These briefings come around ever faster as we move towards the end of this first parliament.
It is therefore appropriate that we should begin to focus not so much on whether we have our policies right but more on how we are progressing on delivery in our programmes. As the President said in his opening address to Parliament on Friday, the foundation has been laid, we have started building and it is against our success in building that I want to be measured. Besides, we have had a lot to say about the National Water Bill in the last few weeks.
But three years is not such a long time. So it is still necessary and relevant to ask whether we are delivering differently and in line with the policies which we espoused in 1994 and to review our progress in transforming the framework within which we work.
So while I will start on a practical note, I will also reflect upon the development of the policy framework and the transformation that will continue to preoccupy us in the coming year.
First, I want to announce that Department has initiated the construction of a new dam, the Mutoti dam on the Luvuvhu river in the Northern Province.
This dam will assure basic water supply to the million or so souls in the Northern Province, in what they call there the far north. It will cost over R200 million to build in addition to more than R400 million which will be spent on additional infrastructure in further phases (there are some more details in your pack).
But it will do more than assure basic water supply for human consumption. It will stabilise the water supply for local irrigation farming, particularly the activities of small scale black farmers, which has been beset by drought- demonstrating that a paper water right is worthless if there is no water in the river, something that I will come back to.
Beyond that, it will also ensure that there is enough water left in the river to sustain the environment of the wetlands and the Kruger Park as well as to meet our obligations to Mozambique.
In terms of our new policy, enunciated in the National Water Policy white paper last year, it is for these purposes that state funds should be expended for capital projects to manage our water resources.
Our policy indicates that financial responsibility for water management projects which will benefit commerce and industry, that will enhance the standard of living of those South Africans lucky enough to afford the luxury of a home with a garden and a pool, financial responsibility for the projects necessary to sustain these activities must lie with the users themselves.
So my second announcement is about the two contracts for Phase 1B of the Lesotho Highlands project that have been signed and the final major contract which is being negotiated with the preferred bidder and will be signed very shortly.
The news here is that these contracts are costing significantly less than expected. And the point to be made is that, while the beneficiaries of projects such as the Lesotho
Highlands Water Project must bear the cost of water development and management, they have the right to demand that those projects are developed in an efficient and cost-effective manner.
So, by taking the decision to proceed expeditiously with Lesotho Phase 1B, we have saved consumers an estimated R500 million rand (while at the same time, giving them a much enhanced assurance of supply, which, as the country bakes in the belated heat of El Nino, is not to be sneezed at). At the same time, we have addressed the social and environmental problems sensitively and effectively.
The important point is that we can have our policies in place and we can and are justly proud of them. But when it comes to taking decisions, we have to be clear about the criteria which guide us and timely and decisive when it comes to action. The Lesotho project demonstrates, I believe, the necessary balance between due consideration and expeditious decision making
So to the third practical announcement.
In the area of forestry, we have debated, during the separate discussions on the restructuring of SAFCOL and the restructuring of DWAF's forestry assets whether the two processes should be merged.
On policy grounds, a decision was taken and, without disagreeing with the President, I believe this was done within the time-frames originally established.. We said that, due to the potential employment and development impacts, we could not look at SAFCOL's Eastern Cape assets in isolation from the other forest assets of government (and, I should emphasise, that it is not only SAFCOL and the Departmental forests; we have found that the national and regional development corporations also have significant forestry stakes there). In other parts of the country, the downstream industrial development is to a large extent already present, and the imperatives are different. So we said, towards the end of last year, that the SAFCOL restructuring process will allow for an option whereby SAFCOL's Eastern Cape forests are pooled with the DWAF forests there.
Having taken that decision, we are, again, acting expeditiously. In terms of the processes agreed for the restructuring of state enterprises which are not just our invention but follow best international practice, potential transaction advisers have been invited to prepare their offers which we will receive by 20'h February. These will be evaluated with preference to candidates from black enterprises and a decision on the appointment of the advisor will be made jointly by the Minister of Public Enterprises and myself by the 6'h March. The formal bidding process will then begin and, contrary to reports in certain financial papers, the real players (as opposed to the armchair critics) are gearing up in a number of practical ways to participate in the bidding process. They appreciate that sound preparatory work is required if an acceptable result is to be achieved.
We are convinced that not only will we maximise the value of SAFCOL but that, in line with the President's speech our approach should enable us to reduce the size of the state without reducing the number of jobs. Working closely with the labour movement as well as with potential investors, we are going all out to find ways to expand forestry as a commercial venture which will create rather than lose jobs.
Another area of practical progress which I want to address is the community water supply programme, the basic RDP programme which has now brought water to nearly one and a half million people since 1994.
We expect within the next few months, hopefully by June, to reach the two million mark. But here we do have a problem and it is correct that I share it with you.
In terms of the current provisions, there will not be enough funding to start any new projects in the coming year. Indeed, simply to continue projects to which we are already committed, we will have to go the to Treasury Committee for additional funds.
One of the reasons for this lies in the success of the structured build up of our capacity; and also in the reforms of the budget structure.
Up to now, we have been able to take the allocations from previous years and roll them forward. The transition from RDP to MTEF has now forced government to look at its commitments. As you can see from the graph, our expenditure has been building up steadily, if rather more slowly than desired. The effect of reaching our target expenditure levels and of ending the rollovers is to take us back to last year's level of expenditure rather than toward our target for next year.
I am sure this can be resolved. But I need to state that, at this moment, there is not enough money on the budget to start the new projects needed to ensure the continuity of the programme and, more important, to ensure that we achieve the objective of having all South Africans with adequate access to basic water supply by the year 2004.
The final area of practical progress is in relation to the working for water programme. This is also something you have heard a lot about recently, principally the wonderful news that its scope has been greatly expanded by the R150 million grant it has received in terms of the poverty relief programme a grant which will enable us to create an additional 40 000 short term jobs. This is of particular importance since it highlights the cross-cutting nature of the programme which addresses not just water conservation, but the management of our agricultural resources, the protection of our environment within the framework of a public works type job creation operation. I am greatly encouraged by the extent to which other Departments are joining in to help achieve our common goals in this regard.
I have outlined a number of areas in which we will be making practical progress over the next six months. But, in concluding, I should clarify the status of our ongoing policy initiatives and incidentally give an economics lesson to our friends in the National Party.
First, there is progress on forestry restructuring and the new Forestry Act. To save time, there are some notes in your pack.
With the National Water Bill, I believe we have achieved an important breakthrough. Many of those who feared an ideological water grab now acknowledge that our concern is to ensure that our limited water is used equitably, efficiently and sustainably for the benefit of our whole society. It is not in the interests of any group to be seen to hold the rest of society hostage, whether it is foresters whose expansion leaves perennial streams dry for months on end; farmers, who irrigate their pasture in the heat of the noon day sun while industrial expansion is strangled by the lack of water. Nor is it in society's interest to destroy the agricultural economy which provides food, raw material and employment for so many of our people.
Despite claims to the contrary, I also firmly believe that the new Bill will not have the calamitous impact on land values that some doomsayers have suggested. In fact, I think that the real impact on land values comes from the uncertainty about access to water which would result from simply allowing conflicts to play themselves. I am heartened by the actions of bankers who continue to invest in irrigation projects. I see in the press that even estate agents in Paarl are pooh-poohing the scare stories.
So I must confess to some impatience with those armchair critics who harp on about this subject. For my part, I'll focus on the actions of decision makers.
In a similar vein, I am amused by the ramblings of young Martinhus van Schalkwyk who claims that the Bill introduces some of the 16 new taxes which continues to claim that government is planning to introduce. I am afraid he's just wrong. Mr van Schalkwyk does not seem to understand the difference between a user charge and a tax. The Bill focuses on developing user charges for, services that were previously paid for by the tax payer. Martinhus seems to think that, just because his constituency used to get something for nothing (paid for by the tax payer) now that they have to start paying, its a tax.
A tax is what it was; a user charge is what it will be and that, in conclusion is what the new water bill is about. Ensuring that those who benefit, contribute. A little Masakhane in the National Party would not go amiss! I will be launching national water week in March with the theme "you have a right to water but a responsibility to conserve it". I look forward to seeing you all then.
Issued by: The Ministry of Water and Forestry