National Water Investment Framework & Strategy Advanced Product 2 Steering Committee Meeting & Work Session 26 January 2012

National Water Investment Framework & Strategy

Advanced Product 2

Steering Committee Meeting & Work Session

26 January 2012

1. Overarching Purpose

• To develop and maintain a dynamic comprehensive National Water Investment Framework/Strategy/plan

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2. Purpose of Meeting

• To obtain a common understanding of the purpose and drivers (mandate) as well as scope, principles and format of the product/programme

• To obtain guidance on product design • To facilitate extended and improved information input• To facilitate effective output, ownership and application

3. “Drivers” for Developing an Investment Framework

• National Treasury requirement (national funding is conditional to submitting an Investment Framework)

• Legal requirement: NW Act requires a development plan • Component of NWRS-2 (investment component and

impementation costing) • Socio-economic development & outcomes demand

integrated infrastructure delivery plans• Various programmes require special investment (e.g. Basic

services, wastewater management, disaster management, asset management, demand & conservation management))

“Drivers” for Developing an Investment Framework (cont)

• Outcomes 6,7,8,9+10 programmes demand infrastructure investment frameworks & programmes

• All major project developments (e.g. de Hoop Dam, water reconciliation studies) demand investment frameworks

• Poor track-record & challenges: under utilized dams & systems, housing with no services

• The application of “source-to-tap, tap to source“ management principle

• It is a logical business approach (appropriate planning and solutions

• Cabinet Lekgotla requirements• Funding negotiations, need for asset mangement

4. Response ?

• No comprehensive response and system• Ad hoc products, ad hoc development• Lack of co-ordination, frustration

• NOW: top priority, urgency, high expectations!!!!!!!!!!!

• Include job creation, fuctionality

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Development process 1

• DWA workshop 13 -14 June 2011• Development of “first order high level business

case” and framework:– DBSA responsibility (as per MoU)– Quick win (based on available information –no

research; no development support)– Support task team established – Product developed (As per DBSA)(August/Sept 2011)– Product incomplete

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5. First order product & perspective• Based on input received as per workshop (DWA, Water

Boards, TCTA, MIIF)• Focus on National and Municipal infrastructure• Spread sheet data base with development time frame for

water resources infrastructure• High level national perspective (limited spatial,

institutional and project presentation)• Limited timeframe• Limited validation (comprehensive municipal data base)

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Financial perspective: first order developmentFinancial perspective: first order developmentCapital requirementsCapital requirements• R573 b R573 b is is required over 10 yearsrequired over 10 years ( (R58b/aR58b/a))• R254 b R254 b availableavailable from present funds over 10yrs ( from present funds over 10yrs (R26b/aR26b/a))• Deficit = Deficit = R319 b R319 b (investment must (investment must doubledouble to meet development and refurbishment to meet development and refurbishment

requirements) ( requirements) (R32b/aR32b/a))• Water resources bulk capital requirement Water resources bulk capital requirement = R16.2b/a = R16.2b/a vs vs R11b/aR11b/a available available• WWater services requires ater services requires R394bR394b over 10 years (excludes major turn around over 10 years (excludes major turn around

investment eg Waste water works)investment eg Waste water works)• NNeed to invest in dedicated programmes eg demand & conservation management eed to invest in dedicated programmes eg demand & conservation management • BBased on essential requirementsased on essential requirements

Action:Action:• Differentiated approach to address unique needs in rural & urbanDifferentiated approach to address unique needs in rural & urban• Financing and tariff model to be development to identify and mobilize alternative Financing and tariff model to be development to identify and mobilize alternative

fundingfunding• Ring fencing of water services financial management to enhance self-financing and Ring fencing of water services financial management to enhance self-financing and

viabilityviability• Improve investment funding & grants (outcome 9.2 action)Improve investment funding & grants (outcome 9.2 action)• Stretch existing financing through effective water use and infrastructure Stretch existing financing through effective water use and infrastructure

maintenancemaintenance• Prevent leakage of available financing through effective financial managementPrevent leakage of available financing through effective financial management

6. Existing Task Team• DWA, DBSA and TCTA• Initial purpose was to facilitate specific component input to

DBSA• However: need was identified to develop a comprehensive

system (“as per drivers” and mandate)• Actions extended to also develop the concept, scope and

format• Actions initiate to develop an advanced intermediate

product by March 2012 and a comprehensive dynamic system by March 2013

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6. Framework design and approachh• Framework vs strategy vs plan• Investment framework = Infrastructure plus business

plus people plus institutional and governance• Total value chain (source to tap to outcome to

source)• Includes outcome, technical, management,

institutional and financial information and perspectives

• Existing,5y MTEF, 10y and longer term perspectives

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6. Framework design and approach (2)h (2)• All water related sectors value chains (municipal, agriculture,

energy, industry, etc.) including outcome alignment • Spatial orientated and reflected• Funding and financial model• Strategic analysis and perspectives• Prioritization and appropriate solutions (modeling)• National to project level perspectives• Project status, information• Accessibility and deliverables

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Total sector perspectiveTotal sector perspective

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regionalregional

locallocal

nationalnational

municipalmunicipal

agricultureagriculture

energyenergy

industryindustry

otherother

wastewaste

Water resource

Investment FrameworkInvestment Framework

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Macro WR

Local WR

Reg bulk

Int bulk

reticulation

energy

Agriculture

supply

was

te

Governance &

managem

ent

existing impl committed reality future

Investment modelInvestment model

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Value chain

Development status

technicalfinancial

management

institutional

Investment FrameworkInvestment Framework

16

Macro WR

Local WR

Reg bulk

Int bulk

reticulation

energy

Agriculture

supply

was

te

Governance &

man

existing impl committed reality future

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Section 1Introduction: Background, rationale,

objectives and scope

Section 3Sector Analysis: Issues and challenges

Section 2 Strategic guiding investment principles

Section 5Investment programmes (alignment to Section 4)

Section 6Funding requirements (for all

Section 5 programmes)

Section 7Investment Planning (with options), strategies

and financing models

Section 8Management, Governance, roles and

responsibilities

Section 9Investment Decision making and monitoring

systems

Section 4Objectives, targets,

outcomes and benefits

7. First order product: gaps• Only water resources and municipal water services

perspective• Lack of regional and spatial perspective • Still need local validation and alignment• Extensive municipal information but requires strategic

assessment and alignment• Municipal information based on MIIF modelling• Still need financing modelling and perspective• Operations and maintenance, governance and programme

costing not addressed• Limited prioritisation and scheme alignment

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7. Development process 2• Need to develop comprehensive and functional (live)

framework and system:– Major expectations (Cabinet, Minister, NT)– Concept and framework developed– Extended (intermediate) product initiated (limited time frame)– DBSA support– Comprehensive business framework well advanced and

development programme 3 underway

• Extended task team

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7. Development process 2• Establish extended task team:

– Technical theme champions– Business and governance champions/role players– Sector partners and champions– Strategic and decision making/enabling partners

• Consolidate and align existing programmes and initiatives

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8. Activities8. Activities

21

Integrated system and data base (PSP)Integrated system

and data base (PSP)

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Spatial information systemSpatial information system22

Financial model

Financial model

Strategic assessmentStrategic assessment

Functional & sector outputFunctional & sector output

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3355

Action 1Action 1Action 2Action 2



Existing programmes and activities• Macro programmes (NGP, Vision 2030, Cabinet, Outcomes

6,7,8,9,10; job creation)• Sector programmes (energy, electricity, agriculture and food,

municipal, mining, schools, health, environment, housing, rural development, Cabinet Lekgotla: 22 DMs plus..)

• National water infrastructure, water resources planning, all towns studies, reconciliation studies, bulk infrastructure programme, basic services, infrastructure asset management, Waste water systems /water supply, under utilised dams

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Existing programmes and activities 2• Water quality (resource) and resource protection• Governance programmes (monitoring networks,

regulations, water use efficiency)• NWRS 2 costing • Enabling strategies and programmes: institutional, skills

development, financial model and tariff strategy • Feasibility studies, budgets, development plans• Implementation projects• MIIF, asset management plans and programmes

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9. Development examples9. Development examples

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Large Water Resource Infrastructure ProjectsLarge Water Resource Infrastructure Projects

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R162 billion investment required over 10 years

Spatial targeting to ensure water security for main socio-economic hubs

Water Reconciliation for main growth areasWater Reconciliation for main growth areas

Legend

Study Focus Areas

Economic Growth AreasEconomic Valueof Growth Areas

All town study: Water resource intervention

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Developing Water Solutions for each Town by 2012 Developing Water Solutions for each Town by 2012 (e.g. Free State)(e.g. Free State)

22 towns in Free State require immediate water

resource solutions

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Regional Bulk InfrastructureRegional Bulk Infrastructure

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Bulk cost perspectives & RBIP projectsBulk cost perspectives & RBIP projects

Type Funding Needs

Regional bulk R75b

Internal supply R60b

Sanitation R37b

Total for 10 yrs R172 b

Location of current RBIG

projects

Total R/10yr

AnnualR/a

Required R172b R17b/a

Available R120b R12b/a

Deficit R52b R5/a

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Informal SettlementsInformal Settlements

Wastewater Treatment Works : Performance RatingWastewater Treatment Works : Performance Rating

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Combined Rating of:• capacity exceedance• effluent compliance• skills deficit• delivery & functionality

Total WWTW = 1155821 municipal works

14% good/excellent

56% very poor / critical

Mtata Dam: Communities in needMtata Dam: Communities in need

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9%

47%

44%

Category B4 munics

Growth Backlog Rehab

21%

20%59%

Category B2 and B3 munics


44%

21%

35%

Category A and B1 munics


Municipal Investment Requirements :

Metros & CitiesSmal & medium Towns

Rural

Focus on new & refurbishment

Focus on backlogs & refurbishment

Growth /New Backlogs Rehabilitation

-

5,000

10,000

15,000

20,000

25,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Rm

illio

n (r

eal)

New distribution infrastructure New bulk and connector infrastructure

Rehabilitation Water demand management

Actual

Required

Municipal Water Supply Investment Requirements(bulk investment and rehabilitation are critical)

R7b/aDeficit

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

A B1 B2 B3 B4

Pop

ulat

ion

(mill

ions

)Bulk water supply service

Served by water boards

Served by municipalities

Rural areas are currently not supported by bulk infra & service management:

Action:• develop institutional model (bulk water utilities?)• develop financing model (existing schemes subsidize new schemes?)• political endorsement (performance agreements)

Water Supply - key challenge areas Water Supply - key challenge areas & situation & situationIssue: Issue:

• Access to basic water supplyAccess to basic water supply ( 59% of households in 1994 to ( 59% of households in 1994 to 94% 94% in 2011) in 2011) • Formal backlog as per approved RDP standard (0,82 mil households = 6%)• Housing related needs (2,3mil new houses with associated services) • Requires major infrastructure & financial investment (R62 bil deficit)• Based on available funding & implementation capacity 2014 targets cannot

be met

• Drinking water qualityDrinking water quality• Only 66 of 914 water treatment works got blue-drop status

(95% performance in metros & cities; 62% in other areas)• Service qualityService quality

• While 94% of households have access to infrastructure less than 75% of households have functional services

• Existing infrastructure in poor state and reaching end of life resulting inregular service interruptions and customer dissatisfaction

Resource Bulk Distribution Service delivery Reticulation

Environment Impact

Supply Chain 3

GROUNDWATER & WATER QUALITY CHALLENGE•Scattered rural settlements • Low economic development• Groundwater dependent • Groundwater quality challenges• Limited surface water potential

WATER AVAILABILITY CHALLENGE •Extensive water backlogs • Water stressed areas• Requires large WR & bulk development (DeHoop + oth)

WATER DISTRIBUTION CHALLENGE • Scattered water needs • Within water-rich WMA (but no access)• Requires major WR & bulk developments

Formal Historic Basic Water Supply Needs

Main backlogs in EC, KZN, LP

KEY URBAN WATER SERVICES CHALLENGES

• Urbanization and densification• Housing related “new” services needs• Internal bulk infrastructure challenges with associated service quality challenges (e.g. drinking water quality, wastewater management, interruptions, effective use, loss prevention and asset management)•Environmental impacts and risks (e.g. urban river quality, health and recreation)

2.3 million households (Mar 2011)2.3 million households (Mar 2011)• informal settlements & backyard dwellersinformal settlements & backyard dwellers• note location differs substantially from note location differs substantially from formal backlogs indicated in blue formal backlogs indicated in blue

Basic Urban Water Supply Challenges

Main challenges in

Metros & Cities

Spatially not aligned with

formal backlogs

Integrated delivery example:Integrated delivery example:Olifants developmentOlifants development

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STRYDPOORT MOUNTAINS

BURGERSFORT

DE HOOP DAM

STEELPOORT TOWN

MOTOTOLO

MOKOPANE

POLOKWANE

LEBOWAKGOMO

JANE FURSE

ORWRDP: PROJECT AREA

FLAG BOSHIELO DAM

Carbonatites

Google Purchase ID: 659773445422225


BURGERSFORT

EPSS

DE HOOP DAM

STEELPOORT TOWN

MOTOTOLO

MOKOPANE

POLOKWANE

LEBOWAKGOMO

JANE FURSE

Flag Boshielo RWS

Tubatse RWS

Nebo Plateau RWS

Lebalelo RWSOlifantspoort South RWSMphahele and Groothoek RWS

Olifants-Sand RWS

ORWRDP: WATER RESOURCES DEVELOPMENT

FLAG BOSHIELO DAM

LEGEND

SUPPLY AREAS

EXISTING BULK WATER PIPELINES

ORWRDP PIPELINES

ESKOM PSS INFRASTUCTURE

PUMP STATIONS

WATER TREATMENT

RESERVOIRS

MOOIHOEK



BURGERSFORT

DE HOOP DAM

STEELPOORT TOWN

MOTOTOLO

MOKOPANE

POLOKWANE

LEBOWAKGOMO

JANE FURSE

Flag Boshielo RWS

Tubatse RWS

Nebo Plateau RWS

Lebalelo RWSOlifantspoort South RWS

Olifants-Sand RWS

ORWSDP: SUPPLY AREAS AND FEASIBILITY STUDIES

FLAG BOSHIELO DAM

LEGEND

SUPPLY AREAS


FEASIBILITY AREAS

MOOIHOEK

Mphahele and Groothoek RWS


Olifants River

Steelpoort River

Leolo Mountains

Strydpoort Mountains

Jane Furse

LEGEND

Study Area

Phase 1

Carbonotites

Flag Boshielo

2006-2010


DE HOOP DAM

Olifants River

Steelpoort River

Leolo Mountains

Strydpoort Mountains

Jane Furse

LEGEND

Study Area

Phase 1

Phase 2

WTW

Reservoir

Carbonotites

Flag Boshielo

2011-2014



BURGERSFORT

EPSS

DE HOOP DAM

STEELPOORT TOWN

MOTOTOLO

MOKOPANE

POLOKWANE

LEBOWAKGOMO

JANE FURSEFlag Boshielo

RWS

Tubatse RWS

Nebo Plateau RWS


Olifants-Sand RWS

ORWSDP: WATER SERVICES DEVELOPMENT

FLAG BOSHIELO DAM

LEGEND

SUPPLY AREAS


ORWRDP PIPELINES

WATER SERVICES BULK PIPELINES


PUMP STATIONS

WATER TREATMENT

RESERVOIRS

MOOIHOEK




BURGERSFORT

EPSS

DE HOOP DAM

STEELPOORT TOWN

MOTOTOLO

MOKOPANE

POLOKWANE

LEBOWAKGOMO

JANE FURSEFlag Boshielo

RWS

Tubatse RWS

Nebo Plateau RWS


Olifants-Sand RWS

ORWSDP: TOTAL WATER SERVICES DEVELOPMENT CAPITAL REQUIREMENTS

FLAG BOSHIELO DAM

LEGEND

SUPPLY AREAS


ORWRDP PIPELINES

WATER SERVICES BULK PIPELINES


PUMP STATIONS

WATER TREATMENT

RESERVOIRS

R 254M

R 349M

R 518M

R 935M

R 922M

R 811M

R 255M


TOTAL R 5 400mGoogle Purchase ID: 659773445422225

Task Team/ Steering Committee TOR• Represent sector, theme, business area with associated

responsibilities and implications • Provide input and advice on concept, design, output

and application• Facilitate sector, theme, technical and any other

related information input• Facilitate validation, quality control and alignment• Partake in strategic analysis• Establish ownership and application• Provide development support

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Though leadership may be hard to Though leadership may be hard to define,define,

the one characteristic common to all the one characteristic common to all goodgood leaders is the ability to make leaders is the ability to make

things happen.things happen.

Ted W EngstromTed W Engstrom

Documents

National Water Investment Framework & Strategy Advanced Product 2 Steering Committee Meeting & Work Session 26 January 2012