The Division of Revenue Bill has a substantial potential impact on the effectiveness of high priority water and sanitation programmes of DWAF.

Specifically, there is concern that the conditionality (s.8, s.12 and schedules 5 and 6) might lead to under-spending or misspending.

The Bill as drafted already places administrative burdens on DWAF that are likely severely to constrain our ability to deliver our programmes efficiently and effectively. It also contains provisions (s.12.2) that would allow further requirements to be added administratively which could aggravate these. Literally interpreted, 5.13 could render critical operations illegal from date of promulgation or require an immediate cessation of service provision.

We are highlighting these issues to the Committee as a contribution to the understanding of Parliament of the factors which impact on the ability of Government Departments to meet their delivery targets. We also believe there is an issue of policy to be considered about the extent to which policy is made by administrative decisions of Treasury or by the relevant members of the Executive.


Two of DWAF's programmes are involved. They have the following objectives:

Capital Programme (Schedule 5)
Targeted provision of infrastructure to enable basic water supply to be provided to rural households who do not have access to such services in a manner which reflects the priorities of provincial growth and development strategies, local integrated development plans and the integrated sustainable rural development strategy. Seven million people have been served with basic water supply (leaving a further seven million to be served) and over twenty million people are estimated to be without adequate sanitation. With Cabinet approval, DWAF is leading the roll-out of a full scale sanitation programme implementation programme in rural areas, particularly those vulnerable to cholera.

Operational Programme (Schedule 6)
This programme undertakes the actual operation of water supply and sanitation infrastructure (pre-1994 infrastructure transferred to the Department from former homelands) until it can be transferred to local government or to local government nominated service providers.


Capital programme
Available funds are divided between provinces on the basis of demonstrated need -population without basic water supplies (census and own surveys). Planning and prioritisation is done with local and provincial government in the context of provincial growth and development strategies and local integrated development plans and from 2001, the nodes of the ISROS.

Projects, which meet local priorities and conditions of cost-effectiveness, are approved against a Business Plan. The capital grant (Schedule 5) is used to fund project implementation by an implementing agent chosen for it capacity to deliver effectively. Implementation includes training and transfer to local operators.

Operational Programme
Water and sanitation schemes are operated by the Department's Regional Offices. To promote cost effective operation, they are managed on the Department's Trading Account. Due, in part, to uncertainties about the Department's mandate to levy charges at local level, income is low even where high levels of service are provided. Where Municipalities levy charges on their residents, including for water provision, they have been reluctant to pay part of this to the Department for the provision of the service. The budget provided in Schedule 6 is used to meet the short fall.


(It should be recalled that when the RDP Fund was terminated, because of rollovers, this led to huge instability in those programmes which were spending effectively (DWAF and Housing) from which we are only just recovering.)

A tight linkage of allocations to individual municipalities will prevent reallocation to other projects in other municipalities where there is slow delivery or reluctance to meet conditions (it is our experience that there is often resistance by municipalities to taking responsibility for supplying poor communities.) The knowledge that funds are tied to individual municipalities and cannot be allocated elsewhere will encourage municipalities to press for projects which address the improvement of services to those already served rather than to the poor.

The provision for project implementation frameworks to be determined by Treasury officials without consideration of practical implementation issues is a matter of concern.

This could result in the planning framework (which has taken five years to be established) being discarded with the result, for instance, that factors such as availability of raw water will be disregarded. Since these plans were developed as components of the Municipalities' Integrated Development Plans, this will weaken the IDP process.


Although it is probably too late to amend the Bill, we would like to bring these matters to the Committee's attention and highlight the need to establish processes which support and do not hinder BOTH delivery and accountability.

It does however appear that there are four areas in which improvements could be made:

1. Provision could be made for existing commitments (both in terms of committed capital projects and existing operating arrangements) not to be subject to new (retroactive) conditions.

2. To maintain some flexibility in disbursement, it would be desirable if allocations to individual municipalities for year 1(2001/2) were to be made and reported on an indicative basis.

3. With respect to capacity building (s.14), there should be recognition of the fact that the arrangements for Local Government Capacity Building programmes have already been put in place which, since they involve donor funds, cannot simply be changed. There is also no guidance as to what should be done in the absence of the framework (and it is arguable that it is much too late to provide such since the relevant preparations for a Programme beginning in April should already have been underway last year.)

4. Where there are policy objectives to be met, for instance the timing of the termination of Department of Water Affairs and Forestry's capital programme and a deadline for the transfer of services to local authorities or their nominated providers, provision should be made for such decisions to be taken "in consultation" with the relevant Ministers.

Without such provisions, this sector Department (and we suspect others too) will be held accountable for delivery AND compliance without the ability to determine the framework for implementation. In such a context, accountability will be weakened since it would be unreasonable to hold the Department to account for delivery given the impact of fundamental conditions outside of its control, which were not in place when budget submissions were made.