Contents. Abbreviations. Minister s Message 1. Director-General s Message 2. Executive Summary 3. Objectives of the WSA Checklist 5

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2 Contents Minister s Message 1 Director-General s Message 2 Executive Summary 3 Objectives of the WSA Checklist 5 Links to other Programmes 6 Checklist Edition Two Results: Provincial Observations 10 Checklist Edition Two results: National Perspective 22 Conclusion 30 Abbreviations CMA DM dplg DWAF HO IWRM KZN LM Catchment Management Agency District Municipality Department of Provincial and Local Government Department of Water Affairs and Forestry Head Offi ce Integrated Water Resources Management Kwa Zulu Natal Local Municipality MSA Municipal Systems Act (Act 32 of 2000) MSP RPMS SFWS WC/DM WSA WSDP WSP WWTW Municipal Support Plan Regulatory Performance Management System Strategic Framework for Water Services Water Conservation and Demand Management Water Services Authority Water Services Development Plan Water Services Provider Waste Water Treatment Works i

3 Foreword by the Minister Upon completion of this Water Services Authority Checklist Edition Two (2007/2008), I gratefully acknowledge the effort of the councilors and administration of local government, and my department, in taking time to engage with the Water Services Authority Checklist, a tool that promotes legislative compliance self-assessment by local government. An impressive 149 municipalities have participated in the Edition Two process, and my Department is certain that we have achieved our multiple objectives, including further strengthening relationships with the local sphere and promoting increased awareness regarding legislative obligations. I remain convinced that this increased awareness in municipal councils, will stand our local leadership in good stead as they work with my Department to tackle a myriad of water services challenges in our common commitment to delivering on Government s promise of universal access While the analysis of results indicates that there has been substantial progress on a number of compliance issues, including the critical issue of the completion of transfer agreements, it remains a matter of grave concern that the promulgation and implementation of by-laws remains a challenge. We must redouble our efforts to ensure that local legislative arrangements are in place, if we are to ensure the delivery of high-quality, sustainable services to all our communities. I am also pleased that this WSA Checklist Edition Two has progressed to adopt our broad sector wide approach and has made links to local government as water user. This report shows that many municipalities are already engaging positively on issues such as Water Conservation and Demand Management. We have a diffi cult task of not only building on gains made in terms of WSA legislative compliance, but also to sharpen our focus on real issues that are affecting water and sanitation in our country. Our government has met the target of the Millennium Development Goals in relation to water and sanitation what has made our targets on water and sanitation a priority is that water is central to meeting other MDGs for example poverty alleviation, health education, and even job creation. Whilst we acknowledge that our sister sphere of local government has an enormous and challenging mandate in regard to implementing service delivery, and we acknowledge our duty to support local government; we have commenced with institutional realignment of the Department of Water Affairs and Forestry to enable it to regulate service delivery in the interests of our communities. The information gathered through the previous and this current WSA Checklist process has fed into DWAF s response in its capacity as supporter, and we will now ensure we react to it in our role as regulator. We hope that the WSA Checklist results, through this report, reach a broad set of stakeholders so we can engage on issues around support and regulation. I would like to recommend my fellow politicians to incentivise action to result not only in legal compliance with Water Services Authority obligations, but also take very purposeful steps to positively impact our key priority areas of drinking water quality, wastewater discharge and contracting with Water Services Providers. Ms Lindiwe Hendricks, MP THE MINISTER OF WATER AFFAIRS AND FORESTRY 1

4 Foreword by the Director-General Colleagues Presented in this report is the Department of Water Affairs and Forestry s (DWAF) analysis of the outcomes of the second edition of the Water Services Authorities (WSA) Checklist. We are indeed grateful that municipalities continue to prioritise engagement with this important self-assessment exercise. I am particularly pleased that 149 municipalities have displayed such willingness to assess their legislative compliance. I wish to take this opportunity to thank Municipal Managers across the country for their willingness to share the outcomes of Council s self-assessment with stakeholders through their approval of published results. While we acknowledge that some discrepancy is possible, nevertheless your collective effort contributes greatly towards the intelligence of the Department and the sector. I am pleased to announce that the Department will be building upon the success of the WSA Checklist, as we strengthen our Regulatory Performance Measurement System, as the strong relationships developed between DWAF and WSAs through the Checklist process will prove invaluable. We trust that each municipality will also have evaluated progress made to date on the eight areas of WSA functionality and will have refl ected on how improvement can be achieved on the implementation of these and future initiatives. We respect that local government, with the strategic support of the South African Local Government Association (SALGA), will take the lead in prioritizing water and sanitation service delivery issues appropriate to its communities, and will refl ect these in Municipal Support Plans, and also ensure alignment with strategic Water Services Development Plans and operational Water Services Provider Business Plans and budgets. The Department will be focused on the outcomes of such actions. As DWAF, we have prioritized programmes aimed at building the foundations essential for more effective and comprehensive regulation; namely drinking water quality, wastewater discharge, water conservation and demand management and Water Services Provider regulation. As drinking water quality in particular is not something on which we can compromise, DWAF is centering much of its attention on municipalities facing diffi culties in this area. The Department is also focused on fi ghting pollution of water resources. Here we are implementing the Waste Discharge Charge System and stepping up our efforts as a regulator to combat non-compliance. We are increasing the capacity of our Compliance, Monitoring and Enforcement (CME) unit and will be taking a tough stance with regard to transgressions. Pollution in all its forms cannot be tolerated and in dealing with pollution we will leave no stone unturned. We trust that local government will support and benefi t from our actions, as we work together to ensure a legislatively complaint, highly effective and sustainable water sector in South Africa. Finally, I wish to thank and congratulate DWAF s Checklist team both at Head Offi ce and across the nine regions for their Herculean effort put into ensuring such a magnifi cent response to the WSA Checklist second edition. Your efforts in ensuring responses and publication of these important self-assessment results from 149 Water Services Authorities is unequalled your endeavor is highly appreciated. Ms Pam Yako DIRECTOR-GENERAL OF DEPARTMENT OF WATER AFFAIRS AND FORESTRY 2

5 Executive Summary The Water Services Authority (WSA) Checklist Edition Two National Report (2007/08) is an achievement in terms of the high level of municipal responsiveness it has achieved. The response rates for the Checklist Edition Two are truly impressive with 149 WSAs having participated. This response rate makes this initiative quite unique in terms of the extent across which this self-assessment tool ranges. This is in relation to the breadth of WSA participation and the breadth of water services delivery issues covered. The achievement underscores the importance of highlighting the value of the WSA Checklist process in terms of eliciting municipal participation and response. The Department intends to build upon the success of this engagement as regulatory initiatives, such as the Regulatory Performance Measurement System, are rolled out. The WSA Checklist Edition Two is more comprehensive than Edition one. The tool is now divided into the following eight s, with Water Use included for the fi rst time: 1: Policy & By-laws 2: Planning 3: Infrastructure 4: Reporting 5: Finance 6: Health & Environment 7: Performance management and regulating water services provision 8: Water Use The Edition Two tool has linked some questions directly to the Strategic Framework for Water Services (SFWS) to provide a view in terms of WSA progress against the following targets: Target 9: Implementation of Free Basic Water Policy by 2008 Target 10: Implementation of Free Basic Sanitation Policy by 2010 Target 13: Transfer of DWAF schemes by 2008 Target 14: Promulgation of by-laws by 2005 Target 15: Annual reporting against WSDP by 2005 Target 16: Contracts with external WSPs by 2005 Target 18: Adoption of SFWS Annexure 2 KPIs by WSAs (however, questions on this target were not included in the WSA Checklist Edition One and are not included in the comparisons drawn in this National Report). The analysis of the WSA Checklist data (2007/08) reported here takes place at two levels. First, in terms of its regulatory function, the data helps DWAF to determine whether municipalities are complying with the legislation that guides the powers and functions of Water Services Authorities. The information gathered through the WSA Checklist process, and published with acknowledgement of municipal leadership, serves as a basis for measuring local government compliance, as well as progress made with compliance over time. Not only do these results add value to DWAF s own business intelligence, they are also a useful resource for sharing information with other Departments, primarily Health and Provincial and Local Government and sector stakeholders. Secondly, in terms of its support role, the analysis also provides DWAF with valuable information regarding the resources that the WSA has available to perform the legislative compliance tasks, such as whether there are suffi cient human resources, physical infrastructure or fi nancial budgets to perform the function. This information can better assist DWAF in prioritizing how best to continue playing a support role to municipalities. 3

6 Results indicate that while there are a number of areas in which WSA s clearly face challenges, it is pleasing that a marked improvement between the results of Edition One and Two are noticeable. The National Report provides an analysis of progress not only against SFWS targets, but also provides observations per Functional Area. The results allow comparison between regions, and as the report focuses primarily on areas that require further attention, these results are highly informative for supporters of local government across the sector. It is important to stress that the WSA Checklist provides a dataset that provides a `voice to municipalities, as it refl ects the results of a municipal self-assessment process. This analysis of results provides essential data on the progress of municipalities towards legislative compliance. It is essential, however, that the results are not read in isolation, but are regarded as a valuable contribution to holistic compliance analysis. While there are a number of areas in which the WSA Checklist Edition Two self-assessment responses from municipalities indicate improved legislative compliance, this National Report focuses largely on those areas that require further attention. It is however, pleasing to note that the highest performing is Infrastructure with a national result of 89% compliance. This aligns with the strong focus by DWAF on bucket eradication and the national effort to meet basic water and sanitation targets. The results reveal a number of positive achievements in terms of progress since Edition One. It is pleasing to note that the attention to governance through years of DWAF support are beginning to bear fruit in numerous areas of water services. There has been a signifi cant improvement against Target 16 of the SFWS, where 78% of the contracts for bulk water provision are signed, demonstrating a 13% improvement from the previous edition. The years of national support directed to municipal planning are also bearing fruit with 91% compliance in the drafting/fi nalization of Water Services Development Plans. Water Services Authorities also report a 28% improvement since Edition One regarding the provision of an annual progress report against their Water Services Development Plans. Edition Two reports a 47% level of compliance. A global view of the WSA Checklist Edition Two results indicates that almost all municipalities are complying in the mid 80 s percentage in all s except 7: Performance management and regulating water services provision (just below ), and it would appear that the state of municipal compliance is on track. It must be acknowledged that this municipal self-assessment of legislative compliance is not always reciprocated by equal performance in implementation It is clear the municipal water sector has matured to requiring a more in-depth analysis than is possible with simplistic yes/no answers as required by the WSA Checklist, if one is to adequately capture where the fault lines exist in municipal water provision. 4

7 Objectives of the WSA Checklist As with the Edition One WSA Checklist, the intended outcomes of this initiative remain To measure current WSA legislative compliance in terms of water services provision To further enhance relationships between DWAF Regional Offi ces and WSAs To determine the focus areas around which WSAs require support These three objectives feed into DWAF s dual role in being the regulator of the municipal delivery of water and sanitation services and its historical, albeit diminishing, role as supporter. The analysis of the Checklist data (2007/08) reported here takes place at two levels. First, in terms of its regulatory function, the data helps DWAF to determine whether municipalities are complying with the legislation that guides the powers and functions of water service authorities. The information gathered through the WSA Checklist process, and published with acknowledgement of the Municipal Manager, serves as a basis for measuring compliance, and progress made with compliance over time, and also for sharing information with other Departments, primarily Health and Provincial and Local Government and sector stakeholders. In this regard, the WSA Checklist does provide a valuable source of information to DWAF with regard to its compliance monitoring role. This is achieved through The relationship building that occurs with DWAF regional offi ces and municipalities during the WSA Checklist process Raising WSAs awareness of the distinctions between WSA and WSP roles and responsibilities Raising awareness around compliance with legislation at the WSA level and Exposing diffi culties in interpreting and implementing legislation. In terms of its support role, the analysis also gives an idea of the resources that the WSA has available to perform the legislative compliance tasks, such as whether there are suffi cient human resources, physical infrastructure or fi nancial budgets to perform the function. These resource results from the WSA Checklist provide insight into why WSAs are achieving suboptimal results. This information can better assist DWAF in prioritizing how best to continue playing a support role to municipalities. Ideally, the WSA Checklist results should translate into the development of an Action Plan to address legislative compliance in each municipality. This would then feed into Municipal Support Plans (MSPs) which would serve as a basis for DWAF to prioritise and implement municipal support needs and requirements. Over and above the value of the Checklist process and results in servicing DWAF s role as regulator and supporter, the objective of the WSA Checklist is to also demonstrate to municipalities the progress that has occurred since Edition One. The information from Edition One is available as baseline information, which makes it possible to measure progress in certain s per WSA as well as to aggregate this municipal performance to the provincial level. 5

8 Links to other programmes Targets of the Strategic Framework for Water Services For the readers who are coming across the WSA Checklist for the fi rst time, it is important to note that the WSA Checklist is divided into eight s, and that some questions are directly linked to the Strategic Framework for Water Services (SFWS) (2003). The SFWS sets out the sector vision, goals and targets. There are a total of 19 SFWS targets. The WSA Checklist has designed the survey to determine progress around the following targets in order to demonstrate whether there is compliance with some of the key areas of WSA responsibility: Target 9: Implementation of Free Basic Water Policy by 2008 Target 10: Implementation of Free Basic Sanitation Policy by 2010 Target 13: Transfer of DWAF schemes by 2008 Target 14: Promulgation of by-laws by 2005 Target 15: Annual reporting against WSDP by 2005 Target 16: Contracts with external WSPs by 2005 Target 18: Adoption of SFWS Annexure 2 KPIs by WSAs (questions on this target were not included in Checklist Edition One and are not included in the comparisons drawn) While there are a number of areas in which WSA s clearly face a number of challenges, it is pleasing that a marked improvement between the results of Edition One and Edition Two are noticeable. For instance, in terms of Target 13, results illustrate a signifi cant improvement in the fi nalization of DWAF asset transfer agreements (89%) demonstrating a 52% improvement between Editions One and Two. This is an encouraging indication that municipalities are beginning to take control of the assets that are fundamental to their capability to be able to deliver water services sustainably. It is also encouraging to see that against Target 16 of the SFWS, 78% of the contracts for bulk water are signed, with a 13% improvement from the previous edition. It is important to stress that the WSA Checklist provides a dataset that provides a `voice to municipalities, as it refl ects the results of a municipal self-assessment process. This analysis of results provides essential data on the progress of municipalities towards legislative compliance. The comparison between regions is also of great value. It is essential, however, that the results are not read in isolation, but are regarded as a valuable contribution to holistic compliance analysis. This is particularly important as the results based on municipal selfassessment do not always correlate with other sector data gathering initiatives. 6

9 Progress Checklist Edition One vs. Edition Two on SFWS targets Percentage compliance 83% 52% 69% 37% 89% 58% 69% 72% 55% 54% 77% WSA Checklist Edition One WSA Checklist Edition Two 78% 65% 47% 53% 82% 62% 72% 19% 1 Free Basic Water Policy Free Basic Sanitation Policy DWAF asset transfer agreement signed Water Services by-laws Tariff By-laws Credit control and debt collection bylaws It is however, essential to note that while the timelines established in the SFWS have passed, there are still many municipalities striving to achieve the targets agreed in the SFWS. Annual report on progress against WSDP Contracts for bulk water signed WSP contracts Municipal Compliance against SFWS targets for Edition Two of the WSA Checklist If WSA=WSP: Performance Management Contract Targets Water Services Targets (SfWS) Related Checklist question National compliance per target Question No Compliance Non- Not Compliance Applicable Sum %-age compliance 9 Free Basic Water Policy Free Basic Sanitation Policy % 13 DWAF asset transfer agreement signed % 14 Water Services by-laws % 14 Tariff By-laws % 14 Credit control and debt collection by-laws % 15 Annual report on progress against WSDP % 16 Contracts for bulk water signed % 16 WSP contracts % 16 If WSA=WSP: Performance Management Contract % 7

10 Results indicate that the two poorest performing areas in relation to the SFWS targets are municipal annual reports against the WSDP and Water Services by-laws. The latter is a worrying result as every WSA has to make by-laws which contain conditions for the provision of water services according to Section 21(1) of the Water Services Act. Water Services By-laws are one of the most fundamental set of rules in order for water departments to function effectively. While there has been an 11% improvement since Edition One, the WSA Checklist as a municipal self-assessment, indicates that only 69% of WSAs have Water Services by-laws in place. When looking at Target 15 of the SFWS, municipal annual reports on progress against the WSDP, there has been a noticeable improvement of 28%, moving from 19% in Edition One to 47% in Edition Two. This is still, nevertheless, fairly low and highlights the degree to which WSAs may not be using the WSDP as an active planning framework and guide for water services. The Free State stands out in particular, in terms of not having WSDPs approved by Council ( of WSDPs adopted by Council). WSAs indicate that the nation-wide poor levels of performance against this target are largely because of poor fi nancial and human resources. National Water Services Regulation Strategy: Regulatory Performance Monitoring System (RPMS) In strengthening and widening its regulatory role, DWAF has put in place a National Water Services Regulation Strategy. This strategy broadly outlines the key areas of regulation (social, environmental, and public health) and lays out the institutional mechanisms for regulating these interconnected areas of water services. In taking into the account the need for institutional capacity building to make regulation, and municipal responses to it, more effective, DWAF has focused on three priority areas in the short term. These are Concentrated regulatory efforts to address compliance and performance challenges in priority municipalities A national drinking water quality regulatory initiative, to manage the potentially serious risks associated with unsafe drinking water A national wastewater discharge regulation initiative However, ensuring compliance is just one sub-set of the regulatory function and DWAF s ability to play this role effectively is heavily dependent on the quality of data that it gets from WSAs at the local level. The mechanism that has been established to monitor the compliance of municipalities is through the Regulatory Performance Measurement System (RPMS). The RPMS relies on revealing information from WSAs based on eleven key performance indicators that can assist the National Regulator in assessing performance. The RPMS uses data already gathered through other processes and systems and then translates these into simple measures to indicate areas of non compliance with required standards and norms. It is DWAF s intention, to harness the success of the WSA Checklist process in terms of eliciting municipal responses as it rolls out the RPMS. Refocused Municipal Support Plans In 2006, DWAF put out a fi ve year strategic plan regarding the vision and process involved in supporting municipalities to achieve the targets set out in the Strategic Framework for Water Services (2003). Since 2006, DWAF has moved to enhance its regulatory function and diminish its support function. As such, Municipal Support Plans have been reoriented to focus on nine priorities for regulation. The fi rst fi ve are the key priority areas of water services highlighted in the proposed refocused Local Government Support Model under development by DWAF, with an additional four areas in order to integrate water resource issues. The intention of this refocus is to enable DWAF to get better quality information to support its regulatory emphasis on these areas. 8

11 Key areas of focus of regulation accommodated in MSPs: 1. Effl uent Discharge 2. Tariffs (appropriateness and affordability) 3. WSA-WSP contracts 4. Universal Access 5. Drinking Water Quality 6. Water Conservation and Demand Management 7. Planning for Water for Growth and Development 8. Water Allocation Reform 9. River Health The linkages to the WSA Checklist are clear as Municipal Support Plans are instruments that can ensure coordinated and focused support in accordance with the identifi ed priorities. The proposed mutation of the WSA Checklist process to feed into populating the RPMS system will enable the WSA Checklist to play a strong support role as a critical feeder into the MSP as well as support to regulation through strengthening the quality of data that the Regulator draws through the RPMS. 9

12 WSA Checklist Edition Two Results: Provincial Observations While there are a number of areas in which the WSA Checklist Edition Two self-assessment responses from municipalities indicate improved legislative compliance, this report focuses largely on those areas that require further attention. It is however, pleasing to note that the highest performing is Infrastructure with a national result of 89% compliance. This aligns with the strong focus by DWAF on bucket eradication and the national effort to meet basic water and sanitation targets. When the sum of the eight functional scores is aggregated at the provincial level, the overall legislative compliance is within the range of the 80s percentage. While this may seem impressive, given international benchmarks, a performance below indicates that there are still many WSAs that are struggling to comprehend what their statutory responsibilities are in relation to water and sanitation services. As this high level of performance is the result of aggregation, it is important that provincial results are discussed according to s in order to identify specifi c challenges that require attention. It is a matter of concern that the results of the provincial picture illustrate that overall, for the second consecutive year the 7: Performance management and regulating water services provision has once again scored the lowest results (69%) in terms of legislative compliance. It is clear that robust effort by local government, with support from DWAF, must be prioritized in order to improve this situation. Provincial results of WSA Checklist Edition 2 1: Policy & By-laws 2: Planning 3: Infrastructure 4: Reporting 5: Finance 6: Health and Environment 7: Performance Management and Regulating Water Service Provision 8: Water Use Eastern Cape 93% 82% 91% 89% 77% 82% 73% 92% Free State 85% 89% 87% 88% 92% 69% 75% Gauteng 94% 85% 89% 89% 88% 85% 67% KZN 85% 88% 92% 88% 98% 88% 82% 83% Limpopo 83% 86% 84% 71% 64% 78% Mpumalanga 77% 67% 87% 85% 86% 74% 59% 82% North West 83% 96% 94% 88% 89% 84% 78% Northern Cape 73% 73% 78% 69% 84% 77% 51% 72% Western Cape 93% 96% 95% 79% 79% 69% ONAL AVERAGES 84% 84% 89% 84% 88% 82% 69% 81% <

13 Western Cape Legislative compliance per - Western Cape 93% 96% 95% 79% 79% Percentage compliance 69% 1 1: Policy & Bylaws Observations 2: Planning 3: Infrastructure 4: Reporting 5: Finance 6: Health and Environment 7: Performance Management and Regulating Water Service Provision 8: Water Use The progress of the Western Cape is pleasing in a number of areas. The close attention paid to Policy and fi - nancial compliance is bearing fruit. However, with regard to 2: Planning WSAs indicate a performance in drafting or fi nalizing WSDPs, while only responded that they provide an annual progress report against the WSDP (Function Area 4: Reporting), with many primarily citing budget constraints. (Please note, this is an area where the results obtained via this municipal self-assessment process, do not correlate with other, internal data sources maintained by DWAF). It is surprising that in relation to SFWS Target 14, only 69% of Western Cape WSAs have tariff by-laws in place, having an anticipated signifi cant impact on the revenue collection capabilities of these WSAs. With regard to 3: Infrastructure, WSAs responded that water and sanitation backlogs have been eliminated by scoring a on providing access to basic water and sanitation. It is, however, noteworthy that these fi gures do not correlate with information provided by the National Benchmarking Report, and may be as a result of differing defi nitions for ensuring basic access is appropriate in dense settlements, be they informal or formal Of concern is 7: Performance management and regulating water services provision, where 46% of WSAs reported to have undertaken a section 78 process with only 44% of these resolving the follow up mechanisms to this process. Also, while 94% of WSAs responded that they have provided approval to access to water for industrial use, 74% responded that they monitor the discharge of industrial effl uent. This raises concerns regarding the implications for water quality. 11

14 Gauteng Legislative compliance per - Gauteng 94% 85% 89% 89% 88% 85% Percentage compliance 67% 1 1: Policy & Bylaws Observations 2: Planning 3: Infrastructure 4: Reporting 5: Finance 6: Health and Environment 7: Performance Management and Regulating Water Service Provision 8: Water Use Despite its generally stellar performance in water services, Gauteng does face some similar performance challenges as the Western Cape. This is in relation to the WSDP where although of municipalities responded that they have drafted or fi nalized their WSDP, only of municipalities claim to be reporting against it annually. Similar to the Western Cape, in 7: Performance management and regulating water services provision, only of municipalities undertook to make a decision about the mechanisms to render Water Services through a section 78 process. Again, budget constraints were cited for this low response. Of this, only 33% resolved the mechanism following the section 78 process. In relation to 8: Water Use, only 25% reported that they participated in Water Resource Management institutional issues and responded that they were involved as a stakeholder in the establishment of either catchment management forums, committees or Water User Associations. The importance of effectively arbitrating the contesting demands for water use in Gauteng cannot be underestimated. It is the economic powerhouse of the country and industry s demands for water are not diminishing. Simultaneous to this, the trend of rapid urban migration with demands for higher levels of service will put an increasing strain on already overcapacitated wastewater treatment plants. One would hope in moving forward, that Gauteng WSAs would demonstrate greater commitment to Water Resources Management institutional issues. In relation to the SFWS Target 13 regarding DWAF asset transfer agreements being signed, it is worrying that a only of Gauteng WSAs complied and of these only 25% stated that DWAF assets were transferred unconditionally. 12

15 KwaZulu- Natal Legislative compliance per - KZN 1 Percentage compliance 85% 88% 92% 88% 98% 88% 82% 83% 1: Policy & Bylaws 2: Planning 3: Infrastructure 4: Reporting 5: Finance 6: Health and Environment 7: Performance Management and Regulating Water Service Provision 8: Water Use Observations Overall, KwaZulu-Natal (KZN) performed very well across all s. The most worrying results from KZN are in relation to the 3: Infrastructure. Only 77% of KZN WSAs reported that they were providing access to basic sanitation. When probed with follow-up questions, 46% of this 77% responded affi rmatively that their unserviced population was less than. Although the proportion of municipalities responding to providing basic water was much higher (85%), only 31% of these municipalities responded affi rmatively that their basic unserved population was less than. The implication of this is that KZN may not meet its water or sanitation targets. When comparing these results with Target 10 of the SFWS, 62% of KZN WSAs stated compliance with a free basic sanitation policy. The reality of large proportions of the province that are rural and poor must be contended with when thinking about developing more appropriate fi nancing mechanisms through intergovernmental transfers to address this issue. With regard to WSDPs, KZN faced the same dilemma as its Gauteng and Western Cape counterparts. There was a reported compliance with drafting or fi nalizing WSDPs, but only 46% of WSAs report on them annually. Finally, in relation to 7: Performance management and regulating water services provision as well as Target 16 of the SFWS, it is worrying that of the WSAs that have internal WSP arrangements, only 67% complied with having performance management contracts in place. The implications for ensuring competent water services provision to communities are self-evident. 13

16 Northern Cape Legislative compliance per - Northern Cape 84% 73% 73% 78% 69% 77% 72% Percentage compliance 51% 1 1: Policy & Bylaws Observations 2: Planning 3: Infrastructure 4: Reporting 5: Finance 6: Health and Environment 7: Performance Management and Regulating Water Service Provision 8: Water Use While there has been some progress in this region between the two Checklist editions, WSAs in the Northern Cape do not appear to be demonstrating the same degree of progress in 1: Policy and by-laws as compared to counterparts in other provinces. In relation to SFWS target 14, only 32% of WSAs stated that they are complying with having water services by-laws in place. The most notable reason given for this was lack of budget. Of the 32% that do comply, of these 75% stated that the by-laws were enforced. The poor compliance evident in 7: Performance management and regulation of water services provision, where 51% compliance is the weakest in the country, raises a fl ag that will require both DWAF and WSAs to work deliberately to rectify this issue. It is worth noting that while 88% of WSAs reported approval of access to water for industrial use, only reported to monitor industrial effl uent. This could explain why when looking at the 8: Water Use, only 65% of municipalities reported that they protect the Water Resource and are compliant with waste discharge licenses. This does help to explain why in relation to 6: Health and Environment, approximately 59% of municipalities stated they have mechanisms in place for the prevention and remedying effects of pollution. The fact that a mere of municipalities claim to have water services by-laws in place guiding this could explain why this area of performance is suboptimal. Through the WSA Checklist self-assessment, WSAs in this province indicated that approximately 45% of WSAs with an internal arrangement with WSPs actually performance manage them. Where there are external providers in place, only of WSAs have a signed contract with their WSPs. Approximately 45% claim the WSA function is managed and accounted for separately from the provider function. Continuing with an analysis of the regulation function, in relation to exploring provider options, only 45% of municipalities took a decision to pursue a section 78 and of these, resolved the mechanism after the decision. There is clearly room for improvement in this area. In the absence of clear accountability mechanisms, such as contracts or performance management systems in place, WSAs are vulnerable in trying to ensure WSPs meet their basic responsibilities. 14

17 In relation to contracts with service providers (Target 16 of the SFWS), 44% of WSAs indicate that they have a bulk supply agreement in place with a water board or with DWAF. This does raise the question of how solid the arrangement is between WSAs and water boards in the Northern Cape. In the absence of a contract that projects bulk water price increases over time and discusses caps on this, WSAs are not able to adequately plan for fi nancing water provision in the long-term. Free State Legislative compliance per - Free State Percentage compliance 85% 89% 87% 88% 92% 69% 75% 1 1: Policy & Bylaws Observations 2: Planning 3: Infrastructure 4: Reporting 5: Finance 6: Health and Environment 7: Performance Management and Regulating Water Service Provision 8: Water Use The Free State has performed well in some s such as Infrastructure and Health and Environment, but with less success in the areas of Planning and Regulation in particular. As with the Northern Cape, 1: Policy and by-laws, WSAs report that only have water services by-laws in place and have credit control and debt collection by-laws in place. Respondents indicated that personnel challenges are hampering progress with regard to credit control by-laws. In relation to 3: Infrastructure, only 45% of WSAs provide basic access to water without interruptions beyond what is legally permissible. This could be because if only of municipalities have credit control by-laws in place, the revenue management capabilities of Free State municipalities is constrained and as such, the revenues to conduct proper operations and maintenance may not be in place or at least prioritized for this critical area of expenditure. With regard to the 7: Performance management and regulating water services provision, despite limited managerial and accounting separation between WSAs and WSPs () there are strong measures in place to actually performance manage WSPs. This is indicated through an impressive of WSAs reporting that they have signed contracts with their WSPs and a noteworthy of WSAs stating that they have key performance indicators in place to performance manage those responsible for operations within the municipality. 15

18 North West Legislative compliance per - North West 83% 96% 94% 88% 89% 84% 78% Percentage compliance 1 1: Policy & Bylaws Observations 2: Planning 3: Infrastructure 4: Reporting 5: Finance 6: Health and Environment 7: Performance Management and Regulating Water Service Provision 8: Water Use North West municipalities claim to have performed exceptionally well across most of the s. The noticeable area for improvement is credit control and debt collection by-laws, where there is 67% compliance. Of these municipalities, only reported that they actually enforced the by-laws. These responses seem to have a correlation with the state of revenue collection. Although there is an 83% compliance with revenue collection legislation, of these 83% of WSAs that responded affi rmatively, 25% affi rmed that their debtors of 60 days and over for water services are less than of their total water services debtors. This indicates that even though legislative requirements are met, actual revenue collection remains problematic. 75% of the 83% WSAs with the relevant legislation in place have more than of their billed customers (i.e. those receiving abovebasic services) paying later than 2 months after the billing date. This affects the cash fl ow and thus sustainability of water services. In relation to the 7: Performance management and regulating water services provision, WSA responses highlight some discrepancy. 92% of WSAs indicate a separation of functions and accounting between the WSA and WSP (92%) yet only of municipalities report that there are contracts in place to support this separation where there is an external provider in place. In relation to 8: Water Use, 44% of municipalities reported that they participated in water resource management institutional issues and half of these respondents reported that they were stakeholders in the establishment of catchment management forums, committees or water user associations. As with other provinces, this is clearly an area that requires local government and DWAF to work together to ensure appropriate participation by local government in critical water resources processes. 16

19 Eastern Cape Legislative compliance per - Eastern Cape 93% 82% 91% 89% 77% 82% 73% 92% Percentage compliance 1 1: Policy & Bylaws Observations 2: Planning 3: Infrastructure 4: Reporting 5: Finance 6: Health and Environment 7: Performance Management and Regulating Water Service Provision 8: Water Use The sustained focus of the DWAF regional team on supporting WSAs to comply with Policy and by-law requirements is clearly bearing fruit in this region. However, in 2: Planning, responses from WSAs indicate that only 79% of municipalities take protection from fl oodlines into account with township planning. The reason given is poor resources where budget, infrastructure and personnel were deemed to be at 64% of what was required. In relation to 3: Infrastructure, WSAs indicate that there is a general challenge with operation and maintenance issues as of municipalities provide access to basic water without interruptions beyond what is legally permissible. Here again, insuffi cient resources was deemed to be the reason with municipalities only having on average 57% of the resources required in the areas of budget, infrastructure and personnel. In relation to 5: Finance, only 43% of municipalities pay for water use in terms of a catchment management charge. A number of WSAs indicated that this is as a result of the fact that they either do not receive invoices from DWAF or are not aware of them, in relation to charges for water use. Again, this is a situation that can be remedied as DWAF and local government work together to meet this challenge. With regard to 6: Health and Environment, municipal self-assessment indicates a number of challenges. Only 57% of WSAs indicate that they have prevention and remedying effects of pollution in place of which insuffi cient budget and personnel are the reasons provided for this result. This is a challenge that requires immediate attention. In relation to bulk water provision (SFWS Target 16 on contracts with service providers), while 83% of contracts for bulk water are signed, the remaining 13% of WSAs are at risk in terms of the ability to determine medium to long term tariffs without cost projections of bulk water costs and how these will affect the tariff structures over time. 17

20 Mpumalanga Legislative compliance per - Mpumalanga 77% 87% 85% 86% 74% 82% Percentage compliance 67% 59% 1 1: Policy & Bylaws Observations 2: Planning 3: Infrastructure 4: Reporting 5: Finance 6: Health and Environment 7: Performance Management and Regulating Water Service Provision 8: Water Use The province s overall performance across the eight s is very uneven with critical attention required in the area of 7: Performance management and regulating water services provision (59% compliance). WSA responses indicate that 56% of municipal WSA functions are managed separately from the provision function. Where the provision is internal, only actually have a performance management system in place. In addition, 56% of bulk supply agreements have been signed between water boards and WSAs, resulting in concerns regarding the ability of WSAs to realistically factor bulk costs into their current and future tariff projections. In terms of a broader overview of the province s performance across all s, in 1: Policies and by-laws, only 69% of WSAs have water service by-laws in place and 75% have tariff by-laws in place (SFWS Target 14). These are basic rules for running the business of water services and DWAF support must direct attention to this foundational aspect of water services governance in the province. WSAs reported that 31% have a free basic sanitation policy in place, again the lowest performance of any province in relation to this, with the reason largely being attributed to insuffi cient resources across all three categories of budget (44%), infrastructure (63%) and personnel (56%). For 2: Planning, 75% reported to have drafted or fi nalized WSDPs (of which 75% have actually been adopted by Council); however, only of WSAs reported providing annual progress reports on the WSDP. In the 3: Infrastructure, of WSAs reported that they provide access to water without interruptions beyond what is legally permissible with the reason given as lack of suffi cient resources (56% across all three sub categories). In 6: Health and Environment, 38% of municipalities reported to have a health and hygiene programme in place and of those who do have this in place, all responded that they are also being implemented. 18

21 In 8: Water Use, it is concerning that WSA responses indicate that only 63% of municipalities report to have a WC/DM programme in place and of this proportion of complying municipalities 57% of municipalities claim to have an implementation plan in place for WC/DM. This correlates with the fact that 75% of WSAs have drafted or fi nalized WSDPs, and that in terms of content, 67% (of this 75%) has included details on existing effl uent disposed of, the same percentage has included details on water sources and future quantities of water to be used and (of 75%) has included existing water conservation, recycling and environmental protection measures. WSAs responses in this functional area clearly present challenges to DWAF as the sector leader, and it is imperative that all stakeholders work together to improve compliance in this critical functional area. Limpopo Legislative compliance per - Limpopo Percentage compliance 83% 86% 84% 71% 64% 78% 1 1: Policy & Bylaws Observations 2: Planning 3: Infrastructure 4: Reporting 5: Finance 6: Health and Environment 7: Performance Management and Regulating Water Service Provision 8: Water Use WSA self-assessment in this province indicates that in terms of legislative compliance in a number of functional areas, municipalities still have some way to go. Results for 6: Health and Environment (71%), 7: Performance management and regulating water services provision, (64%) and Functional Area 1: Policies and By-laws read with responses to target 9 of the SFWS, where 64% of WSAs reported to have a Free Basic Water Policy in place, all provide clear direction in terms of areas requiring deliberate attention. WSAs indicated that in many instances the lack of compliance was attributed to insuffi cient resources for infrastructure and personnel. Municipal responses to compliance in 3: Infrastructure are cause for concern, with 36% compliance levels for providing access to basic levels of sanitation. Here insuffi cient resources across all areas, especially budget (36%) was provided as the main reason. When these same municipalities were probed about their confi dence in being able to eliminate the backlogs within the nationally-defi ned targets, only 45% affi rmed this by responding that only (or less) of the population was not yet serviced with basic sanitation. 19

22 Also note-worthy within this was that 45% of municipalities reported that they provided basic access to water with no interruptions beyond what was legally permissible. This means that 55% of WSAs in Limpopo are not confi dent of eliminating the sanitation backlogs by Again, this could be seen as a proxy for revealing the state of attention to operations and maintenance. In 5: Finance, 64% of WSAs reported compliance with revenue collection legislation. When followed up, of these municipalities, only reported that less than of their water debtors were 60 days or over, thus indicating a low confi dence level in the state of revenue management amongst water departments in this province. In this same, 55% of municipalities reported that they paid for water use through a catchment management charge. In relation to 7: Performance management and regulating water services provision, 27% of municipalities reported that the WSA function was managed and accounted for separately from the WSP Approximately 55% of WSAs reported to monitor WSPs (target 18 of SFWS) by having KPIs in place. Again, these fi gures around performance management and monitoring of WSPs mean little if there is no actual separation of functions in place. Where there are external mechanisms in place for a WSP, of municipalities reported to comply with having a contract in place for this. In relation to 8: Water Use, it is concerning that only of WSAs reported to be promoting Water Conservation/Demand Management through the development of relevant polices. Again, this self-assessment by WSAs provides clear direction on those areas that require deliberate, and co-operative attention from the sector. With regard to 6: Health and Environment, municipal self-assessment indicates a number of challenges. Only 57% of WSAs indicate that they have prevention and remedying effects of pollution in place of which insuffi cient budget and personnel are the reasons provided for this result. This is a challenge that requires immediate attention. In relation to bulk water provision (SFWS Target 16 on contracts with service providers), while 83% of contracts for bulk water are signed, the remaining 13% of WSAs are at risk in terms of the ability to determine medium to long term tariffs without cost projections of bulk water costs and how these will affect the tariff structures over time. Summary of Provincial Observations Once again, the focus on this summary is on the areas of compliance that are a matter of concern, however, this focus is not intended to dismiss the sterling progress made by WSAs across South Africa on a number of critical compliance issues. The recurring issues coming up in nearly all provinces is a clear discrepancy between the number of municipalities that comply in drafting or fi nalizing a WSDP and the much smaller number that actually produce annual progress reports. It seems that in most instances, municipalities claim not to have the resources to comply with this requirement. The second trend is the number of provinces that indicated limitations with regard to providing access to basic water infrastructure without interruptions beyond what is legally permissible. There could be several possible explanations for this. First, these results could be seen as a proxy for insuffi cient attention to operation and 20