TRANSFER PROGRAMME

Department of Water Affairs and ForestryDepartment of Water Affairs and Forestry

TRANSFER PROGRAMMETRANSFER PROGRAMME

PORT FOLIO COMMITTEEPORT FOLIO COMMITTEE MEETINGMEETING

30 April 200230 April 2002


Table of ContentsTable of Contents

• ContextContext

• National PerspectiveNational Perspective

• The Division of Revenue FrameworkThe Division of Revenue Framework

• ConditionsConditions

• Target for 2002/2003Target for 2002/2003


ContextContext DEPT OF WATER AFFAIRS AND FORESTRY :

Managing a large number of water services schemes many of which were transferred from the former Homeland Administrations to the Department in 1994.

Since 1994 has continued to fund the operation and maintenance of these schemes as an interim measure until transfers can be effected to appropriate institutions.

Interim Water services provider (WSP) for 334 water services schemes, as well as a substantial number of water services projects completed since 1994.

In the order of 9456 members of staff attached to the 334 schemes


National PerspectiveNational Perspective

• BUDGET : For operations and maintenance of these schemes has been included in the Division of Revenue Act (Act 5 of 2002) for the 2002/03 financial year as a conditional grant.

• DoRA : Also includes a prescribed framework for the transfer of funds.

• PROGRAMMEPROGRAMME : The Department has initiated a 3 year : The Department has initiated a 3 year programme, commencing from 1 April 2002, to transfer all water programme, commencing from 1 April 2002, to transfer all water services schemes and projects to Local Government. In terms services schemes and projects to Local Government. In terms of this programme, staff, assets and operating budgets will be of this programme, staff, assets and operating budgets will be transferred to Local Government.transferred to Local Government.


National Perspective: Total Count of SchemesNational Perspective: Total Count of SchemesTable 1Table 1

Province Grand Total PercentageEC 49 14.67%FS 2 0.60%KZ 63 18.86%MP 19 5.69%NC 1 0.30%NP 154 46.11%NW 43 12.87%WC 3 0.90%Grand Total 334 100.00%

Percentage 100.00%


National Perspective : Scheme PersonnelNational Perspective : Scheme PersonnelTable 2Table 2

ProvinceWater Services

PersonnelEC 1160KZ 376MP 867LIMPOPO 6650NW 0FS 287WC 0NC 107Total WS Staff 9456


The Division of RevenueThe Division of Revenue• GRANT IN KIND :GRANT IN KIND : During the 2001/02 financial year, the water During the 2001/02 financial year, the water

services services operating subsidyoperating subsidy (DWAF augmentation of the Water (DWAF augmentation of the Water Trading Account) was treated as a “Trading Account) was treated as a “grant-in-kindgrant-in-kind”.”.

• CONDITIONAL GRANT : CONDITIONAL GRANT : As a result of reforms to grant funding As a result of reforms to grant funding from 2002/03, the Water Services from 2002/03, the Water Services Operating SubsidyOperating Subsidy will be will be converted into a converted into a conditional grantconditional grant up to the year 2004/05. up to the year 2004/05.

• EQUITABLE SHARE : EQUITABLE SHARE : The The Conditional GrantConditional Grant is scheduled for is scheduled for consolidation into the “core” Local Government consolidation into the “core” Local Government equitable shareequitable share from the year 2005/06 onwards. from the year 2005/06 onwards.


The Division of RevenueThe Division of Revenue

• OPERATING SUBSIDY : OPERATING SUBSIDY : On a National level, the On a National level, the operating operating subsidysubsidy for the MTEF is as follows: for the MTEF is as follows:

2002/032002/03 R650 687 000R650 687 0002003/042003/04 R720 436 000R720 436 0002004/052004/05 R768 334 000R768 334 000

• NATIONAL TREASURY : NATIONAL TREASURY : Has made limited funds available for Has made limited funds available for the 2002/03 and 2003/04 financial years for the rehabilitation of the 2002/03 and 2003/04 financial years for the rehabilitation of dilapidated water services infrastructure. dilapidated water services infrastructure.

• MUNICIPAL INFRASTRUCTURE GRANT : MUNICIPAL INFRASTRUCTURE GRANT : Broad agreement Broad agreement reached with NT on using the Municipal Infrastructure Grant reached with NT on using the Municipal Infrastructure Grant (Capital programme) to leverage and support the Asset Transfer (Capital programme) to leverage and support the Asset Transfer Programme.Programme.


O&M Budget for DWAF SchemesO&M Budget for DWAF SchemesTable 4Table 4

NC 6 135 6 793 7 245EC 71 952 79 787 85 091FS 22 264 24 647 26 285KZ 17 925 19 837 21 155MP 108 881 120 533 128 546LIMPOPO 341 442 377 975 403 105NW 78 935 87 375 93 186Refurbish't 45000 56000Total 695687 776436 768 334


The Division of RevenueThe Division of RevenueMEASURABLE OUTPUTS for 2002 will include:MEASURABLE OUTPUTS for 2002 will include:

Operation of water services schemes :Operation of water services schemes : Ongoing operation Ongoing operation of water services schemes owned and/or operated by the of water services schemes owned and/or operated by the department.department.

Revenue Collection :Revenue Collection : Improved revenue collection by 10%. Improved revenue collection by 10%.

Billing System : Billing System : Develop and implement an appropriate Develop and implement an appropriate billing system to support municipalities with cost recovery billing system to support municipalities with cost recovery systems, including credit control and indigent policies. systems, including credit control and indigent policies.

Assessment :Assessment : Functional and financial assessment of all Functional and financial assessment of all schemes – by June 2002.schemes – by June 2002.


The Division of RevenueThe Division of RevenueMEASURABLE OUTPUTS for 2002 will include :MEASURABLE OUTPUTS for 2002 will include :

Water Service Provider agreements :Water Service Provider agreements : Water Service Water Service Authority/Water Service Provider agreements Authority/Water Service Provider agreements (including (including provision for the payment of services)provision for the payment of services) in place by 30 September in place by 30 September 2002 2002

WSDP’s and IDP’s :WSDP’s and IDP’s : Ongoing support to local government to Ongoing support to local government to complete their WSDP’s as input to their operating plans, complete their WSDP’s as input to their operating plans, budgets and IDP’sbudgets and IDP’s

Transfers 2002 :Transfers 2002 : Successful transfer of 10% (34) of the Successful transfer of 10% (34) of the

schemes to municipalities and or water boards in 2002/03schemes to municipalities and or water boards in 2002/03

Reward/Incentive System :Reward/Incentive System : Develop and implement, by 1 Develop and implement, by 1 July 2002, an appropriate reward/incentive system for those July 2002, an appropriate reward/incentive system for those municipalities who take early transfer of schemes.municipalities who take early transfer of schemes.


ConditionsConditions

• Operating Budgets :Operating Budgets : By 1 April 2003, operating budgets will By 1 April 2003, operating budgets will fall away unless there is a formal water service provision fall away unless there is a formal water service provision agreement between the department and the relevant agreement between the department and the relevant municipality. municipality.

• Operating Costs : Operating Costs : Operating costs will be recovered from the Operating costs will be recovered from the municipalities and if necessary the interception of the equitable municipalities and if necessary the interception of the equitable share where appropriate. share where appropriate.

• Appropriate Support :Appropriate Support : CBO’s, NGO’s and Water Boards will CBO’s, NGO’s and Water Boards will also recover operating costs from municipalities with DWAF, also recover operating costs from municipalities with DWAF, DPLG and National Treasury providing them with appropriate DPLG and National Treasury providing them with appropriate support in this regard.support in this regard.


ConditionsConditions

The grant will be used to The grant will be used to facilitatefacilitate the transfer of schemes and the transfer of schemes and will be converted into a will be converted into a conditional grantconditional grant in terms of the in terms of the following programme:following programme:

2002/03 – transfer agreements in place by 30 June 2002, schemes 2002/03 – transfer agreements in place by 30 June 2002, schemes transferred with the remaining 3 year operating budget.transferred with the remaining 3 year operating budget.

2003/04 – transfer agreements in place by 30 June 2003, schemes 2003/04 – transfer agreements in place by 30 June 2003, schemes transferred with the remaining 2 year operating budget. transferred with the remaining 2 year operating budget.

2004/05 – transfer agreements in place by 30 June 2004, schemes 2004/05 – transfer agreements in place by 30 June 2004, schemes transferred with the remaining operating budget.transferred with the remaining operating budget.

2005/06 - Operating “conditional grants” for water schemes 2005/06 - Operating “conditional grants” for water schemes transferred to municipalities will be included in the equitable share transferred to municipalities will be included in the equitable share allocation administered by DPLG.allocation administered by DPLG.


Target for 2002/2003Target for 2002/2003

• 34 Schemes Transferred 34 Schemes Transferred • 300 Water service provider agreements by 30 300 Water service provider agreements by 30

September 2002September 2002• 1000 Staff Transferred1000 Staff Transferred• Functional and financial assessment by 30 Functional and financial assessment by 30

June 2002June 2002• 10% Improvement in cost recovery10% Improvement in cost recovery

TRANSFER PROGRAMME

Documents

Transcript of TRANSFER PROGRAMME