Select Committee on FinanceWater Services Operating and Transfer

Subsidy10 May 2006

Department of Water Affairs and Forestry

Jabulani Sindane : DGTrevor Balzer: Acting CFORichard Machaba : Manager National Transfers

Contents

• Progress 2005/06 : Water Services Operating and Transfer Subsidy

• Revised Allocations 2005/06 and Expenditure

• Earmarked Funds : Vote 34 2006/07

• Water Services Operating and Transfer Subsidy 2006/07

• 2006 to 2009 Allocations by Province

• General

PROGRESS 2005/06 : WATER SERVICES OPERATING AND TRANSFER SUBSIDY

Progress to date:• Behind our target, were able to conclude majority of transfer

agreements by the target date of 31 March 2006 (39 agreements, 70%) .

• Some municipalities, particularly those with weak administrative and technical capacity, where special arrangements will have to be made, provision built into agreements;

• Progress can be summarised as follows (to 30 April 2006) : – 43 (out of 58) agreements signed (74%);– 1841 staff transferred (23%);– 3584 staff seconded (44%); – 246 schemes with a total asset value of approximating R4.979

billion transferred (72%), and– Refurbishment total expenditure R362 million (43%).

Revised Operating & Transfer Subsidy 20005/06

  O&M   Refurb   Total

Region Gazette Revised   Gazette

Revised   Gazette Revised

Western Cape 5,616 5,516   760 760   6,376 6,276

Northern Cape 17,284 11,399   12,376 10,682   29,660 22,081

Eastern Cape 79,992 74,489   6,772 4,800   86,764 79,289

Free State 17,677 17,677   10,202 10,202   27,879 27,879

KwaZulu Natal 22,438 22,554   12,505 17,488   34,943 40,042

Mpumalanga119,65

3117,921   11,184 11,984   130,837 129,905

Limpopo476,03

6482,804   34,555 36,558   510,591 519,362

North West 69,270 69,270   21,931 21,377   91,201 90,647

Gauteng 12,803 12,803   3,380 6,150   16,183 18,953

Total820,76

9814,433   113,665 120,001   934,434 934,434

DWAF OPERATING SUBSIDY: OPERATION AND MAINTENANCE EXPENDITURE AS AT

31 MARCH 2006 - 2005/2006 (Not audited)April’05 49,085May’05 60,831June’05 66,507July’05 61,557Aug’05 75,788Sept’05 61,230Oct’05 81,478Nov’05 80,326Dec’05 75,239Jan’06 68,114Feb’06 84,420March’06 102,184TOTAL 866,759

DWAF OPERATING SUBSIDY: REFURBISHMENT 31 MARCH 2006 - 2005/2006

(Not Audited)

Month ExpenditureApril’05 33May’05 2,948June’05 246July’05 10,303Aug’05 5,300Sept’05 3,509Oct’05 9,094Nov’05 10,495Dec’05 8,539Jan’06 3,565Feb’06 12,617March’06 22,693TOTAL 89,342

Earmarked Funds : Vote 34 2006/07(Funds may not be used for other

purposes than those specified)

Activity 2006/07 (R,000)

Devolution of funds from Public Works 97 303

Working for Water 369 000

Working on Fire 44 000

Water services operating subsidy (National)

490 500

Conditional grant to Local Government 500 000

TOTAL 1 400 803

WATER SERVICES OPERATING AND TRANSFER SUBSIDY

Division of Revenue Act 2006:• Allocations for 2006/07 reflected in:

– Schedule 6 – Specific Purpose Recurrent Grant allocation, R500 million (where transfer agreements have been concluded)

– Schedule 7 – Allocation in kind to Municipalities for designated programmes, R490,5 million (where transfer agreements are still under negotiation and staff still on the payroll of the DWAF ).

WATER SERVICES OPERATING AND TRANSFER SUBSIDY

SCHEDULE 2006/07 2007/08 2008/09

Schedule 6 500 000 550 000 600 000

Schedule 7 490 500 490 025 530 507

TOTAL 990 500 1 040 025 1 130 507

2006 to 2009 DoRA Allocations for OPERATION AND MAINTENANCE, HR AND REFURBISHMERNT (By Province)

Region 2006/07 2007/08 2008/09

Western Cape (1%) 6,550 4,341 4,899

Northern Cape (2%) 20,451 17,808 13,244

Eastern Cape (9%) 83,930 85,821 108,904

Free State (3%) 26,615 19,862 27,351

KwaZulu Natal (4%) 37,160 41,880 44,547

Mpumalanga (17%) 172,063 169,836 175,153

Limpopo (54%) 530,573 567,601 599,722

North West (9%) 96,571 113,565 129,386

Gauteng (1%) 16,587 19,611 27,794

Total 990,500 1,040,025 1,131,000

2006 to 2009 DoRA Allocations for REFURBISHMERNT (By Province)

Region 2006/07 2007/08 2008/09

Western Cape (1%) 700 0 0

Northern Cape (4%) 8,368 5,000 436

Eastern Cape (6%) 2,279 2,086 18,256

Free State (2%) 7,877 0 0

KwaZulu Natal (12%) 12,179 15,400 18,000

Mpumalanga (6%) 8,166 3,994 11,602

Limpopo (40%) 39,042 70,364 39,562

North West (24%) 23,145 35,733 29,708

Gauteng (5%) 2,184 3,658 11,000

Total 103,940 136,235 128,564

GENERAL• Specific provision made in Section 13 of the DoRA to adjust

allocations to Municipalities once transfer agreements are concluded and staff transfers concluded.

• Date for conclusion of transfer agreements 31 March 2006, 43 Agreements have now been concluded, 12 of the remaining 15 should be concluded by 30 June 2006 (7 in circulation and 3 95% complete).

• Transfer of staff, budgets and schemes to municipalities by 31 March 2007

• Some schemes (in excess of R100 million in value) will require parliamentary approval before transfer

• Conditional Grants will be incorporated into Local Government equitable share from 2008/09 onwards, final breakout 2011/12.

• Important condition for transfers : Necessary capacity must be in place in the receiving institution for the implementation of the conditional grant (NT and DPLG will have to assist in this regard).

“Some for all forever”