DWA CONSOLIDATED REPORT ON THE PERFORMANCE OF
THE TRANS-CALEDON TUNNEL AUTHORITY (TCTA) AND
THE WATER RESEARCH COMMISSION (WRC)2011/12 FINANCIAL YEAR
Prepared for the Portfolio Committee on Water and Environmental Affairs
23-24 April 2013
PURPOSE
The purpose of this presentation is to provide a strategic overview of the performance of the TCTA and the WRC for the 2011-12 financial year, both from an institutional performance and financial performance perspective
THE SHAREHOLDER MANAGEMENT
3
• Quarterly reporting • Annual Reports• Entities reporting to Portfolio Committee –once a year
Performance Monitoring &
Evaluation
NWRI WB2+1WB2+1
WB 3
WB 3
REPORTING AND GOVERNANCE
CMA 9
CMA 9
CMA 2
CMA 2
CMA 1
CMA 1
Water
board 3
Water
board 3
TCTA TCTA
MinisterMinister
DWAInstitutional
oversight (national &
regional)
DWAInstitutional
oversight (national &
regional)
ParliamentParliament
Public institutions report to the public and Parliament through Annual Reports and to the Department with quarterly performance reports
WRCWRC
Minister appoints boards; approves
shareholder compact
Minister appoints boards; approves
shareholder compact
Portfolio Committee
reviews reports and plans
(hearings, visits)
Portfolio Committee
reviews reports and plans
(hearings, visits)
(1) Oversee institutional establishment;(2) Oversee governance (manage board appointment processes, training etc.); (3) Oversee shareholder compact; (4) Oversee business plans, quarterly performance reports and financial statements etc.
(1) Oversee institutional establishment;(2) Oversee governance (manage board appointment processes, training etc.); (3) Oversee shareholder compact; (4) Oversee business plans, quarterly performance reports and financial statements etc.
279 WUAs &Irrigation Boards
279 WUAs &Irrigation Boards
TCTA STRATEGIC INTENT
• Deliver on all the directives provided by the Minister• Ensure that all project activities facilitate social transformation and build sustainable communities by providing jobs and empowering women, youth and the disabled• Operate the business and its projects and processes in a cost effective manner• Build the knowledge and capability of the organisation• Ensure the continuous availability of high calibre human capital for delivering on the organisational mission into the future
The strategic intent of the TCTA is to assist the shareholder (DWA) to realise national development goals. TCTA’s corporate goals are aligned with the strategic agenda of Government.
The strategic goals for the reporting year were as follows:
PRIMARY PURPOSE OF TCTAThe primary purpose of TCTA is to raise finance and manage the repayment of the debt for each project on behalf of DWA.
DWA cannot do this as a Government Department cannot borrow money
RANGE OF TCTA’S ACTIVITIESTCTA is a multi disciplinary state owned entity specialising in project financing, implementation and liability management.
TCTA’s products and services are as follows:•Project Management and Implementation of bulk raw water infrastructure
• Project design• Project construction• Environmental compliance• Land acquisition• Operation and Maintenance (Outfall tunnel North of LHWP)
•Debt management•Structuring and raising project finance•Knowledge management•Risk management•Operation and maintenance•Socio-economic transformation•Tariff setting
TCTA GOVERNANCE
The Governing Board of the TCTA is appointed by the Minister. The current Board was appointed in August 2010 for a four year term.
As part of the 13 member Board, the Minister appoints two non executive directors, one from DWA and one from National Treasury for the purposes of stakeholder representation.
TCTA’s CURRENT MANDATE AND DIRECTIVES
• Lesotho Highlands Water Project – South Africa portion of the Delivery Tunnel North•Lesotho Highlands Water Project – fulfilling all South African financial obligations to the Government of Lesotho•Advisory services to water management institutions, water boards and DWA• Berg Water Project • Vaal River Eastern Subsystem Augmentation Project• Mooi-Mgeni Transfer Scheme Phase 2• Komati Water Scheme Augmentation Project• Olifants River Water Resource Development Project Phase 2• Mokolo-Crocodile River Water Augmentation Project Phase 1• Metsi Bophelo Borehole Project• Acid Mine Drainage: pump station and neutralisation plant•Refurbishment of Mooi-Mgeni Transfer Scheme – Phase 1
PROGRESS AGAINST MANDATE AND DRIECTIVES
Project Date Received Implementation Status as of 31 March 2012 Next Key Milestones Planned
LHWP 1: Delivery Tunnel North
12 December 1986 Delivering water.In operation and maintenanceDebt Management in accordance with approved strategies
Debt Repayment
2023
LHWP 1: To fulfil all the Republic’s financial obligations in terms of or resulting from the Treaty
3 August 1994 (and incorporated into amended Notice of Establishment 24 March 2000)
Debt Management in accordance with approved strategies
Advisory Services to Water Management Institutions, Water Boards and DWA
Open ended directive Provided services to:DWABloem WaterSedibeng WateruMgungundlovu Municipality
Completed during 2011 -12
Berg Water Project: Dam and Supplementary Pumping Scheme
6 May 2002 Construction complete and handed over to DWA for O & MFinal account to be settled subject to arbitration
Debt Repayment
202831 March 2029
PROGRESS AGAINST MANDATE AND DRIECTIVES
Project Date Received Implementation
Status as of 31 March 2012
Next Key Milestones Planned
Vaal River Eastern Subsystem Project: Pump Station and 131 km pipeline
6 October 2004 System commissioned and delivering waterDefects liability period not commenced on pump stations or pipeline
Handover of Works to DWADebt Repayment
Aug 2012 31 March 2028
Mooi Mgeni Transfer Scheme – Phase 2
29 November 2007
Construction commenced in Feb 2011
ImpoundmentDebt Repayment
Dec 20122034
Olifants River Water Resources Development Project: Pipeline
17 June 2008 (directive revised12 March 2012)
Construction commenced in March 2012
Water Delivery Dec 2013
Komati Water Scheme Augmentation Project: Pump station and Pipeline
29 September 2008
Construction commenced in January 2011
Water DeliveryDebt Repayment
Dec 20122033
PROGRESS AGAINST MANDATE AND DRIECTIVES
Project Date Received Implementation
Status as of 31 March 2012
Next Key Milestones Planned
Mokolo -Crocodile Water Augmentation Project: Pump Station and Pipeline
19 May 2010 Construction commenced in Sept 2011
DebottleneckingWater DeliveryDebt Repayment
Dec 2012Sep 20132033
Metsi Bophelo Borehole Project: Boreholes in 6 Provinces
2 March 2011 Construction commenced in September 2011 and completed the technical works Eastern Cape, Mpumalanga, KwaZulu Natal, North West, and Free State in March 2012.
Boreholes handed over to Water Service Authorities
June 2012
Acid Mine Drainage: Pump Stations and Treatment Plant
6 April 2012 Tender evaluation complete. Award dependent on available funds
Pumping and treatment to prevent breaching of Environmental Critical Level in Central Basin
June 2013
Lesotho Highlands Water Project 2: Funding
Awaiting directive Funding strategy still under discussion and awaiting Government approval
Raising of funding Under negotiation with LHDA/LHWC
FINANCE
PROJECT SURPLUSES AND DEFICITSEach project is accounted for separately.
Throughout the project life-cycle, the projects reflect net surpluses and deficits depending on the phase and repayment profile of the project
At the end of the debt repayment period these balance themselves off to zero
DEBT CURVE ON LHWP
REATIONSHIP WITH WATER TRADING ACCOUNT
The physical assets are recognised in the books of the Water Trading Account as well as the liability for the Water Trading Account to pay tariffs to TCTA
TCTA reflects a financial asset in its books representing the future tariff payments to be received from DWA over the projects debt repayment period
A close working relationship has been forged between TCTA and the Water Trading Account, with tangible strides made in improving customer billing and leverage on expertise
TCTA AS A GOING CONCERN
TCTA is satisfied that given the certainty of cash-inflows from the Department of Water Affairs, that TCTA will have sufficient resources to continue in operational existence for the foreseeable future and for this reason the going concern basis continues to be adopted in preparing the financial statements for the ended 31 March 2012
TCTA BONUSES
NAME POSITION BONUS
R’000
TOTAL SALARY(incl bonus )R’000
J Ndlovu CEO 1 738 5 014
J Nhlapho COO 513 3 179
H Nazeer CFO 415 2 716
L Radzuma CRO 340 2 077
J Claassens Exec: PM 425 2 621
R Matabane Exec: HRM 1 973
C Bleeker Exec: Enterprise Support Services 352 2 015
Z Mbele Exec: Project Finance 399 2 444
L Mnisi Exec: Company Secretary 285 1 781
O Busari Exec: Knowledge Management 395 2 395
TCTA JOB CREATION
PROJECT MMTS-2 ORWRDP-2 KWSAP MCWAP-1 TOTAL S
Unskilled local 173 0 218 111 502
Semi-skilled Africans
263 0 14 59 336
Other (skilled & staff)
42 0 50 52 144
Total 478 0 282 222 982
TCTA: SUMMARY & CONCLUSION
The TCTA is playing an increasing strategic role in the sustainable development and use of raw water resources. Despite the current challenges in its operating macro-economic environment and its multi-project arrangements, the TCTA has reported satisfactory results for the 2011/12 financial year by achieving the majority of its contracted deliverables.
WRC OVERVIEW The WRC derives its mandate from the Water Research Act, Act no 34 of 1971.
In terms of its mandate the WRC is to perform the following functions:
• Promoting co-ordination, co-operation and communication in the area of water research and development• Establishing water research needs and priorities• Simulating and funding water research according to priority• Promoting effective transfer of information and technology• Enhancing knowledge and capacity building within the water sector
WRC STRATEGIC INTENTThe WRC serves as South Africa’s water centred knowledge hub providing the nation with knowledge for sustaining its most precious resource, water.
The WRCs strategy for knowledge creation and its research portfolio is underpinned by its four main key strategic areas (KSAs) these being:
•Water resource management•Water linked ecosystems•Water use and waste management•Water utilisation in agriculture
WRC GOVERNANCE
The Governing Board of the WRC is appointed by the Minister for a four year term and is the Accounting Authority (AA) for the institution in terms of the PFMA.
The Governing Board is constituted of independent non executive members with the exception of the Chief Executive and the Director General of the Department of Water Affairs who serve in an ex officio capacity.
WRC PERFORMANCERevenue 2011/12
During the year under review the WRC continued to leverage levy income by striving to obtain funds from other sources to support water research.
Indicator 2011/12 Budget
2011/12Year-end
ActualLevies as % of total income 86% 83%
Other sources of income as % of total income(rental of facilities & equipment)
14% 17%
Leveraged income as a % of other income *
80% 79%
Income Indicators*Leveraged income includes all other income with the exception of interest
received
WRC PERFORMANCE (continued)
Research Spend (Allocation)
WRC PERFORMANCE (continued)Research Spend (% utilized)
KSA Planned % allocation of funds
% of funds utilised for research projects
Water Resource Management
26 (28) 28 (31)
Water-Linked Ecosystems 14 (13) 17 (20)Water Use and Waste Management
33 (36) 34 (29)
Water Utilisation in Agriculture
27 (23) 21 (20)
The actual % of funds utilised for research projects in each of the KSAs, relative to the allocated funds and is summarised in the table below. (2010/11 data in brackets)
WRC PERFORMANCE (continued)Annual Audit
• The WRC obtained an unqualified audit report of its annual financial statements for 2011/12 financial year.
WRC PERFORMANCE (continued)
Statutory Compliance
The WRC complied with all statutory reporting requirements for the reporting period including:
• strategic plans• business plans• budget• quarterly reports• other relevant statutory submissions
WRC PERFORMANCE (continued)
Research PortfolioDuring the year under review, the WRC managed 322 research projects at various stages of project life cycle, of which about 79% (259 projects) were active projects. In addition 133 reports were published.
Financial Year 2011/12 2010/11
Total No of projects 322 328
No of active projects 258 259
No of new projects 74 77
No of finalised project 96 76
No of solicited projects 101 109
WRC BONUSES
NAME POSITION BONUSES TOTAL INCOME (incl bonuses)
DP Naidoo CEO 0 705 250
R Kfir Former CEO 125 096 820 866
NB Patel CFO 73 306 1 217 155
GR Backeberg Executive Manager 66 526 1 007 286
JN Bhagwan Executive Manager 73 824 1 262 880
E Karar Executive Manager 73 824 1 256 880
R Lutchman Executive Manager 73 113 1 119 807
HG Snyman Executive Manager 73 469 1 109 060
MS Liphadzi Executive Manager 72 682 1 110 311
WRC JOB CREATION
2011/12
506 students on funded projects
6 new appointments at the WRC
WRC ACHIEVEMENTS AGAINST KNOWLEDGE GENERATION INDICATORSObjective Indicators Target
2011/12Achieved2011/12
Improve knowledge on water resource management
To increase the cumulative knowledge by initiating new research projects addressing water management
31 31
To provide the country with supportive knowledge via finalised projects 13 32
To search for new innovative approaches to support water management
2 2
Enhance the knowledge on healthy ecosystems and preserve biodiversity
To increase the cumulative knowledge by initiating new research projects addressing ecosystem health and biodiversity
6 7
To provide the country with supportive knowledge via finalised projects 5 14
To search for new innovative approaches to support ecosystem management
2 3
Objective Indicators Target 2011/12
Achieved2011/12
Improve the knowledge base on water use and waste management, addressing the domestic, mining and industrial use of water
To increase the cumulative knowledge by initiating new research projects addressing water use and waste management
26 30
To provide the country with supportive knowledge via finalised projects 28 38
To search for new innovative approaches to water use and waste management 7 14
Improve the knowledge on productive water utilisation in agriculture
To increase the cumulative knowledge by initiating new research projects addressing productive water utilisation in agriculture
6 6
To provide the country with supportive knowledge via finalised projects 12 12
To search for new innovative approaches to support productive utilisation of water in agriculture
3 3
WRC ACHIEVEMENTS AGAINST KNOWLEDGE GENERATION INDICATORS (cont)
Objective Indicators Target 2011/12
Achieved2011/12
Improve knowledge dissemination
To enhance public understanding of water research (measured as volumes/cumulative number of issues of The Water Wheel) 6 6
To cumulatively increase the numbers of technical and policy briefs 30 36
To improve the dissemination of water research (measured as volumes/cumulative number of issues of Water SA)
4 5
To engage the sector in knowledge-sharing events (number of workshops)
20 21
Enhance research capacity To increase the number (cumulative) of students supported by research projects 400 506
WRC ACHIEVEMENTS AGAINST KNOWLEDGE DISSEMINATION AND CAPACITY BUILDING INDICATORS
Objective Indicators Target 2011/12 Achieved 2011/12
Improved financial performance
Maintain income growth (income growth is measured as meeting the budgetary target of 10% of income)
Meet budget target in full
13% achieved
Maintain high level of research ratio (measured as research funding and support as percentage of total income)
74% (revised budget)
75% achieved
Improve cash-flow management (measured against availability of cash for effective operation)
R25 m. More than R25 m. cash available – achieved R90 m., which is i.r.o. research project commitments
Enhance effective financial management
Improve quality budget planning and reporting (measured as the percentage deviation between actual and budget at year-end)
10% 6% achieved
Improve response to audit results (measured as a percentage of the previous year’s internal audit queries addressed and an unqualified vs. qualified external audit)
70% (internal audit)Unqualified report (external audit)
87.5% achieved (62.5% fully; 25% partially)
Decrease roll-over of research funds (measured as the deviation from the budgetary figure for roll-over of research project funds)
20% 8% roll-over achieved
WRC ACHIEVEMENTS AGAINST FINANCIAL INDICATORS
Objective Indicators Target 2011/12 Achieved2011/12
Improve the system for fund management
To expand Fund Management System to include short-term projects
To conduct a pilot consisting of 10% of short-term projects
Pilot fully implemented
Improve stakeholder relationships
Enhance WRC relationship with the research community (number of WRC 101 courses)
2 4
Improve human resource management
Improve equity (measured by percentage of new appointments being EE)
90% of new appointments are EE
83%
Enhance staff skills by training (measured against in-house and external training courses (cumulative))
2 in-house training courses 5 external training courses
3 in-house, 12 external training courses completed
WRC ACHIEVEMENTS AGAINST SUPPORT SYSTEMS & PROCESSES INDICATORS
WRC: SUMMARY & CONCLUSION
The Commission is a unique, valuable and strategic research entity that plays an important role in the water sector and water research by establishing needs and priorities, stimulating and funding research, promoting the transfer of information and technology and enhancing knowledge and capacity building in the water sector. The Commission has reported satisfactory results for the 2011/12 financial year.
THANK YOU !!!!