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Presentation to the Portfolio Committee: Water & Environment

Presentation by

Mr Trevor BalzerProgramme Manager: Special Projects

16 – 17 March 2010

Regional Bulk Infrastructure Grant (RBIG) programme

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Contents1. Introduction2. SONA 3. Overview

a. RBIG Policy b. Definition of Regional Bulkc. Project Criteriad. Implementation Readiness

5. Budget Allocation6. Progress7. Refocusing RBIG Approach8. MTEF Allocation9. New Priorities

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Introduction

Regional Bulk Infrastructure Programme– Grant mechanism established in 2007 to supplement the

financing for the development of regional bulk water infrastructure and regional bulk sanitation collection as well as regional water and waste water treatment works (social component only)

– Budget Allocation (2010 MTEF) R4.42 billion– Estimated R60 billion investment required

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SONA (Extracts) In addition, we will work to improve the effectiveness of local

government, infrastructure development and human settlements We are not a water rich country. Yet we still lose a lot of water through leaking pipes and

inadequate infrastructure. We will be putting in place measures to reduce our water loss by

half by 2014. This government will ensure that our environmental assets and

natural resources are well protected, and are continually enhanced.

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How does RBIG respond to SONA

Support and assist WSA with Bulk infrastructure operations and maintenance

Ensure that WC/WDM is effectively addressed before approving RBIG projects

Ensure adequate O & M, and asset management measures are part of the new RBIG projects

Promote where possible WC/WDM related RBIG projects i.e. Wastewater recycling (re-use)

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• Aim: This fund aims to support Government’s development targets (e.g. eradication of basic water supply and basic sanitation backlogs) as well as socio economic priorities such as the 2010 Soccer World Cup, enablement of growth and development initiatives as well as addressing specific water risks (e.g. water availability, water quality and environmental challenges).

• Responsibility: DWA is responsible and accountable for the management of this specific-purpose Water Services Regional Bulk Infrastructure Grant.

• Accountability: The transfer from National Treasury to DWA will take place as per DoRA and bi-lateral arrangements.

• Assessment / Allocation: The fund is project focused and each case is assessed and selected on merit. It is not formula based and not generically allocated.

• Co-funding; While this fund must enable economic development, the proportional capital cost for higher levels of domestic, commercial and industrial uses must be obtained from suitable co-funding or financing mechanisms

RBIG Policy

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Policy – Definition of Regional bulk

The infrastructure required to connect the water resource, on a macro or sub regional scale (over vast distances), with internal bulk and reticulation systems or any bulk supply infrastructure that may have a significant impact on water resources in terms of quantity and quality.

– “Macro” is defined as infrastructure serving extensive areas across multi-municipal boundaries

– “Sub-regional” is defined as large regional bulk infrastructure serving numerous communities over a large area normally within a specific district or local municipal area

– Over “vast distances” is considered as any distances greater than 5 km

– Bulk infrastructure that has a “significant impact on water resources” includes:• Any bulk scheme that is designed for maximum demand of 5 Ml/day or more• Any waste water treatment plant that discharges into a fresh water resource

system• Any water treatment plant that is designed for a maximum demand of more

than 2 Ml/day

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Project Criteria

• Funding is only allocated for implementation once the Projects is “implementation ready”.

• Projects must be aligned with regional and national water resource development strategies, including compliance to WC/WDM.

• Projects must provide for realistic longer-term development scenarios and “total needs”

• Projects must have stakeholder involvement and commitment.• Projects must be environmentally acceptable (approved EIA

and environmental Management plan).

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Implementation Readiness

• Comprehensive feasibility planning must be undertaken;• Prove socio-economic benefit;• Financial viability;• Illustrate sustainability• Technical acceptability;• Institutional arrangements;• Agreement , commitments for both implementation and sustainable operation;• Projects must be environmentally acceptable; • A financing plan must be in place, • Compliance to water conservation measures;• Acceptable asset management plans and systems; • Completed Environmental Impact Assessment, and• Water licenses

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Previous financial years 2007/08 and 2008/09• 2007/08 R 300.0 million• 2008/09 R 444.7 million• 2009/10 R 616.8 million

2010/11 MTEF Allocation• 2010/11 R 893.0 million (Including the R54 mil Limpopo

drought relief funding)• 2011/12 R 1675.3 million• 2012/13 R 1849.2 million

Budget allocation

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Progress to dateThe total projects implemented since the start of the programme

are as follows:• 107 projects were started since 07/08 financial year;• 50 implementation projects have been initiated and are in

construction, design or tender phase 32 construction, 18 design / tender phase

• 57 feasibility / implementation ready studies underway (budget for implementation approximately R3 billion)

• 9 projects have been completed• New projects can be funded from 2012/13

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Projects completedThe projects completed to date are as follows:2007/08• Chris Hani Tsomo RDP2 BWS • Delmas Phase 1 Emergency • Thaba Chweu BWS 2008/09• Delmas Phase 2 • Maqwassi Hills RWS 2009/10• Mbhashe North BWS• Mathulini BWS • Greater Mthonjaneni BWS Phase 1 • Van Wyksvlei Interim Solution

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Projects completed in next Quarter

Projects to be completed in the next quarter• Mthatha Bulk Water Intervention • Jagersfontein BWS• Groblersdal Lukau BWS • Van Der Kloof/Petrusville BWS

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Jobs created

RBIG has created 3,448 jobs,

This equates to 188,825 person days.

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Project Challenges & Risks 1. Transfer of funds 2. Misuse of funds by Municipalities3. Many projects were not ready and were given funding4. Non-Dora compliance (eg Roll over requests from NT)5. Inadequate capacity by municipalities to manage

implementation6. Delays in implementation of projects and expenditure7. High escalation costs8. Approval process not followed9. Sustainability of projects once completed (commitments

by Municipalities to perform O&M)10. Lack of Co-funding by WSA

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Refocusing our approach• DWA to take greater/direct control for implementing new RBIG

projects utilising:– Project management capacity from DWA: Regional and National Offices– Utilising the capacity of Water Boards – Utilising DWA construction

• Where feasible new assets to be transferred to Water Boards• Focus on sustainability of projects and Operations and

maintenance

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2010 MTEF ALLOCATIONS

REGIONBudget

Allocation 2010/11

Budget Allocation

2011/12

Budget Allocation

2012/13

Total budget Allocation

% OF TOTAL

EASTERN CAPE 155,400,000 309,000,000 321,650,000 786,050,000 17.8%FREE STATE 87,000,000 153,300,000 108,000,000 348,300,000 7.9%GAUTENG 56,000,000 63,000,000 97,500,000 216,500,000 4.9%KWAZULU NATAL 157,775,000 328,400,000 399,360,500 885,535,500 20.0%LIMPOPO 188,000,000 332,000,000 385,989,000 905,989,000 20.5%MPUMALANGA 64,000,000 93,000,000 47,000,000 204,000,000 4.6%NORTHERN CAPE 50,075,000 148,500,000 120,500,000 319,075,000 7.2%NORTH WEST 48,300,000 105,000,000 120,900,000 274,200,000 6.2%WESTERN CAPE 33,557,000 59,200,000 60,700,000 153,457,000 3.5%SPECIAL PROJECTS

Desalination Strategy and Rollout 4,000,000 5,000,000 5,000,000 14,000,000 0.3%Refurbishment of Namakwa WTW 4,000,000 15,000,000 25,000,000 44,000,000 1.0%

Green Agenda 3,000,000 5,000,000 5,000,000 13,000,000 0.3%Acid Mine Drainage 2,500,000 3,000,000 3,000,000 8,500,000 0.2%

HEAD OFFICE 39,393,000 55,940,000 149,507,500 244,840,500 5.5%TOTAL 893,000,000 1,675,340,000 1,849,107,000 4,417,447,000 100.0%

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Total Needs Assessment as at Dec 08

Province Funding requiredEastern Cape R5 b (preliminary)Free State R5 b (R2.6b priority projects confirmed)

Gauteng R3 b (preliminary)Kwazulu Natal R12.5 bLimpopo R13.8 bMpumalanga R3 b (preliminary)Northern Cape R1.8 bNorth West R8.6 b (preliminary)Western Cape R7.3 bTotal R60 b (preliminary)

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New Priorities (2010)

• Broadening access from under-utilised and single purpose dams (Taung and Josini);

• Desalination Strategy and roll-out• Acid Mine Drainage• Green Agenda• Namakwa Water - refurbishment