TRANSFER PROGRAMME

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TRANSFER PROGRAMME

• PORT FOLIO COMMITTEE MEETING30 April 2002

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Table of Contents

• Context
• National Perspective
• The Division of Revenue Framework
• Conditions
• Target for 2002/2003

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Context

• DEPT OF WATER AFFAIRS AND FORESTRY
• Managing a large number of water services schemes
  many of which were transferred from the former
  Homeland Administrations to the Department in
  1994.
• Since 1994 has continued to fund the operation
  and maintenance of these schemes as an interim
  measure until transfers can be effected to
  appropriate institutions.
• Interim Water services provider (WSP) for 334
  water services schemes, as well as a substantial
  number of water services projects completed since
  1994.
• In the order of 9456 members of staff attached
  to the 334 schemes

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National Perspective

• BUDGET For operations and maintenance of these
  schemes has been included in the Division of
  Revenue Act (Act 5 of 2002) for the 2002/03
  financial year as a conditional grant.
• DoRA Also includes a prescribed framework for
  the transfer of funds.
• PROGRAMME The Department has initiated a 3 year
  programme, commencing from 1 April 2002, to
  transfer all water services schemes and projects
  to Local Government. In terms of this programme,
  staff, assets and operating budgets will be
  transferred to Local Government.

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National Perspective Total Count of
SchemesTable 1
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National Perspective Scheme PersonnelTable 2
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The Division of Revenue

• GRANT IN KIND During the 2001/02 financial
  year, the water services operating subsidy (DWAF
  augmentation of the Water Trading Account) was
  treated as a grant-in-kind.
• CONDITIONAL GRANT As a result of reforms to
  grant funding from 2002/03, the Water Services
  Operating Subsidy will be converted into a
  conditional grant up to the year 2004/05.
• EQUITABLE SHARE The Conditional Grant is
  scheduled for consolidation into the core Local
  Government equitable share from the year 2005/06
  onwards.

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The Division of Revenue

• OPERATING SUBSIDY On a National level, the
  operating subsidy for the MTEF is as follows
• 2002/03 R650 687 000
• 2003/04 R720 436 000
• 2004/05 R768 334 000
• NATIONAL TREASURY Has made limited funds
  available for the 2002/03 and 2003/04 financial
  years for the rehabilitation of dilapidated water
  services infrastructure.
• MUNICIPAL INFRASTRUCTURE GRANT Broad agreement
  reached with NT on using the Municipal
  Infrastructure Grant (Capital programme) to
  leverage and support the Asset Transfer Programme.

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OM Budget for DWAF SchemesTable 4
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The Division of Revenue

• MEASURABLE OUTPUTS for 2002 will include
• Operation of water services schemes Ongoing
  operation of water services schemes owned and/or
  operated by the department.
• Revenue Collection Improved revenue collection
  by 10.
• Billing System Develop and implement an
  appropriate billing system to support
  municipalities with cost recovery systems,
  including credit control and indigent policies.
• Assessment Functional and financial assessment
  of all schemes by June 2002.

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The Division of Revenue

• MEASURABLE OUTPUTS for 2002 will include
• Water Service Provider agreements Water Service
  Authority/Water Service Provider agreements
  (including provision for the payment of services)
  in place by 30 September 2002
• WSDPs and IDPs Ongoing support to local
  government to complete their WSDPs as input to
  their operating plans, budgets and IDPs
• Transfers 2002 Successful transfer of 10 (34)
  of the schemes to municipalities and or water
  boards in 2002/03
• Reward/Incentive System Develop and implement,
  by 1 July 2002, an appropriate reward/incentive
  system for those municipalities who take early
  transfer of schemes.

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Conditions

• Operating Budgets By 1 April 2003, operating
  budgets will fall away unless there is a formal
  water service provision agreement between the
  department and the relevant municipality.
• Operating Costs Operating costs will be
  recovered from the municipalities and if
  necessary the interception of the equitable share
  where appropriate.
• Appropriate Support CBOs, NGOs and Water
  Boards will also recover operating costs from
  municipalities with DWAF, DPLG and National
  Treasury providing them with appropriate support
  in this regard.

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Conditions

• The grant will be used to facilitate the
  transfer of schemes and will be converted into a
  conditional grant in terms of the following
  programme
• 2002/03 transfer agreements in place by 30 June
  2002, schemes transferred with the remaining 3
  year operating budget.
• 2003/04 transfer agreements in place by 30 June
  2003, schemes transferred with the remaining 2
  year operating budget.
• 2004/05 transfer agreements in place by 30 June
  2004, schemes transferred with the remaining
  operating budget.
• 2005/06 - Operating conditional grants for
  water schemes transferred to municipalities will
  be included in the equitable share allocation
  administered by DPLG.

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Target for 2002/2003

• 34 Schemes Transferred
• 300 Water service provider agreements by 30
  September 2002
• 1000 Staff Transferred
• Functional and financial assessment by 30 June
  2002
• 10 Improvement in cost recovery