PRESENTATION TO

PARLIAMENTARY PORTFOLIO

COMMITTEE ON WATER

AFFAIRS AND FORESTRY

06th MAY 2008

Contents

• Area of supply

• Financial performance

• State of Water quality

• Infrastructure roll out plan

• Challenges

• Way forward

Area of Supply

Area of Supply /Cont…

SCHEME NAME SOURCE CUSTOMER CAPACITY

Phalaborwa Lepelle (Olifants) River Ø      Ba-Phalaborwa Municipality.Ø      Mines.

 150 ML/Day

Politsi Makgobaskloof Dam Ø      Greater Letaba Municipality.

7 ML/Day 

Modjadji Modjadji Dam Ø      Greater Letaba Municipality.

3 ML/Day

Nkowankowa Letaba River Ø      Tzaneen Municipality 24 ML/Day

Ebenezer Ebenezer Dam Ø      Tzaneen Municipality.Ø      Polokwane Municipality

 48 ML/Day

Olifantspoort Lepelle (Olifants) River Ø      Polokwane Municipality.Ø      Capricorn District.

 30 ML/Day

Doorndraai Doorndraai Dam Ø      Mokgalakwena Municipality.

12 ML/Day

Flag Boshielo Flag Boshielo Dam Ø      Greater Sekhukhune 8 ML/Day

Financial Performance / Results

Financial Performance

2005

R’000

2006

R’000

2007

R’000

Revenue 159,761 179,656 200,154

Cost of Sales 26,789 41,684 27,337

Operating expenditure

75,102 91,312 97,544

Surplus for the year

45,314 73,942 94,280

Financial Performance / Results/Cont…

Financial Performance 2005

R’000

2006

R’000

2007

R’000

Net interest paid 7,113 (19,103) (8,085)

Accumulated reserves (5,064) 36,709 127,084

Long term loans 274,478 44,491 40,361

Average tariff 2,05 2,16 2,32

Business Performance 2005

Actual

2006

Actual

2007

Actual

Gross Margin % 83% 77% 86%

Current Ratio 1.74 1.83 2.67

Return on Assets % 9.0% 8.1% 11.4%

Financial Performance / Results Cont…

Business Performance 2005

Actual

2006

Actual

2007

Actual

Gross Margin % 83% 77% 86%

Current Ratio 1.74 1.83 2.67

Return on Assets % 9.0% 8.1% 11.4%

Debt-equity ratio 101.9% 45.8% 33.3%

Asset turnover 0.20 0.28 0.28

Debt ratio 50.6% 31.4% 24.9%

Market Development

WATER SERVICE AUTHORITY % MARKET STATUS

Capricorn District Municipality14%

Negotiations are at an advanced stage. Conclusion by January 2007.

Polokwane Local Municipality10%

Agreement of 25 years has been entered into on 01 February 2005

Mopani District Municipality22%

Negotiations are at an advanced stage. Conclusion by March 2007.

Greater Sekukhune District Municipality 22%

Appointment has been confirmed, finalizing the term of the contract.

Vhembe District Municipality0%

Negotiations are at an advanced stage. Conclusion by January 2007.

Mokgalakwena Local Municipality 6% Agreement of 30 years has been entered into on 01 May 2003.

Water Resource Availability Source June 2006 June 2007

Ebenezer 65% 53%

Tzaneen 67% 49%

Magoebaskloof 100% 100%

Blyderivierpoort 100% 97%

Loskop 100% 76%

Flag Boshielo 131% 76%

Doorndraai 81% 53%

Water Sources Sufficiency

•Below average rainfall in the reporting period than previous

•No major interruptions in water production and supply

•Negative impact due to high temperatures and below average rainfall

Service Delivery and Infrastructure Performance / Results

Scheme Performance (2007)

Raw Water

Abstracted (kl/annum)

Pumped

(kl / annum)

Plant Loss% Distribution Loss %

Ebenezer 18 745 403 18 162 744 3.1 9.7

Doorndraai 5159156 4 851 224 6.0 3.1

Phalaborwa 45 048 626 43 831 979 2.7 5.4

Politsi 2 092 462 2 071 826 1.0 1.0

Olifantspoort 14 953 000 13 644 000 8.8 2.2

Flag Boshielo 3 242 061 3 202 695 1.2 12.3

Modjadji 2 393 349 2 363 005 1.3 11.0

Nkowankowa 7 899 062 7 849 450 0.63 0.0

TOTAL 99 483 507 93 954 709

Service Delivery and Infrastructure Performance / Results Cont…

Description Period Amount Beneficiaries

COMPLETED PROJECTS

Tshifudi Regional Water Scheme (Phase 4 ) 2006– 2007 R 7.0m 20 000

Flag Boshielo West Water Supply Phase 3 2006 - 2007 R 6.0 m 5 470

Premier Emergency Water Projects (Greater Tubatse) 2006 – 2007 R 19 m 19 000

Nkadimeng Water Supply Phase 3 2005/06 R 5.4m 6 257

Olifantspoort South NS7 Phase 4 2006/07 R 0.6m 6 900

Sekhukhune Deep Rural Schemes 2006- 2007/08 R 12 m 19 269

CURRENT PROJECTS

Nkadimeng Water Supply Phase 4 2007/08 – 2008/09 R 5.8 m 9 299

Refurbishment of Rural Schemes GSDM 2007/08 R 14m 60 000

Flag Boshielo West Water Supply Phase 2 2008/09 – 2009/10 R 6.5 m 6 500

Olifantspoort Treatment Plant Upgrade Phase 2 to 60Ml/day 2007/08 – 2009/10 R 92 m 250 000

Sekhukhune Deep Rural Household Sanitation 2007/08 R 0.25m 220 (Households)

TOTAL R 118.55m

Implementing Agent for Capital Projects

Support to Municipalities

• Cost Recovery Implementing Agent (56 947 households)• Free Basic Water Service Provision (11 949 households)• Water Demand Management (Installation of telemetry

systems) resulting in water losses averaging 4% on bulk• Water Quality compliance with SANS241:2005 (95%) • Yard Connections in GSDM• Turnaround Strategy Implementation in Phalaborwa and

Tubatse• Tariff Determination in Greater Tubatse LM• Billing and Meter Reading Assistance to Greater Tubatse

LM• Recommissioning of underground water supply in Lepelle

Nkumpi Municipality

Service Delivery and Infrastructure Performance / Results

Scheme Available / Installed Capacity (2007)

Raw Water Purification Pumping Distribution Storage

Ebenezer 73 Ml/d 56 Ml/d 72 Ml/d 55 Ml/d 40 Ml

Doorndraai 38 Ml/d 14 Ml/d 16 Ml/d 16 Ml/d 25 Ml

Phalaborwa 201 Ml/d 76 Ml/d (pot)

72 Ml/d (Ind)

136 Ml/d (Pot)

163 Ml/d (Ind)

136 Ml/d (Pot)

163 Ml/d(Ind)

88.6 Ml (pot)

115 Ml (ind)

Politsi 6.5 Ml/d 6.1 Ml/d 6.5 Ml/d 6 Ml/d 14.4 Ml

Olifantspoort 44 Ml/d 45 Ml/d 118 Ml/d 113 Ml/d 85 Ml

Flag Boshielo 32 Ml/d 8.3 Ml/d 8 Ml/d 17 Ml/d 24 Ml

Modjadji 10 Ml/d 7 Ml/d 4.4 Ml/d 17.7 Ml/d 7.23 Ml

Nkowankowa 30Ml/d 26Ml/d 25Ml/d 25 Ml/d 54.3 Ml

TOTAL 434.5 Ml/d 310.4Ml/d 548.9Ml/d 548.7Ml/d 453.5 Ml/d

Water Quality Monitoring Performance / Results

• Internal Production Control• DWAF monthly monitoring• External Laboratory Monthly Monitoring (Wastewater)

ParameterPerformance (2006/07)

Prescribed Minimum Maximum Compliance

pH 5-9 7.8 9.2 Class 1

Turbidity (NTU) <1.0 0.3 2.0 Class 1

Chlorides (mg/l) 200 13.0 70 Class 1

Total Alkalinity (mg/l as CaCO3) 30 62

Total Hardness (mg/l as CaCO3) 34 70

Calcium Hardness (mg/l as CaCO3)

24 89

Conductivity (mS/m) 150 7 16 Class 1

Total Dissolved Solids (mg/l) 1 000 46 106 Class 1

Aluminium (g/l) 300 0.08 290 Class 1

Water Quality Monitoring Performance / Results /Cont…

ParameterPerformance (2006/07)

Prescribed Minimum Maximum Compliance

Magnesium Hardness (mS/m) 10 45 Class 1

Ammonia (mg/l) 1.0 0.09 120 Class 1

Cadnium (g/l) 5.0 3.0 8.0 Class 1

Cyanide (g/l) 50 0 5.0 Class 1

Flouride (mg/l) 1 0 0.59 Class 1

Iron (g/l) 200 0.14 150 Class 1

Lead (g/l) 20 12.0 78.0 Class 1

Manganese (g/l) 100 0.01 2.8 Class 1

Zinc (mg/l) 5 0.13 0.23 Class 1

Sulphate (mg/l) 400 0.0 8.0 Class 1

Seledium (g/l) 20 12.0 130 Class 1

Phenols (g/l) 10 9.0 49.0 Class 1

Nitrates (mg/l) 10 0.6 1.3 Class 1

Service Delivery and Infrastructure Challenges

• Bulk Ageing Infrastructure Exceeding abstraction Permits (high demands) Overladen treatment plant (upgrades) Poor raw water quality

• Reticulation Poor cost recovery and water demand

management Ageing internal reticulation infrastructure Default of payment by consumers

Lack of maintenanceUnauthorised / illegal connections

Infrastructure Capacity Challenges and Requirements (Ml/d)

0

100

200

300

400

500

600Raw Water Purification Pumping

Distribution Storage Total Demand

Challenges and Solutions

Infrastructure Rollout Plan

Description Funder 2007/08 2008/09 2009/10

Capital Projects 2007/08 

Cathodic Protection Doorndraai and Ebenezer Pipelines LNW R 3 500 000.00 R 1 500 000.00 R 250 000.00

Cathodic Protection Olifantspoort Pipeilines LNW R 3 000 000.00 R 1 000 000.00 R 200 000.00

Bulk Pipeline Survey Phalaborwa LNW R 3 500 000.00 R 500 000.00 R 200 000.00

Olifantspoort Upgrade to 60 Ml/d Phase 2 DWAF/Anglo R 85 000 000.00 R 70 000 000.00 R 7 750 000.00

Supply and Installation of Generators at plants LNW R 4 500 000.00 R 5 000 000.00 R 0.00

Supply and Installation of Sewerage Package Plant at Politsi LNW R 1 500 000.00 R 75 000.00 R 0.00

Phalaborwa Refurbishment and Capital Projects LNW R 32 937 075.00 R 1 937 475.00 R 0.00

Greater Tubatse LM Refurbishment and Capital Projects LNW R 6 517 630.00 R 383 390.00 R0.00

Implementation of GSDM Rural Water and Sanitation Project Flanders/DWAF R 250 000.00 R 625 000.00 R 0.00

Refurbishment of GSDM Water and Sanitation Schemes LNW R 4 000 000.00 R 5 000 000.00 R 5 000 000.00

Upgrading of the Filters at Ebenezer Treatment Plant LNW R 3 500 000.00 R 175 000.00 R 0.00

Description Period Amount BeneficiariesUpgrading of the Olifantspoort WTW and Pipeline Refurbishment

2007/08 – 2009/10 R 92 m 250 000

Upgrading of the Phalaborwa Scheme (Pipelines , Pumpstations)

2008/09 R 5 m 50 000

Extension of the Flag Boshielo WTW 2009/10 R 15 m 50 000

Extension of the Politsi WTW 2009/10 R 15 m 20 000

Replacement of substandard lines in Politsi Bulk Network 2007/08 – 2008/09 R 10.0 m 10 000

Extension of the Doorndraai WT 2009/10 R 25 m 150 000

Replacement of substandard lines in Flag Boshielo 2007/08 – 2008/09 R 3.5 m 50 000

Bulk Water pipeline to Burgersfort from Mooihoek Plant 2008/09 – 2009/11 R 320m 150 000

Upgrading of Burgersfort Wastewater Plant 2009/10 R 84m 15 000

Upgrading of Steelpoort Wastewater Plant 2008/09 – 2009/10 R 25m 2 000

Upgrading Rural Schemes in GSDM 2008/09 – 2009/10 R 10 m 60 000

TOTAL R 512.5m

Rollout Plan……….

Roll out Plan…………..

Description Funder 2007/08 2008/09 2009/10

Capital Projects 2007/08 

Ebenezer Refurbishment and Capital Projects LNW R 5 937 250.00 R 349 250.00 R0.00

Bulk Pipelines Surveys (Own schemes) LNW R 3 500 000.00 R 175 000.00 R0.00

Flag Boshielo Refurbishment and Capital Projects LNW R 4 973 000.00 R 248 650.00 R0.00

Doorndraai Refurbishment and Capital Projects LNW R 3 580 000.00 R 179 000.00 R0.00

Olifantspoort Refurbishment and Capital Projects LNW R 1 080 000.00 R 54 000.00 R0.00

Nkowankowa Refurbishment and Capital Projects LNW R 2 303 500.00 R 135 500.00 R0.00

Politsi Refurbishment and Capital Projects LNW R 4 025 600.00 R 236 800.00 R0.00

Modjadji Refurbishment and Capital Projects LNW R 3 495 200.00 R 205 600.00 R0.00

Refurbishment of Bulk Pipeline Olifantspoort to Specon LNW R 4 000 000.00 R 1 000 000.00 R 250 000.00

SUB TOTAL R 174 349 255.00 R 93 779 665.00 R 15 150 000.00

Rollout Plan…….

Description Funder 2008/09 2009/10 2010/11

New Projects 

Bulk Infrastructre in Burgersfort Town LNW/TUBATSE 92 500 000.00 20 000 000.00 15 000 000.00

Olifantspoort Replacement and Refurbishment of Bulk Meters LNW 3 000 000.00 1 000 000.00 500 000.00

Doorndraai Replacement and Refurbishment of Bulk Meters LNW 1 000 000.00 500 000.00 250 000.00

Ebenezer Replacement and Refurbishment of Bulk Meters LNW 2 000 000.00 500 000.00 200 000.00

Phalaborwa Replacement and Refurbishment of Bulk Meters LNW 1 000 000.00 1 000 000.00 500 000.00

Flag Boshielo Replacement and Refurbishment of Bulk Meters LNW 1 000 000.00 500 000.00 250 000.00

Replacement and Refurbishmnet of Old Pipelines (Ebenezer) LNW 2 500 000.00 2 000 000.00 3 500 000.00

Replacement and Refurbishmnet of Old Pipelines (Doorndraai) LNW 3 000 000.00 3 500 000.00 3 500 000.00

Replacement and Refurbishment of Old Pipelines (Phalaborwa) LNW 2 000 000.00 3 000 000.00 2 500 000.00

Refurbishment of Bulk Reservoirs (Doorndraai, Ebenezer, Olifantspoort, Politsi, Modjadji, GSDM) LNW 3 500 000.00 3 500 000.00 2 000 000.00

SUB TOTAL R 111 500 000.00 R 35 500 000.00 R 28 200 000.00

Capital Infrastructure Plan

Challenges

• Outstanding WSLAs• Debtors outstanding• Drinking Water quality (Source compliant and what comes out of

the tap should be compliant as well)• Ageing Infrastructure • Protracted Section 78 processes• Water license • Increased demand for water• Retention of technical capacity

Wayforward

- Improve governance

- Rehabilitation and maintenance of infrastructure (effective asset management)

- Support municipalities with regard to their cost recovery strategies

- Capacity building, retention and succession planning

- Finalise outstanding Water Service Level Agreements with WSAs

- Intensify technical support to municipalities

THANK YOU