Business Case for the Pongola to Umzimkulu CMA D: WMI Governance

Business Case for the Pongola to Umzimkulu CMA

D: WMI Governance

Why develop a business case?• There are effectively two streams of work required in order to

establish a CMA.CMACMA

National Water Act

Public EntityPublic Entity

Public Finance Management Act

ProposalProposal

Govt Gazette

Govt Gazette

Business CaseBusiness Case

PFMA Schedules (3A)PFMA Schedules (3A)

MinisterMinister Joint Evaluation PanelJoint Evaluation Panel

Approval from AG to open an accountApproval from AG to open an account

Requirements of a Business CaseThe business case will therefore be built around the following themes (capturing these elements):

•Motivation for the entity•Corporate form of the entity•Functions of the CMA•Organisational considerations•Financial arrangements•Institutional and governance arrangements•Mechanisms for Regulation and Oversight•Change management•Risk management•Implementation plan

Various addenda may be developed on specific issues, such as remuneration, performance management and contracts.

Description of the Pongola-Umzimkulu WMA

•Location•Topography•Climate•Socio-Economic Dynamics•Water Availability and Requirements•Key Water Challenges





Figure 1: Economic contribution per sector in the CMA (KZN Provincial Planning Commission, 2011)

4%2%

22%

2%

3%

14%14%

20%

6%

13%Agriculture, Forestry,FishingMining and quarrying

Manufacturing

Electricity, gas and water

Construction

Wolesale, retail, catering,accommodationTransport, storage andcommunicationFinance, insurance, realestate, business servicesCommunity, social andpersonal servicesGeneral Government



Strategic motivation

•Water as a finite resource• IWRM• Hydro boundaries• Subsidiarity• Development & empowerment• Viability

•Framework for CMA Establishment•Evolution of the CMA

• Legitimacy• Consolidation• Responsible Authority

Corporate Form

•Legal nature of CMA• Service Delivery Entity• PFMA, Schedule 3A

•A case for devolution• Stakeholder engagement• Ring-fencing risk• Access to skills, specialists

•Appropriate corporate form

Public Service including:National Government AgenciesProvincial Government Agencies

Public Entities including:Stewardship and Research EntitiesService Delivery EntitiesRegulatory and Statutory Advisory Entities

Government Enterprises including:Statutory Corporations and Financial IntermediariesState Owned CompaniesSubsidiary Companies of public entitiesState Interest Companies

Public Interest Institutions including:Education, Welfare, Recreation Institutions and Professional Bodies

Legal Process•Introduction•Legal requirements

• Amendment of the boundaries of the water management area

• Disestablishment of the Thukela and Usuthu-Mhlatuze CMA

• Amending of the water management area and name of the Pongola-Umzimkulu CMA

Functions of the CMA•Introduction•Delegation and assignment•Delegation of functions•Phased transfer of functions

• Phase 1: Developing relationships and legitimacy• Phase 2: Build capacity and consolidate • Phase 3: Fully functional and responsible authority

•Considerations for the delegation process•Implications for DWA structure and functions

Functions of the CMA

Phase 1: Developing relationships and legitimacy• Involvement in water use registration and verification of water use• Advising and supporting licence applicants on the licensing process and

requirements • Advising DWA on water use authorisations and licenses• Checking of water use against licence conditions and informing DWA of the

results where compliance enforcement is required.• Validation of information submitted for registration.

Phase 2: Build capacity and consolidate• Resource Directed Measures• Water Resources Monitoring • Disaster Management• Water Conservation and Demand Management• Operating of Waterworks• general authorisations and limited authorisation functions• Institutional Oversight

Phase 3: Fully functional and responsible authority • Water Use Authorisation and Licensing• Compulsory Licensing• Issuing of Directives

Organisational Arrangements

•Proposed functional structure of the Pongola-Umzimkulu CMA

Organisational Requirements

•Staffing requirements•Human resource considerations•Mechanisms for Regulation and Oversight•Change management•Internal change management•Rebranding and stakeholder engagement strategy



Total staff 5 31 40 56 63 72

CEO 1 1 1 1 1 1

Manager 1 6 6 6 6 6

Senior 2 8 12 16 19 22

Junior 1 11 15 22 26 31

Admin 1 5 6 11 11 12

Total staff 3 13 16 26 26 26

CEO 0 0 0 0 0 0

Manager 0 3 3 3 3 3

Senior 1 4 4 8 8 8

Junior 1 4 5 10 10 10

Admin 1 2 4 5 5 5

Total staff 3 21 22 32 34 42

CEO 0 0 0 0 0 0

Manager 0 3 3 3 3 3

Senior 1 6 6 10 11 14

Junior 1 8 9 13 14 19

Admin 1 4 4 6 6 6

Yr0 Yr1 Yr2 Yr3 Yr4 Yr5

So

uth

ern

Cen

tral

No

rth

ern

Total Staff in Year 5 = 140



Financial Arrangements

•Sources of Finance•Flow of capital•Financial systems arrangements•Financial analysis

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Institutional and governance arrangements•Corporate Governance Principles•CMA Governing Board•Board membership•Process for appointment of board•Governance Committee Structures•Appointment of CEO

Risk & Risk Management

•Complexity of the project•Spheres of Government•Stakeholder acceptability•Delegation of powers and functions•Financial management•Climate change and natural disasters•Human resources•Organisational technologies

Implementation Considerations

•Institutional establishment• WMA boundaries• Ring fencing revenue• Development of the Business Case• Stakeholder engagement• Establishment of the CMA

•Organisational development• Appoint the Governing Board• Establish initial systems• Appoint CEO• Transfer and appoint staff

Implementation Considerations

•Operationalisation• Develop first Business Plan• Transfer of seed funds• Delegation of functions• Oversight and monitoring

•Stakeholder engagement and capacity building• Establish and implement engagement plan• Establish and implement capacity building and support programme

Thank You!

Documents

Business Case for the Pongola to Umzimkulu CMA D: WMI Governance