SAAWU VIEWS ON THE IMPLEMENTATION OF THE STRATEGIC FRAMEWORK FOR WATER SERVICES

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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY
SAAWU VIEWS ON THE IMPLEMENTATION OF THE
STRATEGIC FRAMEWORK FOR WATER SERVICES 18
February 2004
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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY

• Presentation Structure
• Introduction to SAAWU
• Strategic relevance of water utilities
• SAAWU involvement in the development of and its
  support for the Strategic Framework for Water
  Services
• SAAWU Views on key elements of the Strategic
  Framework for Water Services
• The challenges of interim initiatives
• SAAWU approach and commitments
• Conclusion

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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY
INTRODUCTION TO SAAWU The South African
Association of Water Utilities is a Section 21
Company that was established in March 2001. The
main objective of SAAWU is to build a united
association of public sector water utilities
which co-ordinates, mobilises and uses its
collective capacity to optimise the ability of
municipal authorities to provide sustainable,
efficient and affordable water services to all
the people of South Africa.
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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY
SAAWU MEMBERS (22 Organisations) Albany
Coast Water . Amatola Water. Bloem Water .
Bushbuck Ridge Water Cape Metro
Council . Sedibeng Water Ikangala
Water . Kalahari East/West Water Boegoeberg
Water Lepelle Northern Water Magalies
Water . Mhlathuze Water Midvaal Water . Namakwa
Water Botshelo Water . Overberg Water Rand
Water . Uthukela Water Umgeni
Water . Johannesburg Water NCWSTI . TCTA
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Limpopo Province
Midvaal Water
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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY

• Strategic Relevance of Water Utilities
• The key strategic relevance of the existing water
  utilities in South Africa must be recognised and
  factored into all initiatives taken on the
  implementation of the Strategic Framework for
  Water Services. This strategic relevance is
  directly related to all forms of socio-economic
  development in that
• Approximately 80 of the Gross Domestic Product
  of South Africa (GDP) takes place in the service
  areas of water utilities.
• Approximately 60 of the population of South
  Africa is resident in the service areas of water
  utilities

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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY
The Strategic Framework for Water Services
(SFfWS) SAAWU played a leading role in promoting
the need for a review of policy for the water
services sector SAAWU representatives were
directly involved in the process of drafting the
SFfWS through the core team approach and
bilateral interactions with DWAF and other key
role players SAAWU would again like to complement
DWAF on the consultative and integrated approach
taken in the drafting of the SFfWS SAAWU and its
members are fully supportive of the SFfWS and are
fully committed to its effective
implementation The Cape Town Commitment signed by
SAAWU members and handed to the Minister of Water
Affairs and Forestry
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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY


SAAWU views on the Strategic Framework for Water
Services While all the sections of the SFfWS are
important the SAAWU views on the following
critical sections will be briefly addressed in
this presentation Introduction Sector Vision
Goals and Targets The Institutional Framework The
financial Framework The Planning
Framework National Norms and Standards The
Regulatory Framework Support and Monitoring
Framework
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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY



Sector Goals and Targets SAAWU and its member
organisations are fully committed to playing a
leadership role and working constructively with
all sector stakeholders and role-players to
ensure that the sector goals and targets as set
out in the SFfWS are met.
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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY

• The Institutional Framework
• SAAWU approach and ethos
• Institutional reform must ensure that the best
  possible institutional arrangements are created
  to support municipalities to accelerate and
  improve water service delivery
• SAAWU is a leading participant in the National
  task team on institutional reform
• SAAWU is in agreement and supports the objectives
  for and principles for institutional reform as
  set out in the SFfWS
• SAAWU is a leading participant in the development
  of a strategy for institutional reform that is
  currently being developed for submission in June
  2004

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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY
The Institutional Framework

• Must be done in accordance with the objectives
  and principles as set out in the SFfWS and the
  strategy to be submitted to cabinet in June 2004.
• The process will be complex and take time to
  complete.
• Requires strong political will and commitment
  from key role players ( In particular DWAF)
• Outcomes must support broad socio-economic
  development needs

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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY
The Institutional Framework

• Regional interests for water services must
  transcend local interests ( DWAF role as sector
  leader to ensure this)
• Structural arrangements must recognise
  availability of resources and logical
  arrangements of infrastructure
• Boundaries of regional entities should be
  informed by water management areas and catchments
  in the first instance and political boundaries
  thereafter

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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY

• Institutional Framework (Cont)
• Must build on existing institutional capacity not
  fragment.
• Must create viable and sustainable institutions
• Focus should be on autonomous entities
• Effective utilisation of capacity, skills and
  resources
• Ownership of assets
• Accountability and governance
• ALL DECISIONS ON INSTITUTIONAL ARRANGEMENTS MUST
  BE UNDERPINNED BY WHAT IS IN THE BEST INTERESTS
  OF THE CONSUMER AND CITIZEN

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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY

• Institutional Framework (cont)
• Regulation (Local)
• Recognition of need for local level regulation by
  the WSA (through balanced and fair contracts)
• Local regulation must be balanced with regional
  interests where there is supply to more than one
  municipality
• Strategic Relevance
• The strategic relevance of the water services
  sector must be recognised (dont change for the
  sake of change)
• Institutional reform requires pragmatic approach,
  strong collaboration and resolute execution
• Quick wins are critical

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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY

• Financial Framework
• SAAWU acknowledges the requirement to direct all
  forms of funding for services via municipal
  authorities (DORA) by July 2005
• A number of water boards are operating water
  supply schemes on behalf of DWAF via a range of
  agreements and sizable populations are being
  serviced via these arrangements
• There is a need for a strategy to support the
  withdrawal of the funding by DWAF in order to
  ensure service delivery is not jeopardized
• SAAWU has proposed to DWAF that a multi
  stakeholder strategy be developed as a matter of
  urgency

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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY

• Regulation (National)
• The SAAWU view has always been that a strong and
  ultimately independent regulatory regime is a
  critical requirement
• Effective regulation must take place at all
  business interfaces in the water service supply
  chain (raw water/bulk/reticulation and waste
  management- discharge)
• The role of DWAF as the sector regulator in the
  interim is accepted due to the dynamic changes
  facing the sector in the short to medium term
• Regulatory capacity of DWAF is a concern
• Multi Regulator risk (DWAF, DPLG, NT)

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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY

• Challenges of Interim Arrangements
• A key challenge will be to have a strategy/s in
  place to deal with interim arrangements and
  initiatives while the process of institutional
  reform unfolds and the capacity of DWAF as a
  regulator is established. This strategy should
  address the following issues
• Services must still be delivered, improved and
  extended
• Transfer of DWAF assets and phasing out of
  subsidies to water utilities
• Section 78 processes for water service provider
  options cannot be taken in isolation of the
  institutional reform process where there is a
  potential regional impact
• Securing appropriate WSP contracts

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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY

• Challenges of Interim Arrangements (Cont)
• Current activities must be managed in a manner
  that ensures full cost recovery and institutional
  viability
• Planned initiatives and infrastructure
  development (where investments need to be
  supported by appropriate contractual agreements)
  must be appropriate and relevant
• Decisions taken by municipalities around water
  service delivery options that impact on regional
  interests must be subject to up front evaluation
  and approval
• Water utilities must be able to demonstrate that
  they are efficient and effective water service
  providers who are customer orientated

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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY

• Challenges of Interim Arrangements (Cont)
• Dealing with poorly capacitated and resourced
  municipalities and water utilities
• Extending free basic services in a viable and
  sustainable manner during this period of
  transition
• Building the capacity/capability of the water
  utility to respond to municipal needs in a viable
  manner

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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY

• SAAWU Approach/Commitments
• The SAAWU approach to the issues outlined in the
  presentation is underpinned by
• Active engagement with national government
  agencies and stakeholders on all issues impacting
  on the water services sector (as mandated by the
  general membership)
• Active engagement with national government
  agencies and stakeholders on the strategy and
  process of institutional reform (Through
  representation on the National Task Team on
  institutional reform)

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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY

• SAAWU Approach/Commitments
• Implementation of the Model Bulk Water Services
  Agreement agreed between SAAWU and SALGA (MBWSA)
  with all municipal customers
• Agreeing with SALGA and DWAF the sections of the
  MBWSA that are to be included into the
  regulations to the WSA
• Recognition of the role of municipalities as the
  WSA (Executive authority for water services)

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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY

• SAAWU Approach/Commitments
• Acting in support of municipal water service
  delivery objectives
• Supporting regional objectives and national water
  service delivery objectives/targets.
• Active engagement with SALGA on sector issues
  through the SALGA /SAAWU Working Group

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PRESENTATION TO THE PARLIAMENTARY PORTFOLIO
COMMITTEE OF WATER AFFAIRS AND FORESTRY
Conclusion

• SAAWU and its member organisations are in full
  support of the Strategic Framework for Water
  services and are committed to Playing a leading
  and constructive role in
• Addressing the challenges of the implementation
  of the Strategic Framework for Water Services
  (as per the SAAWU Cape Town Commitment)
• Developing a strategy for institutional reform
  that will clearly and rationally set out the
  framework, principles and guidelines that will
  direct such reform.
• Engaging in the process of institutional reform
  in accordance with the agreed framework,
  principles and guidelines