STRATEGIC FRAMEWORK FOR WATER SERVICES

1. STRATEGIC FRAMEWORK FOR WATER SERVICES Presentation to Parliamentary Portfolio Committee on Water Affairs & Forestry 18 February 2004

2. Outline of presentation • Background • Process to get to the Strategic Framework • Document Structure • Policy highlights and issues • Challenges identified by SALGA • Way Forward

3. Background • More than 11 million, including 9 million rural people served by all spheres of government since 1994 with access to a safe water supply : substantial achievement. • Sanitation high priority and increasing speed of delivery. • Efficient services essential for economic growth and poverty eradication.

4. Water Supply Perspective (Figures based on Census 2001 updated to March 2003) Standpipes further than 200m + boreholes Unacceptable River, pool, dam, stream Standpipes less than 200m Water in house or in yard 28.3 m (61.3%) 6.7 m (14.5%) 6.2 m (13.4%) 5 m (10,8%) Total population : 46.2million 5 m (10,8%) Note : These figures reflect access to infrastructure, not necessarily effective services e.g water quality, flow & sustainability 11.2 m (24,2%) . 17.9 m (38,7%)

5. Sanitation Perspective(Figures based on Census 2001 updated to March 2003) Unacceptable None, pit latrine, buckets, chemical (1.8 m buckets) Flush toilet (connected to sewer systems or septic tank) VIP 24 m 51.9% 4.1m 8.9% 18.1m 39.2% Total population : 46.2million 18.1 m (39.2%) Note : These figures reflect access to infrastructure, not necessarily effective services. 22.2 m (48%)

6. Process to develop the Strategic Framework • “Issues and options” document and consultation thereon: April 02-June 02 • Draft ‘White Paper”: Sept 02 • Second round of consultation • Review with Core Group (DWAF, SALGA, SAAWU, DPLG, NT): Jan - May 2003 • Inputs Minister and final edits: Jul - Aug 03 • Approved by Cabinet as Strategic Framework: 17 Sept 03 • Now official national water services policy

7. Style of document • 10 year vision for sector (not only DWAF) • Comprehensive framework (replaces 1994 White Paper) • Summary of key policies whilst leaving out “guidelines" & detail

8. Document structure • Preface by minister & sector overview • Introduction • Sector vision, goals and targets • Institutional framework • Financial framework • Planning framework • National norms and standards • Regulatory framework • Support & monitoring framework • Conclusion

9. Policy Highlights 1: Targets • Bold step: targets for sector with dates and responsibilities • Developmental targets - Examples: • Access to basic services - 2008 / 2010 • Free basic services - 2005 / 2010 • Transfers - 2005 • Sector Invest 0.75% of GDP annually • Institutional reform – 2013 (strategy 2004) • DWAF reports annually

10. Policy Highlights 2: Mandates • Municipalities: • DWAF: • Water Boards: Ensuring access, planning, regulation and provision. Policy,regulation,support and information management. Regional WSP’s for bulk regulated by DWAF and retail WSP’s (regulated by contract with WSA)

11. Policy Highlights 3: Institutional Reform • Agreement that reform is required • Objectives, principles and approach defined • Reform process set out • national leadership • bottom-up approach • case by case • national institutional reform strategy + finance for implementation • Diverse outcomes likely

12. Policy Highlights 4: Finances • Decentralised fiscal framework • MIG (sector specific conditions) • Tariff policy & setting (use of ES) • Credit control • Financial sustainability

13. Policy Highlights 5:Principles in credit control • Compassion • Communication • Fair and transparent process • Warning • Restricting and not disconnecting, except if tampering or system failure

14. Policy Highlights 6: Planning • Importance of planning (IDP and WSDP) • Integrate water services with water resource planning • Water conservation and water demand management strategy as part of WSDP • Plan for ongoing operations and maintenance

15. Policy Highlights 7:Stepping up the ladder • Provision of basic services most important priority but is only the first step up the ladder (RDP) • Over time water services authorities are expected to provide intermediate and higher levels of service: • wherever practical and • provided it is financially viable and sustainable to do so • Sector to develop financial instruments with funding agencies and National Treasury • Review definition of basic services

16. Policy Highlights 9: Regulation • Importance of planning (IDP and WSDP) • Local regulation by WSA • National regulatory oversight • Format of national regulator to be investigated • Regulation of regional WSPs • Regulatory strategy being developed

17. Policy Highlights 10Mechanisms of Support • Capacity building grant • Knowledge networks (peer to peer) • Advisory service (expertise on demand) • Guidelines and tools (practical) • Strategic support initiatives • Skills development (education, training and capacity building)

18. STRATEGIC FRAMEWORK FOR WATER SERVICES Challenges identified by SALGA

19. Institutional Reform and Section 78 • Need to proceed with institutional reform to reduce costs and increase accountability • Section 78 assessments are ahead of the institutional reform process due to legal requirements • Defining the scopeof the section 78 assessments are a challenge when regional options could be considered, therefore such areas require specific focus. • Ensuring sufficient capacity to undertake & support these activities remain a challenge

20. Transfer Challenges • Joint implementation of the transfer policy remains a challenge, particularly with regard to: • agreement on the condition of assets to be transferred • the number of staff to be transferred • the financial impact on the recipient municipality • “Joint Response Team” approach in dealing with the implementation challenges is welcomed

21. Sanitation • Meeting sanitation targets are a major challenge in the current policy environment • Increased capital and operating funds required to meet the sanitation challenge, including free basic sanitation • DWAF needs to clearly define basic sanitation for dense (often urban) areas. Current policy only caters for less dense (rural) areas, in the form of a VIP per household. This option is not viable in most dense settlements

22. Free basic services policy • The message reaching communities is 'free services' and not 'free basic services' • Communication needs to be improved to prevent negative (financial) impacts on municipalities

23. Planning • Planning initiatives of municipalities, national and provincial government need to be properly aligned. • Also relevant to water services & resource planning. • Linking planning activities of the departments of housing, education and health to municipal planning requires more effort.

24. Support • DWAF support needs to be closely integrated with the work being done by SALGA and must be targeted to those municipalities most in need of assistance. • Continued cooperation between SALGA & DWAF through the Masibambane (sector) approach should ensure optimal use of resources

25. STRATEGIC FRAMEWORK FOR WATER SERVICES WAY FORWARD DWAF SALGA Collaboration

26. Way Forward: Implementation • DWAF and SALGA ‘Communication Roll Out’ to ensure municipalities and sector understand implications of the SFWS • SFWS is a framework – much of the detail is still to be clarified • SALGA / DWAF Summit of October 2003 resulted in Declaration to cooperate and jointly implement the SFWS • All further work to be done through sector task teams

27. Implementation (2) • Institutional Reform • Sector task team established (SALGA, DWAF, NT, DPLG, SAAWU) • Consultant support in place • Strategy development to be completed by June 2004 • Principles of Reform • WSA’s are responsible • WSP’s accountable to WSA • Bottom-up process • National government will lead process • Incremental and case-by-case • Existing and sound business case • Accountability of regional WSPs to WSA • Transform, rather than establish new institutions

28. Implementation (3) • Regulatory Strategy development initiated • Review of sector legislation scoping initiated (amendments to WS Act) • Strategic Assessment of “State of Sector” reporting initiated • Developing a format and scoping of report

29. Implementation (4) • Institutional Support Strategy being initiated • Funding • MIG: sector conditions set (next slide) • Investment modeling to be done at provincial & municipal level • Measuring target achievement complex • Sector collaboration • Great achievements, but much still to be done, particularly in some provinces • Capacity in sector still a challenge

30. MIG • Conditional Grant – cross cutting and sector specific conditions • For basic services only (backlog & the poor) • DWAF and SALGA engaged with other sector stakeholders to set policy and procedures • DWAF concerned about capacity of some municipalities to implement MIG • DWAF must support LG on implementation of projects through MIG

31. Transfer Challenges • The target for transfer of all DWAF owned schemes is June 2005 • Currently slightly behind schedule • Possible special arrangements where municipalities are weak in terms of administrative and / or technical capacity • Limpopo a particular challenge

32. Transfer Progress • 11 Transfer Agreements signed (8 municipalities and 3 water boards) • Negotiations at advanced stage with 21 municipalities (likely to be concluded before 2003/4 financial year end). This represents 34% of agreements. • 48 schemes have been transferred • Total asset value transferred is R648.5m • 316 staff transferred • R25.9m has been transferred to municipalities and water boards for refurbishment

33. Water is Life ! Sanitation is Dignity !