Department of Water Affairs and Forestry Report to

Department of Water Affairs and Forestry Report to Joint Budget Committee of Parliament Ms PAM YAKO Director-General 29 OCTOBER 2008

CONTENT q 1. Medium term sector and departmental policy priorities q 1. 1 Programme 1: Administration q 1. 2 Programme 2: Water Resource Management q 1. 3 Programme 3: Water Services q 1. 4 Programme 4: Forestry q 2. Medium Term Expenditure Trends within the sector q 3. Departmental budget bids not agreed for 2008/09 budget cycle 2

PROGRAMME 1: ADMINISTRATION PRIORITIES APEX PRIORITIES KEY OUTPUT PROGRESS Governance, organization and transformation Project 9: Self employment opportunities in the second economy §Institutional realignment §Organisational reorganization §Gender and youth programme §EPWP programmes §Institutional oversight q. Launch of Women’s Organisation q. Improved systems for monitoring water drinking quality (Award Won) q. On institutional realignment, consultative model has been approved and the model is ready to be rolled out nationally q. DWAF has launched two National Youth Service projects in Letsemeng Municipality q. In Jacobsdale, 75 have been employed as part of the National Youth Service through construction of sanitation infrastructure 3

PROGRAMME 1: ADMINISTRATION PRIORITIES APEX PRIORITIES KEY OUTPUT PROGRESS Improve financial management processes and systems Project 13: Assistance to SMEs including procurement §Risk management §Internal controls and procedures §Planning and budget §Revenue and expenditure management §Assets and liability management §Accounting and reporting §Functional audit committee §Functional internal audit • The risk management policy and the risk implementation plan have been submitted to top management for inputs and/or approval -Programme Managers have been appointed for a management of the various programmes • Expenditure reports and analist are provided to members of Top Management and EXCO for discussion at these meetings. • To improve the quality of the annual financial statements, interim financial statements will be compiled for the period 1 April to 30 September 2008. 4 Internal Audit new structure has been approved

PROGRAMME 2: WATER RESOURCE MANAGEMENT PRIORITIES APEX PRIORITIES KEY OUTPUT PROGRESS Water resource management Speed up community infrastructure programme Ensure that water resources are allocated to promote social and economic development by completing compulsory license processes in five catchment management areas in 2008/09 Verification process completed in 2 areas, Umhlathuze & Jan Dissels, continuing for Inkomati & Vaal. Process initiated for Crocodile West. 5

PROGRAMME 2: WATER RESOURCE MANAGEMENT PRIORITIES APEX KEY OUTPUT PRIORITIES PROGRESS Water resource management Speed up community infrastructure programme Ensure that available water is used efficiently by, amongst others, completing a policy on conservation and demand management in 2008/09 Draft WC/WDM Regulation & Conditions for water use licences in place Maintain a reliable and equitable supply of water by completing the revision of the national water resource strategy in 2009/10 Revision of the NWRS is underway. 6

PROGRAMME 2: WATER RESOURCE MANAGEMENT PRIORITIE S APEX KEY OUTPUT PRIORITIES PROGRESS Water resource management Speed up community infrastructure programme Draft regulations for the establishment of a water resource classification system published for comments in Sept 2008. Ensure that water resources are of a quality that meets the needs of all customers by completing the water system classification regulations in 2008/09 7

PROGRAMME 2: WATER RESOURCE MANAGEMENT PRIORITIES APEX PRIORITIES KEY OUTPUT PROGRESS Water resource management Speed up community infrastructure programme Maximise the devolution of localized water resources management by establishing all proposed catchment management agencies by 2010/11 • 2 functional CMAs (Inkomati & Breede - Overberg). • Board appointment process initiated for Olifants Doorn, Umvoti, Gouritz, Crocodile West, u. Thukela & Usutu Mhlathuze. Berg, Upper Vaal , Olifants & Limpopo proposal process 8 initiated.

PROGRAMME 2: WATER RESOURCE MANAGEMENT PRIORITIES APEX PRIORITIES KEY OUTPUT PROGRESS Water resource management Speed up community infrastructure programme Improve participatory water management by having co-operation agreements and 3 implementing structures in place for all South Africa’s internationally shared rivers by 2010/11 LIMCOM ratified with Zimbabwe still to ratify. Facilitation for post-conflict restructuring programme in DRC & Rwanda. Funding provided for DRC. Facilitation of DWAF’s contribution at UNCSD, UNFF and WWF 9

PROGRAMME 3: WATER SERVICES PRIORITIES APEX KEY OUTPUT PRIORITIES PROGRESS Water Services Project 10: Speed up community infrastructure programme -Over 5. 5 million people served with water between Apr 2004 and Sept 2008 Ensure that all people in South Africa have access to a functioning basic water supply facility and a functioning basic sanitation facility by 2014 by developing policy and regulation and implementing it at local government level as guided by the strategic framework for water services -Over 4. 8 million people served with sanitation between Apr 2004 and Sep 2008 - 240 953 buckets from original 252 254 removed between Feb 2005 and Sep 2008 (only 11, 301 remain) -84% of population with infrastructure receive Free Basic Water (and 72% of poor 10 population receive same)

PROGRAMME 3: WATER SERVICES PRIORITIES APEX PRIORITIES KEY OUTPUT PROGRESS Water Services Project 10: Speed up community infrastructure programme Provide all schools that currently have no services with a safe water supply and sanitation service by December 2010 • 162 schools served with water (171 under construction) • 141 served with sanitation (148 under construction) • 2268 schools reached though Health and Hygiene Programme 11

PROGRAMME 3: WATER SERVICES PRIORITIES APEX PRIORITIES KEY OUTPUT PROGRESS Water Services Project 10: Speed up community infrastructure programme Provide all clinics that currently have no services as well as those with inadequate services with a safe water supply and sanitation service by 2007/08 All clinics served in 2007/2008 12

PROGRAMME 3: WATER SERVICES PRIORITI ES APEX KEY OUTPUT PRIORITIES PROGRESS Water Services Project 10: Speed up community infrastructure programme • Draft National Implementation Framework completed part of strategy document to be finalised by November 2008 • List of projects submitted to National Treasury • Do. RA gazetted • Implementation commenced (26 projects ongoing) • For the past 2 years the budget allocation has been fully committed. Facilitate the provision of regional bulk infrastructure by 2011 by developing the national implementation framework 13

PROGRAMME 3: WATER SERVICES PRIORITIES APEX PRIORITIES KEY OUTPUT PROGRESS Water Services Project 10: Speed up community infrastructure programme Ensure the provision of safe drinking water by all water services authorities by 2009 by effective monitoring, regulation and support as guided by the strategic framework for water services and specified by South African National Standard 241 Electronic drinking water quality management system functional (100% of WSAs reporting on drinking water quality – 94% of tests comply with SANS 241 health parameters) 14

PROGRAMME 4: FORESTRY PRIORITIES KEY OUTPUT PROGRESS Forestry Ensure the sustainable management of all forests, woodlands and plantations by enforcing the National Forests Act (1998) and associated regulations • Criteria, Indicators and Standards developed for the sustainable management of indigenous forests and commercial forestry to ensure environmental and social responsibility while promoting economic viability. • Protected trees list published in the government gazette. Awareness raising ongoing and enforcement actions taken in case of noncompliance. 15

PROGRAMME 4: FORESTRY PRIORITIES KEY OUTPUT PROGRESS Forestry Reduce incidents of veld, forest and mountain fires in line with the National Veld and Forest Fire Act (1998) by implementing fire management and warning information systems and publishing monthly reports. • National Fire Danger Rating System not finalised, but existing system (Mc. Arthur) used to ensure compliance with the NVFFA. • Fire Protection Associations registered across South Africa with the main focus on areas with high fire danger rating. • Ongoing awareness raising with specific focus during the fire season to assist in preventing fires 16

PROGRAMME 4: FORESTRY PRIORITIES APEX PRIORITIES KEY OUTPUT PROGRESS Forestry Project 9: self employment opportunities in the second economy Contribute to economic development and poverty eradication by implementing the National Forests Act and the Million Trees programme and establishing mechanisms to promote enterprise development in the sector. • Million trees programme implemented and since the launch in September 2007, a total of 1 741 062 trees were planted. • Progress has been made in terms of making information accessible to entrepreneurs in the forestry sector through workshops and the distribution of information. 17

PROGRAMME 4: FORESTRY PRIORITIES APEX PRIORITIES KEY OUTPUT PROGRESS Forestry Project 1: Industrial Policy Action Plan Project 9: self employment opportunities in the second economy • Action plan developed and includes §Key Action Plans for the development of afforestation forest, pulp and suitability maps for Eastern Cape; paper and furniture sector developed and Mo. A with DEAT to align afforestation license process; assessment of skills implemented needs and gaps; forestry industry §Accelerate skills development strategy; funding transformation of the policy for small growers; sawlog forestry sector in line strategy to address sawlog shortage. with the targets in the • Forest Sector BBBEE Charter signed Forest Sector BEE by the Minister & industry on 22 May Charter by 2008. Charter submitted to the implementing the Minister of Trade and Industry for publication in the government gazette forest enterprise in terms of the BBBEE Act, 2003 and development programme and other will be published within the next month. Chief Executive Officer for initiatives Charter appointed. Various Task Teams investigating priority issues, i. e. inclusion of the furniture industry and obtaining baseline info on existing industries. 18

PROGRESS WITH MEETING THE MILLENIUM DEVELOPMENT GOALS GOAL: ENSURING ENVIRONMENTAL SUSTAINABILITY MDG TARGET PRIORITY AREA PROGRESS TO DATE COMMENT MDG Target 10: Halve, by 2015, the proportion of people without sustainable access to an improved water source and improved sanitation Access to water 3 684 204 people served with water as of March 2008 Water target already met and exceeded as figure does not include delivery from April 2008 to date Access to sanitation 2 741 437 people served with sanitation Sanitation MDG has already been met. DWAF is striving to meet our own internal targets of 2010 & 2014. 19

PROGRESS WITH MEETING THE MILLENIUM DEVELOPMENT GOALS GOAL: ENSURING ENVIRONMENTAL SUSTAINABILITY MDG TARGET PRIORITY AREA PROGRESS TO DATE COMMENT Poverty alleviation project Working for Water Over 30, 000 previously unemployed people employed each year in over 300 projects across the country, clearing over 800, 000 hectares of invasive alien plants The programme offers high returns on investment in terms of employment opportunities Rain water harvesting Financial assistance provided to RPF 75 tanks constructed Regulations for financial assistance approved Subsidies granted Forestry – Enterprise Development 6 Forest Enterprise projects supported (Salique, Injaka; Amandlemvelo; Khulanathi Greening Co-operative; Galeshewe CNB Nursery; Ntendeka Wilderness Area) Forestry – Forest Sector BBBEE Charter Commercial forestry subsectors: > 80% of emerging plantation growers are black women & > 50% of small charcoal producers are women Promote gender equality and empower women Target: Increase ownership and promote further participation in Forestry sector. 20

PROGRESS WITH MEETING THE MILLENIUM DEVELOPMENT GOALS GOAL: ENSURING ENVIRONMENTAL SUSTAINABILITY MDG TARGET Promote gender equality and empower women PRIORITY AREA PROGRESS TO DATE COMMENT Working on Fire About 1, 900 previously unemployed people trained and deployed as wildfire fighters in eight Provinces. Excellent returns on investment in terms of high quality work opportunities with strong exiting possibilities Forestry – Enterprise Development 6 Forest Enterprise projects supported (Salique, Injaka; Amandlemvelo; Khulanathi Greening Co-operative; Galeshewe CNB Nursery; Ntendeka Wilderness Area) Additional funds will allow the Department to increase the numbers of projects supported Forestry – Forest Sector BBBEE Charter Commercial forestry subsectors: > 80% of emerging plantation growers are black women & > 50% of small charcoal producers are women Target: Increase ownership and promote further participation in Forestry sector. 21

CHALLENGES • Water quality issues • Water losses in the municipalities • Impact of land reform on commercial forestry • Financing mechanisms on forestry enterprise development • Capacity of local government to deliver (skills, finances) • Sustainability (e. g. ageing) of infrastructure – asset management • Project implementation of new national infrastructure • Impact of fires on timber supply 22

CHALLENGES Legislative: • Water Services Act: Section 78; Reimbursement of Water Boards • Forestry Act, • National Water Act: Regulatory Framework not integrated; Institutions • Oversight • Establishment • Sustainability Finance • SAP – Large system that requires proper implementation and post implementation refinements– long term, user requirements • Inadequate capacity (lack of skilled resources) • Segregation between Exchequer and Trading Entity – functions, staff issues • Extensive infrastructure assets – magnitude, spatial distribution/location: Auditable asset plans needed Rehabilitation and refurbishment of ageing national infrastructure 23

CHALLENGES §Impact of land claims on commercial forestry §Governance (transfer of indigenous forests to other state institutions) §Negative impact of fires on timber supply §Implication of timber shortage – Trees harvested earlier (over-exploitation); closure of saw mills (job losses) §Financing mechanisms forestry enterprise development §Post settlement support 24

MEDIUM TERM EXPENDITURE TRENDS 25

STRATEGIC REVIEW - MAIN The current year DWAF Allocation for 2008/09 Total Exchequer Allocations R 586 million Admin R 3 238 million R 2 427 million R 446 million Water Resource Management Water Services Forestry Augmentation to WTE R 320 million Current R 1 615 million Capital 26

EXPENDITURE TRENDS • Current Year Expenditure – 30. 09. 2008 The Department had spent 42. 84 % of its revised appropriation budget of R 6 968 276 million which Includes an amount of R 269 million for rollovers approved by National Treasury. Based on the straight line approach analysis, the department should have spent at least 50% of its allocated budget which represent 7% under expenditure. 27

EXPENDITURE TRENDS • Current Year Expenditure – 30. 09. 2008 – The under expenditure of the budget is mainly attributable to lower spending on the following projects: – Backlog in Water and Sanitation at schools and clinics • • Regional Bulk Infrastructure Construction of De Hoop Dam 28

EXPENDITURE TRENDS • Expenditure per programme Programmes 2005/06 2006/07 2007/08 R’ 000’ Programme 1: Administration 278 378 526 726 601 181 Programme 2: 1 503 464 1 872 479 2 462 514 Programme 3: Water Services 1 510 998 1 454 758 1 866 926 420 919 441 240 451 077 Programme 4: Forestry 29

EXPENDITURE TRENDS • % Spent per programme 2005/06 2006/07 2007/08 R’ 000 Programme 1: Administration 75% 97% 100% Programme 2: 93% 86% 85% Programme 3: Water Services 99% 98% 100% Programme 4: Forestry 99% 96% 30

ADJUSTMENT ESTIMATES AS ANNOUNCED IN THE MTBPS Programmes Programme 1: Administration Main appropriation 2008/09 R’ 000 Additional appropriation 2008/09 R’ 000 Adjusted appropriation 2008/09 R’ 000 586 696 835 587 531 Programme 2: Water Resoures Management 3 238 399 289 713 3 528 112 Programme 3: Water Services 2 427 999 - 2 427 999 446 182 46 792 492 974 6 699 276 337 340 7 036 616 Programme 4: Forestry Total 31

ADDITIONAL ALLOCATIONS (ADJUSTMENT ESTIMATES) PROGRAMME 1: ADMINISTRATION Donations received for Women in Water awards PROGRAMME 2: WATER RESOURCES MANAGEMENT Funds rolled-over De Hoop Dam 260 million Drought relief 9 million Additional funding Working for Water 9, 68 million Working on Fire 7, 6 million Funds transferred From Department of Arts and Culture for Zeragosa Expo 3, 433 million PROGRAMME 4: FORESTRY Self financing Management of forest in the Lowfeldt area Total R’ 000 835 289 713 4632 792 337 340

CURRENT BIDS 2009 MTEF Activity 2009/10 R’ 000’ 2010/11 R’ 000’ 2011/12 R’ 000’ Building of capacity of the state 43 621 110 411 144 702 Adapting and Mitigating the impacts of climate change 20 000 80 000 105 000 Growing the forest sector 80 498 86 973 93 571 133 000 248 000 440 000 - 5 000 277 119 530 383 788 273 Jobs for growth Rehabilitation of abandoned mines TOTAL 33

CAPITAL BIDS 2009 MTEF 2008/09 R’ 000’ • • 2010 FIFA WORLD CUP water and sanitation supply at host municipalities Regional Bulk Infrastructure Programme The National Hydrological Monitoring Networks Management TOTAL 2009/10 R’ 000’ 2010/11 R’ 000’ 313 664 - - 3 706 000 6 450 000 6 800 000 17 000 48 000 50 000 4 039 664 6 498 000 6 850 000 34

BIDS NOT APPROVED BY TREASURY 2008 MTEF Description of Budgets Bids Requests R‘ 000’ Approval R‘ 000’ Working for Water, Working on Fire, Working for Wetlands 110 000 55 000 National Bulk Infrastructure 160 000 - 20 000 3 000 127 000 - Forestry Charter 30 000 - Additional capacity 30 000 5 000 Million trees programmes Masibambane to Replace donor funding 35

BIDS (CURRENT AND CAPITAL) 2009 MTEF • The department is now awaiting the final allocation letter indicating the outcome of the bids submitted. In terms of the National Treasury’s guidelines this letter should be sent to the Department by 21 November 2008 36

THANKS! 37