a practical working programme can be drawn up, alongside consequence management plans for the purpose of checking implementation of resolutions.

Deputy Minister Mahlobo replied that the message from the Committee was clear and action would be taken to actualise the proposed meeting. DWS liaise with the Committee Chairperson to set a time, and would also engage with the Departments of COGTA and Human Settlements in the province, as well as with Water Service authorities. He however, sought clarity on whether the Committee would like to wait for the proposed meeting before getting answers to issues raised or whether he should address some of the issues at the meeting.

Mr Mashego reiterated the agreement of the Committee for the Department to respond to issues already raised. Further responses and clarity can be given at subsequent meetings if need be.

Mr Mahlobo replied that an official from the Department will respond to some of the questions, but most of the issues to be addressed by the Department dealt mostly with implementation rather than discussions.

Mr Trevor Balzer, Acting Director-General, DWS, began by highlighting that the Minister of Water and Sanitation had already written a letter to the MECs of the Departments of Corporate Governance, Human Settlements and Traditional Affairs in the province, requesting a meeting where the challenges currently faced by the water boards (Sedibeng Water and Magalies Water) would be addressed. In the said letter, the impact of the debt owed to the water boards and operations of the water boards was highlighted. The Department has yet to get a response to the letter and a date for the said meeting.

He, as Accounting Officer, has also engaged with the National Treasury, COGTA and SALGA on the issues surrounding the water boards. At the moment no assistance has been offered to the Department, but a facility has been put in place whereby the water boards can be assisted to address the challenges facing water boards, and to proffer solutions that would prevent the closing down of water boards before the projected time frame. Meetings have been held with other water boards, such as the Amatola Water Board and the Bloem Water Board. Sedibeng and Magalies Water Boards were next in line. The Department would work out some type of financial assistance to help water boards get over the current financial challenges. This assistance, which would come in the form of grants and other financial support, would be repayable to the Department once the water boards have fully recovered. In the meantime, the Department would have to reprioritise its budget to keep the water boards afloat.

Deputy Minister Mahlobo continued by responding to the request made by Mr L Basson (DA) that the Department would interact with the MEC in the North West, as well as with the office of the Premier. A visit would be made to the Municipality to address the disrespect shown to the Minister’s directive. Mr Basson had raised this matter for some time, and it was high-time a meeting was scheduled to sort out these issues. Politically speaking, there were other clarity seeking issues that the Department would address.

Deputy Minister Mahlobo and some officials from the SALGA had previously met and would be meeting again to set up a visitation. The agreed upon timeline for meeting with the Committee would be communicated by Monday, 19 October 2020. A letter had been sent to the North West Province regarding these meetings. The Department would also be meeting with the Minister of Finance alongside the MEC for COGTA and Human Settlements in the North West Province to address these challenges facing the province. It would also be necessary for the MEC for Finance in the province to be involved in discussions. This is to ensure that adequate support is given, especially with regard to the status of some of the municipalities under the Province.

Mr Mashego spoke in the vernacular (refer to audio 39:11 to 39:25).

Ms Mohlala also spoke in the vernacular (refer to audio 39:26 to 39:34).

Mr Mahlobo clarified that Mr Balzer’s submission was to the effect that a number of options were being considered in addressing the current issues facing water boards. The Department was doing its best to ensure transparency of the steps taken, and it would continue to do so in reporting to the Committee.

Ms Mohlala said that the issues affecting the North West Province’s needs would require political will to be resolved. Deliberations surrounding these issues made it seem like the municipalities affected were not situated in South Africa. These were ANC municipalities, and the issues now affecting the North West Province was as a result of corruption and lack of capacity. She urged the Committee and stakeholders to do their best to sort out the mess already created by the ANC.

Mr Mashego tried to correct the notion that the ANC was to blame for the current problems facing the North West Province but he was interrupted by Ms Mohlala who reiterated that South Africa was collapsing because of the incapacity and corrupt practices of the ANC.

Deputy Minister Mahlobo suggested that Ms Mohlala should raise a substantive motion to debate the matter she has raised and prove her stance regarding the role played by the ANC in the current issues faced by the North West Province and South Africa in general. She should be prepared to engage with Parliament on the aforementioned position. The Department had done its best and has admitted the challenges it was faced with. The Department therefore disagreed with the Ms Mohlala’s ‘slipping statement’ about the ANC which should be on record.

Mr Mashego urged everyone to ignore the statement and move on to the next agenda item of the meeting, but Ms Mohlala interjected to stand by her statement.

The Chairperson then reiterated the suggestion for Ms Mohlala to file a substantive motion to further debate her stance on the operations of the ANC.

Briefing by the Department of Human Settlements (DHS)

Ms Pam Tshwete, Deputy Minister of Human Settlements, Water and Sanitation, began by acknowledging her colleagues present, starting with Ms Boitumelo Moiloa: MEC for Cooperative Governance, Human Settlements and Traditional Affairs in the North West Province; officials from the National and Provincial Departments of Human Settlements led by the Acting DG Mbulelo Tshangana and the Head of Department (HOD).

The presentation from the DHS: North West Province would focus on the revised business plan and District Development Model of the North West Province. It was however important to note that the Department was currently assessing the capability of provincial departments to spend their entire allocated budget by the end of the current financial year. Already, the impossibility of exhausting the budget has been identified, but the Department would continue to work on its mandate which includes providing hands-on support in developing the recovery plans as well as reallocating funds to provinces that are performing well. Once the Department’s recovery plans have been ascertained as credible, the necessary support would be given by the Ministry to ensure implementation of such programs.

The National Department has undertaken to conduct roadshows to Premiers and emissaries of all provinces that were faced with performance-related challenges. The roadshows would commence next week in the Eastern Cape after which it would be followed by another in the North West Province.

The Committee was reminded to appreciate the status quo of the provinces, as they fell under the provisions of Section 100 (A), which meant that they worked as assistants in stabilising the departments. The DHS was one of those departments that provided hands-on support to various platforms.

It was also pointed out that the current MEC for Corporative Governance, Human Settlements and Traditional Affairs was acting in that position. The North West DHS was included in the existing departmental structure only last year September, and as such, the Department had only one minimum budget in place and many key positions were still vacant.

The presentation to be given by North West DHS would outline the adjusted Human Settlement Development Grant (HSDG) and indicate how this would affect non-financial targets of the province. It should be noted however, that the North West province has two quarterly or priority development area aimed at delivery of houses across the direct interventions aimed at producing different housing topologies; mining initiatives; land acquisition; installation of bulk services; housing for military veterans; and so on.

The Chairperson questioned the numerous delegations and sub-delegations by the Acting DG for the presentation to be made by the National Department.

Mr Mashego asked Deputy Minister Mahlobo to continue with his responses to the questions raised. He noted that answering these questions without necessarily having a working programme will not change the status quo of the North West. Having said that, he noted that the presentation by the DHS raised serious concerns even though it was a good presentation. The presentation showed budget allocations but there were no records of sites and population on which this money had been spent. He recalled the Deputy Minister’s opening remarks that touched on the possibility of the Department’s failure to exhaust the budget allocated to it. He went on to raise a concern from a ministerial point of view that this money might be taken away from the Department and reallocated in other high performing departments. The HOD’s reference to an allocated budget of R100 million, with zero sites and zero population to show for expenditure, therefore, raises the question of where the budget had been spent. The Department may genuinely believe that allocated money has been paid and would be spent but this may not necessarily be the case due to internal politics of the municipality as suggested by Mr Basson. It was therefore necessary that the earlier proposed meeting where the Committee can engage with the departments, municipalities and water boards, be treated as a matter of urgency. At such meeting, issues raised would be aligned with demands and commitments. A consequence management strategy would also be implemented as a means of following up on resolutions. Answering questions at the current meeting would not be sufficient to deal with issues of housing and water faced by the residents of North West.

Ms Mohlala said that Mr Mashego may try to politicise the meeting but this would not be allowed. She opined that officials in charge of setting up Committee meetings should have carried out a thorough investigation to determine the relevance of the current meeting instead of calling a meeting and then suggesting that another meeting should be held before issues can be addressed thoroughly. This only reflected incapacity on the part of the ANC-led government, which in her opinion was now the norm. If the meeting was physical and not held on zoom, it would mean that state resources used in covering the expenses of entities present at the meeting would amount to a waste. Incapacity in this sense would mean a waste of taxpayer’s money. She stated categorically that this incapacity and wastage must come to an end.

Ms Mohlala then went on to highlight the issue of tanks remaining empty for longer periods, while noting that this formed part of the wastage she referred to earlier. It was a waste of taxpayer’s money to buy so many tanks across South Africa without pumping water into them. This was not only peculiar to the North West. Tanks bought for Covid19 relief purposes had become useless because water was not pumped into them. Sometimes, municipalities would have to be called to pump water, and more often than not, nothing gets done until a Member of Parliament is called. This was the level of incapacity that existed in the ANC-led government.

She highlighted the problem of a decline of ground water levels at Grootfontein aquifers, and sought clarity on the cause of this decline, while noting that it could have major consequences for water supply in the future.

Other clarity seeking questions asked by Ms Mohlala included the following:

- How is the DWS addressing the drilling of boreholes around Grootfontein aquifers, which has put further strain on resources?

- Has the master plan for the North West Province been finalised?

- Has the DWS engaged the 2017 infrastructure report card produced by the South African institution of civil engineering (SAICE), which provides a useful analysis of the state of water infrastructure in South Africa, along with remedial action required?

- Does the DWS have a working relationship with the SAICE as a stakeholder?

Ms S Mokgotho (EFF) also supported Ms Mohlala on the need for the departments to respond to questions asked at the meeting. She had questions to ask the DWS but wanted to know if she should wait for the Department to make its presentation before she asked her questions.

The Chairperson replied that the DWS had already made its presentation, and Ms Mokgotho probably missed it due to a poor internet connection. She could go ahead to ask her questions.

Ms Mokgotho went on to ask the following questions:

• What are the reasons for the late submission of variation orders? Has the Department addressed this issue, and if yes, how has the issue been addressed?
• Does the Department have an effective way of dealing with the municipalities who are non-compliant to the conditional grants? If any, can the Department provide the effective strategies to be used in enforcing compliance for conditional grants?
• Why has the Department made it a habit not to pay service providers on time? There have been numerous reports on this. What is the cause and when will the Department stop delaying payments?
• What is the Department doing to address the problem of municipalities implementing projects on the tribal land without an agreement between municipalities and the tribal authority?

Ms N Mvana (ANC) said Ms Mokgotho should have sent in her questions earlier as she was delaying the meeting with her questions.

Ms Mokgotho replied that Ms Mvana was out of order, especially because she was done asking her questions.

Ms Tseke said that as much as she wanted to support the proposal made by Mr Mashego, she had reservations and questions of clarity to pose to the National DHS. She recalled that Deputy Minister Tshwete in her opening remarks said the provincial DHS was fairly new and as such, there were a lot of vacancies within the Department. The DM also referred to Section 100, under which provinces were generally catered for. This meant that the National DHS was responsible for intervening in matters relating to the provincial DHS. She therefore agreed with the Deputy Minister that the amount allocated for the financial year under review might not be completely spent, but instead, there was a higher chance of money taken out of the province and given to other provinces that were performing well.

She however sought clarity on whether the Committee was constitutionally relevant in terms of interacting and intervening directly in matters of the province or it should be interacting with the National DHS who should give feedback to the Committee on progress recorded from interacting and intervening in matters affecting the province.  She also noted that quite a number of officials like the MEC and HOD were still in acting positions. This goes to further buttress Deputy Minister Tshwete’s statement that the Department may not exhaust its allocated budget within the current financial year.

The Chairperson said that Deputy Minister Tshwete would give further explanation about the Section 100 establishments, as there were subsections of Section 100. Subsection (a) made provisions for provinces, while subsection (b) catered for instances where the Department takes over from the province. The Committee should have used the latter as a guide for convening the meeting with the North West Province. Another difficulty that existed in interacting with the relevant entities was the existence of numerous municipalities under Section 39. Most municipalities had Administrators and Counsellors. Nevertheless, the current meeting was very important, as the Committee was saddled with the responsibility of mapping a way forward to ensure that money appropriated for the improvement of North West through service delivery, was utilised appropriately. The Committee has to engage with the Department or other relevant stakeholders deployed in the North West to assist with proposed interventions. A mechanism should be put in place by the Department and the National Treasury to ensure proper monitoring of funds budgeted and expended in the North West, as well as curtail incidences of non-judicious use of allocated budget.

Deputy Minister Mahlobo appreciated the Chairperson and Mr Mashego who stood in for the Chairperson till she could join the meeting. In responding to the question raised on regional utilities, he requested Ms Mohlala to find time to go through the two documents produced by the Department: the National Water Resource Strategy (2nd version) which was approved; and the National Water and Sanitation Masterplan. The Ministry was currently looked into the institutional arrangement for the entire water sector, as there were institutions that reported to the Minister at the moment. Some institutions were in charge of managing the National Water Resource Infrastructure, which primarily oversaw the water training entity including TCTA. There used to be a time when there were numerous water boards, but after some time, the number of water boards were reduced. The Department produced a discussion document which was a result of numerous consultations with officials and stakeholders utilities, and was aimed at establishing a type of a wall-to-wall coverage.

As a response to the issues raised concerning regional utilities, it was pointed out that regional utilities were primarily aimed at the regional infrastructure. The work to be carried out here would normally be done through water boards, but based on the current legislation; municipalities were empowered by the law to choose their own water service providers. At a later time, the Department would shed more light on the arrangements municipalities have with water boards in relation to issues such as the Department’s position on the National Water Resources Infrastructure and how it should be managed; whether or not infrastructure existed at a regional level in terms of water utilities; as well as the role of municipalities in water use.

On the issue of the ground water, it was pointed out that a closer look into the presentation made by Mr Trevor Balzer would show that the economy of the North West Province was mainly driven by mining, agriculture and other industries present. Agriculture remained one of the biggest users of water if considered in relation to the water allocation. However, in terms of water availability, the North West mostly relies on surface water. It also adapts and utilises shared water courses, especially with Botswana and Zimbabwe based on signed international treaties. Although ground water had a very good potential in the province, certain circumstances such as drought can affect its potential as it would have a ripple effect on recharging the aquifers due to inadequate rainfall. The only alternative would be an artificial recharge using available water. Therefore, issues of tension amongst users were bound to exist. This explained the point being raised by the Department regarding dealing with disputes that arise from allocation of water to certain sectors, that is, prescribing that certain sectors use less water than others. The Department was however, looking into the water allocation reform, as well as instruments in the hands of the state. These instruments include the water use authorisation that includes validation and verification, which ultimately leads to compulsory licensing. It was also necessary to give provinces and municipalities a smooth and just transition, as it would be rash to direct provinces to provide their water sources within an impromptu timeframe. The said transition would be carried out through the application of water conservation and demand management strategies, alongside the application of appropriate technologies to deal with pending issues.

It should be noted that the North West has always had its own water plan. The Department had given clear projections for the water needs of the province up to 2050. The Department therefore had plans in place to ensure the growth potential of the province. The Department’s reconciliation staff has been working with the province up to now and the challenges are being identified.

On the SAICE report, it was clarified that the SAICE compiled that report after working with the Department. A closer look into the report would show that the SAICE attested to the infrastructure, which was well developed because of the apartheid policy and mineral deposits. The SAICE report also highlighted some of the issues that have been clearly articulated in the National Water and Sanitation Masterplan; issues such as the neglect of infrastructure; issues of O and M; and issues of future investment. This explained the President’s reference to water as one of the apex net worth industries that can drive the economy apart from the power generation sector.

In responding to the issues raised by Ms Mokgotho, it was pointed out that there was a system in place for assisting municipalities in planning. There was also a regulatory system in terms of the Water Services Act. The 2001 regulations contained some of the processes followed by the Department in assisting, regulating and carrying out assessments on municipalities, as mentioned by Mr Trevor Balzer in his presentation. Assessments were done on the basis of the work done by the Department, as well as other water-related jobs that had been carried out. Technical evaluation reports are then submitted to the Department for approval.

On the issue of tribal authorities, the Department has always worked with them, and intervened in cases where tensions arose between water boards and tribal authorities. The Department enjoyed a good working relationship with a number of tribal councils around the country, and was equipped to deal with issues when they arose.

To add to Deputy Miniister Mahlobo’s comment on the 2017 scorecard by the SAICE, Mr Balzer said that the Department has a working relationship with the SAICE.

On the issue of the decline in ground water levels, an official from the Department noted that the decline in ground water levels was traceable to the decline in rainfall. The amount of rainfall was connected to the level of ground water. For instance, there is more ground water in the East due to more rainfall. In the past three to four years, there has been low rainfall, and this was responsible for the decline in ground water levels in the Grootfontein compartment. This decline was not peculiar only to Grootfontein, as there were other municipalities that suffered from the same effect of little recharge of the boreholes, resulting in most boreholes actually running dry. Even with the implementation of some projects, it was very difficult to assess the water situation. As for water quality, North West was at the receiving end of all the influence coming from Ekurhuleni, Johannesburg and Tshwane, and ends up in Hartbeespoort dam which is highly utopic, that is, the dam has a lot of nutrients, which is expressed by way of the accelerated growth of Algae where the whole dam turns green at certain times of the year, as well as growth of Water Hyacinths on the dam. There is a need to strike a balance between Algae and Water Hyacinths. It was therefore important to ensure that waste water treatment works in the upper catchment of the dams and those operations are carried out based on the license conditions.

Tensions arising from water use would always exist in areas where the resource was limited. In the North West, most of the best sites for building means that the Department needs to start looking into the use of return flows as a resource to enhance and ensure a balance in the supply and demand of water. The only district experiencing a bit of balance in terms of demand and supply of water was Dr Ruth Segomotsi Mompati District Municipality (DM). Water supply and demand in the other three districts were not balanced. The Bojanala Platinum DM was counting on the return flows from Johannesburg, Tshwane and Ekurhuleni. The good news was studies have indicated that there would be more water and return flows. The Department just needs to ensure that the waste water treatment was functioning optimally in order not to affect the quality of the water.

It was pointed out that there was competing use of water in Grootfontein. The boreholes currently supplying Mafikeng were built way back in the 1930s. Some of them had dried out, probably because the aquifers were incomplete and were completed early this year to look at alternative resources. The recommendation from that study was for the Department to identify other aquifers that were currently not in use in order to meet the demand of Mafikeng. The Department would need to drill some more boreholes in the identified aquifers.

With regard to the Masterplan, it was confirmed that North West had a masterplan. However, the Masterplan was now due for a review. The Department would need to intervene in order to achieve a balance in the deficits being experienced in the different districts. It would also begin to explore the current capacity sitting with the Midvaal Water Company (not a water board, but a Section 21 company), which has spare capacity within its infrastructure. The Department also needs to ensure that no overlap occurred in the process as most of the water boards would try to grow their footprint in the province.

On the issue of Variation Orders (VOs), it was pointed out that VOs have to be applied for before the actual money allocated can be spent. At the moment, the experience has been that the VO was applied for after the money has been spent, which in itself has created a lot of problems for the Department. This was because approval has to be gotten from the National Treasury before VOs can be approved for and then paid. The said approval is only done by the National Treasury and not the Department. It was important for due process to be followed, and due diligence carried out by the implementing agents and municipalities in order to ensure that money approved on VOs are actually spent on projects.

Deputy Minister Tshwete continued with responses by noting that those affected mostly by the highlighted issues in the province were the ordinary people on the ground. The Department was committed to working with the North West Province to ensure better living conditions. As earlier mentioned in her opening remarks, the Department would be visiting the North West Province to oversee how money is spent. She agreed that there was a problem of staffing in the provincial department, but the Department was treating this as a matter of urgency. The Project Management and Financial Compliance team was assisting with the staffing, and although progress has been recorded, there was still a substantial amount of work to be done. In the meantime, the HOD who started in October 2019 has been trying her best to stabilise the Department.

Mr Joseph Leshabane, Acting Deputy Director-General (DDG): Project and Programmes Management Unit), DHS, said that the provincial DHS was under Section 100A interventions in terms of the Constitution. As the Deputy Minister already indicated, this meant that the National Department gives directives to the province to undertake certain tasks. From the onset of the interventions, directives were given and aimed at ensuring that a credible business plan was produced for delivery. There was also a forward planning process to deal with projects in the province, and it was necessary for the Department to be fit for purpose. Three things have since happened based on the directives. The Minister’s view was that directives could not just be given without provision made for hands-on support. This has led to the National Department being present in the province.

As far as progress and impact of interventions were concerned, the province has made a big turnaround. The Committee would not have received reports of the North West struggles if there were no issues with the establishment of a provincial department. Part of the intervention was to create a stand-alone department in the North West, and processes were underway. However, the establishment of the provincial department was yet to be completed. As mentioned by the Deputy Minister there were some vacancies for posts yet to be filled, while some staff members have been seconded from other departments. The effect of this was an escalation of the risk of a functional department. The National Department has therefore discussed with the HOD, Administrator and the Office of the Premier to work out the quickest way to resolve these establishment issues. However, these issues impact on delivery, as the Department has struggled to comply with ground management requirements. Regardless of any joint work done with the National Department, the provincial department remains accountable to the National Department for compliance. It was based on compliance failures that the National Department activated the provisions of the Division of Revenue Act and the PFMA. This also explained why the national department refused to continue the transfer of grant to the province. The National Department acted within the ambit of its authority in withholding this grant. This was however a normal process that took place every year and with all provinces. Once noncompliance has been flagged, grants are withheld till compliance, delivery and performance issues are reconciled. Grants are sometimes reduced for underperforming provinces and reallocated to performing provinces.

It should be noted that the Department was aware of these compliance failures, as discussions have taken place with the province, and areas of concern have been indicated alongside steps to resolve these issues. This formed part of what the provincial department was currently sorting out. Once compliance failures are resolved grants would be released. The next concern to address would now be expenditure delivery.

The Department would have to report back to the Committee on the work that it does in terms of intervention in the province as well as progress on delivery. Instances of expenditure with nothing to show for it is a challenge the National Department was currently addressing in the Provincial Department. The Department was also trying to prevent scenarios where funds are transferred to a provincial department but are administered in a non-compliant manner. This would amount to recklessness and irresponsibility on the part of the National Department, which would lead to the National Department being held accountable for its action of transferring a grant while being aware that a provincial department was not compliant with the provisions of the law.

The National Department was saddled with the responsibility of ensuring that the Provincial Department executes its mandate, and delivers on what is in the business plan. Once the province fails at this, consequence management and compliance administration would be executed. As the province prepares and submits its recovery plans, the National Department would be able to collectively agree on what was working or not working in the province; and in areas needing attention, the department would provide guidance till the province achieves a successful delivery. However, the Department did not want to mislead the Committee by painting a perfect picture on the state of the provinces whilst these issues existed.

The North West Head of Department (HOD) recalled that the DHS was created as a stand-alone department in the sixth administration. The province undertook what was termed ‘the provincial macro of organisation of government’, which was led by the Section 100 team from the Department of Public Service and Administration (DPSA). There was a delay in the finalisation of the process which led to insufficient capacity for the DHS. The Provincial Department itself was supposed to be set-up as a separate department on 01 November 2019, but this did not happen on time, and as the process was unfolding, Covid19 hit and the Department went into lockdown. The process resumed as soon as lockdown was eased and the provincial department got registered with SARS and the Government Employee Pension Fund. The only registration that was pending at the time was for the Department of Labour (DoL) with the compensation fund. The National Treasury is currently assisting the provincial department in this regard to ensure that it is sufficiently registered as a Department and can operate as a stand-alone department.

There was a process at play which meant that the provincial department had to wait for the Department of Local Government and Human Settlements (DLGHS) as it then was, to provide it with concomitant resources, namely staff and support for the DHS. This process took longer than was anticipated, and the Department only got its own staff from the allocation of Corporate Governance and 49 vacancies. While this process was unfolding, the provincial department approached the administrator in the Office of the Premier to request staffs that were coming from the Department of Tourism (DoT). These staff members were seconded by letter and have been assisting the Provincial DHS, even though they belong to the Department of Economic Development, Environment, Conservation and Tourism. The national DHS has continued to perform its functions, starting off with the provincial department, and has continued to ensure compliance based on findings.

On the withholding of grants, a letter was written to the province indicating the intention to withhold to which the province responded. It was after this that the province received another letter to the effect that the grant had been withheld for a period of 80 days. The Provincial Department would address the issues and concerns that have been raised by the National Department in this regard, but the Committee should be rest assured that a credible business plan has been submitted and approved.

With regard to forward planning, it was pointed out that in the past, the Department used to procure in the same year when projects are to be rolled out, and this meant that there would be no procurement. Steps were being taken to correct this.

In terms of the ‘fit for purpose structure’, the Provincial Department was working with the National DHS to come up with a ‘fit for purpose structure’. The MEC has already signed the internal structure which initially had been signed by the Minister of Public Service and Administration, but did not have management posts. However, the MEC has signed off the amended structure and consultations have taken place in the National Department and the DPSA. The ‘fit for purpose structure’ would be completed in the shortest possible time.

Despite the fact the Provincial Department battled with some challenges, especially when considering the fact that in April, May and June, there was no activity from the construction sector, it has spent 88.7% of its budget and had invoices of over R150 million to process. The Provincial Department was confident that even with these challenges, it can continue to perform and hold contractors answerable to their obligations. This was the mandate given by the MEC which is being implemented to enable the people of North West to benefit from quality services.

Another issue raised by the National Department was on the Housing Subsidy system (HSS). About 24 000 to 30 000 people that have been approved on the system were yet to get the benefit of a house. The provincial department was working through a process of cleaning up the system and has been requested by the DDG to give an account of the progress in this regard in the next 14 days. The clean-up process is being carried out by all teams in the Department to ensure people who have benefited are taken off the system, while those yet to benefit are prioritised when there is development in the province.

On the recovery plan, the National Department will have the information available shortly. The Provincial Department has pooled services and Blocked projects for the outer years. The Provincial Department has performed sufficiently well on the provision of services especially on the M14 where Dr Tertious has spent 102% in the first two quarters of the year. It was as a result of confidence that with the assistance of the National Department it would continue to correct the mistakes of the past, and also begin to perform at maximum capacity knowing full well that the work of the DHS was important.

MEC Moiloa attested to the existence of challenges in the North West Province as stated clearly by the Deputy Minister. The assistance given by the National Department has been so helpful to the province.

The HOD has clarified that blocked projects have been included in the business plan. Those blocked projects have been there for a long time, but could not be unblocked by the Department.

As for the likelihood of grant forfeiture, the provincial department has been working hard to fast track compliance and other processes to be carried out before the closing date. This was to prevent further hardships on the communities of the North West Province as they benefit mostly from the grant.

Ms Mokgotho said that her questions regarding the allocation made towards drought alleviation in the four municipalities of North West was yet to be answered. She raised the issue of the contractor at Madibeng, whose contract was terminated due to non-performance despite spending R6 million. She sought clarity on what was done after his contract was terminated. She asked ‘Did the municipality or the Department just let him walk away with public money’? ‘What role did the accounting officer in charge play in making sure the contractor account for money spent’? ‘Was there any consequence management applied towards this accounting officer for failing to follow-up on the contractor’s non-performance and non-compliance’?

She also noted that apart from the Madibeng Local Municipality (LM), millions of Rands were allocated to Moses Kotane LM, Ngaka Modiri Molema DM and Dr Ruth Segomotsi Mompati DM for drought relief but no projects were indicated in the table presented to the Committee to show how the money allocated had been spent. Also, Ngaka Modiri Molema DM should have a rollover of R5 371 992 from the amount budgeted, but the record shows there was no rollover. ‘Can the department clarify’?

Deputy Minister Mahlobo said that the Department was able to give account on all water related matters, especially with regard to projects carried out. However, the Department was in no position to speak about consequence management because local government was a sphere on its own that ran its affairs as a government in relation to management of employees and labour related matters, as well as issues of who to contract projects to.

On the issue of the Madibeng contractor whose contract was terminated for non-performance, an Official from the Department noted that the report from Madibeng showed that studies were carried out including geophysics and hydrology done in 23 villages. The contractor also carried out sighting, drilling and testing of water, but then delayed in terms of equipment and fittings and that was why his contract was terminated. The report submitted however, shows that R6 million was spent on the studies carried out in 23 villages.

As for the rollover that was not indicated in Ngaka Modiri Molema DM, it was pointed out that the Department had a spreadsheet that shows projects that were implemented under the drought relief programme. However, not all projects were included in the presentation made to the Committee. The full spreadsheet containing all other information could be made available to the Committee for perusal. It should also be noted that Ngaka Modiri Molema DM submitted a draft close-out report, where it indicated that over-expenditure was recorded on the drought relief programme. In a meeting with the Department, Ngaka Modiri Molema requested more money as it had over-spent in the implementation of the drought relief programmes. The R157 million that was allocated to Ngaka Modiri Molema was actually divided. Sedibeng Water Board was given R47 million to address some of the areas that were identified as hotspots. It should also be recalled that the previous Minister started a programme aimed at eliminating tankering (vandalising equipment so that tanks would have to be brought in) because the Department found out that infrastructure was deliberately being vandalised so that people could bring in tanks. There was a concerted effort to eliminate tankering in those villages by trying to resuscitate the infrastructure that was already in place.

Ms Moiloa recapped all that the Deputy Minister and HOD had said on the DHS being a stand-alone Department. ‘When we deal with the municipalities, we’re dealing with another part of the Department’. As for the issues in Madibeng, she pointed out that Madibeng was under Section 100 (b), and so the Administrator was responsible for carrying out investigations. There are reports that investigations were ongoing to resolve the issue of the contractor. Once investigations have been finalised, the Administrator would submit a report to the Department who would then submit the output of the investigations to the Committee.

The Chairperson requested that the above-mentioned report should be submitted to the Committee secretary within seven days. She noted that the North Province was the last of the provinces to be engaged with. Engagements with provinces have been aimed at interacting with the system in operation. This would further enable the Committee to make substantial recommendations to the Ministers of Water and Sanitation and Finance after engaging with the Budgetary Review and Recommendations Reports (BRRR). It will further help with issues to be considered when engaging on annual reports, in order to have a clear indication of how the system of water and sanitation and human settlement operates in the entire country.

She appreciated the National Department for working together with the Committee in engaging with the business plans of the provinces. This has helped the Committee to better understand the status of provision of housing and water in the country.

The Committee still had outstanding meetings to be held with the COGTA on issues of tariffs, debts with municipalities, SALGA and the Department of Public Works. It also needs to engage with the SIU, as this would help to prepare Members for the engagement with the annual report. The Committee would then be able to have a fair assessment of the Department. All issues raised requiring follow-up in the North West Province would also be considered and finalised.

There was still a lot of clarification needed from the HOD on the blocked projects. Issues such as where the budget of blocked houses had been spent; what role the government plays in terms of reclaiming monies already paid to service providers who fail to do their work; and what sanctions are given to officials implicated in cases of misappropriation of funds by officials still need to be clarified. The Department was asked to submit a formal report clarifying the issues surrounding blocked projects.

The Chairperson appreciated all participants present at the meeting.

The meeting was adjourned.