RMP and PPP Workshop 28 September 2011 Recreational

RMP and PPP Workshop 28 September 2011 Recreational Water Use Policy, General Strategic Plan for Commercialisation & RMP Action Plan 1

Operational Policy for Recreational Water Use Purpose: Defines the Department’s responsibility regarding recreational water use and establishes the fundamental principles, policy, objectives and strategies for regulating this water use 2

Recreational Water Use It includes all recreational activities and exploits , which require water or the water surface of water resources for successful completion. These activities may comprise in alia sport, culture or tourism and can range from de minimus (personal use) to commercial in extent and intent Recognised as a formal use of water (nonconsumptive) under Chapter 4 , s 21(k) as well as s 113 of the National Water Act, 1998 (Act no 36 of 1998) 3

Safety RESOURCES INDUSTRY Equitable Access (Empowerment) COMMUNITY Institutionalisation & Linkages DWA POLICY Legal Framework Communication & Capacity Building Monitoring, Evaluation & Information Management 4

KPA 1: Integrated Resource Planning, Management and Classification • Objective 1: A planning and zonation framework for water resource planning and management is established and included in provincial and local planning frameworks. • Objective 2: Resource management plans (RMPs) are compiled based on the principles underlying the recreational water use resource planning procedure. • Objective 3: Based on RMPs water resources are classified, and RMPs and classification are utilised as decision support tools. 5

KPA 2: Safety • Objective 1: The manner, purpose and extent to which water resources are used safely are appropriately regulated, controlled and managed. • Objective 2: Compliance with industry norms and standards is ensured. • Objective 3: The safe use of water is promoted. 6

KPA 3: Authorisation • Objective 1: Appropriate authorisation of recreational water use is ensured and facilitated. • Objective 2: Appropriate management of water use entitlements is ensured. 7

KPA 4: Equitable Access • Objective 1: The rights of communities to physically access resources for recreational purposes are protected. • Objective 2: Equitable access to the waterbased recreation economy for communities is ensured. 8

KPA 5: Communication and Capacity Building • Objective 1: Understanding of recreational water use and co-operation with and among stakeholders are ensured by changing perceptions and attitudes through the promotion of the value of recreational water use. • Objective 2: Stakeholders and role-players are empowered by ensuring sufficient capacity regarding recreational water use. 9

KPA 6: Institutionalisation and Linkages • Objective 1: Appropriate institutions are established to manage recreational water use effectively. • Objective 2: Functional linkages are established to ensure co-operative governance and effective sharing of management responsibilities regarding the sustainable management of water resources for recreational purposes 10

KPA 7: Legal Framework • Objective 1: Compliance with relevant legislative requirements is ensured. • Objective 2: Recreational water use is positioned as a strategic issue and DWAF as a strategic partner in the legal processes related to recreation, water use, and the use and management of associated resources, etc. 11

KPA 8: Monitoring, Evaluation and Information Management • Objective 1: Performance and compliance regarding recreational water use are monitored and evaluated. • Objective 2: Information is managed and provided in a user friendly and effective manner to assist in decision-making regarding recreational water use. RWUM Next… 12

General Strategic Plan for Commercialisation for Tourism PPPs at Government Waterworks Institutionalisation of the Tourism Public Private Partnership (PPP) Toolkit within DWA 13

General Strategic Plan for Commercialisation The need to carry out this particular project was identified as one of the options the Department of Water Affairs should consider to address issues of under utilisation of State Dams especially on multipurpose dams to optimise the benefits thereof The General Strategic Plan for Commercialisation project (SPC) started in 2006 within the Branch: Policy and Regulation, Sub-directorate: Environment and Recreation It was later handed over to Branch: NWRI, Directorate: Integrated Environmental Engineering Some of the benefits of this project would be poverty alleviation around the dams by attracting investments to our 14 water resources, increase in revenue generation, etc.

Need for Strategic Commercialisation Plan Two critical building blocks of the PPP process is: Strategic Fit: PPPs must always be grounded in the statutory mandate, mission and strategic objectives of the institution, such as its conservation, empowerment and development priorities. The institutions PPP projects must complement these objectives and be reflected in its Resource Management Plans Capacity: Often institutions start PPPs before they have either the internal capacity to manage them or the ability to manage consultants or transaction advisors leading to poor communication, slow and inconsistent decision making and limited commercial insight. 15

What does the General Strategic Plan for Commercialisation address? 1. The Institution’s mandate, vision, objectives and activities 2. It identifies possible sites and opportunities for PPPs 3. It assesses the institution’s legal capacity to carry out a PPP 4. It articulates the institutions commercialisation policy, objectives and strategy 5. Assesses the institution’s personnel and systems capacity for PPPs 6. Establishes budgetary parameters 7. Identifies internal and external stakeholders 8. Identifies what additional support the institution needs 9. Compiles an initial checklists for each of the commercial opportunities identified. 16

Government initiatives • Government’s Accelerated and Shared Growth Initiative for South Africa (ASGISA) indicates that tourism is one of three sectors within which strategies are being developed to promote private sector involvement in rural areas. • Some of DWA’s assets do have a clear value as potential tourist destinations, which could serve a beneficial purpose to poverty alleviation by job creation in mostly rural areas, and benefit the Department if cooperative use reduces maintenance costs incurred by the Department. 17

Government initiatives… Hence the strategy to allow recreational or tourism use, which is commercial in nature, to conditionally take place. (This is not commercialisation of DWAF dam basins, but rather the controlled facilitation of those commercial uses which meet Governments objectives. ) The objectives of Governments process of Public Private Partnerships are to: put private capital at risk; transfer operational costs from public to private sector; and retain ownership of the asset; while some financial benefit accrues to the State 18

Opportunities • Of the 334 dams where DWAF has a mandate, 109 (33%) are currently used for some recreational purposes with the remaining 225 (67%) not being utilised (SPC, 2009). This clearly shows that there may be scope for the increase in recreational use of DWAF dams. Recreational use in terms of the tourism products defined in the PPP Toolkit for Tourism can entail one or more of the following categories: – Accommodation (e. g. floating chalets; house boats; caravan parks); – Food, beverage and retail (e. g. restaurant boats; picnic sites); – Activity-based tourism (e. g. canoe safaris; game viewing; hiking trails); and – Heritage and culture (e. g. cultural villages). 19

DWA’s policy for commercialisation: 1. The equitable and sustainable use of dams for commercial recreation and tourism, based on RMPs developed in association with all stakeholders. This does, however, not preclude DWA from concluding adhoc PPPs based on market, community or other demand. 2. Optimising revenue and return on investment relating to State assets (dams), in keeping with the NWRI Branch intention of operating based on sound business principles, through the risk transfer mechanism of PPPs. 3. Fulfilling social and economic objectives of government, in terms of ASGISA and DWA’s mandate, by redressing past social injustices through promoting LED, SMME 20 development and BBBEE.

DWA’s policy for commercialisation: 4. Effective expenditure and financial management - an area identified in ASGISA as an area for macroeconomic improvement. 5. Implementation of PPPs in co-operation with relevant government institutions to ensure that State dams are developed in order to unlock their socio-economic potential. 21

DWA’s policy for commercialisation: 6. Entering into co-management agreements with private, communal and other parties who hold land areas surrounding or adjacent to dams. Co-management agreements will look at the dam context and seek to realise environmentally sustainable LED opportunities. These agreements will be determined where benefits of the combined land utilisation will generate increased value for money, revenue, and local economic and job creation benefits for all the parties. Because of the neighbour relationship these items cannot be achieved by competitive procurement and will take the form of a negotiated agreement. Co-management agreement will make express provisions for developing economic opportunities on the land adjacent to the State land division of revenue from PPPs. Revenue sharing will be agreed on a case by case basis based on the economic benefits to be realised 22

Objectives: • Revenue Generation • Loss minimisation/savings in existing operations • Optimal Utilisation of Underperforming Assets • Socio-economic Benefits • Infrastructure Upgrades • Tourism Promotion • Resource Protection 23

Commercialisation Strategy Annual Market Test DWA’s commercialisation strategy is to via an annual market test (i. e. by issuing an Expression of Interest, both internal and external) determine demand identify possible PPP opportunities. The possible opportunities will be evaluated and a decision made as to whether a detailed planning (i. e. RMP) or an ad-hoc process should be initiated (refer Figure 1). 24

Prepare EOI Publish / Communicate EOI period and submission Yes, but significant impacts Evaluate EOIs Receive EOI from internal and external proponents Yes, in line with adhoc criteria No RMP Process Communicate to proponents Continue with regulated PPP process Ad-hoc Process 25

Ad-hoc process trigger Prepare Draft LCP Public Review Process Notices for Public Review Public input Review LCP No, but other procurement options Decisions for PPPs Yes No Undertake procurement Disregard opportunities and report to stakeholders Report to AO and Register PPPs Follow PPP process as per Toolkit 26

Planned Approach Trigger No Is an RMP in place? Prepare a RMP* Opportunities do not accord Yes Review and update RMP* Opportunities accord Review PPP opportunities ito SPC and RMP Disregard opportunities and report to stakeholders Report to AO and register PPPs with National Treasury Follow PPP process as per Toolkit * Refer DWAF Guidelines for the Compilation of Resource Management Plans 27

ACTIVITY RESPONSIBILITY DELIVERABLE Initiate and undertake RMPs D: IEE, Operations Directorates RMPs (including local strategic plans for commercialisation) Review Draft RMPs BEC Sub-committee for PPPs Recommendations for approval Approve RMPs Chief Director: Operations Approved RMPs Review PPP opportunities D: IEE BEC Sub-committee for PPPs Recommendations for registration Prepare registration application to PPP Unit of National Treasury and submit to Departmental Bid Adjudication Committee (DBAC) DIEEBEC Sub-committee for PPPs Registration submission Evaluation and approval by DBAC Recommendations for registration Submit registration notice to PPP Unit DIEE DDG: NWRIB and DG to approve Application to PPP Unit Continue with regulated PPP process (pre-feasibility onwards) 28

The criteria for initial evaluation of possible opportunities include: Is it a PPP opportunity in terms of the Toolkit definition? Does it fall within DWA’s mandate? Is it in line with government priorities and DWA’s commercialisation objectives? Is there sufficient budget and capacity to undertake a PPP (albeit a RMP or ad hoc process)? Does the proposal have BBBEE and social development opportunities? Does the proposal demonstrate market potential? Are there any fatal environmental flaws (specifically water use related)? 29

Medium Term Strategy • Staffing of D: IEE and Infrastructure Operations Directorates • The organisational structure should make provision for a manager, supported by a legal advisor and three professionals that reflects capacity required for RMPs and PPPs • Professionals from different backgrounds will be appointed with a view on employing a variety of skills within the RMP/PPP function • PPP capacity will be appointed within the Infrastructure Operations units within the divisions Environmental Engineering 30

Management Structure Act DG: DWA Chief Operations Officer CD: Internal Audit DDG: NWRIB DDG: Finance DDG: P&R DDG: Regions DDG: CS D: SCM See fig 2 Procurement Administration WRM and Water Use Land legal issues; 31 communication support

PPP Responsibilities Finance Branch (SCM) -Procurement (Administrative) -Compliance Monitoring (Administrative) D: IEE Operations Units (RMP and PPP Unit) -Project Management -Contract Management -Project Inception -Pre- and Feasibility Studies -Procurement (technical) -Compliance Monitoring (Technical) Participation and Inputs Responsibility 32

Recreational Water Use Manual Overview • An electronic manual (www. dwaf. gov. za/Documents/Other/RMP/rwum. asp) consisting of: – – – Policies Regulations Guidelines Delegations of Authority Information associated with Policy Key Performance Areas • Collectively dealing with the regulation, management and control of recreational water use (RWU) and access and use of government waterworks 33

Action Plan See Information Pack 34