Portfolio Committee on Water Affairs and

Forestry

Support Received from DWAF and Amatola Waters Role in Rural

Development of Water, Sanitation and Forestry

16-18 OCTOBER 2006

Contents

• Background• Services Received from DWAF• Contribution to Rural Development – Forestry• Contribution to Rural Development – Water• Contribution to Rural Development – Sanitation• Amatola Water Challenges• Questions

Our VisionTo be the service provider of choice for Local Government in the Eastern Cape, delivering a

full range of water services to improve the quality of people’s lives.

Our MandateAmatola Water exists to render water services to water sector institutions, local government authorities and to other customers as defined in the legislation and water service policy of

South Africa

Background

State owned water utility established in Nov 1997 Operational since 1998 as a Water Board Designated area of operation = 45 800 sq.km Area includes BCM, ADM, portions on CHDM, Ukhahlamba

and Cacadu DM’s Head Office located in Vincent, East London Governed by Board of Directors that includes the CEO Managed by CEO and 4 Divisional Directors 235 employees Manage water service assets to the value of R 250 million Production capacity of 102.74 Mega liters potable water per

day. Secondary services offered to support WSA’s and WSP’s

Services received from DWAF• Institutional Reform Leadership – DWAF is leading the process in

the Eastern Cape in a transparent and inclusive manner• Board Training – DWAF have funded the training non-executive

board members• Co-ordination of Strategic Studies – DWAF are funding and co-

ordination the review of the Amatole Water System Reconciliation study

Contribution to Rural Development - Forestry

• No forestry support activities at present

Contribution to Rural Development - Water

• AW produced 22,758 million kiloliters of potable water in the 05/ 06• Estimated 24 % benefited rural poor directly • Remaining 76% distributed internally by WSA’s (the ADM & BCM)• ADM PIA contract – R71,15 million - 65% focus on water backlog elimination• DWAF WSP Transfer – managed CHDM & ADM processes on behalf of WSA’s• DWAF Dam Management Contract – R 5.495 million contract to manage 21

dams in Eastern Cape• Water Hyacinth Control – DWAF contract to manage Kubusi river,

Wriggleswade and Laing Dams• Butterworth Emergency Intervention – operated Butterworth water systems

during May / June 06 strike action on behalf of the ADM• Learnerships – trained 11 females from rural areas as plant operators in 2006,

employed 7 after training• Education Programme – 1318 school pupils from disadvantaged background

toured Nahoon Dam and WTW in 2005 / 06• ADM WSDP Review – in progress at no cost to ADM (R 310 000)• ADM Water Demand Management Programme – assisting ADM to develop

programme at no cost to ADM (R 320 000)• National Water Week – joint planning & participation with DWAF in region• MOU’S – signed with Mvula Trust & ADM to co-operate in water sector activities

Contribution to Rural Development - Sanitation

• ADM PIA contract – R71,15 million - 35% focus on sanitation backlog elimination

• Butterworth Emergency Intervention – operated Butterworth sanitation systems during May/June 06 strike action on behalf of the ADM

• ADM WSDP Review – includes sanitation planning at no cost to ADM

• Nxamkwana Sanitation Project – implementation R 7.98 million project to construct 3523 composting toilets in BCM

• Rural Schools Sanitation Programme – implementing R 48.8 million project to develop sustainable sanitation at rural schools in the Eastern Cape for the Departments of Education and Science & Technology

• Appointed by DWAF to co-ordinate the National Microbiological Monitoring Programme in the ADM and ORTDM areas.

Typical Activities

Butterworth Emergency Intervention – June 06

Nxamkwana Sanitation Project - BCM

ADM / AW MOU

Water Hyacinth Control

Water Week Activities – E. Cape

DOE / DST Rural Schools Sanitation Programme – E. Cape

Education Programme – E. Cape

Dam Management – Mnyameni Dam

National Microbiological Monitoring Programme – ADM & ORTDM

CHALLENGES - TARIFF NEGOTIATIONS

• Bulk Raw Water Tariff– Price of raw water high for poor province– Results in high tariffs for customers

• Bulk Treated Water Tariff– Delayed approval by DWAF creates instability in

sector• 2007/08 Tariff Approval Process

– DWAF raw water tariffs due in September 2006– Tariff negotiations to commence in October 2006– Final proposal submitted to DWAF on 25 January

2007– DWAF table in Parliament on 15 March 2007

CHALLENGES - DWAF COMPLIANCE AUDIT

• DWAF Compliance Audit instituted– Consultation process lacking in terms of

communication with affected water boards to assist with understanding the reason behind the audit and to make provision for costs

– High cost of audit has a large impact on the finances of small water utilities

• Preliminary information submitted to Auditors for planning purposes

• Audit to be complete by 25 January 2007

CHALLENGES - TRANSFER OF DWAF-OWNED ASSETS

• Refund of expenditure incurred to refurbish DWAF-owned assets on inception of the water board in 1998

• Transfer of assets managed by Amatola Water

CHALLENGES - SECTION 78 ASSESSMENTS

• Amatola Water is not fully part of the programme• Some municipalities use Section 78 outcomes as a

substitute for Institutional Reform

CHALLENGES - INSTITUTIONAL REFORM

• Desire for Department to play active leadership role in ensuring all roleplayers are in and fully identify with objectives of project.