JOHANNESBURG WATER (JW) –PREPAYMENT WATER METERING AND PROJECT OPERATION GCIN’AMANAZI (OGA) IN SOWETO,

SOUTH AFRICA

16 OCTOBER 2007

Randhir Singh Prepayment ManagerJohannesburg Water

South Africa

NEWS BRIEFING (Mail and Guardian)

JW CUSTOMER AND BILLING DATABASE

� Number of Townships/Suburbs 4,522� Number of Registered Properties 590,000� Number of Accounts 650,000� Number of Meters 296,000 (±50%)� Non-Revenue Water

NON-REVENUE WATER

100 kℓ 91 kℓ

Customer Meter

RAND

WATER

SYSTEM

J WATERSYSTEM

UNACCOUNTED FOR WATER 19%

PHYSICAL LOSSES 9% COMMERCIAL LOSSES 10%

81 kℓ

Bulk Meter

W ATER BILL

81 kl

= R - - - - -

UFW IN METERED AREAS

NON-REVENUEWATER

65 kℓ 58 kℓ

Boundayof Customer property

RAND

WATER

SYSTEM

J WATER

SYSTEM

UNACCOUNTED FOR W ATER 69%

PHYSICAL LOSSES 11% COMMERCIAL LOSSES 58%

20 kℓ

Bulk Meter

WATER BILL

20 kl

= R - - - - -

DEEMED CONSUMPTION/UFW IN UNMETERED AREAS

PHYSICAL LOSSES

BACKGROUND TO JW

� Johannesburg Water purchases 460 000 Ml (Mega-litres) per annum from Rand Water (Bulk Raw Water Treatment Ser vice Provider)

� Average daily purchases of 1 236 Ml per day� 30% of purchased water is supplied to deemed consumptio n

areas (Soweto, Alex, Orange Farm)� 90% of deemed volume is supplied to Soweto� However, deemed consumption is billed at 20Kl per/m /hh (flat

rate) @ USD 23 per/m/hh)� Payment levels of approximately 15% - Commercial Loss = USD

143 Million/Annum� 7 Million kilolitres is lost monthly� Monetary loss of USD 3 Million/month – USD 36 Million/annum � Hence, selection of SOWETO as a priority for the birth of OGA

NB: 1000l = 1Kl = ± 220 galR 1 Million = ± USD 143K

PROJECT OBJECTIVES

� To reduce non-revenue water through the installation of prepaid meters

� To rehabilitate the water network infrastructure in Soweto

� To change customers from deemed consumption to metered consumption

� To create awareness on water conservation � To increase efficiency around customer

service

PROJECT SCOPE

32

4

5

6

7a

8

9

10

11

12

13

1

7b

SCHEMATIC OF RETICULATION INTREVENTION

H O U S E H O U S E

H O U S E H O U S E H O U S E H O U S E

H O U S E H O U S E

T T

T T T T

T T

R O A DR O A D

4

E X IS T IN G Y A R D C O N N E C T IO N

RO

AD

SU

PP

LY P

IPE

OR

SE

CO

ND

AR

Y M

AIN

RE

TIC

ULA

TIO

N

S H O P

C H U R C H

N E W T Y P E H O U S E

6 6

7 7

6 6

7 7

6 6

7 7

6 6

7 7

5 5 5

2 3O R

23

OR

7 7IN S T A L L

8 8

8 8

8 8

8 8

8

8

8

RO

AD

2 3O R

9

R E P L A C E 7R E P L A C E

TOTAL INTERVENTION

(ISD, TECHNICAL & PREPAYMENT)

DistributorCash Deposit

Bulk Credits

Customer pays Cash

Credits Downloaded

Into Meter

Credits Used Up

Complaints

Data

Data

CustomerToken

JW Call Centre

1

27

8

6

4

3

JW Satellite Office/COJ Cash

Office

CURRENT PREPAYMENT PROCESS

CDS

5

TOTAL PREPAYMENTSYSTEMS

PROJECT CHALLENGES � Total of 169 989 properties in four years � Ideological debate around the concept of

prepayment and user-pay principle� Organised resistance organisations� Project scheduling allowing for multiple

contracting and procurement for Super-Blocks� High staff turn-around� Construction Industry Development Board (CIDB)

Compliance

PREPAYMENT CHALLENGES � Free-Payment technology

� SANS 1529-9 (Nov 2003) - Strict Compliance…Dec 05 rev� STS enhancement or an urgent aligned alternative (CDS)� User-friendly meter technology for JW Customer � Stimulation of the prepayment market (limited meter suppliers)

� Affordability for the consumer – Communication/Transfer of Ownership

� Vandalism , Tampering and Illegal Connections � VENDING TECHNOLOGY, EQUIPMENT AND ACCESSIBILITY � Customer Service Responsiveness and Complaints Handling� Preventative maintenance programs and KPI Monitoring� Proprietary prepayment systems – Inter-operability

COMMON DISTRIBUTION

SYSTEM

BEFORE &AFTER (as of Sept 2007)

USD 23 Million

55%Percentage not topping up (consuming less than FBW)

USD 7Average cost of topping up

USD 23Pre-intervention deemed consumption billing amount

55 Billion litresTotal of Reduction in Bulk Purchase to date (within 36 months w.e.f. July 2004)

*** USD 3 Million

11 Kl per property per month Post-intervention water consumption

85%Percentage reduction in water consumption

66 Kl per property per monthPre-intervention water consumption

BEFORE &AFTER (as of Sep 2007)

250NO OF PLUMBERS

142,000 of 169,989 (83%)PROGRESS ON METER AGREEMENT SIGNAGE

7,000 out of a target of 50,000(14% of target)

METERS INSTALLED in year to date (07/08)

COJ – 14 (CUSTOMER CENTERS)SMME LOCAL BUSINESS – 66

NO OF VENDORS @ 2.5km radii

USD 8 MillionLOCAL ECONOMIC DEVELOPMENT

15,800 (Since project inception)1,800 (current)

NO OF EMPLOYMENT OPPORTUNITIES

From more than 69% to 10% NON-REVENUE WATER

81,968 out of a total of 169,989(48% of total)

METERS INSTALLED

REMEDIAL RELFIEF BENEFITS-PREPAYMENT

EFFECTIVE AS OF 1 JULY 2007

81,968EMERGENCY WATER OF 4Kl/ANNUM

AS AND WHENSPECIAL CASES ALLOCATION THROUGH AN APPEALS MECHANISM (UNDER REVIEW APPROVAL)

55,810 FREE BASIC WATER OF 6Kl/MONTH

26158FREE BASIC WATER OF 10Kl/MONTH (ONLY REGISTERED INDIGENTS

PREPAYMENT CHALLENGES � Project Cost: USD 143 Million (present value)� Monetary savings at the completion of the

Project: USD 23 Million per year (present value)

� Pre-intervention monetary loss of USD 2 Million per month

� External and shareholder funding sources� To date USD 72 Million has been spent

CHAKDE INDIA!