Institutional and Contracting Arrangements - DWA Home Page

DOCUMENT TABLE OF CONTENTS 

SECTION 1: PROCESS CONSIDERATIONS FOR INSTITUTIONAL AND CONTRACTING 

ARRANGEMENTS 

SECTION 2: SMALL MEDIUM AND MICRO ENTERPRISE (SMME) CONTRACTING 

ARRANGEMENTS 

SECTION 3: LABOUR ONLY CONTRACTING ARRANGEMENTS 

SECTION 4: COOPERATIVES CONTRACTING ARRANGEMENTS 

SECTION 5: VOLUNTARY ASSOCIATIONS CONTRACTING ARRANGEMENTS 

SECTION 6: APPENDIX XV (RURAL SANITATION INFRASTRUCTURE) 

SECTION 7: APPENDIX XVI (PROJECT PARTICULAR SPECIFICATIONS FOR ON-SITE SANITATION 

SYSTEMS) 

SECTION 8: SCHEDULE OF QUANTITIES 

SECTION 9: CONTRACTORS TERMS OF REFERENCE 

SECTION 10: SERVIVE PROVIDERS TERMS OF REFERENCE 

3

4 

SECTION 1 

PROCESS CONSIDERATIONS FOR 

INSTITUTIONAL AND CONTRACTING 

ARRANGEMENTS

Contents 

PART I: BACKGROUND 1 

1 INTRODUCTION 1 

2 THE SANITATION JOB CREATION PROJECT 1 

3 THIS GUIDELINE OBJECTIVE AND PURPOSE 1 

4 THE MUNICIPALITY’S OBJECTIVES 2 

PART II: PROCEDURAL REQUIREMENTS 3 


6 DECISION-MAKING FLOW CHART 3 

7 SCOPING NEEDS 4 

TABLE OF CONTENTS 

8 DETERMINING THE APPROPRIATE INSTITUTIONAL ARRANGEMENT 5 

9 FORMS OF CONTRACTORS 6 

9.1 Individuals .......................................................................................................................................................... 

6 

9.2 Legal Entities (SMMEs) ....................................................................................................................................... 

6 

9.2.1 Close Corporation (CC) ............................................................................................................................... 

7 

9.2.2 Company ..................................................................................................................................................... 

7 

9.3 Non-Profit Organisations .................................................................................................................................... 

7 

9.3.1 Voluntary Associations ............................................................................................................................... 

7 

9.3.2 Trusts .......................................................................................................................................................... 

7 

5

6 

9.3.3 Co-Operatives ............................................................................................................................................. 

7 

9.3.4 Section 21 Companies ................................................................................................................................ 

8 

10 PROCESS CONSIDERATIONS ...................................................................................................................................... 

8 

11 CONTRACTING .......................................................................................................................................................... 

8 

11.1 Contracts to Appoint Legal Entities................................................................................................................. 

9 

11.2 Contracts with Voluntary Associations ........................................................................................................... 

10 

11.3 Labour Only Contracts .................................................................................................................................... 

10 

11.4 CIDB Contract ................................................................................................................................................. 

10 

12 PAYING THE CONTRACTOR ........................................................................................................................................ 

11 

13 CONTRACT AND RISK MANAGEMENT ...................................................................................................................... 

11 

14 DOCUMENTS LINKED TO THIS GUIDELINE ................................................................................................................ 

12 

PART III: APPENDICES 19 

14.1 Forms of Contractors ...................................................................................................................................... 

19 

14.2 Individuals ...................................................................................................................................................... 

19 

14.3 Legal Entities (SMMEs) ................................................................................................................................... 

19 

14.3.1 Close Corporation (CC) ............................................................................................................................... 

19

14.3.2 Company ..................................................................................................................................................... 

20 

14.3.3 Non-Profit Organisations ............................................................................................................................ 

21 

14.3.4 Voluntary Associations ............................................................................................................................... 

21 

14.3.5 Trusts .......................................................................................................................................................... 

22 

14.3.6 Co-Operatives ............................................................................................................................................. 

23 


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INTRODUCTION 

PART I: BACKGROUND 

Local government has the power and function for ensuring the delivery of sanitation services. The Strategic 

Framework for Water Services, 2003, establishes a target to have basic sanitation facilities for all by 2010. In 

addition, the task of meeting the Sector Target can used as an opportunity for the municipality to impact local 

economic development by creating jobs within the community. 

2 

THE SANITATION JOB CREATION PROJECT 

The overall aim of the sanitation job creation project is to significantly increase both the number of project 

related jobs created by DWAF in the delivery of water, sanitation and forestry services, and to contribute 

towards the sustainability of these jobs. Through a programme of multi- stakeholder collaboration and 

participation the project has the following objectives: 

• to increase the number of jobs that are created within local communities when sanitation projects are 

being implemented within those communities; 

• to improve the sustainability and marketability of skills development through accredited training as an 

essential component of all sanitation projects for unemployed and other targeted groups; 

• to improve the institutional development of municipalities and other strategic partners in sanitation at 

the local government level to more pro- actively address job creation opportunities in the context of 

sanitation service delivery and the Expanded Public Works Program; 

• to investigate the potential for linking water, sanitation and forestry job creation opportunities with local 

economic development (LED); 

• to promote the adoption of alternative implementation models which will enhance the job creation 

programme and ensure greater participation of local communities; 

• to improve sanitation management issues related to job creation through assessing best practice locally 

(and in the SADC region), information sharing and proactive monitoring, evaluation and reporting; and 

• to ensure that women, youth, disabled and other designated groups are provided with job opportunities 

in the sanitation sector. 

The project is also envisaged as a structured approach to coordinate a number of existing initiatives in the 

sector, and at the same time to significantly enhance the levels of awareness and commitment to achieving 

the 2009/10 goals in a cost efficient, sustainable manner. 

3 THIS GUIDELINE OBJECTIVE AND PURPOSE 

The purpose of this document is to support the municipalities to achieve their sanitation job creation targets 

(set by the sector leaders including DWAF) by maximizing and promoting the use of SMMEs / cooperatives and 

other emerging forms of contractors / service providers as implementing agents, support agents, consultants, 

contractors, suppliers etc. 

The document includes some practical support documentation, approaches and tools that may be used by 

municipalities to support these objectives. 

It is important to note that the guide highlights issues for the municipality to consider, but each municipality 

must take its specific needs and challenges into consideration when determining what would be appropriate 

for its specific situation.

4 

THE MUNICIPALITY’S OBJECTIVES 

By definition, municipalities include the local communities in its jurisdiction. In addition to ensuring basic 

service delivery to its communities, the municipality has a broad developmental mandate such as promoting 

local economic development and facilitating the creation of jobs wherever possible for its local community. 

The municipality is also the water services authority, and as such has a duty to take steps to ensure service 

delivery. This includes planning for and funding infrastructure development, and deciding how the infrastructure 

should be operated and maintained on an ongoing basis. 

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5 

10 

INTRODUCTION 

PART II: PROCEDURAL REQUIREMENTS 

The objective of the municipality in the Sanitation Job Creation Project will be to 

• meet the Sanitation Target; and 

• Provide opportunities for sustainable Job creation for the community by the community. 

The task of the municipality in this instance is to determine where toilets need to be built, according to what 

specification and by when. How this is achieved is then either 

• implemented in-house by the municipality or 

• transferred to a contractor to manage and construct or 

• Done by a combination of the above 2. 

The municipality can do this by project managing each project site and directly engaging the labour fro the 

local communities as independent contractors; alternatively it can appoint an independent contractor to 

project manage the projects that in turn would be responsible for engaging with the local labour. 

When the toilets are completed, according to specification and on time, the contractors, suppliers and service 

providers are paid for a job well done. 

The municipality does not want to be perceived, legally or practically, as the employer of any person. Ideally 

the municipality would also want to shift the task of supply and logistics management to someone who can 

best handle it in the circumstances. Institutionally thus, the municipality would have a contract with a third 

person or persons who are either managed by the municipality’s internal project manager, or an external 

entity who manages the project and the people who are benefiting from job creation. 

Depending on what model is chosen, the person or entity that the municipality is contracting with will have 

various skills and expertise and will thus be required to different things. 

6 

DECISION-MAKING FLOW CHART 

The municipality will need to follow a logical decision-making process when embarking on the project, 

including:- 

• What should the team look like to do the tasks and functions – what should be done in-house and what 

should be outsourced / or is there a combination? 

• How does the municipality want the jobs to be implemented to enhance sanitation job creation? 

• Is the municipality going to support new business ventures for sustainable job creation and in what form 

should these business ventures of the local communities be accommodated? 

• What should the contracting arrangement be? 

• Who will be responsible for the contract management especially for the quality control and the regular 

payments of the local labour?

The above diagram indicates the decision making requirements. The municipality should understand all the 

requirements of the different options before embarking on a specific route. 

7 

SCOPING NEEDS 

Before a municipality can embark on the Sanitation Job Creation Project, a municipality needs to determine 

its needs and challenges in relation to basic sanitation infrastructure, considering issues such as: 

• What is the backlog for basic sanitation services (identify the number of units to be built); 

• What is the available budget to address the backlog (how much money is available, from what source (e.g. 

DWAF/ equitable share/ MIG etc) and the drawdown requirements; 

• Where is the backlog (identify project sites); 

• 

What is the appropriate service level considering affordability by the municipality and the community 

11

• 

• 

• 

8 

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and the funding sources (consider both infrastructure development costs and the ongoing funding of 

operational requirements); 

What legal entity is best suited to do the work and what the most suitable contracting arrangements 

are; 

What has been promised to the community and by when; and 

What are the job creation opportunities (regionally, locally and per project site)? 

DETERMINING THE APPROPRIATE INSTITUTIONAL ARRANGEMENT 

A municipality must first consider its specific 

• needs in relation to basic sanitation services; 

• local conditions in relation to the project sites (existing capacity/ experience etc); 

• objectives for the Sanitation Job Creation Project; 

• technological choice and the most suitable contract mechanism to construct the units; and 

• Existing capacity to manage such a project. 

Only then can it design an appropriate institutional arrangement, which will then influence the process to be 

followed and the type of contract. 

The water services authority has to establish a number of relationships with other organisations who have 

roles and functions to play in promoting the goal of providing services to all. The municipality is required to 

have adequate institutional capacity to perform its duties as a Water Services Authority but can decide to 

outsource aspects of infrastructure developments, and or service provision. 

The relationships and functioning between the municipality and its internal and external partners should not 

be dealt with in isolation, especially the: - 

• interactions between people, technology, structure and environment; 

• management and control of the programme, and 

• Information and reporting required for decision-making and co-ordination in a formal sense. 

The municipality must decide on which functions it wishes to perform (in terms of policies and procedures), 

in terms of: - 

• Functional tasks - tasks identified in the delivery of the service / construction of the toilets. The functions 

should be co-ordinated and overseen by dedicated resources allocated by the municipality. 

• Delivery of services – responsibilities and tasks grouped around products and services. How should the 

municipality communicate and relate to the ‘customer’ (i.e. the Village Committees / CBOs or WSP’s) 

• Institutional arrangements between divisions / departments within the municipality in terms of coordination 

and management - i.e. technical, finance, corporate services, administration and planning etc. 

Due to the extent and volume of work required the municipality will need a strategy and policy on its internal 

organisational structure required and the use for appointment of consultants. 

The relationship between the municipality and the service providers / consultants / contractors needs some 

consideration in terms of: 

• Contracts of appointment (generally formal contracts) between the parties. Issues relating to the ‘contract’ 

are commitment, resources and action between client and consultant. 

• Performance of tasks against each contract, coupled with the responsibility of the municipality to monitor, 

evaluate and verify the product. The evaluation should be seen as a continuous review, which will have a 

significant impact on the quality of the project. 

The municipality-contractor team relationship generally depends on: 

• Activity or area of competence; 

• Awareness of different styles – management and performance; 

• 

Sensitivity to cultural and other issues which may influence acceptance (especially where labour intensive

• 

• 

9 

construction is involved, gender, language, and working practices); 

Responsiveness to the municipality’s needs (timeframe and quality of service); and 

Skills with an awareness of developing new processes. 

FORMS OF CONTRACTORS 

Ideally the form of contractor will be decided upon by those responding to the terms of reference and scope 

of work advertised by the municipality. It is however important to have some background as to options 

available for contractors to think about as in some instances, the municipality will need to play a pro-active 

role in supporting the community to not only choose their appropriate structure, but also support the 

establishment and ongoing processes. 

In this guideline, we group the different forms of contractors that might be relevant for sanitation job 

descriptions as follows. 

1. Individuals; 

2. Legal entities (SMMEs / cooperatives etc.); and 

3. Non-profit organisations. 

Refer to appendix 1 for more detailed information on each of these forms of contractors. 

9.1 

Individuals 

Individuals will mostly be considered for the “labour only contract”. 

A sole trader, also known as a proprietorship, trades in his/her personal capacity and under his/her own 

name. 

From a legal point of view, the business affairs and the personal affairs of a sole trader are considered to be 

one and the same. The sole trader, as well as the spouse should they be married in community of property, 

will be held jointly liable for the financial obligations of the business. 

9.2 

Legal Entities (SMMEs) 

Legal entities are likely to be already established entities that will respond to the municipality’s advertised 

Tender for the appointment of a contractor to Project Manage or construct the project. It will need to have 

a trading track record to demonstrate skills and experience to meet the job specifications. Contractors who 

are either a company or Close Corporation will have considered the following when forming themselves. 

9.2.1 Close Corporation (CC) 

A Close Corporation (CC) may have between 1 and 10 members, it may not have more than 10 members, 

and all members own and manage the CC. Their interest in portion of the CC must always add up to 100% 

and be expressed as a percentage. 

9.2.2 Company 

If there are more than 10 people (including natural persons, other companies or trusts or legal entities) that 

want to start a business together, they cannot form a CC. They will have to start a partnership or a company. 

A company is a registered association (group) of people, and it is incorporated (made up/ put together) 

according to the Companies Act of 1973. 

9.3 

Non-Profit Organisations 

We have used “non-profit” here in the sense that all benefits of the organisation stay within the organisation 

and are not distributed to outside shareholders. In addition to “non-profit characteristics”, the tax laws 

13

also provide some dispensation if the organization meets the criteria and is managed as a “public benefit 

organisation”. 

There are four legal structures to consider, namely voluntary associations (such as community based 

organizations), a co-operative, trusts and Section 21 companies. The choice of legal entity should depend on 

both the size and complexity of the organisational requirements, as well as that of potential funders. 

9.3.1 

14 

Voluntary Associations 

Voluntary associations are flexible to run and have few requirements. A voluntary association is a separate 

legal entity. A voluntary association is created by entering into an agreement with three or more people. 

A constitution is written, outlining the aims of the organisation, how it will be structured and the rules that 

will govern it. 

9.3.2 

Trusts 

A trust is an arrangement, set out in a written document (called the trust deed) in which an owner or 

founder hands over property and/or funds to a group of people (called trustees) who administer the assets 

for the benefit of other people (called beneficiaries) for a stated objective. Unlike a voluntary association 

or Section 21 company, the trustees are liable if a legal dispute arises. Trust property is protected by the 

Trust Property Control Act. 

9.3.3 Co-Operatives 

Many small businesses were started, and are started, by individuals whose main aim is to benefit themselves 

and his/ her family. If there was a situation where a group of people, or even an entire community, wanted to 

start the same enterprise, it might make sense for all these individuals to start an enterprise where everyone 

would benefit equally, and where profits are equitably shared with everyone involved. 

This is how a Co-operative enterprise is started. A ‘co-operative’ is about working together toward a 

common goal. It is an organisation that is democratically controlled by the members. This means that the 

conditions of employment, wages and all other business decisions are reached through the consensus of all 

the workers in that co-operative. 

9.3.4 

Section 21 Companies 

Section 21 companies are generally used by Non-Governmental Organisations (NGOs). 

Section 21 companies resemble business oriented (for profit) companies in their legal structure, but do not 

have a share capital and cannot distribute shares or pay dividends to their members. Any assets owned by 

the company and growth in the company are put towards the furthering of goal and vision (not the interest 

of the shareholders. But they are ‘limited by guarantee’, meaning that if the company fails its members 

undertake to pay a stated amount to its creditors. 

A Section 21 company has a two-tiered governance structure consisting of the members and directors. The 

members exercise their powers in general meetings. The directors have broad executive responsibility. They 

must appoint independent auditors and convene an annual general meeting. 

10 

PROCESS CONSIDERATIONS 

The scope of work and type of institutional arrangements will dictate what process requirements must be

followed and complied with. 

In all instances the municipality will be contracting for services and in some instances also for goods and 

supplies, from a third party. 

If the third party is from the private sector – there must be compliance with the Supply Chain Policy of the 

municipality. The scope of the contract will then determine the process to be followed (direct appointment/ 

closed tender or open competitive procurement). 

A further policy to bear in mind would be the municipality’s goals around broad-based black economic 

empowerment. Provided it is done fairly and transparently, the tender process can be designed to target 

specific communities with specific profiles. So for example, for a specific project site, the tender can prescribe 

that only persons residing in the community where the project site is, can respond to the tender. 

If the contractor is the public sector (such as a water board which may have the appropriate capacity to be 

project manager then the contract can be entered into without competitive procurement because it is the 

public sector. 

If the scope of work includes to maintain and operate the infrastructure and interact with the community in 

this regard (such as customer care and collect charges) this specific portion of the work would be considered 

a “municipal service” and hence Chapter 8 of the Municipal Systems Act would be relevant – in particular it 

may trigger the need to comply with s78 of the Municipal Systems Act in regard to the process for considering 

service delivery mechanisms. 

If the contract will involve future financial commitments to the third party for more than three years, s33of 

the Municipal Finance Management Act must be complied with. 

11 

CONTRACTING 

Once the scope of work, and the process determined, and contractors have been identified, the next step is to 

negotiate with the third party. The contract must be transparently developed and negotiated by appropriately 

mandated officials of the municipality. Once signed, it is binding on the municipality for the duration of the 

contract. As DWAF has an interest in the performance under the contract, DWAF should be kept advised 

of developments at all times. 

A key focus of both the scoping of work, contract negotiations and contract management will be money. 

Once a municipality has an understanding of what its sanitation needs are, the municipality would have 

worked out a budget, and determined exactly where its funding sources are, and what needs to be done to 

access the funding. 

The benefit of competitive procurement is that a municipality can test its budget assumptions in the market. 

If bids come back way below or above the expected budget – the scoping might be inaccurate or the risk 

profile of the contracts too expensive. 

There are many different contracting options available to a municipality and it is important that the municipality 

understand its roles and responsibilities with each one before embarking on any one of them. The key driver 

of the terms of the contract will be the Terms of Reference. 

The Terms of Reference generally form a part of a larger “Form of Contract” which could be used in the 

designing of the tender dossiers. All standard forms of contract (see table below) applicable in South Africa 

may be used for labour-intensive projects. It is not necessary to create special new forms of contract or to 

amend existing forms to implement labour based works. 

Requirements for labour-intensive works need, however, to be established in the scope of work / specifications 

/ schedules / works information / scope of services / scope associated with a contract for both consultants 

and contractors. Generic Terms of Reference are available in the appendices to the different contracts 

attached. 

The different contract scoping options can be described in the following main categories, namely:- 

15

• As contractor contract – where the municipality appoints contractors (could be service providers, 

consultants, contractors, suppliers) to perform any task or function for the municipality. 

• As a turnkey contract – where the municipality has one contract with one contractor, and that contractor 

takes responsibility for managing all service providers who need to be engaged to do the job. Generally 

the team can be made up of technical and social service providers, contractors and project managers. 

• As individual contracts – for direct appointment by the municipality to individuals to undertake any 

portion of the work. We refer to these as “Labour only Contracts”. 

• Combinations of the above. 

Each standard form of contract uses different terms to describe the parties to the contract and to establish 

requirements for the works (see table below). These guidelines use the terms employer and contractor for 

the parties engaged in construction works, client and consultant for the parties engaged in professional service 

contracts and scope of work for requirements in both professional service and construction contracts. 

11.1 

16 

Contracts to Appoint Legal Entities 

Generally the contract to appoint any close corporation / company or cooperative will be 

similar in nature. Because the municipality is contracting with a legal entity, it is assumed that there will 

have been a tender / quote process followed which resulted in legal entity having the required skills and 

expertise to take and managed certain operational, technical and social risk on the project. 

Thus the contractor/s will need to demonstrate that the contractor has a track record of sufficient management, 

technical capacity and responsibility to: 

• Contract with the WSA 

• Source, manage and pay the local labour 

• Source, manage and pay for the materials required 

• Build the toilets to specification on time 

• Invoice the WSA on achievement of certain milestones 

The municipality will have to ensure that it has the capacity to: 

• Scope the job requirements very specifically 

• Understand the target market of contractors and what the appropriate size of the project will be 

• Project manage a number of contracts, depending on how they are scoped and what the need 

• Do site inspections and to pay on achievement of milestones 

• Settle disputes 

• Mechanisms for ensuring the local labour receives benefit fro the sanitation job creation project 

• Verify and pay claims – when local labour employed this may have to be fast tracked 

The SMME and cooperatives contracting guidelines sets out generic contracts that may be used for appointing 

any business entity or cooperative respectively. The key distinguishing factor for a “Legal Entity” is that the 

contractor takes a lot more responsibility. The Legal Entity may want to consider using the labour contract, 

modified to suit its needs, and with no reference to the municipality as the Legal Entity takes the responsibility 

of managing the local labour. 

11.2 

Contracts with Voluntary Associations 

The voluntary association contracting guideline provides a generic contract that may be used for the 

appointment of voluntary associations. This would be where the municipality wants to focus on job creation 

by using the local labour, but also supporting potential sustainability of an association by building skills for 

the association to respond to other future opportunities together. It places a potential obligation to provide 

administrative support to the association (such as annual meetings; decision-making, financial reporting etc.).

11.3 

Labour Only Contracts 

In this instance, the WSA contracts with individual persons whose job it will be to build the toilets. Once 

the toilets are built, the contract comes to an end and the contractor will need to find other work. The 

municipality retains all project management and technical, operational and social risk. 

The labour only contracting guideline sets out a generic contract that may be used for the engagement of 

individuals to fulfill a specific task. This may also be used by the entities above if they have to engage with the 

local labour. 

11.4 

CIDB Contract 

The standard forms of contract which are generally in use in South Africa are: 

Standard form of contract Location for items covered by the Names of the Parties to a 

GCC 1990, COLTO 1997, FIDIC Short Form of 

scope of work 

Specifications 

Contract 

Employer 

Contract 

Contractor 

FIDIC Conditions of Contract for Construction (“Red Specification and schedule Employer 

Book”) 

Contractor 

NEC Engineering and Construction Contract and Works Information Employer 

Engineering and Construction Short Contract 

Contractor 

JBCC 2000 Principal Building Agreement , Minor Works Schedule Employer 

Agreement 

Contractor 

NEC - The Professional Services Contract Scope of Services Employer 

Consultant 

CIDB Standard Services Contract Scope of Work Employer 

Service Provider 

SAACE Form of Agreement for Consulting Services Scope of Services Client 

Consultant 

GCC 2004 Specifications Employer 

Contractor 

Due to the current environment the CIDB Standard Services Contract is a key focus area and some generic forms are 

attached the CIDB contracting forms guidelines. 

12 

PAYING THE CONTRACTOR 

Payment to the third party: What - When - How - must be clearly agreed before any work commences to 

avoid misunderstandings and dispute. The total price and how it will be paid over time (payment against 

objective milestones or time sheets or disbursements +10% etc) must be clearly stated in the contract. It 

is critical that the municipality follows due process to get the contracts into place and ensures performance 

by the Contractor in terms of contract to avoid charges of irregular or fruitless and wasteful expenditure. It 

is further important that the municipality sets up internal procedures to ensure payments are made to the 

contractors as promised in the contracts. 

13 

CONTRACT AND RISK MANAGEMENT 

As the water services authority, the municipality is ultimately accountable to both DWAF as sector leader 

and regulator, and most importantly the community which it services, for ensuring basic infrastructure for 

service delivery. 

Irrespective of the choice of contract or third party, the municipality must be aware of progress being made 

by the third party. The way in which the municipality manages risk will depend on who has been allocated 

the risk in the contract. 

If it is an entity contract, the entity must perform against outputs and thus assumes most of the technical 

and financial risk. The key performance indicators to be monitored by the municipality will be the number 

of toilets built according to specification and the number of local jobs created. The entity will be paid a fee 

to manage all the risk. 

With the labour only and voluntary association options, the municipality assumes a larger technical and 

17

operational and financial risk and will need to have a full time technically orientated project manager to 

monitor performance, probably on an input specification basis. The municipality will also in some instances 

be managing purchase and distribution of supplies and so will take the risk of the funding of this, and on the 

logistics if getting it to the project sites on time so that the labour is not kept waiting. 

It is important that the municipality acknowledge this responsibility of contract and risk management as an 

important job and include it in an employee’s performance contract, with appropriately delegated powers 

and time allocation to do the job properly. The alternative is to contract a service provider to undertake the 

function of the transaction advisor/ contract manager for the duration of the Sanitation Job Creation Project 

and ensure that the contract spells out what both the municipality and the contract manager must do in 

scoping/ contracting and implementing the contract for the duration of the project. 

18 

DOCUMENTS LINKED TO THIS GUIDELINE 

14 

There are numerous documents that are linked to this guideline (and are referred to herein), namely:- 

Document Name File name Description 

“Process Considerations for 

institutional and contracting 

arrangements” 

“Small Medium and Micro 

Enterprise (SMME) contracting 


“Labour Only contracting 

Arrangements” 

“Cooperatives contracting 


“Voluntary association 

contracting Arrangements” 

Appendix XV – “Rural sanitation 

infrastructure – project 

implementation strategy” 

Appendix XV1 – “Project 

Particular Specifications for 

on-site sanitation systems – 

Ventilated Improved Pit toilets” 

Appendix XV2 – “Schedule of 

Quantities for a VIP toilet” 

“Contractors Terms of 

Reference” 

“Service Providers Terms of 

Reference” 

Process.doc 

Smme.doc 

Labouronly.doc 

Cooperatives.doc 

Voluntary.doc 

Appxv.doc 

Appxv1.doc 

Appxv2.doc 

TORcontractor.doc 

TORconsultant.doc 

Document explaining process considerations, different 

forms of contractors and the contracts. 

Document explaining SMME characteristics, guidelines 

for municipalities and generic contracts. 

Position paper and characteristics for municipalities 

appointing labour directly – with a generic contract. 


appointing cooperatives – with a generic contract. 


appointing cooperatives – with a generic contract. 

Document that a WSA or municipality can use to 

describe their policies and principles that may be used 

by service providers and contractors in designing 

procurement documents and implementation 

methodologies. 

SANS 10365-1:2004 

Materials and design parameters that should be used 

by service providers for on site VIPs 

Preamble and schedule of quantities that may be used 

by service providers in procurement documentation 

for a rural on-site VIP toilet programme. 

TOR documentation that may be used by 

municipalities in the appointment of contractors for a 

rural on-site VIP toilet programme. 

TOR documentation that may be used by 

municipalities in the appointment of consultants 

/ service providers for a rural on-site VIP toilet 

programme.

14.1 

Forms of Contractors 

PART III: APPENDICES 









5. Legal entities (SMMEs); and 


14.2 

Individuals 



name. 




14.3 










The members of a CC must be “natural persons”, meaning that a Company, society, club etc cannot become 

a member, as a Company is not a natural person. A Natural person is a living, breathing human being, as 

opposed to a legal entity such as a Company. The assets and debts of the business belong to the CC, and the 

assets and debts of the members have nothing to do with the CC. 

A Close Corporation’s name must always end with the abbreviation ‘CC’. The name of the CC, the registration 

number as well as the names of all the members must appear on all business documents, such as letterheads, 

invoices, etc. 

Advantages of the cc 

• The law is simple and easy to comply with. 

• The close corporation has a simple management and decision making structure. Most decisions are taken 

informally. 

• All members are part of the management and have a direct interest in the success of the enterprise. 

• The close corporation has a legal personality (it can act in its own name) with all the benefits this involves, 

and this gives the enterprise continuity. 

• 

The members are not taxed personally for the dividends they receive. 

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• An auditor does not have to be appointed, only an accounting officer. 

• Annual general meetings are not mandatory. 

• Any addendum to the original founding document can be added simply by registering the addendum. 

Disadvantages of the cc 

• If the enterprise wishes to expand it may have only 10 members. It can cause the close corporation to be 

converted to a company. 

• The close corporation can have financing problems, as the members have limited liability for the debts of 

the enterprise. This makes it difficult to obtain credit. 

• If a member wishes to sell her/his interest, all the other members of the close corporation must give their 

consent. 

14.3.2 Company 





A company will have directors and shareholders. Shareholders are people or other companies that have 

put money into the business, and they are the owners of the business. Directors are the managers of the 

company. Sometimes the owners (the shareholders) and the directors (the people that manage the company) 

are the same people, and sometimes they are different people. A private company will have a maximum of 50 

shareholders. As with a CC, the registration number of the company and all the names of the directors must 

be printed at the bottom of the company letterhead, and any other official company documents. 

One major advantage of a company (as apposed to a partnership) is that the law says that the assets and debts 

of the company belong to the company and the assets and debts of the Shareholders and Directors belong to 

the Shareholders and Directors, which means that it has nothing to do with the Company. This is the same 

for a CC, as discussed above. 

Another area where a company is the same as a CC is that the Directors and Shareholders must always write 

Pty (Ltd) behind the name of the company (it was CC for a Close Corporation). If they write the name 

of the company without writing Pty (Ltd) behind it, the law will not see the company as separate from its 

shareholders. This means that the law will see the debts and assets of the company as the debts and assets 

of the Shareholders and Directors. 

Legally, a private company (or any other type of company) must prepare annual financial statements, and these 

must be audited. This means the company must appoint a chartered accountant. 

Advantages of the Company 

• The company is a legal person and therefore exists independently from its shareholders. 

• Shares and therefore ownership can be transferred. This means that a shareholder can sell his shares (his 

portion of the company that he owns. When he does this, he is no longer an owner of the company). 

• Shareholders are not legally responsible for the debts of the company. 

• As in the case of the close corporation the company has “perpetual succession” (indefinite life-span), 

which means the business can continue even if the members die. 

Disadvantages of the Company 

• A private company must meet various extra costs, such as founding costs, annual subscriptions and the 

cost of issuing shares. 

• There are many broad prescriptions (instructions) for establishing and managing the company. 

• The company’s business is, as a result of the compulsory publication of its statements, constitution, etc., 

known to everyone, including its competitors. 

20

14.3.3 









Most organisations begin life as a voluntary association, as it is the structure with the least requirements. 

Voluntary associations do not have to be registered (though there is little reason not to) and tend to suit 

small community based organisations with relatively few members. That said, many larger organisations prefer 

the voluntary association structure as it gives them more flexibility. Co-operatives are voluntary associations 

that have complied with the requirements of the Co-operatives Act. 

Trusts tend to suit organisations that have been established to oversee the use of property or assets, for 

instance a specific community development trust that allocates money and resources in the community. 

Section 21 companies work in a similar way to for-profit companies and suit larger, more complex organizations 

that have a non-governmental objective. 

14.3.4 


Voluntary associations are flexible to run and have few requirements. A voluntary association is a separate 

legal entity. 

• 

Laws governing voluntary associations 

Voluntary associations are governed by the common law, which requires that the voluntary association’s 

objectives must be lawful and not primarily for gain or profit for its members. 

• Voluntary associations and the donor community 

Much is said of the how undesirable the voluntary association structure can seem to donors, particularly those 

in the corporate world. This needn’t be the case though, and many successful organisations have remained 

as voluntary associations due to the flexibility that they offer. In order to attract larger donors, a voluntary 

association can structure itself in a more transparent way, have its financial statements audited and obtain tax 

exemption status, all of which will fulfill the criteria of most large donors. 

• How to become a voluntary association 

A voluntary association is created by entering into an agreement with three or more people. A constitution 

is written, outlining the aims of the organisation, how it will be structured and the rules that will govern it. 

• 

To register or not to register? 

Although a voluntary association does not need to be registered with the government in order to be a 

legal entity, there is little reason not to. Registration is free and is quite straight forward. Donors generally 

require registration, as will a bank if the association wants to open an account. 

• 

How to register 

Registration is straightforward and does not require legal assistance. 

1. An application form must be completed together with two copies of organisation founding 

documents (constitutions) in full. Both copies must be signed. 

21

2. Send documents to HSRC Building, 134 Pretorious Street, Pretoria, 0001 or Directorate: Non- 

Profit Organisations, Department Of Social Development, Private Bag X901, Pretoria, 0001 

If there are no problems with the documentation, the registration certificate will be posted after 3-5 

months. 

• 

22 

Ongoing requirements 

In order to maintain registration status with the government, the association must submit its annual 

financial statements, checked by a registered accountant, and annual report each year. One general meeting 

is required per year, as set out in the organisation’s constitution. 

• 

Tax Exemption 

An organisation registered with SARS as a “non-profit organisation” has benefits both for the organisation 

and for funders and donors of the organization. Tax exemption status under s18A of the Income Tax Act 

has benefits for the organisation although employees are still subject to PAYE and UIF deductions by the 

organisation as employer. To obtain the registration forms, visit the SARS website on: www.sars.gov.za or go 

to your nearest SARS office. 

14.3.5 

Trusts 

A trust is an arrangement, set out in a written document (called the trust deed) in which an owner or 

founder hands over property and/or funds to a group of people (called trustees) who administer the assets 

for the benefit of other people (called beneficiaries) for a stated objective. 

• 

Laws governing trusts 

Trusts are regulated by the common law and the Trust Property Control Act 57 of 1988. 

• 

No independent legal personality 

Unlike a voluntary association or Section 21 company, the trustees are liable if a legal dispute arises. Trust 

property is protected by the Trust Property Control Act. 

• 

How to form a trust 

A notary public must write and attest the trust deed. (A notary public is an attorney with an additional 

qualification which authorises him or her to certify that documents to be filed in a government registry 

are authentic.) Then the trust deed must be registered with the Master of the High Court. The trust deed 

names intended trustees, but it is the Master who actually formally appoints them. 

The Master of the High Court may ask the trustees to provide security for the proper performance of 

their duties. This is usually arranged through an insurance company. If one wants to do away with the need 

for this security, the Master usually requires that you appoint auditors and give a full set of reasons why the 

trustees should be exempted. 






This is how a Co-operative enterprise is started. A ‘co-operative’ is about working together toward a




• Laws Governing Co-operatives 

In order to contract with co-operatives it might be necessary for municipalities to first assist with the creation 

of co-operatives. This is regulated by the Co-Operatives Act No 14 of 2005, which enables co-operatives 

to register and acquire a legal status separate from their members and facilitate the provision of targeted 

support for emerging co-operatives, particularly those owned by women and black people. The Department 

of Trade and Industry has published a Guide to the South African Co-operatives Act 2005. 

A co-operative is a voluntary association formed by a group of people who have a common need that they 

want to address jointly, or a group of people who want to create employment for themselves. Each member 

has an equal voice in decisions, and members have a primary duty to each other, not to anyone outside of the 

co-operative. The benefits of a co-operative are shared by all members. 

There are different types of co-operatives such as agricultural co-operatives and housing co-operatives. The 

two that might be appropriate for this instance is: 

• Worker co-operatives: 

provides employment to its members; and 

• Service co-operatives: 

provides services to its members. 

Co-operatives require formality such as: 

• A constitution, naming the members (at least 5) and directors, and setting out the rules of engagement 

between the members including membership, meetings and management; 

• registration with Registrar of Co-operatives; 

• Sets of annual financial statements; 

• Regular meetings etc. 

Worldwide, some 800 million people are members of co-operatives, and it is estimated that cooperatives 

employ about 100 million people. Because Co-operatives have been so successful in certain parts of the 

world, the South African government is trying to encourage more and more people to start co-operatives. 

It is very important that a co-operative is operated and managed in the same way that any other business 

is run, because this is important in ensuring that all the people work effectively and efficiently, and that the 

income (the money you bring in) exceeds the expenditure. If a co-operative is set up in the right way - with 

enough commitment, support and planning – then it can play a major role in helping to provide jobs and fight 

poverty. 

Advantages 

• Cooperatives develop healthier communities. All the workers split the profit equally amongst each 

member. 

• Because these workers live in the community, they spend their money in the community which helps to 

create stronger communities. 

• Cooperatives improve the quality of work. Workers control the business democratically, and they appoint 

the managers themselves. Because of this, the managers are accountable directly to the workers and will 

not exploit the workers for their own benefit. 

• Cooperative jobs are sustainable, meaning that the co-operative can continue indefinitely. The reason 

for this is that co-operatives are formed to help with employment in the community. The owners of the 

co-operative are the workers who live in the community and will not close down the business to make 

profit elsewhere. 

• All members of a co-operative benefit from any surplus money that it makes. 

• There is a ‘moral incentive’ for being in the co-operative - a desire to be part of a democratic business 

that benefits a whole community. 

23

14.3.7 

24 



Section 21 companies resemble business oriented (for profit) companies in their legal structure, 

but do not have a share capital and cannot distribute shares or pay dividends to their members. 

Any assets owned by the company and growth in the company are put towards the furthering of 

goal and vision (not the interest of the shareholders. But they are ‘limited by guarantee’, meaning 

that if the company fails its members undertake to pay a stated amount to its creditors. 

A company has a two-tiered governance structure consisting of the members and directors. 

The members exercise their powers in general meetings. The directors have broad executive 

responsibility. They must appoint independent auditors and convene an annual general meeting. 

• 

Laws governing Section 21 companies 

Like other companies, section 21 companies are governed by the Companies Act. 

• 

Forming a Section 21 company 

All companies, including Section 21 companies, are registered with the Registrar of Companies 

in terms of the Companies Act. Before being registered, the Registrar must approve the name 

chosen. A company may not begin its work until it is registered, which takes about two to four 

months. 

The founding documents for a Section 21 company are the memorandum and the articles of 

association. The memorandum sets out the purpose of the NPO; the articles of association 

regulate how it operates. Registering a company is a complex process and legal assistance should 

be sought. 

The following forms are required for registration: 

Documents Purpose Fees 

CM5 (in duplicate) Application for reservation of name R50-00, original stamped 

CM22 (in duplicate) Notice of registered office and postal address None 

CM29 

Consent of registration of Directors, Auditors and 

None 

Officers 

CM31 (in duplicate) Consent to act as an Auditor None 

Power of Attorney Authorisation to act on behalf of promoters None 

The following documents will make up the Memorandum and Articles of Association: 


CM3 (in duplicate) Certificate of Incorporation R350-00, original stamped 

CM4 (in duplicate) 

Memorandum of Association of a company without share 

None 

capital 

CM4A (in duplicate) Guarantee concerning the liability of members None 

CM4B (in duplicate) Association clause and particulars of members None 

CM44B (in duplicate) 

Articles of Association of a company without a share 

capital 

None 

CM44C (in duplicate) Signatory to Articles of Association None 

See also: www.cipro.co.za/registration_form/reg_forms.asp

• 


The ongoing requirements for a Section 21 company are more extensive then the others. They 

can, however, help keep structure the running of the organisation. 

A company must: 

• appoint auditors; 

• maintain a registered address; 

• keep up-to-date registers of members and directors in the prescribed form; 

• hold an annual general meeting in accordance with the prescribed procedures; and 

• keep financial and accounting records in the prescribed form, present these to the AGM of members and 

file them with the Registrar. 

The directors’ names must appear on all letters, catalogues and circulars distributed or published. Directors 

must ensure that proper minutes and attendance registers are kept of all meetings. The directors’ report 

must be presented to the AGM. 

25

26 

SECTION 2 

SMALL MEDIUM AND MICRO 

ENTERPRISE (SMME) 

CONTRACTING ARRANGEMENTS

Contents 


PART I: BACKGROUND..................................................................................................................................................... 

1 

1 INTRODUCTION ...................................................................................................................................................... 

1 

2 THE SANITATION JOB CREATION PROJECT ....................................................................................................... 

1 

3 THIS GUIDELINE OBJECTIVE AND PURPOSE ..................................................................................................... 

1 

4 THE MUNICIPALITY’S OBJECTIVES ...................................................................................................................... 

1 

5 SMALL MEDIUM AND MICRO ENTERPRISE (SMME) DEFINITION ...................................................................... 

1 

6 PROCEDURAL REQUIREMENTS ........................................................................................................................... 

1 

7 FORMS OF CONTRACTORS .................................................................................................................................. 

1 

7.1 Individuals ........................................................................................................................................................... 

1 

7.2 Legal Entities (SMMEs) ...................................................................................................................................... 

1 

7.2.1 Close Corporation (CC) .............................................................................................................................. 

1 

7.2.2 Company .................................................................................................................................................... 

1 

7.2.3 Co-Operatives ............................................................................................................................................. 

1 

7.3 Non-Profit Organisations .................................................................................................................................... 

1 

27

28 

7.3.1 Voluntary Associations ................................................................................................................................ 

1 

7.3.2 Trusts .......................................................................................................................................................... 

1 


1 

8 CONTRACTING ....................................................................................................................................................... 

1 

8.1 Contracts to Appoint Legal Entities ..................................................................................................................... 

1 

8.2 CIDB Contract .................................................................................................................................................... 

1 

9 PAYING THE CONTRACTOR 1 

10 TAX ISSUES ............................................................................................................................................................. 

1 


11 APPENDIX 1 – GENERIC CONTRACT WITH A SMME .......................................................................................... 

1

1 

INTRODUCTION 






2 


























(set by the sector leaders including DWAF) by maximizing and promoting the use of SMMEs as implementing 

agents, support agents, consultants, contractors, suppliers etc. 





for its specific situation. 

4 


By definition, municipalities include the local communities in its jurisdiction. In addition to ensuring basic 

29






One of the main objectives that any municipality should have in their contracting of SMMEs is the creation 

of an enabling environment for the procurement of SMMEs (from the development of terms of references, 

tender documentation, tender adjudication and appointment through to support during implementation of 

emerging contractors). 

5 

30 

SMALL MEDIUM AND MICRO ENTERPRISE (SMME) DEFINITION 

From “Best Practice Guideline B2: Methods and procedures for implementing preferential procurement 

policies March, 2004: Edition 1 of CIDB document 1008”. 

Consideration Definition 

Primary definition 

Adherence to 

legislation 

Independence 

Control 

Size of business 

Secondary definition 

Managed 

(Control) 

Separate and 

Distinct 

Business Entity 

A sole trader, partnership or legal entity which adheres to statutory labour 

practices, is registered with the South African Revenue Services and is a 

Separate and Distinct Business Entity, including co-operative enterprises and 

non-governmental organizations, Managed by one Owner or more which, 

including its branches or subsidiaries, if any, is predominantly carried out in any 

sector or sub sector of the economy mentioned in column 1 of the Schedule 

to the Small Business Act (Act 102 0f 1996) and which can be classified as a 

micro - a very small, a small or a medium enterprise by satisfying the criteria 

mentioned in columns 3, 4 and 5 of the Schedule opposite the smallest relevant 

size or class as mentioned in column 2 of the Schedule 

The possession and exercise of legal authority and power to manage the assets, 

goodwill and daily operations of a business and the active and continuous 

exercise of appropriate managerial and financial authority and power in 

determining the policies and directing the operations of the business. 

An enterprise which is free of any significant degree of direct or indirect 

Ownership, or Control, by any business which engages in similar business 

activities. Indicators of control shall, without limitation, include interlocking 

management or Ownership, common Principals, identity of interests among 

family members, shared facilities and equipment, or common use of employees. 

Note: A business will not be considered to be a Separate and Distinct Business 

Entity should another business or a Principal of another business which 

engages in similar business activities owns more than 20% of the equity in that 

business. 

Owner A person who has all the customary incidents of ownership, including the 

right of disposition, and sharing in all the risks and profits commensurate with 

the degree of ownership interest as demonstrated by an examination of the 

substance, rather than the form of ownership arrangements. 

Note: 

1. 

A Small Business Enterprise can be defined along the lines of the primary definition for an SMME, 

using the same secondary definitions: 

A sole trader, partnership or legal entity which adheres to statutory labour practices, is registered

2. 

with the South African Revenue Services and is a Separate and Distinct Business Entity, including cooperative 

enterprises and nongovernmental organizations, Managed by one Owner or more which, 

including its branches or subsidiaries, if any, is predominantly carried out in any sector or sub sector 

of the economy mentioned in column 1 of the Schedule to the Small Business Act (Act 102 0f 1996) 

and which can be classified as a micro - a very small or a small enterprise by satisfying the criteria 

mentioned in columns 3, 4 and 5 of the Schedule opposite the smallest relevant size or class as 

mentioned in column 2 of the Schedule 

The National Small Business Act (Act 102 of 1996) provides the following tabulation in the Schedule 

to the Act: 

Column 1 Column 2 Column 3 Column 4 Column 5 

Sector or 

Subsectors in 

accordance with 

the standard 

industrial 

classification 

Mining and 

Quarrying 

Size or 

Class 

Small 

Very small 

Micro 

Manufacturing Small 

Very small 

Micro 

Construction Small 

Very small 

Wholesale Trade, 

Commercial Agents 

and Allied Services 

Transport, 

Storage and 

Communications 

Micro 

Small 

Very small 

Micro 

Small 

Very small 

Micro 

Total fulltime 

equivalent of 

paid employees 

Less Than 

50 

20 

5 

50 

20 

5 

50 

20 

5 

50 

10 

5 

50 

10 

5 

PROCEDURAL REQUIREMENTS 

Total annual 

turnover 

Less Than 

R 7,50 m 

R 3,00 m 

R 0,15 m 

R10,00 m 

R 4,00 m 

R 0,15 m 

R 5,00 m 

R 2,00 m 

R 0,15 m 

R25,00 m 

R 5,00 m 

R 0,15 m 

R10,00 m 

R 2,00 m 

R 0,15 m 

Total gross 

asset value 

(fixed property 

excluded) 

Less Than 

R 4,50 m 

R 1,80 m 

R 0,10 m 

R 3,75 m 

R 1,50 m 

R 0,10 m 

R1,00 m 

R0,40 m 

R0,10 m 

R4,00 m 

R0,50 m 

R0,10 m 

R2,50 m 

R0,50 m 

R0,10 m 

6 

The scope of work and type of institutional arrangements will dictate what process requirements must be 







In the “Process Considerations for Institutional and Contracting Arrangements” guidelines document there 

is a detailed explanation for municipalities on:- 

• The need to follow a logical decision-making process when embarking on the project. 

• The need to determine its needs and challenges in relation to basic sanitation infrastructure 

• 

Determining the most appropriate institutional arrangement 

31

7 

32 

FORMS OF CONTRACTORS 









2. Legal entities (SMMEs); and 


7.1 

Individuals 



name. 




7.2 










7.2.2 Company 











common goal. It is an organisation that is democratically controlled by the members. This means that the



7.3 









7.3.1 


Voluntary associations are flexible to run and have few requirements. A voluntary association is a separate legal entity. 

A voluntary association is created by entering into an agreement with three or more people. A constitution is written, 

outlining the aims of the organisation, how it will be structured and the rules that will govern it. 

7.3.2 

Trusts 

A trust is an arrangement, set out in a written document (called the trust deed) in which an owner or founder hands 

over property and/or funds to a group of people (called trustees) who administer the assets for the benefit of other 

people (called beneficiaries) for a stated objective. Unlike a voluntary association or Section 21 company, the trustees 

are liable if a legal dispute arises. Trust property is protected by the Trust Property Control Act. 

7.3.3 



Section 21 companies resemble business oriented (for profit) companies in their legal structure, but do not have a 

share capital and cannot distribute shares or pay dividends to their members. Any assets owned by the company and 

growth in the company are put towards the furthering of goal and vision (not the interest of the shareholders. But 

they are ‘limited by guarantee’, meaning that if the company fails its members undertake to pay a stated amount to its 

creditors. 

A Section 21 company has a two-tiered governance structure consisting of the members and directors. The members 

exercise their powers in general meetings. The directors have broad executive responsibility. They must appoint 

independent auditors and convene an annual general meeting. 

8 

CONTRACTING 







33



are some generic Terms of Reference that may be used. 




attached. 

The different contract scoping options can be described in the following main categories, namely:- 

• As contractor contract – where the municipality appoints contractors (could be service providers, 

consultants, contractors, suppliers) to perform any task or function for the municipality. 

• As a turnkey contract – where the municipality has one contract with one contractor, and that contractor 

takes responsibility for managing all service providers who need to be engaged to do the job. Generally 

the team can be made up of technical and social service providers, contractors and project managers. 

• Combinations of the above. 

Each standard form of contract uses different terms to describe the parties to the contract and to establish 

requirements for the works (see table below). These guidelines use the terms employer and contractor for 

the parties engaged in construction works, client and consultant for the parties engaged in professional service 

contracts and scope of work for requirements in both professional service and construction contracts. 

8.1 

34 


Generally the contract to appoint any SMME being a close corporation / company or cooperative 

will be similar in nature. Because the municipality is contracting with a legal entity, it is assumed that 

there will have been a tender / quote process followed which resulted in legal entity having the required skills 

and expertise to take and managed certain operational, technical and social risk on the project. 
















The generic contract that may be used for appointing any business entity is attached in appendix 1. The key 

distinguishing factor for a “Legal Entity” is that the contractor takes a lot more responsibility. The Legal Entity 

may want to consider using the labour contract, modified to suit its needs, and with no reference to the 

municipality as the Legal Entity takes the responsibility of managing the local labour. 

8.2 

CIDB Contract 

The standard forms of contract which are generally in use in South Africa are:

Standard form of contract 

GCC 1990, COLTO 1997, FIDIC Short Form of 

Contract 

FIDIC Conditions of Contract for Construction 

(“Red Book”) 

NEC Engineering and Construction Contract and 

Engineering and Construction Short Contract 

JBCC 2000 Principal Building Agreement , Minor 

Works Agreement 

Location for items covered 

by the scope of work 

Specifications 

Specification and schedule 

Works Information 

Schedule 

NEC - The Professional Services Contract Scope of Services 

CIDB Standard Services Contract Scope of Work 

SAACE Form of Agreement for Consulting Services Scope of Services 

GCC 2004 Specifications 

Names of the Parties 

to a Contract 

Employer 

Contractor 

Employer 

Contractor 

Employer 

Contractor 

Employer 

Contractor 

Employer 

Consultant 

Employer 

Service Provider 

Client 

Consultant 

Employer 

Contractor 

Due to the current environment the CIDB Standard Services Contract is a key focus area and some generic forms are 

attached the CIDB contracting forms guidelines. 

9 









10 

TAX ISSUES 

Generally all tax issues are dealt with during tender or negotiation phases where a legal entity is required to 

provide the following documentation during this phase:- 

General compulsory documents with any contract / tender form 

1 Company / CC Registration Certificate 

2 Financial statements / letter from your auditors or accountant certifying annual turnover 

3 Current VAT / TAX clearance certificate (original document) 

4 Company Profile / Corporate Brochure 

Original cancelled cheque or Bank Certificate verifying the banking details. (Please note that any 

5 

changes to bank details in future will be subject to the same requirement) 

The following documents must be available on request: 

6 Shareholders / Association / Partnership Agreement, Memorandum and/ or Articles of Association 

7 Registration to Professional Institutions / Statutory Bodies 

8 Share Certificates 

9 Track record of the legal entity (projects of similar nature and financial security) 

35

11 

36 

APPENDIX 1 – GENERIC CONTRACT WITH A SMME 


Note this contract is applicable for all legal entities including cooperatives and SMMEs. 

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

>>>>>>> 

1. 

DEFINITIONS 

1.1. 

1.2. 

1.3. 

1.4. 

1.5. 

Project Name: ….………………………………………. 

Project Number: …………………………………….…. 

Contract Number: ………..……………………………. 

MUNICIPALITY 

SANITATION JOB CREATION PROJECT 

Fixed Term Contract 

Between 

The Municipality and the Contractor 

To the Building of Toilets using Local Labour 

The Municipality is: 

Name: ……………..……………………………Municipality………………………………………………. 

Address: ………………………………………………………………………………………………………….… 

VAT Number ………………………………………………………………………………………………………... 

Contact Person: …………………………………………………………………………………………………… 

Contact Number: …………………………………………… 

The Municipality Project Manager is: 

Name: ……………………………………………………………………………………………………………. 


The Contractor is: 

Name: ……………………………………………………………………………………………………………. 

Registration Number:…………………………………………………………………………………………….… 

VAT Number ………………………………………………………………………………………………………. 

Address: ………………………………………………………………………………………………………… 

Contact Person………………………………………………………………………………………………… 


The Project is the management of the building of toilets on the Project Site, Monday to Friday from 8h00 to 16h00 for 

the Project Term, as more fully described in the Terms of Reference attached as Annexure A. 

The Project Site is …………………………………………………………..

2. 

3. 

4. 

1.6. 

1.7. 

1.8. 

PROJECT 

2.1. 

2.2. 

2.3. 

2.4. 

The Project Term is 

Start Date: ………………………………………… 

End Date: ………………………………………… 

The Project Remuneration (stated VAT inclusive) is: 

Fixed Monthly Project Management Fee: R ………………………(VAT incl) 

Local Labour Rate: R……….per day per local labour used (VAT incl) 

Disbursements: cost + ……% (VAT incl) 

“Local labour” means sub-contractors from the community in which the Project Site is situated. 

The Municipality is committed to eradicating the basic sanitation infrastructure backlogs. 

The Municipality has appointed the Contractor to ensure that the Project is properly executed to achieve this 

objective. 

APPOINTMENT 

3.1. 

3.2. 

3.3. 

3.4. 

3.5. 

3.6. 

In addition to building toilets, the Municipality wants to create job opportunities for its local communities. 

The job creation opportunity is directly linked to the Project. 

The Contractor is contracted to manage the Project, and in return will earn the Project Remuneration. 

The Contractor shall start and will finish work on the Project Term dates (see 1.6 above). 

This is not a contract of employment between the Contractor and the Municipality. 

Other than payment of the Project Remuneration (see 1.7 above), as earned by the Contractor, the Contractor will be 

entitled to no other benefits. 

The Municipality is not obligated to appoint the Contractor for any other work after this Project Term is expired. 

Neither the Contractor nor the Municipality will be allowed to hand over their rights and responsibilities in terms of this 

contract to another person or business, without the others prior written approval. 

CONTRACTOR’S OBLIGATIONS 

The Contractor will: 

4.1. 

4.2. 

4.3. 

4.4. 

4.5. 

develop a Project Site Programme and update and communicate it regularly; 

manage the Project and the Project Site; 

ensure that other than the full-time employees of the Contractor, only Local Labour is used for this Project, managed 

and paid appropriately at the rate agreed to in this Contract; 

report progress weekly to the Municipality Project Manager; 

complete daily forms recording all materials and supplies purchased, when and how used and proof of costing, and 

37

5. 

6. 

7. 

38 

4.6. 

4.7. 

4.8. 

4.9. 

4.10. 

4.11. 

consolidate and submit weekly to the Municipality Project Manager; 

complete daily timesheets for the Local Labour used and consolidate and consolidate and submit weekly to the 

Municipality Project Manager; 

provide its own insurance to cover against accidents; 

not hold the Municipality responsible for negligence caused through any misuse of tools, equipment, material and 

funds provided to do the work; 

bring any problems, complaints or grievances, to the attention of the Municipality Project Manager immediately; 

be responsible for all expenses in executing the Project including getting to and from the project site, sourcing and 

managing the Local Labour, clothing, meals, accommodation and any taxes that may be due; ad 

be responsible for any tax due. 

MUNICIPALITY’S OBLIGATIONS 

5.1. 

5.2. 

5.3. 

5.4. 

PAYMENT 

6.1. 

6.2. 

6.3. 

6.4. 

6.5. 

DISPUTE 

7.1. 

7.2. 

The Municipality will ensure that the Site is made available to the Contractor to enable the Contractor to undertake 

the Project. 

The Municipality Project Officer will receive and sign off on or raises queries on the weekly reports (Progress, Time 

Sheets, and Materials and Supplies Log) and submit them to the Municipality every 2 weeks. 

The Municipality will pay the Contractor if work as described in this contract is undertaken properly. 

The Municipality will not be responsible for any claims, losses and legal actions against the Contractor. 

The Payment Rates (see 1.7 above) agreed in this Contract will not be increased or decreased. 

Based on the weekly submission of the Project Progress Report, Local Labour Time Sheets, and Supplies and 

Materials Log (see 4 above) the Municipality Project Manager will consolidate and unless queried, submit the payment 

requisition to the Municipality. 

The Contractor will only be paid once the timesheets have been approved and processed by the Municipality. 

The Contractor will be paid every second Friday in arrears, in South African Rand. 

Payment will be made into the bank account of the Contractor. The Contractor will be responsible for settling the 

materials and supplies bills and the Local Labour, including all tax due. 

Any problems, complaints or grievances of the Contractor must be brought to the attention of the Municipality Project 

Manager as quickly as possible. 

Any problems, complaints or grievances of the Municipality Project Manager in relation to the Contractor will be 

discussed with the Contractor as quickly as possible.

8. 

7.3. 

TERMINATION 

8.1. 

8.2. 

8.3. 

8.4. 

If the problem cannot be resolved between the Municipality Project Manager and the Contractor within 48 hours 

of raising it, it shall be escalated to the Municipality and if still not resolved within 48 hours from referral, to the 

Department of Water Affairs And Forestry for final determination. 

Unless terminated earlier, the contract will automatically expire on the End Date of the Project Term. All payment due 

to the Contractor at the End Date will be paid to the Contractor within 1 week of the End Date. 

The Municipality can terminate the contract before the end date in the following circumstances: 

8.2.1. 

8.2.2. 

where the contractor has committed criminal activity including theft, fraud or been violent or caused unrest 

on the Project Site, the termination will be with immediate effect of telling the Contractor and the Contractor 

will be required to leave the Project site immediately and no Payment will be due to the Contractor; 

if the Municipality Project Manager is not satisfied with the performance of the Contractor, one written 

warning will be given with reasons for dissatisfaction. If there is no improvement in performance within 1 

week (7 days from notice) the Municipality Project Manager can terminate the contract, and the Contractor 

shall leave the project site provided that all payment due to the Contractor up to the termination date shall 

be paid within 2 weeks of the early termination date. 

If the Contractor does not want to or cannot continue working on the Project, 2 weeks (14 days) notice shall be given 

to the Municipality Project Manager. If the Municipality accepts in writing the early termination, payment for all work 

undertaken until date of termination will be paid to the date of termination. 

If the Contractor’s services are required for this Project after the end date stated above, this contract may be extended 

by agreement of both parties, provided such agreement is recorded in writing. 

Signed at.............................. for and on behalf of the Contractor, duly authorised 

on the............day of............................20...... 

Signature ............................... 

As Witnesses: 

1. .......................................... 

Full Name ...........................………… 2. .......................................... 

Signed at...........................................for and on behalf of the Municipality, duly authorised 

on the............day of............................20...... 

Signature ............................... 

As Witnesses: 

1. .......................................... 

Capacity ...........................………… 2. ........................................... 

39

40 

ANNEXURE A: PROJECT TERMS OF REFERENCE

1. MATERIAL AND SUPPLIES: 

(Estimated quantity, source of supply and cost) 

2. LOCAL LABOUR: 

Estimated number of jobs to be created: 

Process for contracting local labour: 

Process for paying local labour: 

ANNEXURE B: CONTRACTOR’s SCHEDULE OF QUANTITES 

41

42 

SECTION 3 

LABOUR ONLY 


Contents 



1 

1 INTRODUCTION ...................................................................................................................................................... 

1 


1 


1 


2 

5 LABOUR ONLY CHARACTERISTICS ...................................................................................................................... 

2 


2 

7 CONTRACTING ....................................................................................................................................................... 

3 

7.1 Contracts to Appoint Labour Only ....................................................................................................................... 

3 


9 TAX ISSUES 3 


10 APPENDIX 1 – GENERIC CONTRACT WITH LABOUR ONLY ............................................................................... 

5 

43

1 

44 

INTRODUCTION 






2 


























(set by the sector leaders including DWAF) by maximizing and promoting the use of local labour in sanitation 

construction activities. 






4 


By definition, municipalities include the local communities in its jurisdiction. In addition to ensuring basic






In the appointment of labour directly from the municipality there are many legal issues that must be considered 

before the actual appointment. 

5 LABOUR ONLY CHARACTERISTICS 



name. 
















6 







• Determining the most appropriate institutional arrangement 

7 

CONTRACTING 



of the terms of any contract will be the Terms of Reference. 




attached. 

45

7.1 

46 

Contracts to Appoint Labour Only 

In this instance, the WSA contracts with individual persons whose job it will be to build the toilets. Once 

the toilets are built, the contract comes to an end and the contractor will need to find other work. The 

municipality retains all project management and technical, operational and social risk. 

The labour only guideline does provide a generic contract that may be used for the engagement of individuals 

to fulfill a specific task. This may also be used by the entities above if they have to engage with the local 

labour. 

8 









9 

TAX ISSUES 

Although the municipality is contracting with independent contractors (whether an entity, a labour only or a 

voluntary association), the way in which the Tax Laws are written may deem the municipality an “employer” 

for tax purposes and require the municipality to deduct income tax and UIF from the payments to the labour 

and pay it over to the Receiver of Revenue. If this is required, and the labour fall above the minimum tax 

bracket, then the municipality must issue the labour with IRP5s once the project is complete. 

The Fourth Schedule of the Income Tax No. 58 of 1962 requires the presence of three elements before 

employee’s tax and UIF contributions may be deducted, namely, an employer, paying remuneration to an 

employee. To the extent that the local labour performs their duties under the supervision of the municipality 

or somebody representing the municipality, it is considered that the local labour would be employees for the 

purpose of the Fourth Schedule. 

The annual equivalent of the remuneration needs to be determined when the tax period is shorter than a full 

tax year in order to determine the amount of the employee’s tax to be withheld. 

The daily rate which will be received by the casual labourers would constitute ‘remuneration’ as defined in 

the hands of the employees. 

The ‘remuneration’ for PAYE and UIF purposes would in the present circumstances is the same. 

In terms of paragraph 2(1) of the Fourth Schedule and section 8 of the Unemployment Insurance Contributions 

Act (the “UIC Act”), the employee’s tax and UIF contributions must be paid over to SARS within 7 days after 

the end of the month during which the amount was deducted. 

In terms of paragraph 14(2) of the Fourth Schedule and section 8(2) of the UIC Act, the employer must 

submit a statement of earnings on form EMP201 to SARS together with the requisite payment of employee’s 

tax. 

Where ‘remuneration’ is earned from standard employment, the tax tables must be consulted in order to 

determine the amounts of employee’s tax to be withheld and where remuneration is earned from nonstandard 

employment PAYE must be withheld at a rate of 25% of remuneration paid to the employee. 

Standard employment is defined in paragraph 11(B) of the Fourth Schedule and means – 

• any employment in terms of which an employee is required to render services to any one employer 

for a period of at least 22 hours and every four weeks falling within the period of such employment: 

Provided that for the purposes of this paragraph no regard shall be had to –

periods of temporary absence over the employee due to leave or exceptional circumstances; or 

any temporary reduction in working hours imposed by the employer; or 

• the employment of any employee with an employer if such employee declares in writing that he does not 

and will not during the period which he holds such employment render services to any other employer; 

or 

• Where any employer conducts his business in such manner that the employees are regularly or frequently 

employed for such periods as may be required by the employer, the employment of any such employee 

of the Commissioner, after consultation with the employer of with any body or association representing 

any group of employers, so direct. 

Where the remuneration falls within the ambit of ‘standard employment income’ the weekly or monthly 

tables should be used to determine the SITE or PAYE to be withheld, unless such employee is in possession 

of a tax directive. 

It should be noted that even where the criteria of ‘standard employment income’ as defined above is not met, 

an employee will nevertheless be deemed to be in standard employment if the employee works for at least 

5 hours a day and receives less than R153,00 per day. 

Currently, in terms of the Tax Tables, employee’s tax would only be withheld in respect of monthly 

rates exceeding R3 332,00 per month and which exceeds a annual equivalent of R39 984,00. 

Where the employment is not classified as standard employment income employee’s tax should be 

withheld at a rate of 25% of the daily rate paid. 

47

10 

48 


APPENDIX 1 – GENERIC CONTRACT WITH LABOUR ONLY 

Note this contract is applicable for local labour being appointed directly by the municipality. 

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

>>>>>>> 

Project Name: ….………………………………………. 

1. 

DEFINITIONS 

1.1. 

The Authority is: 



-------------------------- MUNICIPALITY’s 



Between 

The Authority and the Independent Contractor 

To Assist with the Building of Toilets 

Name: ………………………………………………………………………………………… 

…………………. 

Address: ………………………………………………………………………………………… 

……………….… 

Contact Person: ………………………………………………………………………………… 

………………… 


1.2. 

The Project Manager is: 

Name: ………………………………………………………………………………………… 

…………………. 


1.3. 

The Independent Contractor is: 

Name: …………………………………………………………………………………………… 

………………. 

Identity Number: ………………………………………………………………………………… 

…………….… 

Address: ………………………………………………………………………………………… 

……………… 


1.4. 

The Independent Contractor’s Fixed Term Job is to:………………………………………………………....

2. 

3. 

1.5. 

1.6. 

1.7. 

1.8. 

1.9. 

PROJECT 

2.1. 

2.2. 

2.3. 

2.4. 

2.5. 

The Municipality is ………………………………….Municipality in the …………………..Province. 

[Note: If the Authority is the Municipality – delete this clause 1.5, 2.2 and the second half of 3.3] 

The Project is the building of toilets on the Project Site on a Monday to Friday from 8h00 to 16h00 for the 

Project Term. 

The Project Site is ………………………………………………………….. 


Start Date: ………………………………………… 

End Date: ………………………………………… 

The Payment Rate is: 

R………………. per 8 hour day; or 

R…….……….. per hour of less than 8 hours is worked in a day 

R……………… per hour worked pre-authorised on a Saturday, Sunday or Public Holiday. 


The Municipality has appointed the Authority to ensure that the Project is properly executed to achieve 

this objective. 

The project site will be managed by the Authority’s Project Manager. 



APPOINTMENT 

3.1. 

3.2. 

The Independent Contractor is contracted to perform the Job, for the Payment. 

The Independent Contractor shall start and will finish work on the Project Term dates. 

3.3. This is not a contract of employment between the Independent Contractor and the Authority, [nor the 

Municipality]. 

3.4. 

3.5. 

3.6. 

Other than payment for the Job, the Independent Contractor will be entitled to no other benefits including 

paid leave. 

The Authority is not obligated to appoint the Independent Contractor for any other work after this Project 

Term is expired. 

Neither the Independent Contractor nor the Authority will be allowed to hand over their rights and 

responsibilities in terms of this contract to another person. 

49

4. 

5. 

6. 

50 


The Independent Contractor will: 

4.1. 

4.2. 

4.3. 

4.4. 

4.5. 

4.6. 

4.7. 

4.8. 

4.9. 

perform duties according to the rules and regulations defined by the Project Manager; 

not hold the Authority responsible for negligence caused by himself through any misuse of tools, equipment, 

material and funds provided to do the work; 

report daily to the Project Manager; 

complete daily timesheets and submit to the Project Manager; 

respect other contractors and will not intimidate them; 

give his/her best for the Project and the community; 

provide his/her own insurance to cover him/herself against accidents; 

bring any problems, complaints or grievances, to the attention of the Project Manager immediately; and 

be responsible for all his own expenses including getting to and from the project site, clothing, meals, 

accommodation and any taxes that may be due. 

AUTHORITY’S OBLIGATION 

5.1. 

5.2. 

5.3. 

5.4. 

The Authority will ensure that the Project Manager: 

5.1.1. 

5.1.2. 

5.1.3. 

PAYMENT 

6.1. 

6.2. 

6.3. 

develops a Project Site Programme and updates and communicates it regularly; 

manages the Project Site and the jobs required; and 

receives and signs off, or raises queries, on the daily time sheets and submits them to the 

Authority on a weekly basis. 

The Authority will perform its responsibilities to enable the Independent Contractor to do the Job including 

providing the necessary tools and materials on time and at the right place. 

The Authority will pay the Independent Contractor if the job is undertaken properly. 

The Authority will not be responsible for any claims, losses and legal actions against the Independent 

Contractor. 


The Independent Contractor must complete a daily timesheet, indicating activities undertaken for every 

hour worked per day and submit them daily to the Project Manager. These timesheets will be checked 

and once approved, authorised by the Project Manager and submitted weekly to the Authority. 

The Independent Contractor can claim a maximum of 8 hours per day, unless the Project Manager has

7. 

8. 

6.4. 

6.5. 

6.6. 

6.7. 

6.8. 

DISPUTE 

7.1. 

7.2. 

7.3. 

specified in writing to the Authority that the Independent Contractor’s services are required for longer than 

8 hours per day. 

The Independent Contractor is required to work on weekdays only, unless the Project Manager has 

specified in writing to the Authority that the Independent Contractor’s services are required on a weekend 

or public holiday. 

The Independent Contractor will not be paid for hours not spent at work during a normal working day. 

Payment will be made less any tax due, if any, which will be clearly indicated on the Payment Schedule 

provided to the Independent Contractor. 

The Independent Contractor will only be paid once the timesheets have been approved by the Authority, 

and will be paid every second Friday, in Rands cash, on the Project Site unless otherwise agreed for 

security reasons. 

The Independent Contractor shall sign in person, with proof of identification, for the payment received. 

Any problems, complaints or grievances of the Independent Contractor must be brought to the attention 

of the Project Manager as quickly as possible. 

Any problems, complaints or grievances of the Project Manager in relation to the Independent Contractor 

will be discussed with the Independent Contractor as quickly as possible. 

If the problem cannot be resolved between the Project Manager and the Independent Contractor within 48 

hours of raising it, it shall be escalated to the Authority and if still not resolved within 48 hours from referral, 

to the Department of Water Affairs And Forestry for final determination. 

TERMINATION 

8.1. 

8.2. 

8.3. 

Unless terminated earlier, the contract will automatically expire on the End Date of the Project Term. All 

payment due to the Independent Contractor at the End Date will be paid to the Independent Contractor 

within 1 week of the End Date. 

The Authority can terminate the contract before the end date in the following circumstances: 

8.2.1. 

8.2.2. 

the Independent Contractor has committed criminal activity including theft, fraud or been violent 

or caused unrest on the Project Site. The termination will be with immediate effect of telling the 

Independent Contractor and the Independent Contractor will be required to leave the Project site 

immediately and no Payment will be due to the Independent Contractor; 

if the Project Manager is not satisfied with the performance of the Independent Contractor, one oral 

warning will be given with reasons for dissatisfaction. If there is no improvement in performance 

within 48 hours the Project Manager can terminate the contract, and the Independent Contractor 

shall leave the project site provided that all Payment due to the Independent Contractor shall be 

paid within 1 week of the early termination date. 

If the Independent Contractor does not want to or cannot continue working on the Project, 24 hours notice 

51

52 

shall be given to the Project Manager. Payment for all work undertaken until date of termination will be 

paid to the date of termination. 

8.4. If the Independent Contractor’s services are required after the end date stated above, a new contract will 

be entered into. 

I understand and agree to the terms of this Contract. I hereby undertake to do the Job to the best of 

my ability. 

At..............................as the Independent Contractor on the ……………… project 

on the............day of............................20...... 

As Witnesses: 

Signature ............................... 1. .......................................... 

Full Name ...........................………… 2. .......................................... 

At...........................................for and on behalf of the Authority 

on the............day of............................20...... 

As Witnesses: 

Signature ............................... 1. .......................................... 

Capacity ...........................………… 2. ...........................................

54 

SECTION 4 

COOPERATIVES 


Contents 



1 

1 INTRODUCTION ...................................................................................................................................................... 

1 


1 


1 


2 

5 COOPERATIVES ...................................................................................................................................................... 

2 

5.1 General ............................................................................................................................................................... 

3 


4 

7 CONTRACTING ....................................................................................................................................................... 

4 

7.1 Contracts to Appoint Legal Entities ..................................................................................................................... 

4 




10 APPENDIX 1 – GENERIC CONTRACT WITH A COOPERATIVE ........................................................................... 

7 

55

1 

56 

INTRODUCTION 






2 

























The purpose of this document is to support the municipalities to achieve their sanitation job creation 

targets (set by the sector leaders including DWAF) by maximizing and promoting the use of cooperatives as 

implementing agents, support agents, consultants, contractors, suppliers etc. 






4 








One of the main objectives that any municipality should have in their contracting of cooperatives is the 

creation of an enabling environment for the procurement of cooperatives (from the development of terms 

of references, tender documentation, tender adjudication and appointment through to support during 

implementation of emerging contractors). 

5 COOPERATIVES 









• Laws Governing Co-operatives 

In order to contract with co-operatives it might be necessary for municipalities to first assist with the creation 

of co-operatives. This is regulated by the Co-Operatives Act No 14 of 2005, which enables co-operatives 

to register and acquire a legal status separate from their members and facilitate the provision of targeted 

support for emerging co-operatives, particularly those owned by women and black people. The Department 

of Trade and Industry has published a Guide to the South African Co-operatives Act 2005. 

A co-operative is a voluntary association formed by a group of people who have a common need that they 

want to address jointly, or a group of people who want to create employment for themselves. Each member 

has an equal voice in decisions, and members have a primary duty to each other, not to anyone outside of the 

co-operative. The benefits of a co-operative are shared by all members. 

There are different types of co-operatives such as agricultural co-operatives and housing co-operatives. The 

two that might be appropriate for this instance is: 

• Worker co-operatives: 

provides employment to its members; and 

• Service co-operatives: 

provides services to its members. 

Co-operatives require formality such as: 

• A constitution, naming the members (at least 5) and directors, and setting out the rules of engagement 

between the members including membership, meetings and management; 

• registration with Registrar of Co-operatives; 

• Sets of annual financial statements; 

• Regular meetings etc. 

Worldwide, some 800 million people are members of co-operatives, and it is estimated that cooperatives 

employ about 100 million people. Because Co-operatives have been so successful in certain parts of the 

world, the South African government is trying to encourage more and more people to start co-operatives. 

It is very important that a co-operative is operated and managed in the same way that any other business 

is run, because this is important in ensuring that all the people work effectively and efficiently, and that the 

income (the money you bring in) exceeds the expenditure. If a co-operative is set up in the right way - with 

enough commitment, support and planning – then it can play a major role in helping to provide jobs and fight 

57

poverty. 

Advantages 

• Cooperatives develop healthier communities. All the workers split the profit equally amongst each 

member. 

• Because these workers live in the community, they spend their money in the community which helps to 

create stronger communities. 

• Cooperatives improve the quality of work. Workers control the business democratically, and they appoint 

the managers themselves. Because of this, the managers are accountable directly to the workers and will 

not exploit the workers for their own benefit. 

• Cooperative jobs are sustainable, meaning that the co-operative can continue indefinitely. The reason 

for this is that co-operatives are formed to help with employment in the community. The owners of the 

co-operative are the workers who live in the community and will not close down the business to make 

profit elsewhere. 

• All members of a co-operative benefit from any surplus money that it makes. 

• There is a ‘moral incentive’ for being in the co-operative - a desire to be part of a democratic business 

that benefits a whole community. 

5.1 

58 

General 

With the cooperative option, the municipality assumes a larger technical and operational risk and will need 

to have more technically orientated project manager to monitor performance. The cooperative performance 

should be output based and specified as such. The municipality will also in some instances be managing 

purchase and distribution of supplies and so will take the risk of the funding of this, and on the logistics if 

getting it to the project sites on time so that the cooperative is not kept waiting. 


important job and include it in the cooperatives performance contract, with appropriately delegated powers 






6 












• 

Determining the most appropriate institutional arrangement

7 

CONTRACTING 









are some generic Terms of Reference that may be used. 




attached. 

7.1 


Generally the contract to appoint any SMME or COOPERATIVE will be similar in nature. 

Because the municipality is contracting with a legal entity, it is assumed that there will have been a tender 

/ quote process followed which resulted in legal entity having the required skills and expertise to take and 

managed certain operational, technical and social risk on the project. 
















The generic contract that may be used for appointing any business entity is attached in appendix 1. The key 

distinguishing factor for a “Legal Entity” is that the contractor takes a lot more responsibility. The Legal Entity 

may want to consider using the labour contract, modified to suit its needs, and with no reference to the 

municipality as the Legal Entity takes the responsibility of managing the local labour. 

8 







59



9 

60 

TAX ISSUES 

Generally all tax issues are dealt with during tender or negotiation phases where a legal entity is required 

to provide the following documentation during this phase:- 


1 Association Registration Certificate 

2 Financial statements / letter from your auditors or accountant 

3 Organisation Profile 

4 Organisation constitution and AGM minutes 

Original cancelled cheque or Bank Certificate verifying the banking details. (Please note 

5 

that any changes to bank details in future will be subject to the same requirement) 


6 Articles of Association 

7 Track record of the Association (projects of similar nature and financial security)

10 


APPENDIX 1 – GENERIC CONTRACT WITH A COOPERATIVE 

Note this contract is applicable for all legal entities including cooperatives and SMMEs. 

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

>>>>>>> 

1. 

DEFINITIONS 

1.1. 

1.2. 

1.3. 

1.4. 

Project Name: ….………………………………………. 



------------------ MUNICIPALITY 



Between 

The Municipality and the Contractor 

To the Building of Toilets using Local Labour 



Address: ………………………………………………………………………………………………………….… 

VAT Number ………………………………………………………………………………………………………... 




Name: ……………………………………………………………………………………………………………. 


The Contractor is: 

Name: ……………………………………………………………………………………………………………. 

Registration Number:…………………………………………………………………………………………….… 

VAT Number ………………………………………………………………………………………………………. 

Address: ………………………………………………………………………………………………………… 

Contact Person………………………………………………………………………………………………… 



the Project Term, as more fully described in the Terms of Reference attached as Annexure A. 

61

2. 

3. 

4. 

62 

1.5. 

1.6. 

1.7. 

1.8. 

PROJECT 

2.1. 

2.2. 

2.3. 

2.4. 



Start Date: ………………………………………… 

End Date: ………………………………………… 





“Local labour” means sub-contractors from the community in which the Project Site is situated. 



objective. 

APPOINTMENT 

3.1. 

3.2. 

3.3. 

3.4. 

3.5. 

3.6. 













4.1. 

4.2. 

4.3. 

4.4. 

develop a Project Site Programme and update and communicate it regularly; 

manage the Project and the Project Site; 

ensure that other than the full-time employees of the Contractor, only Local Labour is used for this Project, managed 

and paid appropriately at the rate agreed to in this Contract; 

report progress weekly to the Municipality Project Manager;

5. 

6. 

7. 

4.5. 

4.6. 

4.7. 

4.8. 

4.9. 

4.10. 

4.11. 



complete daily timesheets for the Local Labour used and consolidate and consolidate and submit weekly to the 





bring any problems, complaints or grievances, to the attention of the Municipality Project Manager immediately; 

be responsible for all expenses in executing the Project including getting to and from the project site, sourcing and 

managing the Local Labour, clothing, meals, accommodation and any taxes that may be due; ad 

be responsible for any tax due. 


5.1. 

5.2. 

5.3. 

5.4. 

PAYMENT 

6.1. 

6.2. 

6.3. 

6.4. 

6.5. 

DISPUTE 

7.1. 

7.2. 


the Project. 


Sheets, and Materials and Supplies Log) and submit them to the Municipality every 2 weeks. 

The Municipality will pay the Contractor if work as described in this contract is undertaken properly. 







The Contractor will be paid every second Friday in arrears, in South African Rand. 






discussed with the Contractor as quickly as possible. 

63

8. 

64 

7.3. 

TERMINATION 

8.1. 

8.2. 

8.3. 

8.4. 







8.2.1. 

8.2.2. 















on the............day of............................20...... 

Signature ............................... 

As Witnesses: 

1. .......................................... 

Full Name ...........................………… 2. .......................................... 


on the............day of............................20...... 

Signature ............................... 

As Witnesses: 

1. .......................................... 

Capacity ...........................………… 2. ...........................................

ANNEXURE A: PROJECT TERMS OF REFERENCE 

65

1. MATERIAL AND SUPPLIES: 

(Estimated quantity, source of supply and cost) 

2. LOCAL LABOUR: 

Estimated number of jobs to be created: 

Process for contracting local labour: 

Process for paying local labour: 

66 

ANNEXURE B: CONTRACTOR’s SCHEDULE OF QUANTITES

68 

SECTION 5 

VOLUNTARY ASSOCIATIONS 


Contents 

PART I: BACKGROUND 1 


2 THE SANITATION JOB CREATION PROJECT 1 

3 THIS GUIDELINE OBJECTIVE AND PURPOSE 1 

4 THE MUNICIPALITY’S OBJECTIVES 2 


5 VOLUNTARY ASSOCIATIONS CHARACTERISTICS 2 

5.1 Voluntary Associations 2 

5.2 Trusts 4 

5.3 Section 21 Companies 4 

5.4 General 6 

6 PROCEDURAL REQUIREMENTS 6 

7 CONTRACTING 7 

7.1 Contracts to Voluntary Associations 7 




10 APPENDIX 1 – GENERIC CONTRACT WITH VOLUNTARY ASSOCIATIONS 1 

69

1 

70 

INTRODUCTION 






2 


























(set by the sector leaders including DWAF) by maximizing and promoting the use of voluntary Associations 

in sanitation construction activities. 






4 








In the appointment of voluntary associations directly from the municipality there are many legal issues that 

must be considered before the actual appointment. 

5 VOLUNTARY ASSOCIATIONS CHARACTERISTICS 

A voluntary association is a “non-profit” organisation established to perform functions at a local (mostly) 

community level. We have used “non-profit” here in the sense that all benefits of the organisation stay within 

the organisation and are not distributed to outside shareholders. In addition to “non-profit characteristics”, 

the tax laws also provide some dispensation if the organization meets the criteria and is managed as a “public 

benefit organisation”. 




Most organisations begin life as a voluntary association, as it is the structure with the least requirements. 

Voluntary associations do not have to be registered (though there is little reason not to) and tend to suit 

small community based organisations with relatively few members. That said, many larger organisations prefer 

the voluntary association structure as it gives them more flexibility. Co-operatives are voluntary associations 

that have complied with the requirements of the Co-operatives Act. 

Trusts tend to suit organisations that have been established to oversee the use of property or assets, for 

instance a specific community development trust that allocates money and resources in the community. 

Section 21 companies work in a similar way to for-profit companies and suit larger, more complex organizations 

that have a non-governmental objective. 

5.1 


Voluntary associations are flexible to run and have few requirements. A voluntary association is a separate legal entity. 

• 

Laws governing voluntary associations 

Voluntary associations are governed by the common law, which requires that the voluntary association’s objectives 

must be lawful and not primarily for gain or profit for its members. 

• Voluntary associations and the donor community 

Much is said of the how undesirable the voluntary association structure can seem to donors, particularly those 

in the corporate world. This needn’t be the case though, and many successful organisations have remained 

as voluntary associations due to the flexibility that they offer. In order to attract larger donors, a voluntary 

association can structure itself in a more transparent way, have its financial statements audited and obtain tax 

exemption status, all of which will fulfill the criteria of most large donors. 

• How to become a voluntary association 

A voluntary association is created by entering into an agreement with three or more people. A constitution is written, 

outlining the aims of the organisation, how it will be structured and the rules that will govern it. 

• 

To register or not to register? 

Although a voluntary association does not need to be registered with the government in order to be a legal entity, 

71

there is little reason not to. Registration is free and is quite straight forward. Donors generally require registration, as 

will a bank if the association wants to open an account. 

• 

72 

How to register 

Registration is straightforward and does not require legal assistance. 

1. An application form must be completed together with two copies of organisation founding documents 

(constitutions) in full. Both copies must be signed. 

2. Send documents to HSRC Building, 134 Pretorious Street, Pretoria, 0001 or Directorate: Non- Profit 

Organisations, Department Of Social Development, Private Bag X901, Pretoria, 0001 

If there are no problems with the documentation, the registration certificate will be posted after 3-5 months. 

• Ongoing requirements 

In order to maintain registration status with the government, the association must submit its annual financial 

statements, checked by a registered accountant, and annual report each year. One general meeting is required per 

year, as set out in the organisation’s constitution. 

• 

Tax Exemption 

An organisation registered with SARS as a “non-profit organisation” has benefits both for the organisation and for 

funders and donors of the organization. Tax exemption status under s18A of the Income Tax Act has benefits for the 

organisation although employees are still subject to PAYE and UIF deductions by the organisation as employer. To 

obtain the registration forms, visit the SARS website on: www.sars.gov.za or go to your nearest SARS office. 

5.2 

Trusts 

A trust is an arrangement, set out in a written document (called the trust deed) in which an owner or founder hands 

over property and/or funds to a group of people (called trustees) who administer the assets for the benefit of other 

people (called beneficiaries) for a stated objective. 

• 

Laws governing trusts 

Trusts are regulated by the common law and the Trust Property Control Act 57 of 1988. 

• 

No independent legal personality 

Unlike a voluntary association or Section 21 company, the trustees are liable if a legal dispute arises. Trust property is 

protected by the Trust Property Control Act. 

• 

How to form a trust 

A notary public must write and attest the trust deed. (A notary public is an attorney with an additional qualification 

which authorises him or her to certify that documents to be filed in a government registry are authentic.) Then the 

trust deed must be registered with the Master of the High Court. The trust deed names intended trustees, but it is the 

Master who actually formally appoints them. 

The Master of the High Court may ask the trustees to provide security for the proper performance of their duties. This 

is usually arranged through an insurance company. If one wants to do away with the need for this security, the Master 

usually requires that you appoint auditors and give a full set of reasons why the trustees should be exempted.

5.3 



Section 21 companies resemble business oriented (for profit) companies in their legal structure, but do not have a 

share capital and cannot distribute shares or pay dividends to their members. Any assets owned by the company 

and growth in the company is put towards the furthering of goal and vision (not the interest of the shareholders. But 

they are ‘limited by guarantee’, meaning that if the company fails its members undertake to pay a stated amount to its 

creditors. 

A company has a two-tiered governance structure consisting of the members and directors. The members exercise 

their powers in general meetings. The directors have broad executive responsibility. They must appoint independent 

auditors and convene an annual general meeting. 

• 

Laws governing Section 21 companies 

Like other companies, section 21 companies are governed by the Companies Act. 

• 

Forming a Section 21 company 

All companies, including Section 21 companies, are registered with the Registrar of Companies in terms of the 

Companies Act. Before being registered, the Registrar must approve the name chosen. A company may not begin its 

work until it is registered, which takes about two to four months. 

The founding documents for a Section 21 company are the memorandum and the articles of association. The 

memorandum sets out the purpose of the NPO; the articles of association regulate how it operates. Registering a 

company is a complex process and legal assistance should be sought. 

The following forms are required for registration: 


CM5 (in duplicate) Application for reservation of name R50-00, original stamped 

CM22 (in duplicate) Notice of registered office and postal address None 

CM29 Consent of registration of Directors, Auditors and Officers None 

CM31 (in duplicate) Consent to act as an Auditor None 

Power of Attorney Authorisation to act on behalf of promoters None 

The following documents will make up the Memorandum and Articles of Association: 


CM3 (in duplicate) Certificate of Incorporation R350-00, original stamped 

CM4 (in duplicate) 

Memorandum of Association of a company without share 

capital 

None 

CM4A (in duplicate) Guarantee concerning the liability of members None 

CM4B (in duplicate) Association clause and particulars of members None 

CM44B (in duplicate) Articles of Association of a company without a share capital None 

CM44C (in duplicate) Signatory to Articles of Association None 

See also: www.cipro.co.za/registration_forms/reg_forms.asp 

• 


The ongoing requirements for a Section 21 company are more extensive then the others. They can, however, help 

keep structure the running of the organisation. 

A company must: 

73

• appoint auditors; 

• maintain a registered address; 

• keep up-to-date registers of members and directors in the prescribed form; 

• hold an annual general meeting in accordance with the prescribed procedures; and 

• keep financial and accounting records in the prescribed form, present these to the AGM of members and 

file them with the Registrar. 

The directors’ names must appear on all letters, catalogues and circulars distributed or published. Directors 

must ensure that proper minutes and attendance registers are kept of all meetings. The directors’ report 

must be presented to the AGM. 

5.4 

74 

General 













6 







• Determining the most appropriate institutional arrangement 

7 

CONTRACTING 



of the terms of any contract will be the Terms of Reference. 




attached. 

7.1 

Contracts to Voluntary Associations 

There is a generic voluntary association contract attached in the appendix that may be used for the appointment 

of voluntary associations. This would be where the municipality wants to focus on job creation by using the 

local labour, but also supporting potential sustainability of an association by building skills for the association

to respond to other future opportunities together. It places a potential obligation to provide administrative 

support to the association (such as annual meetings; decision-making, financial reporting etc.). 

8 









9 

TAX ISSUES 

Although the municipality is contracting with independent contractors (whether an entity, a labour only or a 

voluntary association), the way in which the Tax Laws are written may deem the municipality an “employer” 

for tax purposes and require the municipality to deduct income tax and UIF from the payments to the labour 

and pay it over to the Receiver of Revenue. If this is required, and the labour fall above the minimum tax 

bracket, then the municipality must issue the labour with IRP5s once the project is complete. 

The Fourth Schedule of the Income Tax No. 58 of 1962 requires the presence of three elements before 

employee’s tax and UIF contributions may be deducted, namely, an employer, paying remuneration to an 

employee. To the extent that the local labour performs their duties under the supervision of the municipality 

or somebody representing the municipality, it is considered that the local labour would be employees for the 

purpose of the Fourth Schedule. 

The annual equivalent of the remuneration needs to be determined when the tax period is shorter than a full 

tax year in order to determine the amount of the employee’s tax to be withheld. 

The daily rate which will be received by the casual labourers would constitute ‘remuneration’ as defined in 

the hands of the employees. 

The ‘remuneration’ for PAYE and UIF purposes would in the present circumstances is the same. 

In terms of paragraph 2(1) of the Fourth Schedule and section 8 of the Unemployment Insurance Contributions 

Act (the “UIC Act”), the employee’s tax and UIF contributions must be paid over to SARS within 7 days after 

the end of the month during which the amount was deducted. 

In terms of paragraph 14(2) of the Fourth Schedule and section 8(2) of the UIC Act, the employer must 

submit a statement of earnings on form EMP201 to SARS together with the requisite payment of employee’s 

tax. 

Where ‘remuneration’ is earned from standard employment, the tax tables must be consulted in order to 

determine the amounts of employee’s tax to be withheld and where remuneration is earned from nonstandard 

employment PAYE must be withheld at a rate of 25% of remuneration paid to the employee. 

Standard employment is defined in paragraph 11(B) of the Fourth Schedule and means – 

• any employment in terms of which an employee is required to render services to any one employer 

for a period of at least 22 hours and every four weeks falling within the period of such employment: 

Provided that for the purposes of this paragraph no regard shall be had to – 

periods of temporary absence over the employee due to leave or exceptional circumstances; or 

any temporary reduction in working hours imposed by the employer; or 

• the employment of any employee with an employer if such employee declares in writing that he does not 

and will not during the period which he holds such employment render services to any other employer; 

75

or 

• Where any employer conducts his business in such manner that the employees are regularly or frequently 

employed for such periods as may be required by the employer, the employment of any such employee 

of the Commissioner, after consultation with the employer of with any body or association representing 

any group of employers, so direct. 

Where the remuneration falls within the ambit of ‘standard employment income’ the weekly or monthly 

tables should be used to determine the SITE or PAYE to be withheld, unless such employee is in possession 

of a tax directive. 

It should be noted that even where the criteria of ‘standard employment income’ as defined above is not met, 

an employee will nevertheless be deemed to be in standard employment if the employee works for at least 

5 hours a day and receives less than R153,00 per day. 

Currently, in terms of the Tax Tables, employee’s tax would only be withheld in respect of monthly 

rates exceeding R3 332,00 per month and which exceeds a annual equivalent of R39 984,00. 

Where the employment is not classified as standard employment income employee’s tax should be 

withheld at a rate of 25% of the daily rate paid. 

During the procurement period the municipality should request the following documentation from any 

voluntary association:- 


1 Association Registration Certificate 

2 Financial statements / letter from your auditors or accountant 

3 Organisation Profile 

4 Organisation constitution and AGM minutes 

Original cancelled cheque or Bank Certificate verifying the banking details. (Please note 

5 

that any changes to bank details in future will be subject to the same requirement) 


6 Articles of Association 

7 Track record of the Association (projects of similar nature and financial security) 

76

10 


APPENDIX 1 – GENERIC CONTRACT WITH VOLUNTARY ASSOCIATIONS 

Note this contract is applicable for voluntary associations being appointed directly by the municipality. 

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 

>>>>>>> 

1. 

DEFINITIONS 

1.1. 

1.2. 


------------------ MUNICIPALITY’s 



between 

The Municipality and a Voluntary Association 

To Project Manage the Building of Toilets using Local Labour 

Project Name: ….………………………………………. 




Address: ………………………………………………………………………………………………………….… 

VAT Number ………………………………………………………………………………………………………... 




Name: ……………………………………………………………………………………………………………. 


1.3. The Contractor is a voluntary association, details of which are attached in Annexure A. For purposes of contracting, 

the details are of the duly authorised representative of the voluntary association: 

1.4. 

1.5. 

1.6. 

Name of Voluntary Association: ……………………………………………………………………………………………. 

Contact Person………………………………..……………………………………………………………………………… 



the Project Term, as more fully described in the Terms of Reference attached as Annexure B. 



Start Date: ………………………………………… 

End Date: ………………………………………… 

77

2. 

3. 

4. 

78 

1.7. 

1.8. 

PROJECT 

2.1. 

2.2. 

2.3. 

2.4. 





“Local labour” means members of the Voluntary Association identified in Annexure A. 



objective. 

APPOINTMENT 

3.1. 

3.2. 

3.3. 

3.4. 

3.5. 

3.6. 

In addition to building toilets, the Municipality wants to create job opportunities for its local communities, and has 

supported the establishment of voluntary association to be appointed as the Contractor. 

The job creation opportunity for the voluntary association is directly linked to the Project. 











4.1. 

4.2. 

4.3. 

4.4. 

4.5. 

4.6. 

work with the Municipality to develop a Project Site Programme, and update and communicate it regularly; 

manage the Project and the Project Site in accordance with the Project Site Programme; 

ensure that the Local Labour are members of the Voluntary Association are managed and paid appropriately at the 

rate agreed to in this Contract; 

report progress weekly to the Municipality Project Manager; 



complete daily timesheets for the Local Labour used and consolidate and consolidate and submit weekly to the

5. 

6. 

7. 

4.7. 

4.8. 

4.9. 

4.10. 





bring any problems, complaints or grievances, to the attention of the Municipality Project Manager immediately; and 

be responsible for all expenses in executing the Project including managing the members of the voluntary association, 

getting to and from the project site, managing the Local Labour, clothing, meals, accommodation and any taxes that 

may be due. 


5.1. 

5.2. 

5.3. 

5.4. 

PAYMENT 

6.1. 

6.2. 

6.3. 

6.4. 

6.5. 

DISPUTE 

7.1. 

7.2. 

7.3. 


the Project. 


Sheets, and Materials and Supplies Log) and submit them to the Municipality on a weekly basis. 

The Municipality will pay the Contractor if the work as described in this contract is undertaken properly. 







The Contractor will be paid every Friday in arrears, in South African Rand. 






discussed with the Contractor as quickly as possible. 




79

8. 

80 

TERMINATION 

8.1. 

8.2. 

8.3. 

8.4. 




8.2.1. 

8.2.2. 















on the............day of............................20...... 

As Witnesses: 

Signature ............................... 1. .......................................... 

Full Name ...........................………… 2. .......................................... 


on the............day of............................20...... 

As Witnesses: 

Signature ............................... 1. .......................................... 

Capacity ...........................………… 2. ...........................................

ANNEXURE A: VOLUNTARY ASSOCIATION DETAILS 

1. Name of Voluntary Association: ………………………………………………………………………………………………………………. 

2. If the Voluntary Association is registered as a Non Profit Organisation with the Department of social Development, , what is the registration 

number: ……………………………………………………………… 

3. Copy of the Voluntary Association Constitution: Yes/ No 

4. Members of the Voluntary Association: 

NAME AND IDENTITY NUMBER RESIDENTIAL ADDRESS ROLES AND RESPONSIBILITIY IN THE VOLUNTARY 

ASSOCIATION AND ON THE PROJECT 

5. Process for becoming or member or terminating membership of the voluntary association: …………………………………………… 

………………………………………………………………………………………………………………………………………………………… 

………………………………………………………………………………………………………………………………………………………… 

…………………………………………………………………………………………………… 

6. Process for managing performance of the members on the Project Site: ………………………………………………………………… 

………………………………………………………………………………………………………………………………………………………… 

………………………………………………………………………………………………………………………………………………………… 

……………………………………………………………………………… 

7. Process for paying members who work on the project Site: ……………………………………………………………………………… 

……………………………………………………………………………………………………………………………………………………… 

……………………………………………………………………………………………………………………………………………………… 

……………………………………………………………………… 

8. Process for resolving dispute of members: …………………………………………………………………………………………… 

………………………………………………………………………………………………………………………………………………… 

………………………………………………………………………………………………………………………………………………… 

…………………………………………………………………… 

81

ANNEXURE B: PROJECT TERMS OF REFERENCE 

82

84 

SECTION 6 

APPENDIX XV 

RURAL SANITATION INFRASTRUCTURE 

(PROJECT IMPLEMENTATION STRATEGY)

1 

1.1 

Rural Sanitation Infrastructure (project implementation strategy) 

LM / DM roles and relationships 

The District Municipality as the WSA itself ultimately leads the rural sanitation programme implementation. 

Key competencies that will be provided by the District Municipality include:- 

• Strategic leadership during planning, design and implementation of the sanitation programmes 

• ISD, social mobilisation and institutional building 

• Health and hygiene programme strategies and promotion 

• Training 

• Costing and budget provision through MIG and other donor sources 

• Logistic management 

• Detailed planning 

The District Municipality / WSA is responsible for the following key activities:- 

• 

• 

• 

Providing, designing and developing contracts with the service providers and other implementing 

agents required (e.g. contractors) 

All contract and financial management of service providers and other implementing agents (e.g. 

contractors) contracts including monitoring and evaluation, verification of invoices, variation orders 

(i.e. change in scope of works), budget control and payment 

The WSA also bears primary responsibility for project performance management and monitoring 

The Local municipalities and ward committees have important roles and responsibilities throughout the project 

implementation process – including the important role in the prompt, accurate and effective communication 

to and from the customer (i.e. community) to ensure their participation and satisfaction. 

The key objectives of the LM / DM partnership in the implementation of this sanitation project is: - 

To get rural communities (at the lowest level) to participate effectively in the implementation of the 

sanitation projects 

To monitor and effectively incorporate household and community based resources to ensure project 

sustainability 

To prioritise, allocate and distribute public funds, 

To develop partnerships between government and rural communities to sustain infrastructure 

All projects are sustainable technically and institutionally with sound systems and procedures in place. 

Consumers are satisfied 

The local municipalities / ward committees will assist the communities to carry out their responsibilities 

successfully. There are five main objectives, which need to be undertaken in this regard: 

Mentoring and supporting the community based organisations on a regular basis - both in technical, and 

institutional and social development (ISD) fields. 

To ensure that the projects are implemented on time, within budget and to an acceptable quality 

Technical and ISD assessment of all projects 

To assist and ensure regular communications between the DM and the communities. Messages delivered 

should be prompt, accurate and concise for all to understand. 

To set up procedures and to identify and support appropriate local community structures 

1.2 

Project level meetings 

There are two project level meetings, namely:- 

Project Steering Committee 

1. 

85

2. Site meetings 

1.2.1 Project Steering Committee 

The project steering committee meeting is a community meeting held at the project level. All beneficiary 

communities (villages) and interested parties should be invited to participate therein. These meetings are an 

important communication tool to ensure transparency and full community input and support of the projects. 

The service providers are to keep minutes of these meetings. 

These PSC structures should have democratically elected community members. The meetings should take place 

throughout the project implementation time frame. During peak construction period these meetings should 

be held monthly. During planning and post project these meetings should be scheduled when required. 

A community member or ward councillor, who will be responsible to ensure that meetings take place and 

there is a platform for the broader community to communicate with the authorities, should chair the meeting. 

It is a social meeting where service providers must present key project information. 

The appointed service providers can use these community PSCs as an important communication link with the 

broader community and to maximize accountability and transparency during the course of implementation. 

The PSC will ensure that the advantages, disadvantages, operation and maintenance costs of all sanitation options 

are discussed with the community. The output will be a range of affordable and environmentally appropriate options 

selected by the community. The selected designs should be submitted for discussion with the WSA, for approval. This 

is essential for sustainability as both households and local government will be responsible for future maintenance and 

operation costs depending on the choice of technology. 

The committee members should be paid for their time and tasks completed – the current (2005) rates are 

a maximum of R75 per day, premised on transport costs to two meetings; quality assessors and other key 

personnel are paid R1000 a month, for what is often virtually a full-time job. The project business plans must 

clearly indicate the payment strategies and guidelines, with a budget allocation. This must be discussed with 

communities and get their prior approval. 

The use of local community bank accounts is not recommended. 

1.2.2 Site meetings 

The project site meeting is a more technical quality control, project-monitoring meeting held at the project. 

There should be some representation from the PSC meeting (representing the communities) at these 

meetings. The WSA, contractor, LM officials and ward councillor should be invited to participate therein. 

These meetings are the standard technical contracts meetings. The service providers will keep detailed 

minutes of these meetings. 

1.3 Role of community members 

The WSA recognises the important role the community members play in any project planning, design and 

implementation. The roles and responsibilities of the community members include:- 

• To increase their knowledge and awareness of sanitation-related health issues 

• To have the necessary skills for managing their sanitation facilities 

• 

• 

• 

86 

• To develop their skills for controlling and preventing sanitation-related communicable diseases, with 

special emphasis on cholera 

To improve individual and household hygiene behaviours 

To develop community self-reliance through: 

o The utilization of trained local Village Health Workers 

o The dissemination of project management and committee skills 

To promote skills development and provide short-term employment opportunities for local builders

• 

To make key decisions on technological choice and design criteria (i.e. there should be local choice, and 

not an ‘one size fits all’ programme”) 

The roles and responsibilities of community members on the respective projects could be as follows: 

• The overall local management of their projects 

• Assistance in the selection of local development workers to be trained to carry out Baseline Surveys. 

• Assistance in the selection of local development workers to be trained in health and hygiene awareness 

• Assistance in monitoring of the impact of health and hygiene initiatives 

• Assistance in the selection of local builders; 

• Assistance in the drawing up of contracting procedures for the hiring of local builders; 

• Chairing all of project meetings; 

• Consulting with and reporting to the respective communities on a regular basis 

Communities should be encouraged to be gender sensitive in setting up their structures, as women are 

directly affected by the absence of adequate sanitation. Community personnel can also be trained in basic 

project management, and systems have been set up to assist them in managing the projects. 

All rural communities in the ???? District Municipality are deemed to be fully indigent and eligible for the grant 

funding. 

1.4 

Toilet Construction 

The construction programme will provide householders with a range of practical options in order that 

informed decisions can be made with respect to upgrading their existing sanitation status or constructing 

a new facility. 

In any area the choice of sanitation option is governed by the following constraints: 

• Availability of water; 

• Size of plot; 

• Geology; 

• Potential risk of groundwater contamination; 

• Ability of the WSA to deliver the project within budget within the principle of “some for all”; and 

• Ability of the householder to operate and maintain the infrastructure. 

In line with current policy, sanitation options will be confined to various forms of on-site sanitation. The 

WSA will meet the full capital cost of their chosen options, unless the value of the material required by the 

household exceeds the budget provided through project business plan. 

1.5 Demonstration toilets (Required / Not Required) 

The WSA approves of the construction of demonstration toilets. The intention is to construct at least one 

demonstration toilet of each type of material or design (up to 5 units) per village as local circumstances 

dictate. 

87

Local community members should be made aware of the key principles of VIPs through the health education 

programme and during the course of construction. The purpose of the construction of demonstration toilets 

will be to: 

• Demonstrate models, construction techniques, materials and designs from which communities are able to 

select their most suitable option. 

• Train a team of local builders in each village / community to construct latrines to required standards. The 

training will ensure that builders are competent in the principles and construction of various technology 

options and their associated health benefits. 

The demonstration latrines will be built at sites that will be identified by the respective communities, but will 

nonetheless be sites that are: 

• Accessible to people in general, albeit under controlled conditions 

• Sites which will ensure that the latrines are properly maintained and cleaned 

The budget for the demonstration toilets and the associated training must be clearly indicated in the project 

business plan. 

1.6 

88 

Facilities for people with disabilities 

Additional funds will be made available for household that have members/s with a physical disability. The 

service providers must present their design standards to address their particular access needs – wide door, 

access ramp etc. to the beneficiaries for approval before implementation begins. 

The number of households and budget requirement for these toilets must be clearly indicated in the project 


1.7 

Upgrading of Existing Latrines 

The project business plan must address the upgrading of existing latrines as a project activity. Assistance 

to the householders with existing units will be in the form of advice and materials to construct a “healthy 

hygienic unit”. In most cases new units may need to be constructed, with homeowners encouraged to 

utilize what available materials they are able to provide. All upgraded units will form part of the total units 

constructed and will be used in the average cost per unit. 

The minimum standard for upgrades is that the superstructure should be to an acceptable standard and the 

pit should (at least) have up to 3yrs capacity. 

1.8 

Pit construction 

All pits must have a volume of at least three cubic metres. Any pit smaller than this will fill within a few years 

and become useless. The digging of the pit is the responsibility of the contractor. Should the contractor wish 

to use the household occupants for the digging of the pit they must be reimbursed appropriately – i.e. as 

their part of ‘the People’s Contract’. The contractor is then responsible for the quality control and that it is 

dug to specification. 

1.9 Types of top-structures 

A Ventilated Improved Pit (VIP) latrine will be offered as a basic level of service to the rural households. 

The superstructure may be constructed from materials including wood, mud blocks, cement blocks, and 

local available materials etc. The final choice of the structure to be constructed will be determined by the

householder taking affordability above the subsidy level, into consideration. 

There are no community (or household) contributions required in the construction of any toilet. 

Various sanitation options should be presented to the community for their approval. These options will 

include costs, durability, privacy, maintenance, advantages and disadvantages of each toilet and suitability of the 

structure to the area and community. 

Technical Consideration 

The advantages of the VIP toilet and its applicability to the rural environment are that it does not require 

water for its operation, it is relatively inexpensive to construct, operate and maintain and it offers the same 

health benefits as waterborne systems. 

In order to ensure that the VIP toilet is comfortable to users and functions well, technical design details and 

guidelines for rural sanitation facilities will be utilized in the design of VIP toilets. 

Some of the basic requirements of a VIP system are as follows: 

• A dark sealed pit either lined or unlined. 

• Strong and sturdy cover slab to carry the superstructure. 

• Comfortable superstructure (building). 

• Vent pipe extending from the pit to at least 500mm above the roof of the superstructure. 

• Fly-screen fitted to top vent pipe. 

The above technical considerations will ensure a safe and comfortable toilet facility. The vent pipe will assist 

in ensuring that bad odours are drawn away from the toilet and the fly screen will assist in trapping insects 

that enter in the pit. This ensures that these insects do not spread diseases. 

Where solid rock precludes excavation to a depth of more than 0.5 m, alternatives such as Urine Diversion 

Toilets, double pits and other alternatives can be considered. 

Top-structure costs vary widely, depending on dimensions, design, materials, distance from the supplier, whether 

the supplier can deliver directly to the settlement, local availability of building sand and water, whether local 

builders or external contractors are used etc. Wide ranges of top-structure permutations are possible. 

1.10 

Operation and maintenance responsibilities 

All operation and maintenance of the VIP will essentially be the responsibility of individual households with 

support from the Water Service Authority or its delegated agent. The user education programme (described 

below) will assist households to perform their operation and maintenance functions. 

Once the toilet has been completed it must be signed-off and handed over to each recipient household. The 

WSA or its designated agents will also do an independent quality control check before payment. Each VIP on 

payment must get a unique number and a GPS point to be included in the WSA GIS system. 

Should any external support be required the need should be communicated to the WSA through the ward 

councillor and LM channels. 

1.11 

User Education, including Health and Hygiene Education 

1.11.1 User Education 

The user education programme must be project specific and planned for in each project implementation 

programme. The user education programme should include:- 

89

• It is the responsibility of the service providers to ensure that the necessary level of user education and 

an ongoing monitoring process is provided. 

• There must be a clear budget provision made for this programme. This training programme budget will 

form part of the subsidy amount per unit. 

• 

• 

• 

1.12 

90 

A programme of user education training must be developed and a clear strategy for its implementation 

highlighted in the business plans. This training programme must coincide with the time of health and 

hygiene promotion and identification of the appropriate technology choice. 

Responsibility for operation and maintenance of VIP and UD toilet systems essentially lies with the 

householder. 

Factors to be addressed by the programme of user education include: 

o Correct operation, cleaning and repair of the latrine, 

o Use of suitable anal cleansing material, 

o Design life of the latrine and what to do when the pit is full, 

o Implications of system failure (on personal health and on the environment), 

o Where to obtain assistance when things go wrong. 

Wages and Labour Standards 

The construction of VIP toilets for household sanitation projects is conducive to labour intensive construction 

techniques. This implies maximum utilization of local community labourers in: 

• Digging and / or lining pits; 

• Constructing the superstructure. 

The service provider and the WSA will still be responsible to monitor the quality of construction. 

Wages will generally be the rates used within ???? District Municipality - water and sanitation projects. 

Wages and standards will be agreed with all parties prior to start of construction. Projects, which run longer 

than 12 months, will make provision for reviewing wages on an annual basis. 

Construction activities will be packaged in a manner allowing local individuals or groups to undertake the task 

work. Completed work will be paid for on a monthly basis. Costs of labour will be claimed monthly against 

the completed work and the records of payments made to contractors and labour will be processed and 

submitted as part of the monthly claims for the project in accordance with the details of the schedule. 

The service providers must ensure through their procedures and site staff that the local labour are monitored 

and paid in accordance with the measured and completed tasks. Task rates and sizes will be reviewed and a 

recommendation will be submitted to the WSA. 

1.13 

Tender Procedures 

The supply of most materials for the programme will be organized and managed by the service providers / 

contractors??. 

Tender specifications for rural projects will be standardised, with outputs defined in each business plan. 

Standard technical drawings will be used, with standard bills of quantities. 

1.14 

Procurement Policy 

The service provider team must implement the projects in accordance with the approved ???? District 

Municipality procurement policies and procedures.

Preference will be given to locally based suppliers wherever possible, although it must be noted that in certain 

instances, the cost advantages of bulk buying and delivery may offer the most appropriate procurement 

affordability approach. 

1.15 

Key Performance Indicators 

Outputs 

Local Municipality and 

Ward Councils brought 

on board with process 

and capacitated where 

appropriate. 

General attitudes of 

villages to sanitation, to 

health issue, etc., as well 

as common practices, 

ascertained. 

Trainers identified, 

contracted, and 

capacitated, where 

appropriate, to provide 

training to local builders, 

VHWs etc. 

VSCs formed and 

constituted (if not done 

already) 

VSCs empowered 

to manage sanitation 

implementation within 

their respective villages 

Communities informed 

of sanitation processes, 

and of technological 

options 

Sanitation promotional 

activities carried out in 

villages 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Objectively Verifiable 

Indicators (Obis) 

Meetings held 

Workshops held 

Municipality & Ward Councils 

put sanitation programme 

onto regular council meeting 

agenda 

Municipality & Ward Council 

monitors project progress 

Needs Assessment survey 

presented to Local 

Municipality 

date 

by stipulated 

Expressions of Interest 

published at relevant and 

appropriate 

projects 

times during 


Contracts signed 

Meetings held 

Training carried out 

Training carried out at 

appropriate 

during the project 

milestones 

Projects effectively managed 

Households aware of 

technological choices 

Households 


Meetings held 

make 

Promotional activities 

Demonstration latrines 

Means of Verification 

(mV) 

Minutes of meetings 

W o r k s h o p 

proceedings 

Council meeting 

agenda and minutes 

Needs Assessment 

Survey report 

Calls for Expression in 

relevant publications 


proceedings 

Signed Contracts 

Minutes of Meetings 

Training plans / 

modules 

Reports on training 

P a r t i c i p a n t s ’ 

evaluations of 

training 


modules 

Training reports and 

evaluations 

A p p r o p r i a t e 

information in PAs’ 

project and financial 

files 

Committee meeting 

minutes 

C o m p l e t e d 

questionnaires 



schedule 

D e m o n s t r a t i o n 

latrines 

Training reports 

and participant 

evaluations 

Assumptions / Risks 

Councillors and / 

or officials show no 

interest in being part 

of programme 

Councillors and / or 

officials show do not 

have time to be part of 

programme 

Householders do not 

wish to partake in 

process 

Householders not 

honest in their 

responses 

Sufficient, and 

a p p r o p r i a t e l y 

experienced individuals 

/ organizations / 

companies not available 

to carry out the work 

Community shows no 


of the process 

A p p r o p r i a t e l y 

experienced and skilled 

individuals not available 








91

Local builders trained 

in latrine construction, 

principles of sanitation 

etc. 

Demand for latrines 

demonstrated at 

household level 

M&E of project carried 

out at community level 

1.16 

92 

1 

2 

3 

Reporting 

 

 

 

 

 

Training exercises 

Latrines built / upgraded 


Increasing numbers of latrine 

subsidies applied for 

M&E exercises 

Training 

modules 

plans / 

Labour 

reports 

training 

Latrines 


schedule 

Activity reports 


evaluations 

Completed latrine 

subsidy application 

forms 

M&E schedules 

M&E reports 

The following communication / reporting channels – both written, meetings 

and verbal (with allocated resources made available) will be required and 

monitored:- 

• Contractor / SMME to household 

• Household to PSC 

• PSC to ward committee 

• Ward committee to LM 

• LM to WSA 

The service provider will develop a standardised report to link with other 

client reporting requirements 

Standardised documentation requirements are required – for example checklists 

for completed units, recording / GPS of each site, numbering systems etc. 





Community show no 

demand 

Levels of poverty too 

high 

Community prefers 

higher level of service 

(e.g. waterborne 

sewerage)

ICS 

ISBN 0-626- 

SECTION 7 

APPENDIX XVI 

PROJECT PARTICULAR SPECIFICATIONS FOR 

On-site sanitation systems 

Ventilated improved pit toilets 

SANS 10365-1:2004 

Edition 1 

SOUTH AFRICAN NATIONAL STANDARD 

Published by Standards South Africa 

1 dr lategan road groenkloof private bag x191 pretoria 0001 

tel: 012 428 7911 fax: 012 344 1568 international code + 27 12 

www.stansa.co.za 

© Standards South Africa 2004 

93

SANS 10365-1:2004 

Edition 1 

Contents 

Foreword ........................................................................................................................................................................ 

Introduction ................................................................................................................................................................... 

1 Scope .......................................................................................................................................................................... 

2 Normative references ............................................................................................................................................ 

3 Definition .................................................................................................................................................................. 

4 General ...................................................................................................................................................................... 

5 Material ...................................................................................................................................................................... 

6 Design and construction of a VIP toilet ............................................................................................................. 

94 

6.1 Pit ......... ............................................................................................................................................................ 

6.2 Location ......................................................................................................................................................... 

6.3 Lining ............................................................................................................................................................. 

6.4 Collar .............................................................................................................................................................. 

6.5 Cover slab ...................................................................................................................................................... 

6.6 Pedestal and toilet seat ............................................................................................................................... 

6.7 Superstructure .............................................................................................................................................. 

6.8 Ventilation, vent pipe ................................................................................................................................... 

6.9 Fly screen ....................................................................................................................................................... 

6.10 Hand-wash attachment ............................................................................................................................... 

6.11 Summary of recommended minimum dimensions ............................................................................... 

Bibliography ................................................................................................................................................................ 

Page

On-site sanitation systems 

Part 1 

Ventilated improved pit toilets 

1 Scope 

This part of SANS 10365 provides recommendations for the location, design and construction of stand alone, domestic, ventilated 

improved pit (VIP) toilets. 

2 Normative references 

The following standards contain provisions which, through reference in this text, constitute provisions of this part of SANS 10365. 

All standards are subject to revision and, since any reference to a standard is deemed to be a reference to the latest edition of 

that document, parties to agreements based on this part of SANS 10365 are encouraged to take steps to ensure the use of the 

most recent editions of the standards indicated below. Information on currently valid national and international standards can be 

obtained from Standards South Africa. 

SANS 1083 (SABS 1083), Aggregates from natural sources – Aggregates for concrete. 

SANS 1090 (SABS 1090), Aggregates from natural sources – Fine aggregates for plaster and mortar. 

SANS 10252-2 (SABS 0252-2), Water supply and drainage for buildings Part 2: Drainage installations for buildings 

SANS 50197-1/EN 197-1(SABS EN 197-1), Cement – Part 1: Composition, specifications and conformity criteria for common cements 

SANS 50413 /EN 413-1 (SABS EN 413-1), Masonry cement Part 1:Specification 

3 Definition 

Ventilated Improved Pit Toilet (VIP toilet) toilet which comprises: 

a) a pit into which the excreta falls and from which the liquid fraction seeps into the surrounding soil; 

b) a slab which covers the pit and which has two holes, one for the excreta to fall through and one for the vent pipe; 

c) a superstructure which provides privacy and which prevents light from entering the pit; 

d) vent pipe which removes odour from the pit; 

e) a fly screen at the top of the vent pipe which prevents flies from entering the pit and which also prevents flies that have entered 

the pit from leaving through the vent pipe. 

4 Operating principles 

1. 

2. 

3. 

4. 

5. 

6. 

No water is needed to operate a VIP toilet (i.e. there is no flushing). 

The pit shall retain sufficient moisture for biological decomposition to occur, as the faecal matter will not break down if 

the pit is too dry and as a result the pit will fill up rapidly. 

The egress of water from the pit shall be adequate to prevent the pit being filled up rapidly with faeces and urine. 

Provision shall be made to access the pit of a VIP toilet through the slab in order to empty it manually or per vacuum 

action when required. Alternatively it shall be possible for the VIP toilet to be moved when the pit is full. 

Odour is removed from the pit through the action of wind blowing across the vent pipe and to a lesser extent by the air 

heating up on the inside of the vent pipe. 

Flies which are attracted into the pit by the smell are trapped by the fly screen at the top of the vent pipe as they try to 

escape to the light. 

5 Material 

5.1 Cement 

The cement used shall comply with the requirements of SANS 50197-1or SANS 50413. 

5.2 Aggregate 

The aggregate shall consist of sand, crushed or uncrushed gravel, crushed stone or rock, or a combination of any of these and shall 

95

comply with the requirements in SANS 1083 and SANS 1090. 

5.3 Concrete 

The concrete shall be capable of coping with the exposure conditions expected. Where necessary this will dictate cement and 

aggregate selection. 

Recommended volumetric mix proportions are given in table 1. 

96 

Table 1 — Volumetric mix proportions for concrete and mortar 

1 2 3 4 

Cement 

Purpose for use 

Wheelbarrowa) Sand 

Wheelbarrowb) Stone 

Wheelbarrow 

Mortar for plastering 1 6 - 

Mortar for bricklaying 1 6 - 

Concrete for foundations and floors 1 3 4 

Cover slab 1 2 2 

a) The volume of 2 packets of cement is equal to the volume of 1 wheelbarrow of cement 

b) The type of sand shall comply with the purpose, i.e. plaster sand for plastering, building sand for bricklaying and 

river or crusher sand for concrete 

5.4 Bricks 

The bricks used for the building of the superstructure (and of the vent pipe, if applicable) shall be capable of coping with the 

exposure conditions expected. 

5.5 Water 

The water used in the mixing of the concrete shall be clean and free from deleterious quantities of impurities. 

5.6 Cover slab 

The cover slab shall generally be made of concrete or cement-mortar 

5.7 Pedestal 

The pedestal can be commercially fabricated with ceramic, polyethylene, glass reinforced plastic (GRP) and 

PVC or can be fabricated on site with wood, concrete, mortar or bricks. 

5.8 Superstructure 

1. 

2. 

The walls and roof can be constructed from a variety of local or prefabricated materials that are durable and 

weatherproof. 

All hinges. Locks and handles shall be of robust construction and resistant to corrosion. 

5.9 Vent pipe 

The vent pipe shall be manufactured from uPVC pipe, brick, fibre cement pipe or cast iron. 

5.10 Fly screen, 

The fly screen shall be resistant to damage from UV light, rain water and the gases emanating from the pit. 

6 Design and construction of a VIP toilet 

1) 

Pit 

The recommended pit storage volume for a typical household 

a) (excluding the freeboard) is as given in 

Table 2.

2) 

NOTE A method for determining the pit storage volume as a function of the number of people using the pit, the solid accumulation rate and 

the desired life span of the pit is described in the publication Building VIPs: Guidelines for the design and construction of domestic ventilated improved pit 

toilets. 

b) 

c) 

Freeboard height above the storage volume shall be as given in Table 2 and Figure 1. 

A pit can be round or rectangular. A round pit is more stable and is recommended in less cohesive 

soils. 

d) For maximum efficiency, a pit shall be large and deep. Round pits with diameter 1 m to 1,5 m and 

square pits with a width of 1 m to 1,5 m are the norm. Longer and shallower pits are acceptable in 

the case of rocky areas or areas with a high water table. 

e) 

f) 

g) 

h) 

i) 

j) 

If the pit depth cannot be achieved due to rock or groundwater, an alternative such as a urine diversion 

toilet should be considered. 

The size of the pit and the porosity of the soil surrounding it shall be such that water will percolate 

faster out of the pit than liquids entering the pit. 

A pit shall not penetrate the water table 

Only faecal matter, urine and cleansing water shall be allowed to enter the pit. 

Separate provision shall be made for the disposal of grey-water and other household waste. 

A drawing of a typical VIP toilet is shown in figure 1. 

Location 

a) 

± 

Figure 1 — Drawing of a typical VIP toilet 

The toilet shall be situated downhill and at least 30 m from a borehole or a well (see SANS 10252-2). 

97

3) 

4) 

5) 

98 

b) 

c) 

d) 

e) 

f) 

The toilet shall be near the house but so sited as not to endanger the structure of any building or any services on the site 

or on the border of the site. 

The toilet shall afford privacy of use by facing towards the house 

If practical, more than one potential suitable location should be identified per stand where there is no pit emptying 

service. 

Where the pit will be emptied by a vacuum tanker the toilet shall be situated such that a vacuum tanker can approach 

to within 30 m of the toilet and not more than 2 m above the pit. 

Lining 

a) 

b) 

c) 

The toilet shall not be built under or near trees. 

Pits in stable soil which will be emptied by hand or pits moved when full need not be lined. 

Pits in unstable soils and those that will be emptied by vacuum tanker shall be lined. 

The lining and soil shall be sufficiently porous to allow water to seep out. 

d) 6.3.4 The lining can be constructed from concrete blocks, bricks, cement-stabilised soil blocks, stones 

or mesh-reinforced soil-cement. 

Collar 

a) 

b) 

c) 

d) 

A collar shall be installed in all pits to: 

i. 

ii. 

iii. 

prevent surface water or soil fines running into the pit; 

support the cover slab and the mass of the users; and 

support the mass of the superstructure if it rests on the slab. 

A collar shall be impervious and extend to at least 500 mm below the top of the pit and at least 75 mm above ground 

level. 

A collar shall be surrounded by a cement-stabilised earth bank or a shaped earth drain. 

The same material that would be used for a lining is suitable for a collar. 

Cover slab 

a) 

b) 

c) 

d) 

e) 

f) 

The cover slab shall generally be made of concrete. 

The minimum thickness of the slab panel shall be as given in Table 2. The mass of the slab shall not 

exceed 150kg (to allow it to be moved by hand). 

The reinforcing shall be as given in Table 2. 

Reinforcing have to be designed for a flat slab exceeding 1,5 m in span. 

A cover slab shall have two holes to accommodate the pedestal and the vent pipe. The shapes and 

sizes of the holes shall correspond with the shapes and sizes of the pedestal and the vent pipe. 

It can be circular or rectangular.

6) 

7) 

g) 

h) 

A cover slab shall be properly supported by the pit lining or pit collar by allowing an overlap of at least 

75 mm on each side. 

Separate panels shall be sealed against each other with a weak mortar mixture or window putty to 

obtain a fly-proof joint. 

Pedestal and toilet seat 

a) 

b) 

c) 

d) 

e) 

f) 

g) 

h) 

i) 

j) 

k) 

l) 

Some cultures’ groups may require a squatting plate and not a pedestal. 

The pedestal shall have a smooth inside surface and be impervious to the penetration of water. 

Pedestals can be commercially fabricated with ceramic, polyethylene, glass reinforced plastics (GRP) 

and uPVC or can be fabricated on site with concrete, mortar or bricks. 

Concrete or mortar pedestals shall be painted with a waterproof paint. 

The inside walls shall be vertical or splayed slightly outwards from top to bottom (to minimize 

fouling). 

The inside walls shall be located directly over the pit. A side chute is not recommended. 

The pedestal height shall be between 350 mm and 450 mm. 

A toilet seat shall be installed. The minimum internal dimensions of an oval seat are 310 mm and 

250 mm and for a round seat the diameter is 250 mm. 

The opening in the seat shall be smaller than the opening in the pedestal with an overlap of at least 

10 mm at the front end side and at least 70 mm at the back. 

The surfaces of the toilet seat and lid shall be smooth and free of obstructions. 

The hinges of the seat and lid shall be corrosion-resistant. 

A gap shall be provided between the seat and lid for ventilation purposes. 

Superstructure 

a) 

b) 

c) 

d) 

e) 

The superstructure can be rectangular shaped, circular or spiral with or without a privacy wall (a 

screen wall makes a door unnecessary). 

The design of the superstructure shall ensure privacy, comfort and protection against the weather. 

The design of the superstructure shall allow for emptying the pit, if required. (manually or by 

vacuum). 

To reduce load on the cover slab, pit collar or lining, the superstructure can be offset. Any part of a 

wall that extends beyond the edge of the cover slab shall be supported by a foundation. 

The vent pipe may be situated inside or outside of the superstructure. 

99

100 

f) 

g) 

h) 

i) 

j) 

k) 

l) 

While the superstructure should allow indirect light to enter, the pit shall be kept dark. 

The superstructure shall be adequately fastened to the cover slab or the foundation. 

The roof shall be waterproof and adequately fastened to the walls. 

The vent pipe shall be adequately fastened to the superstructure. 

If the door opens outwards it is more prone to wind damage but the interior floor area can be 

decreased, thus reducing building costs. 

The minimum dimensions of a superstructure shall be as given in table 2. 

The walls and roof can be constructed from a variety of local or prefabricated materials that are 

durable and weatherproof. 

8) Ventilation 

a) 

b) 

c) 

i. 

ii. 

iii. 

i. 

ii. 

iii. 

i. 

ii. 

iii. 

General 

Moving air shall be allowed to enter the superstructure through the vent holes through the walls 

and above the door, through the gap between the lid and seat, through the pedestal into the pit 

and out through the vent pipe. 

Ventilation openings shall be provided and positioned high up in the walls or above the door (see 

Figure 2). 

The total ventilation opening areas for incoming air should be at least three times the cross- 

sectional area of the vent pipe. 

Vent pipe 

Wind shear across the vent pipe is the main cause of ventilation in the system. 

The vent pipe shall have a diameter of at least 110 mm. 

The vent pipe shall extend at least 500 mm above the highest point of the roof. 

Fly screen 

The vent pipe shall be covered with a mesh to prevent flies entering or leaving the pit. 

The mesh shall be secured horizontally over the top of the vent pipe. 

The openings in the mesh shall have a maximum size of 1 mm x 1 mm. Smaller openings will cause 

resistance to free air flow and larger openings allow insects to pass through to the pit.

iv. 

v. 

vi. 

The mesh shall be located in such a position that leaves will not accumulate on it. 

The mesh shall be made of aluminium, stainless steel, glass fibre or other material resistant to 

corrosion from uv light, rust and the gases emanating from the pit. 

Cowls should not be used over the vent pipe as they obstruct the light and induce turbulence, 

thereby reducing wind shear at the top of the vent pipe. 

a) Fly control b) Ventilation 

Figure 4 — The ventilation systems 

6.10 Hand-wash facility 

Where a water stand pipe is not available nearby a small water tank should be provided. 

101

6.11 Summary of recommended minimum dimensions a) 

102 

Table 2 — Summary of recommended minimum dimensions 

Pit 

1 

Component 

Storage volume: 

2 

Recommended minimum dimensions 

3 

Pit to be emptied 2,0 m3 Toilet to be moved 3,0 m3 Freeboard: 0,5 m 

Collar Depth: 

Projection above ground level: 

500 mm 

75 mm 

Slab support width: 75 mm 

Slab Thickness: 

Overlap on collar: 

Reinforcement if span is < 1,5 m: 

In underside of slab 

75 mm 

75 mm 

Concrete cover over reinforcement 

Type: 8 mm bars, 250 c/c each way, or 

Ref 193 steel mesh, or 

4 mm roofing wire, 150 c/c 

25 mm 

Pedestal 

Seat opening 

Height from floor: 350 mm to 450 mm 

b) Round 

Oval 

250 mm diameter 

310 mm X 250 mm 

Superstructurec) (on site constructed) 

Internal height: 

Internal width: 

Internal length, door opening outwards: 

1,9 m 

0,9 m 

1,2 m 

Internal length, door opening inwards: 2,0 m 

Dimension between pedestal and door opening outwards 0,6 m 

Door Height: 

Width: 

1,5 m 

0,7 m 

Vent pipe Diameter: 

Extending above roof: 

110 mm 

500 mm 

Fly screen Openings: 

a) Dimensions may not be suitable for disabled people. (See SANS 10400). 

b) When bench seats are provided an additional opening of 200 mm can be provided. 

1 mm x 1 mm 

c) Precast units are normally not prone to structural weakness and dimensions of 800 mm width and 1 100 mm length with door opening 

outwards are acceptable.

Bibliography 

Building VIPs: Guidelines for the design and construction of domestic Ventilated Improved Pit toilets. Division of Building technology, CSIR, 

1999 

© Standards South Africa 

103

104 

SECTION 8 

SCHEDULE OF QUANTITIES

PREAMBLE TO THE SCHEDULE OF QUANTITIES 

1 

2 

3 

4 

5 

For the purposes of this schedule of quantities, the following words shall have the meanings hereby 

assigned to them. 

Unit: The unit of measurement for each item of work as defined in the Project Particular 

Specifications - Fences or the Project Specifications. 

Quantity: The number of units of work for each item. 

Rate: The payment per unit of work for which the bidder tenders to do the work. 

Amount: The product of the quantity and the rate tendered for an item. 

Lump Sum: An amount tendered for an item, the extent of which is described in the schedule of 

quantities, the specifications or elsewhere, but of which the quantity of work is not 

measured in units. 

This schedule of quantities forms part of the contract documents and must be read in conjunction 

with all the other documents comprising the contract documents. 

The quantities set out in the schedule of quantities are only approximate quantities. The quantities 

of work finally accepted and certified for payment, and not the quantities given in the schedule of 

quantities, will be used to determine payments to the Contractor. 

The validity of the contract shall in no way be affected by differences between the quantities in the 

schedule of quantities and the quantities finally certified for payment. Work is valued at the rates or 

lump sums tendered. 

Rates and lump sums shall include full compensation for overheads, profits, incidentals, tax (other 

than VAT), etc. and for the completed items of work as specified, all in accordance with the Project 

Particular Specifications. Full compensation for completing and maintaining, during the defects liability 

period, all the work shown on the drawings and specified in the project particular specifications and 

project specifications and for all the risks, obligations and responsibilities specified in the general 

conditions of contract, special conditions of contract, project particular specifications and project 

specifications shall be considered as provided for collectively in the items of payment given in the 

schedule of quantities, except in so far as the quantities given in the schedule of quantities are only 

approximate. 

The bidder shall fill in a rate or a lump sum for each item where provision is made for it even where 

no quantities are given. Items against which no rate or lump sum has been entered in the bid will not 

be paid for when the work is executed, as payment for such work will be regarded as being covered 

by other rates or lump sums in the schedule of quantities. 

The bidder shall fill in a rate against all items where the words “rate only” appears in the amount 

column. Although no work is foreseen under such item and no quantities are consequently given in 

the quantity column, the tendered rate shall apply should work under this item actually be required. 

Bidders should note the provisions of paragraph 12 of this preamble. 

If the bid should group a number of items together and tender one lump sum for each group of items, 

this single tendered lump sum shall apply to that group of items and not to each individual item, or 

should he indicate that full compensation for any item has been included in the rate for another item, 

105

6 

7 

8 

9 

10 

11 

12 

13 

106 

the rate for the item included in another item shall be deemed to be nil. 

The tendered lump sums and rates shall be valid irrespective of any change in the quantities during 

the execution of the contract. 

The works executed are measured for payment in accordance with the methods described in the 

contract documents under the various payment items, notwithstanding any custom to the contrary. 

Attention is directed to the provisions of the project particular specifications regarding the 

measurements of quantities for payment. Except where specified otherwise than in project particular 

specifications, the nett measurement or mass of the finished work in place shall be taken for payment, 

and any volume or mass of work in excess of that prescribed, shall be excluded. 

The amount of work or the quantities of material stated in the schedule of quantities shall not be 

considered as restricting or extending the amount of work to be done or quantity of material to be 

supplied by the Contractor. 

The statement of quantities of material or the amount of work in the schedule of quantities shall 

not be regarded as authorization for the Contractor to order material or to execute work. The 

Contractor shall obtain the Engineer’s detailed instructions for all work before ordering any materials 

or executing work or making arrangements in this regard. 

The short descriptions of the payment items in the schedule of quantities are only given to identify 

the items and to provide specific details. Reference shall, inter alia, be made to the drawings, project 

particular specifications, project specifications, general conditions of contract and special conditions 

of contract for more detailed information regarding the extent of work entailed under each item. 

The provisions of the general conditions of contract shall apply to provisional sums and prime cost 

sums. 

Subject to the conditions stated in paragraph 12 below, the rates and lump sums filled in by the bidder 

in the schedule of quantities shall be final and binding with regard to submitting the bid, and may not 

be adjusted should there be any mistakes in the extensions thereof and in the total sums appearing 

in the bid. Should there be any discrepancies between the bid sum and the correctly extended and 

totaled schedule of quantities, the rates will be regarded as being correct, and the Employer shall have 

the right to make adjustments to the bid sum to reconcile the bid sum with the total of the schedule 

of quantities. In such an event the Contractor will be consulted but, failing agreement between the 

parties, the decision of the Employer shall be final and binding. Adjustment of the bid sum will take 

place prior to the signing of the contract. In their own interest bidders must make double sure of the 

correctness of their tendered rates, the extensions and the bid sum. 

A bid may be rejected if the unit rates or lump sums for some of the items in the schedule of quantities 

are, in the opinion of the Employer, unreasonable or out of proportion, and if the bidder fails, within a 

period of seven (7) days of having been notified in writing by the Employer to adjust the unit rates or 

lump sums for such items, to make such adjustments. 

The units of measurement indicated in the schedule of quantities are metric units 

The following abbreviations are used in the schedule of quantities: 

mm = millimetre 

m = metre 

km = kilometre

14 

15 

m 2 = square metre 

ha = hectare 

m³ = cubic metre 

l = litre 

kl = kilolitre 

kg = kilogram 

t = ton (1000 kg) 

No = number 

mn = meganewton 

% = per cent 

KW = kilowatt 

Kn = kilonewton 

PC sum = prime cost sum 

Prov sum = provisional sum 

All rates and sums of money quoted in the schedule of quantities shall be in rands and whole cents. Fractions of a cent shall be discarded 

The item numbers appearing in the schedule of quantities refer to the corresponding item numbers 

in the project particular specifications. 

107

1 

108 

SUMMARY OF SCHEDULE OF QUANTITIES 

Section A Contractor’s Establishment on Site and General Obligations. R...................……….. 

Section B Construction of Works R...................……….. 

Section C Training of targeted labour R……………………… 

Section D General Requirements – Community Liaison Officer R……………………… 

NETT TOTAL OF BID R...................……….. 

ALLOW 10% CONTINGENCIES R...................……….. 

SUB TOTAL R...................……….. 

ALLOW 14% VALUE ADDED TAX R...................……….. 

TOTAL AMOUNT CARRIED TO FORM OF BID R...................……….. 

THE CONTRACT IS NOT SUBJECT TO CONTRACT PRICE ADJUSTMENT. 

SIGNATURE OF BIDDER: ................................... .................................. 

ON BEHALF OF: ..................................................................... 

DATE: .....................................................................

VIP Toilet 

Payment 

I t e m 

Clause 

No 

Description Unit Quantity Rate Amount Comments 

A FOUNDATIONS AND PIT 

1 

Site clearance: 

Clear area of site of all rubbish, debris, 

vegetation, hedges, shrubs and trees not 

exceeding 200mm girth, bush, etc including a 

O w n e r ’ s 

minimum space around the structre of 3m. m2 5 

responsibility 

Excavation in soft material exceeding 2m 

deep and not exceeding 4m deep 

2 Pit m3 3 

Extra over trench and hole excavation in 

soft material for excavation in 

3 Intermediate material m3 0.5 

4 Hard rock material m3 0.5 

5 

6 

7 

Risk of collapse of excavations: 

Sides of trench and hole excavations exceeding 

1,5m deep m2 6 

Keeping excavations free of water: 

Keeping excavations free of all water other 

than subterranean water Item 1 

UNREINFORCED CONCRETE CAST 

AGAINST EXCAVATED SURFACES 

Strip footings (20 MPa/19 mm concrete) m3 1.2 

VIBRATED REINFORCED CONCRETE 

8 1240 x 400 x 80mm Thick pit cover slab 

sections with bevelled top edges, reinforced 

with high tensile steel, two slabs with holes 

for either the vent pipe or the pedestal, and all 

external slabs fitted with four 10mm diameter x 

650mm girth U-shaped high tensile steel lifting 

handles, bent to detail and cast in m3 1.5 

9 

REINFORCEMENT 

High tensile steel Y12 1.2m 20 

BRICKWORK IN Pit Linings 

10 One brick walls with seepage gaps every 3rd 

row m2 14 

11 

12 

13 

14 

Sub-Total : Carried Forward to Final Summary 

SUPERSTRUCTURE 

BRICKWORK IN SUPERSTRUCTURE 

Brickwork of NFP bricks in class II mortar: 

One layer of approved 375 micron DPC 

embossed damp proof course: m 7 

One brick walls m2 15 

100 x 70mm Lintels 

150mm Wide brick reinforcement built in 

m 1.2 

horizontally into joints of brickwork m 30 

109

110 

VIP Toilet 

Payment 

I t e m 

Clause 

No 

Description 

15 

30 x 1,6mm Roof tie 1,6m long with one end 

fixed to timber and other end wrapped around 

two 6mm diameter x 110mm long mild steel 

Unit Quantity Rate Amount Comments 

reinforcing bars and built into brickwork 

Mortar bed on top of raking gable walls to form 

No 4 

16 

17 

close joint with underside of roof sheeting 

15mm Thick high density natural grey fibre 

cement cills cut to sized including galvanised 

m2 0.3 

lugs and fixing to brickwork 


m 0.6 

18 

ROOF COVERINGS 

PROFILED IRON SHEETING AND 

ACCESSORIES 

0.5mm galvanised iron currugated sheeting 

lapped at ends and sides and fixed to timber 

purlins m 5 

19 

20 

Sawn softwood: 

38 x 75mm Wall plates 

38 x 114mm Longitudinal rafters at a pitch not 

less than 10 degrees with 500mm overhang on 

m 2.4 

21 

22 

either side 

50 x 76mm Purlins 

Two coats creosote on sawn roof timbers 

2.5mm Diameter galvanised wire tie 2500mm 

girth bent double and wrapped around rafter 

and purlin with ends tied together and spiked 

m 

m 

m2 

6.8 

4.2 

3.6 

23 

24 

25 

26 

27 

to timber 

Galvanised two way hurricane clip 

3” timber nails 

1” tacks (to attach hurricane clips) 

75mm galvanised roof screws with rubber 

No 

No 

kg 

kg 

5 

4 

0.2 

0.1 

washers No 32 

28 

29 

30 

31 

FRAMED DOORS, ETC 

Red meranti framed braced battened door with 

plywood veneer covering on both sides, hung 

to steel frames 

44mm x 813 x 2032mm high door 

Approved three lever lockset with striking plate 

No 1 

fixed to metal No 1 

Approved internal door latch 

1,2 mm Double rebated frames suitable for 

No 1 

110mm brick walls for door 613 x 2032 high 


No 1 

PLASTERING 

32 

SCREEDS 

3:1 Cement screeds on floor 23mm thick 

concrete steel trowel floated to a smooth 

finish 

INTERNAL PLASTER 

m2 2 

33 1:5 Cement plaster on walls m2 15 

Sub-Total : Carried Forward to Final Summary

VIP Toilet 

Payment 

I t e m 

Clause 

No 

Description Unit Quantity Rate Amount Comments 

34 

35 

36 

37 

SANITARY FITTINGS 

Roto moulded HDPE heavy duty pedestal 

with black safety dropper tube, and fixing in 

position in hole (hole elsewhere) in concrete 

slab complete with footpiece, funnel, plug, 

lifting handle, etc in accordance with SABS 

standard 

Wash hand basin complete with fittings, and 

No 1 

fixing to wall with support wall brackets 

Unplasticised polyvinyl chloride (uPVC) waste 

and vent piping conforming to SABS 967 with 

No 1 

solvent cement jointing 110mm pipe m 3 

110mm Air vent cowl with fly screen No 1 


PAINTWORK 

One coat primer, one undercoat and two coats 

acrylic on internal plaster walls m2 7 

One coat zink chromate primer and one coat 

undercoat and finish in two coats alkyd enamel 

paint on metal frames m2 2 

Prime under coat and two coats enamel on 

doors m2 3.5 


LABOUR COSTS 

1 FOUNDATIONS and PIT day 2 

2 Strip footings (foundations) and slabs day 2 

3 MASONRY - pit lining day 3 

4 Superstructure - walls day 4 

5 ROOF, DOOR, WINDOW CILL day 1 

6 

PLASTERING, PLUMBING AND 

FINNISHING day 2 

TOTAL OF BUILDING WORK (EXCLUDING 

VAT) 

111

112

SECTION 9 

TERMS OF REFERENCE 

CONTRACTORS 

113

114 

Terms of Reference 

Contractors 

Tender for the construction of ???? VIPs as part of the Water & Sanitation Programme of the ????? 

District / Local Municipality. 

This term of reference is developed to implement a sanitation project within the context of EPWP in pursuant 

with Provincial Growth and Development Strategies (PGDs) of each province. It enables the sanitation 

project not only to respond effectively to national EPWP and Millennium Developmental Goals (MDGs) 

performance indicators but also to maximise the local job creation opportunities. 

The Terms of reference for this project is developed: 

1. To increase the number of jobs that is created within the local community; 

2. To improve the sustainability and marketability of skills development through accredited training as an 

essential component of the sanitation project for unemployed and other targeted groups, 

3. To investigate the potential for linking sanitation job creation opportunities with local economic 

development (LED) 

4. To improve sanitation management issues related to job creation through information sharing and proactive 

monitoring, evaluation and reporting, and 

5. To ensure that youth and other designated groups are provided with job opportunities in the sanitation 

project. 

1 

Background Information 

Water Services Authority 

???? District / Local Municipality Name 

Relevant municipality background 

 

In the implementation of the rural sanitation infrastructure programme in the ??? municipality there are many 

dynamics and characteristics that inform the decisions made and the implementation methodology. 

The project implementation methodology for ??? municipality is based on emerging best practice nationally. 

This includes:- 

Maximising the involvement of local residents and their ward representatives 

Maximising opportunities for employment, skills development, LED and contractor development 

Effective user education for long-term O&M and health improvement 

Effective project management systems. 

Other related programmes 

2 

Contract Objectives 

2.1 Overall Aim 

The overall aim of this sanitation job creation project is to significantly increase both the number of jobs 

created in the delivery of sanitation project, and the sustainability of these jobs. 

2.2 

Overall Objectives 

The overall objective of this sanitation project is to contribute to the improvement of living conditions in 

the project areas. The desired outcomes of the project must include, inter alia: 

1. Improved access to sanitation through the provision of new VIPs 

2. Health improvement, through an effective programme of health and hygiene promotion 

3. User education, to provide users with understanding of the system’s vulnerabilities, and their own role in 

long-term maintenance - so as to promote sustainability 

4. Local economic development (LED) implementation strategies are promoted, through skills development 

of local builders, SMMEs, opportunities for labourers, use of local suppliers and contractors etc 

5. Capacity building and training in toilet construction, and 

6. Community development to encompass all the developmental benefits of the implementation 

programme 

2.3 Local Economic Development 

A key principle and Performance Areas which the client will monitor closely is the sanitation implementation 

methodologies used by contractors to maximize the Local Economic Development (including job creation) 

within the scope of this project implementation. The WSA believes that in a methodology of maximizing LED, 

and focusing on a social marketing strategy will ultimately increase the demand for sanitation facilities. The 

LED model should also result in a fast track implementation product. 

One of the key reporting areas will be on the LED ratio, which will be based on the percentage (%) of total 

budget that communities will benefit from for LED (including local labour, other community payments, local 

suppliers costs and training of community skills etc.). 

3 

3.1 

Assumptions and Risks 

Assumptions 

Record of Decisions 

The local government (District Municipality) and the communities have approved of this project. The contractor 

must have the necessary skills and capacity to identify issues that will impact on the project implementation 

and budgets. The appointed contractor will inform the ???? Municipality on all issues that required decisions 

or approvals. 

3.2 

Risks 

Community Dynamics 

The community involvement and decision making in all phases of the project implementation is seen as a key 

criteria to the end sustainability of any project. 

Key risk areas that could arise from the community participation in the project implementation are: 

• Community decision-making may take time. The support team is required to provide as much 

information as is reasonably required for communities to make informed decisions. 

• 

The communities may request minor changes to the strategy, designs or infrastructure layouts. The 

115

116 

• 

• 

support team should consider them and be in a position to provide the ???? Municipality and community 

with the implications (time, cost and other) of the proposed changes. 

The community leadership is dynamic and there may be changes / alterations as the projects 

progresses. 

The nature of community-based projects should be considered especially for unforeseen circumstances 

like labour issues, power struggles etc. 

The appointed contractor is required to support the key developmental objectives behind community-based 

implementation as much as is feasible during the contract period. 

Funding Flows and Contracting Lines 

The contractor is to assess their responsibilities in line with the funding flows and contracting lines - attached 

in appendix B. The contractor must note that it is a job creation project and delays in payments to the 

recipients will impact on production. If there are anticipated cash flow “top ups” required the contractor 

must clearly indicate this in their cash flow projections (which must be linked with the production targets 

indicated in their workplan). 

4 

4.1 

Scope of Work 

General 

4.1.1 Project description 

Any constructed infrastructure should conform to the relevant SABS specifications and standards. All 

standards, including material to be used, must comply accordingly. 

In Appendix XV1 please find a generic SABS specification that can be used. 

4.1.2 Geographical Area to be covered 

This contract covers selected communities in ???? District / Local Municipalities of the ???? Province. The 

communities identified as beneficiaries of the sanitation programme are as follows: 

 

4.1.3 

Target Groups 

The communities indicated above are the target groups. The feasibility studies, district budget allocations 

and community dynamics will ultimately determine which of these communities will receive the 

infrastructure or training. Not all projects may proceed past the feasibility stage. 

4.2 

4.2.1 

Specific activities 

Contracting Environment 

This appointment will be in line with the traditional client (WSA) contractor 

/ contractor model or the contractor being the programme manager or a turnkey model.

Or 

Or 

117

4.2.2 

118 

Contractors appointment 

The appointed contractors tasks; roles and responsibilities are to be described in the methodology of the 

tender submission in terms of the following 3 general phases of the project cycle: 

In the tender bid the contractor is to complete the table below and submit it in the tender submission – and 

indicate key dates and methodologies for the following tasks:- 

Tasks Req’d Target Deliverable Methodology 

Planning & Preparation 

Date 

Phase 

Workplans presentations to Yes Minutes of meetings 

community and municipality 

Community approval letters 

Cash flow projections 

Implementation Phase 

Implementation of community Yes 

Detailed workplan 

ISD, project management and other 

development programmes 

Construction of the VIPs Yes 

capacity building programmes. 

Materials on site 

Monitor, evaluate and quality Yes 

Construction of units to specification 

Quality Management System 

control checks on the 

Monthly reports 

construction of the units 

Certification of monthly Yes Monthly progress reports 

progress and works 

Payment certificates 

completed 

Project management support Yes 

Completion certificates 

General support including municipal 

to the ???? Municipality 

reporting and completion of M&E 

Handover Phase 

Handover / Completion Yes 

documentation 

Household h/over certificate signed 

certificate signed by all 

Unit numbered and registered 

stakeholders 

Client / contractor h/over certificate 

signed 

Operations and maintenance Yes 

End of project completion report 

O&M manual 

strategies and manuals (with 

Training manual 

training) 

Other supporting documentation. 

The table below must be completed by the tenderer to indicate the estimate labour costs that are budgeted 

for per unit. 

LABOUR COSTS 

Sub – Structure 

Unit Quantity Rate 

1 Foundations and Pit day Unskilled, Semi - Skilled labour 

2 

Strip footings (foundations) and 

slabs 

day Semi & Skilled labour 

3 Masonry - pit lining day 

Total Sub - Structure 

Super - Structure 

4 Superstructure - walls day 

5 Roof, door and window cill day 

6 Plastering, plumbing and finishing day 

Total Sub - Structure 

Alternative Super - 

Structure 

Semi & Skilled labour (unskilled labour as 

support) 


support) 


support) 


support)

7 Assembly (Prefabricated Units) 

Total Labour Budget 

 

Social Facilitation 

day 

Construction quality control etc. day 

User Education – Health and hygiene 

promotion 

day 

Other social facilitation 

Total Social Facilitation 

day 

The table below must be completed by the tenderer to indicate the construction methodology and local economic 

development principles that the contractor will use to ensure that the project is implemented in support of sanitation 

job creation objectives. 

VIP Component Construction methodology 


1 Foundations and Pit 

5 

2 Strip footings (foundations) and slabs 

3 Masonry - pit lining 


4 Superstructure - walls 

5 Roof, door and window cill 

6 Plastering, plumbing and finishing 

Alternative Super - Structure 

7 Assembly (Prefabricated Units) 

 


Construction quality control etc. 

User Education – Health and hygiene 

promotion 


LED Targets 

The contractor is required to report on the following:- 

Skilled persons 

Semi skilled persons 

Unskilled persons 

Persons that will be employed by the 

contractor per annum 

Proposed subcontractors 

that will be used Budget allocation (Rands) 

SMME (1)

SMME (micro)

8 

Logistics and Timing 

8.1 Location 

The appointed contractor will be required to liase, communicate and coordinate all it activities with the ???? 

Municipality in their office on this contract. 

8.2 

9 

Commencement Date and Period of Execution 

The intended commencement date is , and the period of execution of the contract will be for 

months from the signing of the contract. 

The appointed contractor will be notified, if there is additional scope of work proposed for the project. 

In such cases the contractor scope of works may be extended depending on their performance. The ???? 

Municipality and the community committee will decide on the possible extension of the contract. This 

extension will also depend on successful negotiations of technical and financial implications of the scope 

of additional works. Payment and approval of the contractor will be based on the submission of detailed 

information. 

Reporting Requirements 

The appointed contractor will be responsible for providing monthly progress reports, submitted, not later 

than the 25 th of each month. 

All payment certificates will be submitted to the “client representative” (7 above), before the 25 th of each 

month to allow for processing, resolution of queries before subsequent payment. All report formats have to 

be compliant with the tools that will be used in monitoring and evaluating progress in this contract, and both 

electronic and hard copies provided. 

There must be a final progress report and final invoice at the end of the period of execution. The draft final 

progress report must be submitted at least one month before the end of the period of execution of the 

contract. 

10 Monitoring and Evaluation 

10.1 

Definition of indicators 

Project indicators reports 

The contractor must develop key performance indicators against which progress in the work can be monitored 

and measured. These must be submitted in the project business plans / action plans and agreed with the 

client. 

Progress of Work – Value, Physical Progress and Quality of Workmanship 

Progress of the value of work done shall be monitored against the Works / Contract Programme provided 

by the Contractor and reported at each monthly Site Meeting. Valuation of the work done for payment 

purposes shall be done monthly, by not later than the 25 th day of the month and the recommendation for 

payment forwarded to the Clients Representative by the end of the month. 

121

The contractor must provide a generic report format within 2 weeks of contract award to client for 

approval. 

Provisional Work – Quantity 

The quantity of work measured provisionally shall be re-measured immediately, that it is complete, and that 

section of the Final Account agreed with the Contractor. 

Variations/Site Instructions 

All variations/site instructions having a monetary value are to be costed and approved in writing by the Client 

before such work is put in hand. No payment will be made for unauthorised work. 

Quality of Materials and Workmanship 

Any deviation from the specified standards of materials or workmanship that the contractor becomes aware 

of shall be referred to the Client within 5 days of observation. 

Cost Reporting 

The contractor shall provide a monthly cost report, which reflects additions or omissions from the Contract 

Sum in the following categories: 

• Provisional work 

• Provisional Sums 

• Approved Variations 

• Approved Site Instructions 

• Variations pending approval from the client 

• Contingency Sums 

• Escalation if applicable 

• The Budget Allocation 

• The Current Anticipated Final Cost 

Cost Reports are to be sequentially numbered and properly dated. 

Final Account 

The Final Account shall be submitted to the Client for comment within 30 days of Practical Completion and 

agreement reached within a further 45 days. 

Special requirements 

In addition to the indicators noted above, the contractor programme of work, cash flow, and the reports 

submitted and the various presentations / workshops made will be used to monitor and evaluate his / her 

performance. 

122

123

124 

SECTION 10 

TERMS OF REFERENCE 

SERVICE PROVIDERS

Terms of Reference 

Service Providers 

Tender for professional service providers for the construction of ???? VIPs as part of the Water & Sanitation 

Programme of the ????? District / Local Municipality. 

This term of reference is developed to implement a sanitation project within the context of EPWP in pursuant 

with Provincial Growth and Development Strategies (PGDs) of each province. It enables the sanitation 

project not only to respond effectively to national EPWP and Millennium Developmental Goals (MDGs) 

performance indicators but also to maximise the local job creation opportunities. 

The Terms of reference for this project is developed in line with sanitation job creation principles: 

1. To increase the number of jobs that is created within the local community; 

2. To improve the sustainability and marketability of skills development through accredited training as an 

essential component of the sanitation project for unemployed and other targeted groups, 

3. To investigate the potential for linking sanitation job creation opportunities with local economic 

development (LED) 

4. To improve sanitation management issues related to job creation through information sharing and proactive 

monitoring, evaluation and reporting, and 

5. To ensure that youth and other designated groups are provided with job opportunities in the sanitation 

project. 

1 

Background Information 

Water Services Authority 

???? District / Local Municipality Name 

Relevant municipality background 

 

In the implementation of the rural sanitation infrastructure programme in the ??? municipality there are many 

dynamics and characteristics that inform the decisions made and the implementation methodology. 

The project implementation methodology for ??? municipality is based on emerging best practice nationally. 

This includes:- 

Maximising the involvement of local residents and their ward representatives 

Maximising opportunities for employment, skills development, LED and contractor development 

Effective user education for long-term O&M and health improvement 

Effective project management systems. 

Other related programmes 

 

125

2 

126 

Contract Objectives 

2.1 Overall Aim 

The overall aim of this sanitation job creation project is to significantly increase both the number of jobs 

created in the delivery of sanitation project, and the sustainability of these jobs. 

2.2 

Overall Objectives 

The overall objective of this sanitation project is to contribute to the improvement of living conditions in 

the project areas. The desired outcomes of the project must include, inter alia: 

1. Improved access to sanitation through the provision of new VIPs 

2. Health improvement, through an effective programme of health and hygiene promotion 

3. User education, to provide users with understanding of the system’s vulnerabilities, and their own role in 

long-term maintenance - so as to promote sustainability 

4. Local economic development (LED) implementation strategies are promoted, through skills development 

of local builders, SMMEs, opportunities for labourers, use of local suppliers and contractors etc 

5. Capacity building and training in toilet construction, and 

6. Community development to encompass all the developmental benefits of the implementation 

programme 

2.3 Local Economic Development 

A key principle and Performance Areas which the client will monitor closely is the sanitation implementation 

methodologies used by service providers to maximize the Local Economic Development (including job 

creation) within the scope of this project implementation. The WSA believes that in a methodology of 

maximizing LED, and focusing on a social marketing strategy will ultimately increase the demand for sanitation 

facilities. The LED model should also result in a fast track implementation product. 

One of the key reporting areas will be on the LED ratio, which will be based on the percentage (%) of total 

budget that communities will benefit from for LED (including local labour, other community payments, local 

suppliers costs and training of community skills etc.). 

3 

3.1 

Assumptions and Risks 

Assumptions 

Record of Decisions 

The local government (District Municipality) and the communities have approved of this project. The service 

provider must have the necessary skills and capacity to identify issues that will impact on the project 

implementation and budgets. The appointed service provider will inform the ???? Municipality on all issues 

that required decisions or approvals. 

3.2 

Risks 

Community Dynamics 

The community involvement and decision making in all phases of the project implementation is seen as a key 

criteria to the end sustainability of any project. 

Key risk areas that could arise from the community participation in the project implementation are: 

• Community decision-making may take time. The support team is required to provide as much 

information as is reasonably required for communities to make informed decisions. 

• 

The communities may request minor changes to the strategy, designs or infrastructure layouts. The

• 

• 

support team should consider them and be in a position to provide the ???? Municipality and community 

with the implications (time, cost and other) of the proposed changes. 

The community leadership is dynamic and there may be changes / alterations as the projects 

progresses. 

The nature of community-based projects should be considered especially for unforeseen circumstances 

like labour issues, power struggles etc. 

The appointed service provider is required to support the key developmental objectives behind communitybased 

implementation as much as is feasible during the contract period. 

Funding Flows and Contracting Lines 

The service provider is to assess their responsibilities in line with the funding flows and contracting lines - 

attached in appendix B. The service provider must note that it is a job creation project and delays in payments 

to the recipients will impact on production. If there are anticipated cash flow “top ups” required the service 

provider must clearly indicate this in their cash flow projections (which must be linked with the production 

targets indicated in their workplan). 

4 

4.1 

Scope of Work 

General 

4.1.1 Project description 

Any constructed infrastructure should conform to the relevant SABS specifications and standards. All 

standards, including material to be used, must comply accordingly. 

The appointed service provider team is not expected to establish a site office. The existing establishment in 

the province must be used for making technical and financial analyses, as well as for the preparation all other 

contractual reports. 

4.1.2 

Geographical Area to be covered 

This contract covers selected communities in ???? District / Local Municipalities of the ???? Province. The 

communities identified as beneficiaries of the sanitation programme are as follows: 

 

4.1.3 

Target Groups 

The communities indicated above are the target groups. The feasibility studies, district budget allocations 

and community dynamics will ultimately determine which of these communities will receive the 

infrastructure or training. Not all projects may proceed past the feasibility stage. 

4.2 

4.2.1 

Specific activities 

Contracting Environment 

This appointment will be in line with the traditional client (WSA) contractor 

/ service provider model or the service provider being the programme manager or a turnkey model. 

127

Or 

Or 

128

4.2.2 

Service Provider appointment 

The appointed service providers tasks; roles and responsibilities are to be described in the methodology of 

the tender submission in terms of the following 4 general phases of the project cycle: 

1. Planning Phase 

This phase begins from the commissioning (or signing) date of the appointed service provider contract until 

either a feasibility report or business plan is completed for each selected and identified community or cluster. 

The ???? Municipality will determine priority projects with the support team where after the support team 

will produce a month-by-month workplan. 

The methodology and Key Performance Areas for the service provider during this phase should be described 

in the submission under the following headings: 

i. 

ii. 

iii. 

iv. 

Desktop analysis: 

Business plan drafting, development and approval: 

Geohydrological assessments procurement assistance, strategy, and supporting implementation (if 

required) 

Environmental Impact Assessments (if required) 

2. Preparation Phase 

This phase is best described from when the project business plan (or workplan) is approved by the ???? 

Municipality until the works tender is approved and contractors are ready to start implementation of 

projects. 

The methodology and Key Performance Areas for the specialist during this phase should be described in the 

submission under the following headings: 

i. Business Plan (BP) approval from ???? Municipality: a project business plan is submitted to the ???? 

Municipality with clear project scope of work, identified and priced for implementation. The ???? Municipality 

will approve the project scope of works and the strategies recommended. 

Key Performance Areas: 

a) BP approved by the community structures 

b) BP and key deliverables approved by the ???? Municipality 

c) Detailed workplan with delivery of completed units targets 

d) Cash flow projections 

e) Bills of Quantities (BoQs) of proposed structures with budget estimates 

f) Council Resolution (if required) 

g) Provincial Government line departments (if required) approval of Business Plan 

h) EIA submitted and approved (if required). 

ii. Preparation of Works Tender: the service provider is required to assist the ???? Municipality to draft 

and prepare a construction tender documentation for the projects identified and approved. 

Key Performance Areas: 

a) Clear Terms of Reference, bills of quantities and other contract documentation 

b) Approved construction tender documentation 

c) Tender advertisement, adjudication and award 

d) Participation and support in clarification meetings. 

3. Implementation Phase 

This phase will begin from when the successful contractors are appointed and they start project construction 

activities. 

129

The methodology and Key Performance Areas for the service provider team during this phase should be 

described in the submission under the following headings: 

i. Implement key tasks required (including capacity building programmes, project management and other 

technical support functions) 

ii. Monitor, evaluate and quality control checks on the performance of the selected contractors and 

suppliers: 

iii. Certification of monthly progress and works completed 

iv. Project management support to the ???? Municipality 

4. Handover Phase 

There are 2 key performance areas in this phase, namely:- 

1. handover between the contractor and the community (or household), 

2. Handover of the completed project to the ???? municipality (with the production of a completed 

closure report). 

The methodology and Key Performance Areas for the service provider during this phase should be described 

in the submission under the following headings: 

i. 

ii. 

5 

130 

Handover / Completion certificate signed by all stakeholders 

Operations and maintenance strategies and manuals (with training) 

Process Chart 

In the tender bid the service provider is to complete the table below and submit it in the tender submission 

– and indicate key dates and methodologies for the following tasks:- 

Tasks Req’d Target Deliverable Methodology 

Planning Phase 

Desktop analysis 

Business plan drafting, 

Yes 

Yes 

Date 

Pre feasibility report 

Sanitation business plan 

development and approval 

Geohydrological assessments No 

(or workplan) 

procurement assistance, 

strategy, and supporting 

implementation (if required) 

Environmental Impact No 

Assessments (if required 

Preparation Phase 

Business Plans (workplans) Yes Minutes of meetings 

presentations to community 

Community approval 

and municipality 

letters 

Drafting of tender documents Yes 

Cash flow projections 

Detailed workplan 

Tender documents 

submitted, approved and 

Implementation Phase 

Implementation of community Yes 

tenders awarded. 

ISD, project management 

development programmes 

and other capacity 

Monitor, evaluate and quality Yes 

building programmes. 

Quality Management 

control checks on the 

System 

performance of the selected 

Monthly reports 

contractors and suppliers 

Certification of monthly Yes Monthly progress 

progress and works 

reports 

completed 

Payment certificates 

Completion certificates

Project management support 

to the ???? Municipality 

Handover Phase 

Handover / Completion 

certificate signed by all 

stakeholders 

Operations and maintenance 

strategies and manuals (with 

training) 

Yes General support including 

municipal reporting 

and completion of M&E 

documentation 

Yes Household h/over 

certificate signed 

Unit numbered and 

registered 

Client / contractor h/ 

over certificate signed 

End of project completion 

report 

Yes O&M manual 

Training manual 

Other supporting 

documentation. 

The table below must be completed by the tenderer to indicate the design parameters and implementation 

methodology that will monitored by the service provider in ensuring that the project is implemented in support 

of sanitation job creation objectives. 

VIP Component 


Design methodology Implementation Methodology 

1 Foundations and Pit 

2 

Strip footings (foundations) 

and slabs 

3 Masonry - pit lining 


4 Superstructure - walls 

5 Roof, door and window cill 

6 

Plastering, plumbing and 

finishing 

Alternative Super - 

7 

Structure 

Assembly 

Units) 

 

(Prefabricated 

if not 


Construction quality control 

etc. 

User Education – Health 

and hygiene promotion 


In appendix XV are the standard technical specifications that may be used in the procurement 

documentation. 

6 

Skills required by service providers 

The appointed service providers are required to indicate their capacity (of the proposed team members) to 

perform the tasks identified above. The skills required by the project team should include:- 

1. 

2. 

3. 

4. 

Project and Programme Management 

Business Planning 

Project design, financial estimates and contract administration 

a. Preliminary Design Stage 

b. Design and Tender Stage 

c. Construction Stage 

Reporting - The preparation and submission of reports 

131

132 

5. 

6. 

Construction Monitoring 

Training and capacity building 

Key service provider personnel 

All key service provider personnel who have a crucial role in implementing the contract should submit their 

names and CVs in the tender submissions. These key personnel should be allocated tasks in the process chart 

in chapter 5 above. 

Company profile 

In addition to the individual expertise noted above, the tenderer shall include a company profile of no more 

than 4 pages that shall include: 

• Specific experience related to the project. No more than five suitable references shall be given including 

client, date, and contact person and project description. 

• Available expertise including number of personnel and qualifications. 

• Management capacity. 

• Other relevant information e.g. Professional registration, professional indemnity insurance, VAT 

registration, Tax clearance certificates etc. 

7 

8 

Client Representatives 

The ??? Municipality will be represented by:- 

Name 

Address 

C o n t a c t 

details 

Telephone 

Cell phone 

email 

Logistics and Timing 

8.1 Location 

The appointed service provider will be required to liase, communicate and coordinate all it activities with the 

???? Municipality in their office on this contract. 

8.2 

Commencement Date and Period of Execution 

The intended commencement date is , and the period of execution of the contract will be for 

months from the signing of the contract. 

The appointed service provider will be notified, if there is additional scope of work proposed for the project.

9 

In such cases the service provider scope of works may be extended depending on their performance. 

The ???? Municipality and the community committee will decide on the possible extension of the contract. 

This extension will also depend on successful negotiations of technical and financial implications of the 

scope of additional works. Payment and approval of the service provider will be based on the submission 

of detailed information. 

Reporting Requirements 

The appointed service provider will be responsible for providing monthly progress reports, submitted, not 

later than the 25 th of each month. 

All payment certificates will be submitted to the “client representative” (7 above), before the 25 th of each 

month to allow for processing, resolution of queries before subsequent payment. All report formats have to 

be compliant with the tools that will be used in monitoring and evaluating progress in this contract, and both 

electronic and hard copies provided. 

There must be a final progress report and final invoice at the end of the period of execution. The draft final 

progress report must be submitted at least one month before the end of the period of execution of the 

contract. 

10 Monitoring and Evaluation 

10.1 

Definition of indicators 

Project indicators reports 

The service provider must develop key performance indicators against which progress in the work can be 

monitored and measured. These must be submitted in the project business plans / action plans and agreed 

with the client. 

Progress of Work – Value, Physical Progress and Quality of Workmanship 

Progress of the value of work done shall be monitored against the Works / Contract Programme provided 

by the Contractor and reported at each monthly Site Meeting. Valuation of the work done for payment 

purposes shall be done monthly, by not later than the 25 th day of the month and the recommendation for 

payment forwarded to the Clients Representative by the end of the month. 

The service provider must provide a generic report format within 2 weeks of contract award to client for 

approval. 

Provisional Work – Quantity 

The quantity of work measured provisionally shall be re-measured immediately, that it is complete, and that 

section of the Final Account agreed with the Contractor. 

Variations/Site Instructions 

All variations/site instructions having a monetary value are to be costed and approved in writing by the Client 

before such work is put in hand. No payment will be made for unauthorised work. 

Quality of Materials and Workmanship 

Any deviation from the specified standards of materials or workmanship that the service provider becomes 

133

aware of shall be referred to the Client within 5 days of observation. 

Cost Reporting 

The service provider shall provide a monthly cost report, which reflects additions or omissions from the 

Contract Sum in the following categories: 

• Provisional work 

• Provisional Sums 

• Approved Variations 

• Approved Site Instructions 

• Variations pending approval from the client 

• Contingency Sums 

• Escalation if applicable 

• The Budget Allocation 

• The Current Anticipated Final Cost 

Cost Reports are to be sequentially numbered and properly dated. 

Final Account 

The Final Account shall be submitted to the Client for comment within 30 days of Practical Completion and 

agreement reached within a further 45 days. 

Special requirements 

In addition to the indicators noted above, the service provider programme of work, cash flow, and the reports 

submitted and the various presentations / workshops made will be used to monitor and evaluate his / her 

performance. 

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Appendix XV 

11 

Rural Sanitation Infrastructure (project implementation strategy) 

11.1 LM / DM roles and relationships 

The District Municipality as the WSA itself ultimately leads the rural sanitation programme implementation. 

Key competencies that will be provided by the District Municipality include:- 

• Strategic leadership during planning, design and implementation of the sanitation programmes 

• ISD, social mobilisation and institutional building 

• Health and hygiene programme strategies and promotion 

• Training 

• Costing and budget provision through MIG and other donor sources 

• Logistic management 

• Detailed planning 

The District Municipality / WSA is responsible for the following key activities:- 

• 

• 

• 

Providing, designing and developing contracts with the service providers and other implementing 

agents required (e.g. contractors) 

All contract and financial management of service providers and other implementing agents (e.g. 

contractors) contracts including monitoring and evaluation, verification of invoices, variation orders 

(i.e. change in scope of works), budget control and payment 

The WSA also bears primary responsibility for project performance management and monitoring 

The Local municipalities and ward committees have important roles and responsibilities throughout the project 

implementation process – including the important role in the prompt, accurate and effective communication 

to and from the customer (i.e. community) to ensure their participation and satisfaction. 

The key objectives of the LM / DM partnership in the implementation of this sanitation project is: - 

To get rural communities (at the lowest level) to participate effectively in the implementation of the 

sanitation projects 

To monitor and effectively incorporate household and community based resources to ensure project 

sustainability 

To prioritise, allocate and distribute public funds, 

To develop partnerships between government and rural communities to sustain infrastructure 

All projects are sustainable technically and institutionally with sound systems and procedures in place. 

Consumers are satisfied 

The local municipalities / ward committees will assist the communities to carry out their responsibilities 

successfully. There are five main objectives, which need to be undertaken in this regard: 

Mentoring and supporting the community based organisations on a regular basis - both in technical, and 

institutional and social development (ISD) fields. 

To ensure that the projects are implemented on time, within budget and to an acceptable quality 

Technical and ISD assessment of all projects 

To assist and ensure regular communications between the DM and the communities. Messages delivered 

should be prompt, accurate and concise for all to understand. 

To set up procedures and to identify and support appropriate local community structures 

11.2 

Project level meetings 

135

There are two project level meetings, namely:- 

1. Project Steering Committee 

2. Site meetings 

11.2.1 Project Steering Committee 

The project steering committee meeting is a community meeting held at the project level. All beneficiary 

communities (villages) and interested parties should be invited to participate therein. These meetings are an 

important communication tool to ensure transparency and full community input and support of the projects. 

The service providers are to keep minutes of these meetings. 

These PSC structures should have democratically elected community members. The meetings should take place 

throughout the project implementation time frame. During peak construction period these meetings should 

be held monthly. During planning and post project these meetings should be scheduled when required. 

A community member or ward councillor, who will be responsible to ensure that meetings take place and 

there is a platform for the broader community to communicate with the authorities, should chair the meeting. 

It is a social meeting where service providers must present key project information. 

The appointed service providers can use these community PSCs as an important communication link with the 

broader community and to maximize accountability and transparency during the course of implementation. 

The PSC will ensure that the advantages, disadvantages, operation and maintenance costs of all sanitation options 

are discussed with the community. The output will be a range of affordable and environmentally appropriate options 

selected by the community. The selected designs should be submitted for discussion with the WSA, for approval. This 

is essential for sustainability as both households and local government will be responsible for future maintenance and 

operation costs depending on the choice of technology. 

The committee members should be paid for their time and tasks completed – the current (2005) rates are 

a maximum of R75 per day, premised on transport costs to two meetings; quality assessors and other key 

personnel are paid R1000 a month, for what is often virtually a full-time job. The project business plans must 

clearly indicate the payment strategies and guidelines, with a budget allocation. This must be discussed with 

communities and get their prior approval. 

The use of local community bank accounts is not recommended. 

11.2.2 Site meetings 

The project site meeting is a more technical quality control, project-monitoring meeting held at the project. 

There should be some representation from the PSC meeting (representing the communities) at these 

meetings. The WSA, contractor, LM officials and ward councillor should be invited to participate therein. 

These meetings are the standard technical contracts meetings. The service providers will keep detailed 

minutes of these meetings. 

11.3 Role of community members 

The WSA recognises the important role the community members play in any project planning, design and 

implementation. The roles and responsibilities of the community members include:- 

• To increase their knowledge and awareness of sanitation-related health issues 

• To have the necessary skills for managing their sanitation facilities 

• 

• 

136 

• To develop their skills for controlling and preventing sanitation-related communicable diseases, with 

special emphasis on cholera 

To improve individual and household hygiene behaviours 

To develop community self-reliance through: 

o 

The utilization of trained local Village Health Workers

• 

• 

o The dissemination of project management and committee skills 

To promote skills development and provide short-term employment opportunities for local builders 

To make key decisions on technological choice and design criteria (i.e. there should be local choice, and 

not an ‘one size fits all’ programme”) 

The roles and responsibilities of community members on the respective projects could be as follows: 

• The overall local management of their projects 

• Assistance in the selection of local development workers to be trained to carry out Baseline Surveys. 

• Assistance in the selection of local development workers to be trained in health and hygiene awareness 

• Assistance in monitoring of the impact of health and hygiene initiatives 

• Assistance in the selection of local builders; 

• Assistance in the drawing up of contracting procedures for the hiring of local builders; 

• Chairing all of project meetings; 

• Consulting with and reporting to the respective communities on a regular basis 

Communities should be encouraged to be gender sensitive in setting up their structures, as women are 

directly affected by the absence of adequate sanitation. Community personnel can also be trained in basic 

project management, and systems have been set up to assist them in managing the projects. 

All rural communities in the ???? District Municipality are deemed to be fully indigent and eligible for the grant 

funding. 

11.4 Toilet Construction 

The construction programme will provide householders with a range of practical options in order that 

informed decisions can be made with respect to upgrading their existing sanitation status or constructing 

a new facility. 

In any area the choice of sanitation option is governed by the following constraints: 

• Availability of water; 

• Size of plot; 

• Geology; 

• Potential risk of groundwater contamination; 

• Ability of the WSA to deliver the project within budget within the principle of “some for all”; and 

• Ability of the householder to operate and maintain the infrastructure. 

In line with current policy, sanitation options will be confined to various forms of on-site sanitation. The 

WSA will meet the full capital cost of their chosen options, unless the value of the material required by the 

household exceeds the budget provided through project business plan. 

11.5 Demonstration toilets (Required / Not Required) 

The WSA approves of the construction of demonstration toilets. The intention is to construct at least one 

demonstration toilet of each type of material or design (up to 5 units) per village as local circumstances 

dictate. 

137

Local community members should be made aware of the key principles of VIPs through the health education 

programme and during the course of construction. The purpose of the construction of demonstration toilets 

will be to: 

• Demonstrate models, construction techniques, materials and designs from which communities are able to 

select their most suitable option. 

• Train a team of local builders in each village / community to construct latrines to required standards. The 

training will ensure that builders are competent in the principles and construction of various technology 

options and their associated health benefits. 

The demonstration latrines will be built at sites that will be identified by the respective communities, but will 

nonetheless be sites that are: 

• Accessible to people in general, albeit under controlled conditions 

• Sites which will ensure that the latrines are properly maintained and cleaned 

The budget for the demonstration toilets and the associated training must be clearly indicated in the project 


11.6 Facilities for people with disabilities 

Additional funds will be made available for household that have members/s with a physical disability. The 

service providers must present their design standards to address their particular access needs – wide door, 

access ramp etc. to the beneficiaries for approval before implementation begins. 

The number of households and budget requirement for these toilets must be clearly indicated in the project 


11.7 Upgrading of Existing Latrines 

The project business plan must address the upgrading of existing latrines as a project activity. Assistance 

to the householders with existing units will be in the form of advice and materials to construct a “healthy 

hygienic unit”. In most cases new units may need to be constructed, with homeowners encouraged to 

utilize what available materials they are able to provide. All upgraded units will form part of the total units 

constructed and will be used in the average cost per unit. 

The minimum standard for upgrades is that the superstructure should be to an acceptable standard and the 

pit should (at least) have up to 3yrs capacity. 

11.8 Pit construction 

All pits must have a volume of at least three cubic metres. Any pit smaller than this will fill within a few years 

and become useless. The digging of the pit is the responsibility of the contractor. Should the contractor wish 

to use the household occupants for the digging of the pit they must be reimbursed appropriately – i.e. as 

their part of ‘the People’s Contract’. The contractor is then responsible for the quality control and that it is 

dug to specification. 

11.9 Types of top-structures 

A Ventilated Improved Pit (VIP) latrine will be offered as a basic level of service to the rural households. 

138

The superstructure may be constructed from materials including wood, mud blocks, cement blocks, and 

local available materials etc. The final choice of the structure to be constructed will be determined by the 

householder taking affordability above the subsidy level, into consideration. 

There are no community (or household) contributions required in the construction of any toilet. 

Various sanitation options should be presented to the community for their approval. These options will 

include costs, durability, privacy, maintenance, advantages and disadvantages of each toilet and suitability of the 

structure to the area and community. 

Technical Consideration 

The advantages of the VIP toilet and its applicability to the rural environment are that it does not require 

water for its operation, it is relatively inexpensive to construct, operate and maintain and it offers the same 

health benefits as waterborne systems. 

In order to ensure that the VIP toilet is comfortable to users and functions well, technical design details and 

guidelines for rural sanitation facilities will be utilized in the design of VIP toilets. 

Some of the basic requirements of a VIP system are as follows: 

• A dark sealed pit either lined or unlined. 

• Strong and sturdy cover slab to carry the superstructure. 

• Comfortable superstructure (building). 

• Vent pipe extending from the pit to at least 500mm above the roof of the superstructure. 

• Fly-screen fitted to top vent pipe. 

The above technical considerations will ensure a safe and comfortable toilet facility. The vent pipe will assist 

in ensuring that bad odours are drawn away from the toilet and the fly screen will assist in trapping insects 

that enter in the pit. This ensures that these insects do not spread diseases. 

Where solid rock precludes excavation to a depth of more than 0.5 m, alternatives such as Urine Diversion 

Toilets, double pits and other alternatives can be considered. 

Top-structure costs vary widely, depending on dimensions, design, materials, distance from the supplier, whether 

the supplier can deliver directly to the settlement, local availability of building sand and water, whether local 

builders or external contractors are used etc. Wide ranges of top-structure permutations are possible. 

11.10 Operation and maintenance responsibilities 

All operation and maintenance of the VIP will essentially be the responsibility of individual households with 

support from the Water Service Authority or its delegated agent. The user education programme (described 

below) will assist households to perform their operation and maintenance functions. 

Once the toilet has been completed it must be signed-off and handed over to each recipient household. The 

WSA or its designated agents will also do an independent quality control check before payment. Each VIP on 

payment must get a unique number and a GPS point to be included in the WSA GIS system. 

Should any external support be required the need should be communicated to the WSA through the ward 

councillor and LM channels. 

139

11.11 User Education, including Health and Hygiene Education 

11.11.1 User Education 

The user education programme must be project specific and planned for in each project implementation 

programme. The user education programme should include:- 

• It is the responsibility of the service providers to ensure that the necessary level of user education and 

an ongoing monitoring process is provided. 

• There must be a clear budget provision made for this programme. This training programme budget will 

form part of the subsidy amount per unit. 

• A programme of user education training must be developed and a clear strategy for its implementation 

highlighted in the business plans. This training programme must coincide with the time of health and 

hygiene promotion and identification of the appropriate technology choice. 

• Responsibility for operation and maintenance of VIP and UD toilet systems essentially lies with the 

householder. 

• Factors to be addressed by the programme of user education include: 

o Correct operation, cleaning and repair of the latrine, 

o Use of suitable anal cleansing material, 

o Design life of the latrine and what to do when the pit is full, 

o Implications of system failure (on personal health and on the environment), 

o Where to obtain assistance when things go wrong. 

11.12 

140 

Wages and Labour Standards 

The construction of VIP toilets for household sanitation projects is conducive to labour intensive construction 

techniques. This implies maximum utilization of local community labourers in: 

• Digging and / or lining pits; 

• Constructing the superstructure. 

The service provider and the WSA will still be responsible to monitor the quality of construction. 

Wages will generally be the rates used within ???? District Municipality - water and sanitation projects. 

Wages and standards will be agreed with all parties prior to start of construction. Projects, which run longer 

than 12 months, will make provision for reviewing wages on an annual basis. 

Construction activities will be packaged in a manner allowing local individuals or groups to undertake the task 

work. Completed work will be paid for on a monthly basis. Costs of labour will be claimed monthly against 

the completed work and the records of payments made to contractors and labour will be processed and 

submitted as part of the monthly claims for the project in accordance with the details of the schedule. 

The service providers must ensure through their procedures and site staff that the local labour are monitored 

and paid in accordance with the measured and completed tasks. Task rates and sizes will be reviewed and a 

recommendation will be submitted to the WSA. 

11.13 

Tender Procedures 

The supply of most materials for the programme will be organized and managed by the service providers / 

contractors??. 

Tender specifications for rural projects will be standardised, with outputs defined in each business plan. 

Standard technical drawings will be used, with standard bills of quantities.

11.14 

Procurement Policy 

The service provider team must implement the projects in accordance with the approved ???? District 

Municipality procurement policies and procedures. 

Preference will be given to locally based suppliers wherever possible, although it must be noted that in certain 

instances, the cost advantages of bulk buying and delivery may offer the most appropriate procurement 

affordability approach. 

11.15 

Key Performance Indicators 

Outputs 

Local Municipality and 

Ward Councils brought 

on board with process 

and capacitated where 

appropriate. 

General attitudes of 

villages to sanitation, to 

health issue, etc., as well 

as common practices, 

ascertained. 

Trainers identified, 

contracted, and 

capacitated, where 

appropriate, to provide 

training to local builders, 

VHWs etc. 

VSCs formed and 

constituted (if not done 

already) 

VSCs empowered 

to manage sanitation 

implementation within 

their respective villages 

Communities informed 

of sanitation processes, 

and of technological 

options 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Objectively Verifiable 

Indicators (Obis) 

Meetings held 


Municipality & Ward Councils 

put sanitation programme 

onto regular council meeting 

agenda 

Municipality & Ward Council 

monitors project progress 

Needs Assessment survey 

presented to Local 

Municipality 

date 

by stipulated 

Expressions of Interest 

published at relevant and 

appropriate 

projects 

times during 


Contracts signed 

Meetings held 

Training carried out 

Training carried out at 

appropriate 

during the project 

milestones 

Projects effectively managed 

Households aware of 


Households 


Meetings held 

make 

Means of Verification 

(mV) 



proceedings 

Council meeting 

agenda and minutes 

Needs Assessment 

Survey report 

Calls for Expression in 

relevant publications 


proceedings 

Signed Contracts 

Minutes of Meetings 


modules 

Reports on training 

P a r t i c i p a n t s ’ 

evaluations of 

training 


modules 

Training reports and 

evaluations 

A p p r o p r i a t e 

information in PAs’ 

project and financial 

files 

Committee meeting 

minutes 

C o m p l e t e d 

questionnaires 


Assumptions / Risks 

Councillors and / 

or officials show no 


of programme 

Councillors and / or 

officials show do not 

have time to be part of 

programme 

Householders do not 

wish to partake in 

process 

Householders not 

honest in their 

responses 

Sufficient, and 

a p p r o p r i a t e l y 

experienced individuals 

/ organizations / 

companies not available 












141

Sanitation promotional 

activities carried out in 

villages 

Local builders trained 

in latrine construction, 

principles of sanitation 

etc. 

Demand for latrines 

demonstrated at 

household level 

M&E of project carried 

out at community level 

11.16 

142 

1 

2 

3 

Reporting 

 

 

 

 

 

 

 


Demonstration latrines 

Training exercises 

Latrines built / upgraded 


Increasing numbers of latrine 

subsidies applied for 

M&E exercises 


schedule 

D e m o n s t r a t i o n 

latrines 

Training reports 


evaluations 


modules 

Labour training 

reports 

Latrines 


schedule 

Activity reports 


evaluations 

Completed latrine 

subsidy application 

forms 

M&E schedules 

M&E reports 

The following communication / reporting channels – both written, meetings 

and verbal (with allocated resources made available) will be required and 

monitored:- 

• Contractor / SMME to household 

• Household to PSC 

• PSC to ward committee 

• Ward committee to LM 

• LM to WSA 

The service provider will develop a standardised report to link with other 

client reporting requirements 

Standardised documentation requirements are required – for example checklists 

for completed units, recording / GPS of each site, numbering systems etc. 








Community show no 

demand 

Levels of poverty too 

high 

Community prefers 

higher level of service 

(e.g. waterborne 

sewerage)

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