Impact of SONA on Water & Sanitation Sector, with Deputy Minister

Meeting report

The Department of Water and Sanitation presented on the 2023 State of the Nation Address implications for DWS as well as the current status of its infrastructure programme including
1. Major national water resource infrastructure projects
2. Major water services projects
3. Water use license applications
4. Management of flood events.

These projects were to commence:
1. Lesotho Highlands Water Project
2. Umzimvubu Dam Project
3. Raising of the Clanwilliam Dam wall
4. Hazelmere Dam
5. Tzaneen Dam.

The DWS presenters were: Mr F Moatshe, DWS: Chief Financial Officer; Dr S Phillips, DWS: Director General; Ms N Fundakubi,  DWS: Deputy Director General: Corporate Services and Support; Mr R Mathye: DWS: Deputy Director General: Water Services; Mr X Zwane, DWS: Deputy Director General: Regulation, Compliance and Enforcement; Mr M Motsatsi DWS: Chief Director: Internal Audit; Ms B Manyakanyaka, DWS: Chief Director: Corporate and Organisational Planning.

Discussion
Ms R Mohlala (EFF) asked if DWS has done a study on the economic value to be attained by the Umzimvubu water project. She referred to page 12 and asked where it anticipated to acquire funding and for the time frame. She asked if the Trans-Caledon Tunnel Authority (TCTA) and the Water Trading Entity (WTE) will be charged in offtake agreements. She emphasized the damage to water and sanitation infrastructure caused by worsening load-shedding where it was creating major challenges for the provision of water and sanitation operations and maintenance. How is this being addressed and was there a need for water authorities to create a separate budget for procuring high-level generators to ensure that water provision is sustained. She asked if there were sustainable operations and maintenance budget allocations for these infrastructure projects.

Ms Mohlala said the President's State Of The Nation Address stated that the Lesotho Highlands project is critical for ensuring security of water supply to South Africa from the Kingdom of Lesotho. Will the royalties paid for water from Lesotho increase on a yearly basis and what is the actual agreement between the two nations.

The presentation discussed only the roll out plan of each project. She asked for further information such as the budget for each project and the additional costs. It seemed DWS is commencing this project only in the medium term but budget has already been utilized on the project and questioned if this would counted as fruitless and wasteful expenditure.

Mr L Basson (DA) referred to a media headline that the presentation did not address about dam safety where of the Department's top 20 dams, only 1% – meaning two dams – are in line with safety. Was the Sterkfontein and Vaal dam not complying. The question is if these dams do not comply because inspection was conducted and found they were not safe or that inspection has not been done at all.

Ms S Mokgotho (EFF) asked about the finalised procurement of the Giyani contractor for the water treatment works refurbishment on page 32. Which contractor was awarded that contract and how would the tensions about local employees being employed on the project be managed because this was a contentious issue.

Ms Mokgotho asked about the status of the Vaal Dam Intervention programme which entailed a failed or incomplete intervention. What were the total costs from inception to date and what would be the project cost.

Ms N Sihlwayi (ANC) commended the important role played by Treasury on the Umzimvubu project as there has been a call to create a value-for-money economic analysis with Treasury. This long awaited outcome is highly appreciated especially since it comes within budget. However, she lives approximately 10km away from the dam and there are still taps installed by DWS that do not have water. She asked the Department to see what happened to these taps and to investigate if there is infrastructure below ground so that there is no duplication of infrastructure when the dams are constructed and water distributed to individual households. She urged this in the name of cost saving and prevention of fruitless and wasteful expenditure.

Although she had thanked the Department for the intervention at Umzimvubu project, she was not satisfied with DWS discussion on the R8 billion budget. This project has spanned 20 years in the making. DWS must provide the process plan on the "who's and how's" on the roll-out plan considering that the finance is now available and to rebuild the public's confidence.

She addressed her concerns about the danger of partnership between DWS and Eskom as it was an entity riddled with complex challenges. She recommended that DWS first understand how Eskom will present its own programme and it will implement with current electricity challenges which disturb the water plant and distribution systems. here were no vengeance against Eskom but that the structure is needed in such programmes more importantly to restore confidence in the Committee that Eskom is ready to deliver.
 
Ms G Tseke (ANC) welcomed the security of water allocated to communities. She stated her gratitude. If government continues at this positive pace, the country would be a much better place to live in. South African communities would finally have water from these projects. She recommended that the Committee conduct physical oversight inspections to these projects to monitor progress.

Ms Tseke noted what the President's SONA said on load shedding and its impact on critical infrastructure and where technically possible there should be exemptions for infrastructure such as hospitals and water treatment systems. She asked what the DWS position was on exemptions . She was awareness of the newness of these calls but was it in talks with stakeholders such as municipalities and Eskom for such infrastructure to be exempt from load-shedding.

She noted that the presentation mentioned only Loskop and Lekwa for Mpumalanga infrastructure but in the previous year there was a Rust De Winter Dam project but DWS made no mention of it. What was the progress at Rust De Winter Dam especially with the financial injections that were provided for it. She asked DWS about reduction of the backlog on water licensing and then thanked the DG for the raised standards.

The Chairperson asked why the feasibility study took one financial year. There was no footnote to change it on the written presentation – it is still written as such. This could make the Committee fail to hold DWS accountable because it would be a matter of hearsay later.

The Chairperson said the Committee would appreciate if DWS firstly discussed previous Lesotho project financial statistics on work done. On the commercial part of the Lesotho project, what is its progress and how is it beneficial to South African and Lesotho communities. He was aware that there was a budget allocated to this project. He noted his investigation on the Lesotho commercial projects about the exporting of fish to Australia and the construction of malls on the side of the mountain. What is its value to the people of Lesotho and the business of South Africa.

He commended DWS for the Umzimvubu innovation, especially the reduction of the R18.1 billion budget as it had chosen to upgrade what is already there reducing the budget to R8 billion rather than build from scratch for R17.5 billion. These were great initiatives. He raised the capabilities of the construction units or if too old in terms of manpower. The construction units must be transformed to reflect the demographics of the country and requested a progress report on it. He continued to laud DWS on the work achieved in the country as a whole.

It was unfortunate as Government and the Committee we do not celebrate the good work done enough. He referred to the DWS communication strategy and asked why there were constantly competing narratives between good work progress reports on one hand and daily public complaints on the other. People complain because there is not proper communication when infrastructure in damaged by floods; therefore people complain about the competence of DWS even going as far as calling for the reduction of its budget. Another example is if an area or province has been assigned work to be done but because of poor public communication of the correct details, the public expects the work to be done immediately . He recommended oversight to ensure work is done with expertise as municipalities sometimes do not have the capability to do the work. They have of a shortage of skilled people to implement these projects and fail to comprehend the amount of work needing to be done.

The Chairperson questioned why Umgeni Water was the chosen appointee for the Bizana bulk water supply project in the Eastern Cape especially with the known high political tensions in that area. He was worried that it might cause delays due to people protesting that the project was not utilising local resources.

The Chairperson once again mentioned the impressive work that DWS had achieved in various provinces. He spoke about Mpumalanga where the Mapulana tribal land lacks water. Although water is coming from Zelvaght dam and Motlatsi river but the people of Thaba Chweu did not have water and this area remains unmentioned in the reports.

DWS response
Dr Sean Phillips, DWS Director-General, responded that TCTA and WTE would not be involved in assisting with the financing of the Mzimvubu project. It would be financed from the annual budget and that they have reached an agreement with Treasury in making the project more feasible.

Dr Philips discussed load shedding and the impact it had on water and sanitation infrastructure. The President's declaring a state of disaster meant that the President and Department of Cooperative Governance and Traditional Affairs (COGTA) were currently under way in creating structures but in the meantime DWS has made submissions to the Presidency and the teams working on the management of electricity supply called National Energy Crisis Committee (NECOM). Proposals have been submitted on which routes could be taken in the short term. Firstly it is important to have a bottom up approach because at national level DWS cannot manage issues happening at local municipal level and initially municipalities need to decide on their own if they need to purchase generators. In most municipalities, water and sanitation infrastructure is not fed directly from Eskom but rather fed by the municipality's electricity department and for exemptions to occur, it needs to happen between the municipality and Eskom.

He cautioned that exemption is not an easy solution because DWS infrastructure is embedded in municipal electricity grids which serves large parts of the surrounding communities meaning it is not simple to isolate the water and sanitation pumping stations and in doing so it would isolate large parts of the surrounding areas which would result in Eskom not reducing the load amount needed to prevent a total collapse of the electricity grid.

There are a number of proposals to mitigate the current water shortage crisis tabled at national level that could form part of the state of disaster process.

The reason for water shortages during load shedding is that the water to households is fed from reservoirs through gravity and when the water level is low in the reservoirs it does not have the pressure to reach high lying areas and municipalities cannot pump water during load shedding to reservoirs. They suggested that water boards maximise their water storage capacity during the time where there is no load shedding and optimise their operations during these times.

DWS has not yet done the full survey of all the interventions currently made by municipalities but it has some knowledge of who has purchased generators. For example Rand Water has allocated hydro-power facilities and solar power for some of their infrastructure. Based on the information we have on those municipalities struggling with their revenue collection, they struggle to keep the generators running because of the high cost of diesel used to run the large generators.

DWS has also proposed through the Presidency that all water boards should be encouraged to put in place new alternative sources of power in the short term such as diesel generators. But in the medium term they should consider sources of power with much lower operational costs such as solar power, inverters and batteries. In the medium to long term water boards and municipalities where financially feasible need to build storage capacity so during load shedding there is more to deliver.

Households could install rain water catchment tanks with tax incentives for household catchment tanks. Currently any entity that receives electricity from Eskom can apply for exemption from Eskom and many water boards have applied for exemption and were granted exemption from load shedding but it is more complex at municipal level because electricity is supplied by the municipality rather than directly from Eskom. At municipality level it is difficult due to the rigidity of the infrastructure.

DWS proposed expediting these exemptions so approved applicants can get them more quickly.
It also proposed municipalities get funding from the relief package from the National Disaster Fund to purchase generators and for running costs of running generators during load shedding.

Royalties paid to Lesotho are governed by international agreements between South Africa and Lesotho Highlands Development Authority (LHDA) and it is based on inflation increase. Secondly the Lesotho project is financed by the private sector for both phases. TCTA raises money on the private markets and thereafter the funds are paid to LHDA which uses the money to build in infrastructure.

The Vaal project has been through a number of phases from inception to date. There were various bodies involved with its implementation and currently the intervention is led by Rand Water which was appointed by DWS as the implementing agent. There were other interventions before including that by SANDF. However accurate financials would have to be provided at a later stage.

An entity called ERWAT from the City of Ekuthuleni was also involved in the intervention of the Vaal dam. With Rand Water they have so far spent R227 million as noted in the presentation. However, the largest cost will come with the upgrading of the major waste water treatment works in the area. There has been a population increase due to rural to urban migration with new household water and sanitation connections but unfortunately municipalities have not simultaneously increased their water works. There is a capacity shortage in sewage flows due to population growth in that area. There is a need to upgrade the waste water treatment works which will cost R7 billion as stated in the presentation. The tender process has begun as well as the design for the huge upgrade of the waste water treatment works.

There are limitations to outsourcing expertise to municipalities. With over 200 municipalities, DWS does not have the power to deploy to municipalities and is not funded to have that expertise either. DWS is not funded to have ongoing expertise at municipalities; however the Municipal Infrastructure Support Agent (MISA) under COGTA is used partially for this purpose. Providing expertise is the not the solution to the problem but rather it is the poor management and governance issues instead. In some cases the expertise is never given a chance or heard by the council and municipal manager.

Mr Leonardo Manus, Chief Director: Infrastructure Operations and Maintenance, DWS, said dam safety regulations require an evaluation every five years to be completed but that does not mean dam there is no dam safety. They were currently complying with their quarterly and annual inspections conducted by DWS technical teams but the law requires DWS to have external independent inspections which was overdue but it has since appointed an independent approved person and there will soon be compliance on all dams and not only the top 20.

For the Umzimvubu water project, they have agreed on the philosophy of acknowledging the brownfields that exist in the area. They will conduct a bridging study to bring all communities who would benefit from the scheme and get them connected with the water authorities and district municipalities in the area. The bridging study will provide DWS with answers on what is required to close the gaps. He assured the Committee that the construction unit does reflect the demographics and a report to demonstrate this will be provided.

Mr Masala Mulaudzi, Director, DWS said progress has been made at the Rust De Winter Dam which is a DWS project. A feasibility study has been conducted and an Implementation Readiness Study (IRS) has been submitted. The IRS is currently being reviewed and they are ready to begin with construction during the first quarter of 2023. The budget allocated for this project is R150 million. This particular project is being prioritised as it was long overdue around 2017/18 and he was proud to announce that they we now moving into the construction phase.

The contractor for Giyani water treatment works is Wolo Water Works [unclear] which was appointed by Mopani District Municipality. Appointments have been finalised for three villages through Mopani. For Bombeni Village, HCTC Pty Ltd has been appointed in the amount of R20 million, Muhu [unclear]has Vuku Trading R29.2 million; Ngovu [unclear] has Lamosedile Trading Enterprise R19.9 million.

Thaba Chweu in Mpumalanga is being prioritised for this current financial year by DWS with a R40 million allocation to address water and sanitation challenges. They are happy with the progress. They are now studying in the future to address the other identified challenges presented by Thaba Chweu for future improvements.

The reason Umgeni Water of KZN is operating in Bizana in the Eastern Cape stems back years ago from 2007/8. At that time this decision was taken by OR Tambo due to capacity challenges by Amatole Water in the Eastern Cape. They have not changed that as progress has been satisfactory and there has not been any rift reported between the stakeholders.

Mr Livhuwani Mabuda, DWS Chief Director: Water Resource Planning, explained they did undertake economic assessment of the Mzimvubu Project and that currently they have the on budget funding . The project improved significantly because now they are able to anticipate the Lalini Dam part of the project if funded off budget would prove to be commercially viable. The assessment conducted has revealed that approx 400 hectares would be irrigated to allow for a viable macadamia enterprise to significantly assist the communities. The assessment also showed that 148 000 households would be supplied with water which is about 700 000 people in the area. These areas include Joe Gqabi, OR Tambo, Alfred Nzo District Municipalities. The project cost effectiveness ratio was about R3 per cubic meter with a tariff of R4/5 litre water which is lower than the Amatole Water. This assessment revealed that it can create its own operating energy with surplus. The energy surplus is substantial with a life cycle of about 30 years. It would bring in about R14 billion which is a positive and these funds can be ring fenced for use in the area.

Ms Wisana Mavasa, DWS Communications Director, said communication has been amplified to communicate to the public on the Department activities and programmes such as the projects that were outlined here. We issue media statements and address both national and community media as well social media platforms on a regular basis which aids in amplifying DWS communication efforts to ensure that members of the community and the general public are informed. It also communicates on its anti corruption strategy which is continually covered by the media. There is continuous report back to DWS leadership on a daily basis.

Mr Mandla Math..., DWS Chief Director of Communication, said since the Committee first complained about media perceptions, DWS had concluded its own assessment and it was shown that it did not balance out the various themes currently affecting its operations such as the inclusion of the anti corruption strategy campaign. The Department has therefore undergone to conduct daily monitoring of its communication effectiveness and ensure all themes are reported on and there is balance. It now issues three weekly statements with a balance in those themes. Each of their media statements do attract enormous media coverage and publicity that generate interviews and news articles. They ensure to infuse these themes so all areas are covered. In its assessments, results showed these are balanced and that the three-statement release target is effective and most importantly helps DWS reach as many people as possible. On a weekly basis it monitors public reaction as well as determines an aggregate quarterly to see on average how these themes are balanced.

Ms Lindiwe Lusenga, DWS Deputy Director General: International Water Cooperation, noted that the commercial projects were happening within Lesotho meaning South Africa has no say in the project except for the projects on our borders. Lesotho has its own strategy for the commercial initiative. Portfolio Committee members visited Lesotho and have witnessed them. These strategies include a fish export industry.

Ms Lusenga replied that South Africa does pay royalties to Lesotho. There are two determining factors that would increase royalty fees. Those are the electricity index and operational cost index. With the current challenge of Eskom, there are chances the royalties would increase.

Deputy Minister David Mahlobo said the President had spoken about how the electricity matter would be dealt with and possible exemptions of water treatment plants from load shedding. He commended DWS for its work done on strategies against load shedding. He was aware of the cost incurred due to load shedding and gave the example of the diesel costs that Rand Water reported to run the pumping stations.

Ministry response
Deputy Minister Mahlobo lauded Rand Water's new 210 megalitre Vlakfontein reservoir built to the highest building technology standards which would cover Mpumalanga areas, Gert Sibande and Nkangala District Municipalities as well as Ekhuruleni and Tshwane. In Polokwane they have kept a close eye as Lepelle Northern Water (LNW) has a backup system for any power failure. The Minister has been encouraging DWS to build more energy and water capacity storage facilities.

The Section 63 Vaal Intervention programme is closely watched as they do not intend for the allocated budget to be returned to the fiscus due to poor or non performance . Rand Water and DWS are attending to this and there is some stability but the challenges there remain.

On dam safety, it is important that the Ministry ensure DWS infrastructure is in good condition in terms of structural integrity. The 2022 Jagersfontein Tailings Dam collapse in the Free State was an example that if they did not enforce national as well as international regulations, that manmade natural disasters of unimaginable proportions would follow. However he assured the Committee and public that South African dam safety is of international standard and that the country is part of a global organisation that inspects dam safety. He urged the public to work hand in hand with DWS especially now with the recurring heavy rainfall and floods. With the recent rain deluge in various parts of the country, most dams are full and have started overflowing which demands that DWS authorities open the sluice gates such as the Vaal Dam. He spoke to the unfortunate illegal land occupation in geographical areas which have no by-law enforcement where communities have taken it upon themselves to encroach the flood line and reside there. This is another reason for the flooding devastation. He called on the Committee to conduct inspection in those areas as part of its infrastructure safety oversight. He was pleased with the President's confirmation of the state of disaster in affected areas such as Gauteng and Mpumalanga. The provincial teams led by the DG and DDG have formed part of the disaster management teams and he hopes things will flow just as smoothly as they did in the 2022 KZN and Eastern Cape floods. He repeated his concern about the danger of those communities that have illegally occupied flood line areas. These events have occurred due to global warming and climate change.

He lauded Minister Mchunu for the Loskop Water Supply project which had been on the agenda for many years and is now finally under construction for the people of Sekhukhune and Moutse areas. Strides have been made and efforts will bear fruit soon. This was due to Minister Mchunu's good leadership style which has also worked in eThekwini and Giyani. The Rust De Winter dam had been in the pipeline for close to 20 years and construction has finally begun there too. Progress has been made at Giyani and Nandoni too with the appointment of the water works contractor. Water would be coming to Malamulele. He referenced Nandoni and the water being treated in a water treatment plant so capacity can provide water to the surrounding villages. There is a management structure in place as well as stakeholders including DWS and the district is supporting the municipalities. There is awareness of tensions that may arise naturally due to localization concerns but currently Mopani Mayor Pule Shayi supported by the Ministry has handled these from the word go when they arise.

Deputy Minister Mahlobo made it clear that the message from the Ministry is that the people of Mopane and Limpopo must benefit especially women and the youth from the economic opportunities but that water must arrive at people's homes. These are the points that needed to be addressed and reinforced.

On Thaba Chweu, the biggest hindrance was the pollution of the water systems in that area where some cases have even led to court cases. The Ministry and the DG have provided funds for the Water Services Improvement Grant and the district is the appointed implementing agent. The municipalities can also make use of the Human Settlement Development Grant. Thaba Chweu was in a district that does need assistance in matters of governance and technical abilities and in 2023 there is a project to deal with its water treatment issues.

Minister's Input
Minister Senzo Mchunu said that it was important to address the roles and responsibilities of DWS and that these questions cannot be addressed via the media. DWS is often criticised for not addressing infrastructure but the general public has misinformation on the separation of authority between municipality, the water board or DWS on water and sanitation. Municipalities do not have full authority and responsibilities on infrastructure matters. Previously, they had been left to manage their own operations and were not supervised while the public believes that DWS is to blame for lack of service delivery. As stakeholder there has been a reconfiguration in the approach to work like water reticulation in the country which was not provided for in the legislation. DWS should look into policy matters and adjust legislation to enable DWS to work in a much more synchronized manner with municipalities.

He cautioned that he was not suggesting that DWS take over all water and sanitation works. He emphasized that it is a matter of policy adjustment as some municipalities battle to deliver services but still require all the possible resources from DWS. In some cases, 10 years' worth of work is not showing anything. This does not add up where demand is high but there is low delivery.

The Minister also said that DWS is slowly working with local governments. This was not a power hungry aim but it is more an infrastructure partnership intervention. The Department is currently on an inspection intervention of work done from 2013/14 on all infrastructure matters irrespective of which municipalities. Some issues are provincial and local governance matters. He believed synergy is crucial and the solution.

Minister Mchunu announced that in the first week of March 2023 DWS will be having intense meetings with Gauteng municipalities to deal with the deluge of complaints from residents who live in high land areas like Etwatwa and Tshwane as it needs to get to the bottom of load shedding and water cuts. They aim to have operational flow in infrastructure across the province and Rand Water – the synergy is key which will help with meeting demands.

He questioned the imbalance between litres of water received and litres of water transferred. How is the water managed especially that which is delivered to households? The system of calculating times for Eskom power cuts and cheaper Eskom daily rate times is a complex matter. He concluded that DWS continues to learn and adapt to the current national crisis.

Meeting adjourned.