Rand Water Parliamentary Portfolio Committee Water Affairs & Forestry Presentation of Annual Report Snapshot • Revenue - R4,119 bn (R3,672 bn~2006) • Total Assets - R 6,257 bn (R5,387 bn~2006) • All Rand Water financial reports are unqualified • Staff Employed - 2900 • Corporate ISO 9001:2000 accredited • All plants ISO 14001 accredited Rand Water Geographical Footprint Consumers Supply Area Total Pipeline Length Total Number of Reservoirs - 12 million 18 000 km2 3 400 km 54 Performance Highlights • Profit • Revenue • Cash generated from operations 25.3% 12.2% 17.8% • Sales volume 2.7% Performance Highlights 2007 2006 • Customer Satisfaction Index: 76% • Training spend (as % of Total Payroll) 7% 76% 7% • Employment equity at management level 75% 64% • BEE spend 60% 64% Corporate Social Involvement • Water related and non-water related • The focus area and allocation of funds ( ~ Approx R2.5 m) Focus Area Type of Support Spent HIV/AIDS Home based care R780 000 Special needs institutions Training equipment R493 000 People with Disabilities Resource provision R335 000 Women Empowerment Shelter provision R304 000 Care of the Elderly Support to institutions R284 000 Partnerships Partnering with organisations R420 000 Health Grants to organizations R 80 000 Corporate Social Involvement • This is water related activities in partnership with different stakeholders Summary of Job Creation and Local Supplier Support Gender Jobs Created % Male 224 48 Female 267 52 Total 513 100 Project funds spent on local labour and suppliers Items Funds Spent % Traditional Suppliers 468 000.00 4 PDI Suppliers 10 000 000.00 52 Total 10 468 000.00 100 Corporate Social Involvement • This is water related activities in partnership with different stakeholders Project Description Area Water pipeline Reinforcement Winterveldt R 7 000 000 CT Winterveldt Sanitation Winterveldt R 7 500 000 CT Emfuleni Leaks Repairs Bekkersdal R 1 900 000 Emfuleni, RWF Tshwane- Leaks Repairs Mamelodi R 1 500 000 CT, RWF DACEL-Alien Plant Removal Elandsfontein R 1 665 000 GDACE DACEL-Alien Plant Removal Mogale City R 1 485 000 GDACE KZN Donga Rehabilitation Bergville R 4 825 000 DEAT HIV/Aids Mainstreaming National R 1 754 000 DWAF Water Sector Monitoring National R 7 200 000 DWAF Bushbuckridge Water Supply Kumani Village R 1 900 000 BBR Rand Water Golden Gate Freestate R 2 000 000 RW Siluma Wetland Gauteng R 5 550 000 RWF Blesbokspruit Nigel R 1 265 000 RWF Sri Lanka Water Service Support Sri Lanka R 3 850 000 DWAF TOTAL Project Value R46 383 000 Funder Energy Crisis Impact • Request by Eskom to cut usage by 10% • Active engagement with Eskom: • Cooperation but on our terms • Water quality and reliability problems • Active/Dynamic pumping and reservoir management – to encourage savings • Essential services exemption • Still finding ways of saving on electricity usage – energy efficiency programme CONSULTATION • SALGA: • Use of surplus to reduce tariff • Supported Capital Programme • Value chain sustainability • National Treasury: • Inflation target • Explore feasibility of further reduction 10.0% Cost of Raw Water (Ex 1 April) Rand Water Tariff (Ex 1 July) CPIX 9.0% 7.9% 8.0% 7.0% 6.3% 6.0% 5.6% 5.0% 4.0% 2004 2005 2006 2007 2008 2009 Allocation of surplus : Project Overview Forecast Cashflow Significant Capital Projects (R m) Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 A Augment infrastructure 5720 420 439 395 470 529 B Renovation & replacement 1370 148.6 271 344 323 310 C Total 7090 569 710 739 793 839 Allocation of surplus • Central to our operations - pipelines • Generally very old – mostly in excess of 80 years • Significant amounts being spent on augmentation and refurbishment to ensure operational sustainability • Increased expenditure due to escalation • Reserves will be used to smooth the tariff and cater for new schemes Projects plan - Process Steps • Additional water supply scheme due to development. • Planned programme of renovation to existing infrastructure • Analyses of latest estimates of future water demand growth patterns depending on development statistics. Projects plan - Process Steps • Condition assessment of current infrastructure. • Annual infrastructure recommendations combine : - extra capacity for 15 year demand growth - renovation to maintain existing capacity How are costs determined • Estimates for these projects are done by escalating similar work already completed. • By enquiring from the market what the current costs for the work are. Water Quality Full adherence to SANS 0241 (based on a WHO standards) Water Quality - Cont Fit with overall DWAF Strategy • Emfuleni Sanitation • Delmas involvement • Western Highveld Involvement Challenges : Sanitation & Environmental Pressures • 85 per cent of local municipalities within Rand Water’s catchment area have challenges with meeting DWAF’s effluent management standards • This increases Rand Water’s purification cost • This ultimately places greater pressure on Rand Water’s tariff increments One solution is to roll out the Emfuleni Regional Sanitation Scheme
