BRIEFING TO THE SELECT COMMITTEE ON

SOCIAL SERVICES

ON

FUNCTIONING, PROVISION AND STRENGTHENING OF

WATER SUPPLY SERVICES BY THE WATER BOARDS

Presented by Ms M A Diedricks

Director–General

4 August 2015

Contents

1. Policy and legislative mandates

2. Overview of water boards

3. Functioning

4. Provision

5. Strengthening of water supply

6. Challenges

7. Conclusion

22

POLICY AND LEGISLATIVE MANDATESPolicy & Legislation Description

White Paper on Water & Sanitation, 1997

Recognised a need for water boards and public sector entities .

Water Services Act , Act No 108 0f 1997

Give Minister the powers to establish and disestablish water boards and outline the procedure for appointing Board members.

Strategic Framework for Water Services

Recommended the Institutional Reforms in the sector.

Public FinanceManagement Act , Act No.1 of 1999

National Public Entities listed as Schedule 3B under PFMA.

National Water Resource Strategy-2

Chapter 8 on Water Management Institutions including plan to establish Regional Water Utilities

Raw Water Pricing Strategy, 2007

Defines Water Resource Management functions to be charged to users

National Development Plan, 2012

Regional Water Utilities , CMAs and National InfrastructureAgency to be created . 3

Overview of water boards

• Water Boards are public entities and they conduct theirprimary business in accordance with a mandate derivedfrom legislation and government/sector policies andprotocols.

• They are established in terms of Water Services Act , ActNo 108 0f 1997 and are listed as Schedule 3 b under thePFMA

• Water boards are key strategic entities as all socio-economic development within their designated area ofsupply is linked to the delivery of reliable, healthy and costeffective bulk services.

• There were a total of 12 water boards in South Africaduring 12/13 financial year and this was reduced to 9 in13/14 .

4

Water Boards

Financial year : 1 Jul to 30 Jun

Water Boards (Schedule 3B

of the PFMA)

Amatola Water

Lepelle Water

Bloem Water

Magalies Water

Mhlathuze Water

Rand Water

Overberg Water

Sedibeng Water

Umgeni Water

Minister

5

The key role of Water Sector Institutions is to support South Africa as a

developmental state to deliver on Government Developmental Objectivesthrough :

Value

Adding

Contribution

1. Using water for promoting socio-economic developmental agenda .

2.Reducing inequality through access to water and job creation .

3.Leveraging additional investments for infrastructure development

4.Enabling rural communities to use water for rural livelihoods.

5.Promoting greater citizen participation in decision making

6.Allowing for innovation and knowledge generation.

6

Contribution to government outcomes

Effective water resources management critical foundation to achieve the above outcomes

6Efficient

economicinfrastructu

re

9 responsive,

accountable, effective &

efficient localgovernment

4Employment & inclusive

growth

7

Water infrastructure management(current distribution of assets)

R50bNational

Regional

Local

12

R55b

R34b

R160b

DWA (R143b) Water Boards Local government

RW

UW

R30b in

bonds

TCTA

8 metros

19 cities

21 districts

121 locals

R370b

Bubble size = asset value

9

Overview of water boards Medium Term Budget

Water Boards

2014/1531%

2015/1631%

2016/1738%

Medium term budget

Rand

thousan

d

2014/15 2015/16 2016/17 2017/18

Water

Boards 15 738 659 15 394 534 19 248 522 21 204 516

TOTAL 15 738 659 15 394 534 19 248 522 21 204 516

10

PRESENTATION TITLE

Presented by:

Name Surname

Directorate

Date

Functionality and Provisioning

11

12

Snapshot of consolidated performance on

functionality and provision of water supply

• 99% Compliance with SANS 241Product Quality

• According to South African Marketing Research Association, the Industry Average for Customer Satisfaction Surveys is 80% - 82.5%

Customer Satisfaction

• Non Revenue water majority within 4-10%

• Debtor days within 30- 60 days average only 2 of 9 water boards above 120 days.

Financial Viability

• All Water Boards achieved this target with 100%Reliability of supply

• Capex for all Water Boards is 7 219 millionIncreased access to services

13

14

Lepelle

Northern

Target

< 5%

Met <5%

Rand Water Target

< 3.9%

Met 3.5%Mhlatuze Target

<5%

Met 2.4%

Umgeni Target

< 5%

Met <5%

Amatola Target

12%

Met <10%

Bloem Target

<13%

Met <5%

Sedibeng Target

< 8%

Met <5%

Magalies Target

< 5%

Met 3.6%

Overberg

(not regional)

Met SANS

I & II

Non-Revenue Water

DWS Description : Avoidable water lost as a percentage (%) of water produced(annually for the SHC App 1 and quarterly/progressively for the relevant quarterlyreport)

1. Avoidable water lost as a percentage of water produced (total of treatment plus distribution

• DWS KPI : Manage avoidable water lossesDWS Description : Avoidable water lost as a percentage (%) of water produced (annually for the SHC App 1 andquarterly/progressively for the relevant quarterly report)

• Description: This measures the amount of avoidable water lost in the production and distribution process as apercentage of the total water produced.

2011 2012 2013 20142015 (Q3

YTD)2016

(Base)2016

(Target)

Actual 4.6% 4.3% 3.5% 3.5% 3.04%

Target 4.6% 3.8% 4.1% 3.9% 3.7%

2016 Base and Target 3.9% 3.7%

4.60%

4.30%

3.50% 3.53%

3.04%

4.60%

3.78%

4.10%

3.90%

3.70%

3.90%

3.70%

3.0%

3.5%

4.0%

4.5%

5.0%

1. Avoidable water lost as a percentage of water produced (total of treatment plus distribution)

15

CONSOLIDATED PERFORMANCE

Budget vs Actual Income Statement June 2014

(R000's)

Actual Budget Variance Variance %

Volume sold 2 606 962 666 26 33 475 900 (26 513 234) (1.0)

Sales 13 128 083 14 722 609 ( 1 594 526) (10.8)

Cost of sales 4 333 789 6 079 022 17 452 33 28.7

Gross surplus 8 794 294 8 643 587 150 707 1.7

Other income 1 626 378 181 280 1 432 343 797.2

Operating cost 8 80 313 7 309 201 (1 171 112) (16.0)

Direct labour 2 547 656 2292 078 (255 578) (11.2)

Energy 20 21 955 20 31 992 9 997 0.5

Maintenance material 282 895 293 611 10 716 3.6

Chemical/purification 395 786 477 286 81 500 17.1

Depreciation 657 326 685 924 28 598 4.2

General expenses 1 794 729 1 412 869 (381 860) (27.0)

Other expenses 779 926 115 441 (664 485) (575.6)

Operating surplus (deficit) 1 940 359 1 515 666 424 693 28.0

Net interest 252 399 140 326 112 073 79.9

Other comprehensive income (cost) 144 478 (17 755) 162 233 (913.7)

Net surplus (deficit) for period 2 337 236 1 638 237 698 999 42.716

Selected indicators for Water Boards 14/15 Name of Water

Board

Volumes Sold

Million cu m/yrRevenue Capex Staff

Amatola 38 361 148 379

Bloem 94 463 49 273

Lepelle 94 530 66 320

Magalies 83 395 867 250

Mhlathuze 134 344 107 175

Overberg 46 39 5 63

Rand 1 495 9 541 3 900 3 006

Sedibeng 96 660 377 469

Umgeni 416 2 062 1 700 816

Total 2 496 14 395 7 219 599617

18

Strengthening Water Supply : Key Projects

18

19

AMATOLA WATERStrengthening Water Supply

Amatola Water Projects Status R million

KSD PI(Bulk Water& Bulk Sanitation) Construction 1 400

Binfield Park BWSS Construction 86.5

Sandile/Peddie Regional BWSS Construction 547

Debe BWSS Construction 90

Masincedane BWSS Construction 52

Ndlambe BWSS Construction 295

19

Contribution towards strengthening of

water supply

Amatola Water Board

Provision of bulk water

• Influence and support the process and model for a Regional Water Utility in the Province

• Develop an fully integrated provincial master plan including funding considerations

• Increase the relevance of AW as an institution and improve overall image

• Complete AW Plant Upgrade and KSD PI Projects• Entrenched Batho Pele Principles

20

Amatola Water Board

Area of Operation & Gazetted Area

21

22

BLOEM WATERStrengthening water supply

Key Projects

Bloem Water Key Projects Status R million

Rustfontein WTW Upgrade Detailed Design 260

Lesaka - OK/Motlatla Pipeline Procurement PSP 60

Gariep to Knellpoort Pipeline Feasibility 1 800

Knellpoort – Welbedacht RWP Detailed Design 255

Rustfontein - Lesaka Pipeline Construction 90

Thaba Nchu Borehole Upgrade Construction 10Welbedacht - Bloemfontein Pipeline Procurement 270

Excelsior Booster Pump station Procurement 15

Brandkop Reservoir Extension Planning 80

Dewetsdorp Pipeline EIA & WULA approvals 20 22

Challenges for Bloem • Groothoek Dam

– The Groothoek dam supplies water to Groothoek WTW and has a design capacity of 11.9 x 106 m3. Besides supplying water to the villages South of Thaba Nchu, the system acts as an augmentation scheme for the Rustfontein water supply system. The current dam level is below 0%.

• Rustfontein Dam

– Rustfontein dam supplies water to the Rustfontein WTW, and has a design capacity of 71.210 x 106 m3. The Rustfontein Dam receives bulk of its water from the Knellpoort/Novo transfer scheme. The dam level is less than 25%

• Knellpoort Dam

– The dam was constructed to serve as the storage capacity for WelbedachtDam, and has a storage capacity of 136 x 106 m3 . The Knellpoort dam is supplied with transferred water from the Caledon River via the TienfonteinPump Station. The dam level is less than 50%.

• Welbedacht Dam

– The dam is located along the Caledon River and supplies water to the Welbedacht WTW. The dam, since its construction in 1973, has lost approximately 95% of its storage capacity due to siltation.

23

Current Supply Areas

Municipalities

Mangaung MM

Kopanong LM

Naledi LM

Mantsopa LM( Excelsior Town)

Total: 1.2 million24

LEPELLE NORTHERN WATER Strengthening Water Supply

Key Projects

Lepelle Northern Water Key Projects Status R million

Politsi WTW Pipeline in design and Plant Upgrade in tender 261

Phalaborwa Scheme Construction 109

Doorndraai Scheme Construction 7

Ebenezer Scheme Planning 27

Olifantspoort Scheme Planning 3

Greater Giyani

3 Water Treatment Works, bulk infrastructure, storage and reticulation

-Boreholes for rural and urban areas

Greater Tzaneen 11 Water Treatment works (3 managed by LNW), bulk infrastructure, storage and

reticulation

-Boreholes

Greater Letaba Municipality 3 Number WTW and bulk infrastructure, storage and reticulation

-Boreholes for rural and urban areas

Polokwane Municipality Ebenezer Water Treatment Plant

Lepelle Nkumpi Municipality Olifantspoort Water Treatment Plant

Aganang Local Municipality Local aquifer 1

Blouberg Local Municipality Alldays. Water for this scheme is currently sourced from the local aquifer

Elias Motsoaledi Groblersdal Water treatment

Fetakgomo LM Olifantspoort treatment plant. Currently the actual water demand is 8.3 ML/d and the

supply of 6.0 ML/d. 25

Area of Supply

Infrastructure

• Operates 12 purification

schemes – ranging from

1 – 74 Ml/day Potable

Water

• 140 Ml/day in

Phalaborwa industries

• Bulk pipeline length of

1062 km with varying

sizes of up to 1.2m

• The pipelines caters for

263 Ml/day Potable &

140 Ml/day incl.

Industrial water.

Outstanding

Areas

26

PRESENTATION TITLE

Presented by:

Name Surname

Directorate

Date

MAGALIES WATERStrengthening Water Supply

Water Board Project Name Status R mil

Magalies Water Tuschenkomst - Ruighoek BWS Procurement 139

Magalies Water Klipdrift WTW Upgrade Construction 296

Magalies Water Sondela Booster Pump-station Detailed Design 51

Magalies Water Pilanesberg BWSS (South Scheme) Construction 1100

Magalies Water Pilansberg BWSS (North Scheme) Construction 600

Magalies Water Pilanesberg BWSS – Phase 2 Detailed Design 1 500

Magalies Water Pilanesberg BWSS – Phase 3 Inception 600

Magalies Water Wallmannsthal WTW Upgrade Inception 145

Magalies Water Wallmannsthal to Baviaanspoort Pipeline Construction 94

Magalies Water Rustenburg Emergency Supply Scheme Procurement 85

Magalies Water Klipvoor Scheme (Moretele North) Detailed Design 2 012

Magalies Water Moretele South Scheme Detailed Design 65027

Strengthening water supply

LOCAL MUNICIPALITY SUPPLIED

DISTRICT

MUNICIPALITY

PROVINCE SUPPLY SYSTEM

Vaalkop Klipdrift

Wallmannsthal

Cullinan

Rustenburg Local Municipality

Bojanala Platinum District Municipality

North West Province

X

Moses Kotane Local Municipality

X

Moretele Local Municipality

X

Thabazimbi Local Municipality

WaterbergDistrict Municipality

Limpopo Province

X

Modimolle Local Municipality

X

Bela Bela Local Municipality

X

City of Tshwane Metro Municipality

GautengProvince

X X X

28

HISTORIC AND PLANNED POPULATIONS SUPPLIED

AND TO BE SUPPLIED BY MAGALIES WATER

Local municipality ProvincePopulation

2011 2014 2020 2040

Bela-Bela Limpopo 44 648 48 039 55 613 90 596

Thabazimbi Limpopo 54 681 59 162 69 254 117 077

Modimolle Limpopo 49 594 49 490 49 282 48 597

Mookgopong1 Limpopo 24 737 24 968 25 436 27 060

Kgetlengrivier1 North West 34 700 38 383 46 965 92 015

Madibeng North West 373 354 410 594 496 587 755 079

Moretele2 North West 183 946 185 718 189 312 201 803

Moses Kotane North West 233 189 234 731 237 847 248 534

Ramotshere Moiloa1 North West 21 548 22 155 23 420 28 183

Rustenburg North West 479 386 531 848 654 883 956 216

Dr JS Moroka1 Mpumalanga 35 812 36 092 36 659 38 613

City of Tshwane 3

Gauteng 91 963 96 768 106 377 138 407

Total 1 627 558 1 737 947 1 991 635 2 742 181

Note 1 Not currently supplied by Magalies Water2 Currently only supplied indirectly by Magalies Water, via City of Tshwane3 Covering only areas directly served by Magalies Water determined pro rata on total water use 29

AREA OF OPERATIONS

30

MHLATHUZE WATERStrengthening Water Supply

Key Projects

Mhlathuze Water Key Projects R million

Mhlathuze Water Jozini BWSS 1 400

Mhlathuze Water Dukuduku Resettlement Project BWSS 803

Mhlathuze Water Hluhluwe BWSS 96

Mhlathuze Water Nsezi WTW Capacity Upgrade

Mhlathuze Water Hlabisa BWSS 205

31

Strengthening Water Supply

2015-07-30

Consumer Current contracts and allocations (Ml/d)

Medium term provision

Mondi 100 100

Richards Bay 48 65

Empangeni 37 37

Foskor 17 20 (clarified)

uThungulu/Umkhanyakude - 25

Ngwelezana - 8

Reserve 26 10

Total Potable 205 26032

OVERVIEW - AREA OF STUDY

The study area includes: Zululand, Umkhanyakude, Uthungulu and the City of uMhlathuze. 33