Water Research Commission & Trans-Caledon Tunnel Authority 2020/21 APPs, with Deputy Minister

Meeting report

Water Research Commission: Annual Performance Plan (WRC)

Ms Nozi Mjoli, Chairperson: Water Research Council (WRC), and Mr Dhesigen Naidoo, Chief Executive Officer: (WRC) briefed the Committee on the annual performance and corporate plan for the 2020/21 period.

Mr Naidoo informed that the WRC served a broad range of government departments, such as science and innovation, the environment, agriculture, public enterprises and trade and industry, amongst others.

Covid-19 had already affected the WRC as well. The strategic plan would have to be changed, and research had been adversely affected as well. The suspension of the academic calendar had also impacted the work of the WRC.

The WRC had a significant portfolio of community-based projects. These community-based projects had all stalled as a result of the lockdown.

The major impact areas of the WRC were water security, proper sanitation, food security, energy security and water quality.

On financial matters, the inflationary impact on the income and expenditure budgets over the planning period had been pegged at around 5%, in line with the National Treasury 2020 medium term expenditure framework (MTEF) technical guidelines.

The levy income had been impacted by the consumption volumes which in general had shown declining trends.

The WRC intended to fill 12 new positions that were mainly focused on the pursuit and support of the entity’s strategy around impact, and to bolster in-house research capabilities and business development.

The expenditure on research and development innovation comprised more than 60% of total WRC expenditure.

Trans Caledon Tunnel Authority: Annual performance plan

Mr Gerald Dumas, Chairperson: Trans Caledon Tunnel Authority (TCTA) Board, and Mr Percy Sechemane, Chief Executive Officer (CEO): TCTA, briefed the Committee on the entity’s APP and financial statements.

Mr Sechemane said the TCTA was currently busy with the following projects, amongst others:

• The acid mining drainage short-term interventions in five provinces;
• The uMkhomazi Water Project Phase;
• The Berg River Voelvlei Augmentation Scheme; and
• The Mzimvubu Water Project.

The TCTA, as a Department of Water and Sanitation (DWS) entity, was funded through Budget Vote 41. This specific budget vote’s aim was geared towards ensuring the availability of water resources to facilitate equitable and sustainable socio-economic development, and ensure universal access to water and sanitation services.

The TCTA had a clear transformation strategy in place that covered procurement policies, employment opportunities for the previously disadvantaged, black economic empowerment, localisation, skills development and study opportunities.

To date, the TCTA had funded and implemented the following projects;

• An infrastructure project in Lesotho for the Lesotho Highlands Water Project (LHWP);
• The Berg River Project
• The Vaal River Eastern Sub-system
• Phase 2c of the Olifants River Water Resources Development Project
• Funding and implementation of the Komati Water Scheme Augmentation Project.

The economic impact of these TCTA projects was significant.  Phase 2 of the LHWP that fed the Vaal River System supported 50-60% of South Africa’s gross domestic product (GDP).

The uMkhomazi Water Project that was part of the uMgeni System, provided water services to five million Kwazulu-Natal citizens, whereas the Berg River Voelvlei scheme that formed part of the Western Cape supply chain supported between 10-13% of South Africa’s GDP.

The TCTA had experienced problems with some projects. The Olifants River scheme that cost about R6, 6 billion had stalled. The project had been placed on hold due to mines not signing the offtake agreements. The TCTA was busy exploring alternative funding avenues, such as the Development Bank of Southern Africa (DBSA).

Discussion

Mr M Mashego (ANC) said that the DWS was supposed to give an opinion on the performance of the two entities first. The Committee was not in a position to measure these two entities’ performance against what had been expected by the DWS.

He added that if the WRC stood at the cutting edge of water research and technology, why had there been problems with the implementation of certain projects?

Mr L Basson (DA) expressed his gratitude to the two entities for the respective presentations. From the TCTA’s presentation, he understood that borders could not be crossed as a result of Covid-19. Clearly, this had financial implications. In light of this, he wanted to ascertain whether a clause had been written into the contract that covered disasters.

On the Crocodile River Augmentation Scheme, he recalled that the delay had been as a result of negotiations around the size of the pipes that had to be installed. Would this impact on water licences for agricultural purposes?

Ms M Mohlala (EFF) wanted to ascertain when the AG’s recommendations would be implemented and an addendum thereof provided to the Committee by the TCTA.

Ms N Mvana (ANC) said the WRC had mentioned that South Africa had underutilised the country’s underground water. She wanted to know what the reasons for this were.

She requested clarity from the TCTA on whether any measures had been put in place to deal with the challenge of contractors not being able to cross the borders at the moment.

Ms E Powell (DA) expressed her support for the sterling work done by the WRC. In light of the Covid-19 pandemic, she wanted to know whether it would be employing electronic mechanisms to conduct vital research and measurements.

Mr A Tseki (ANC) said that the AG’s findings of the previous years should find expression in the plans for the coming year. As it stood, none of the two entities had incorporated the findings by the AG or the Department of Monitoring and Evaluation. These were supposed to be reflected so that the entities could correct any anomalies.

Ms S Mokgotho (EFF) asked the TCTA whether mechanisms had been put in place that ensured the proper execution of projects. She also wanted to know whether the TCTA had engaged with their Lesotho counterparts, and what the relationship with the Basothos was. Had it devised measures that ensured that it managed to secure the R9.5 billion before requests were made for government guarantees?

She wanted to know why the mines had not signed the take-off agreement for the Olifants River scheme.

She commended the WRC for its commitment to employment equity, and asked for the precise number of female managers who were employed by the WRC.

Mr S August (Good) said he had no questions as he had technical issues.

Ms C Seoposengwe (ANC) wanted to know whether the TCTA intended to pump more water into the Vaal River.

The Chairperson lamented the decision by the mines around the Olifants River to not sign a take-off agreement with the TCTA. If the mines failed to come on board, where did they source their water from? She wanted to know how these mines were awarded water use licenses.

She echoed the comments by Mr Masego and Mr Tseki about the lack of reporting from the entities.  She commented that the oversight unit within the DWS was supposed to review the action plan before it was submitted to Parliament.

WRC’s replies 

Ms Mjoli said slide 5 of the presentation showed how the WRC’s goals were aligned with the DWS. This had been approved by the DSW.

Mr Naidoo added that the presentation presented to Members had been submitted to the DWS and approved by the Minister of Human Settlements, Water and Sanitation. The WRC had employed a strict vetting process beforehand that ensured information was aligned to the WRC’s mandate.

Responding to Mr Mashego, Mr Naidoo said that South Africa stood at the cutting edge of water research and ranked in the top 20 of water research countries. It was thus a powerful player, though more room was needed to actualise the research into concrete plans.

He was at pains to explain that the AG’s audit findings had been incorporated into the presentation. He pointed towards section four of the presentation, which detailed specific targets based on the findings. He said that the AG’s findings had been taken seriously.

On underground water usage, he explained that South Africa was in a peculiar and unusual situation.  Most countries exploited underground water, yet South Africa had not followed suit. Its under-exploitation of ground water could be attributed to a lack of infrastructure and energy. It would have to invest in geo-hydraulic sciences and experiment with alternative energy resources if any success were to be forthcoming in this respect. He regarded this as attainable, and mentioned that this had been incorporated into the Water Master Plan.

He said the WRC had adapted well to the challenges posed by Covid-19. It had already conducted a webinar with about 160 project managers, and to date it had conducted other outreach programmes. It had actually been more successful during the lockdown period with its outreach endeavours.

On WRC technology, he added that researchers based at the University of Rhodes had done excellent work during the lockdown period. They had been able to conduct research remotely. The WRC itself had also conducted measurements remotely through remote sensing.

On capital expenditure, Mr Naidoo said that the WRC would like to get all internal systems in place and that all financial numbers had to be relooked. The WRC would like to develop its information technology (IT) capacity.

About 62% of the WRC staff component consisted of women, and only about 30% of women occupied senior managerial positions. He added that the WRC had prioritised the absorption of individuals from previously disadvantaged communities, and would continue to do so. It was committed to representation and inclusivity.

TCTA replies

Mr Dumas responded that the reports submitted by the TCTA were futuristic, and amplified the alignment of the TCTA to the core purpose of the National Development Plan (NDP) and the Water Master Plan. The TCTA remained focused on how to improve access to water resources.

Mr Sechemane said the TCTA had submitted the presentation to the DWS and National Treasury for consideration and approval. It would never submit anything to Parliament without the inputs of these two important government entities.

On contractual obligations, he said most agreements signed by South Africa on partnerships such as the LHWP contained protection clauses. These clauses covered natural disasters. At the moment, none of the big projects were in jeopardy, as these had not yet been awarded.

The TCTA had a cordial working relationship with their Basotho counterparts, and the AG’s findings would be thoroughly addressed.

He referred Members to slide 24 of the presentation that detailed information on the internal control environment. This information would be compiled into an addendum, and forwarded to the Committee.

Discussions on the pipeline size for the Crocodile River Augmentation Scheme had been concluded. The TCTA had received complaints that too much water might be piped through bigger pipes, and this might affect the delivery of water to other users.

On ground water usage, Mr Sechemane informed the Committee that mining used to be the backbone of the South African economy, and pre-1994 there had been no environmental awareness in the country. The result was large scale pollution of ground water. This impacted heavily on whether such groundwater could be used for human consumption. Notwithstanding, the TCTA had expressed interest in technology that could adequately capture groundwater.

Regarding the R9.5 billion, he said that National Treasury had been slow with the approvals, and requested the Committee’s assistance in having the funds approved.

On the Olifants River, he said the mining industry’s aim was to make money. The mines did not sign the off-take agreements due to the fall in commodity prices. When commodity prices fell, mines normally took a backseat when it came to large investments. The TCTA was currently working with the Development Bank of South Africa (DBSA).

He added that the TCTA was not responsible for decisions about pumping rivers or dams full of water. Water boards and municipalities were the responsible entities. The TCTA was responsible only for the LHWP.

Deputy Minister’s comments

Mr David Mahlobo, Deputy Minister: Human Settlements, Water and Sanitation, referred to the alignment issues, and said he was confident about the presentations by the WRC and TCTA to the Committee. The DWS had liaised with two entities about their respective strategic plans and APPs. These consultations had been led by the two Deputy Directors General (DDGs) responsible within the DWS. The Department was therefore satisfied that what had been presented met governmental and legislative requirements.

On the issue of financial performance, the DWS had taken note of the comments on the audit outcomes. The Department agreed that the APP should contain a section that dealt with the audited outcomes, accompanied by a remedial report. The DWS would in future provide a quarterly report with an agreed remedial action plan. It wanted all of its entities to receive clean audits.

The Deputy Minister lauded the good work carried out by the WRC, and commented that South Africans should be proud of the entity’s achievements. The WRC played an important regional and international role. He called for support of its technological innovations.

He also lauded the good work done by the TCTA, whose role was particularly amplified during disaster situations. Its work should be supported, as water would be the backbone of economic development. To illustrate the importance, the Deputy Minister referred to ten very important projects that had to be completed within the next eight years.

On the Crocodile Augmentation Scheme, he said his Department would continue to engage the Department of Mineral Resources and Energy (DMRE) and mining houses on the scheme. The TCTA always ensured that water use licences were not abused and awarded to the right entities.

He added that the TCTA should be allowed to go to the market and borrow money, as water infrastructure was important for economic development. South Africa would suffer the consequences if the country did not invest in water infrastructure.

Follow-up comments

Ms Mokgotho took exception to the responses by the TCTA. Apparently, Mr Sechemane had disrespected EFF Members by not addressing them directly as well, when he responded to questions.

Pandemonium ensued between ANC and EFF Members, who traded barbs. Mr Mashego accused EFF Members of not respecting the Chairperson.

The Chairperson cautioned Members against disrupting the meeting.

Mr Sechemane apologised to EFF Members for the misunderstanding.

After the situation had settled down, the Chairperson adjourned the meeting.