PRESENTATION TO THE WATER AND FORESTRY PARLIAMENTARY PORTFOLIO COMMITTEE

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PRESENTATION TO THE WATER AND FORESTRY
PARLIAMENTARY PORTFOLIO COMMITTEE

• 07 MAY 2008
• SJ SEKGOBELA
• CHIEF EXECUTIVE OFFICER

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ABOUT MAGALIES WATER

• Magalies Water is a state owned entity (SOE)
  established in 1969 in terms of the original
  mandate issued under the Water Act of 1956 and
  later the Water Services Act 108 of 1997.
• The Board operates in four provincial areas of
  North West, Limpopo, Mpumalanga and Gauteng.
• The Board is managed from its headquarters based
  in Rustenburg, North West Province.
• The Board currently serves a number wide range of
  stakeholders, mines, municipalities etc.
• On average the Board processes and distributes
  approximately 400 Ml/d of bulk potable water and
  approximately 50 Ml/d of bulk sanitation to serve
  about 1.5 million consumers and end users.

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Perspective of Magalies Water

• Vision
• To be the leading provider of quality water
  services
• Mission Statement
• Magalies Water shall, pursue and attain its
  vision by
• Optimising operational resources and technologies
• Influencing and contributing to healthy water
  resources
• Ensuring staff equity, competence and capability
• Complying with relevant legislation, standards
  and guidelines
• Building customer and community capacity and
  relationships

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HEAD OFFICE

• Physical Address 38 Heystek Street Rustenburg
• PMG note photos have been removed

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Area of supply
Eastern region
Western region
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Area of Operation

• The operational area covers 34 000 km² through
  abstraction from two major catchments namely the
  Crocodile and Olifants.
• The Board operates in four provincial areas of
  North West, Limpopo, Mpumalanga and Gauteng.

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Governance

• Board appointed by Minister provides strategic
  leadership.
• Responsibilities fulfilled in terms good
  governance.
• Board meeting attendance of 80.
• Board support intellectual contributions to
  SAAWU.

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Achievements highlights

• Appointment and management of bulk water and
  sanitation plants on behalf of municipalities.
• Successful implement of the refurbishment
  programmes of Vaalkop, Rustenburg and Roodeplat
  water supply schemes to an amount of R800m.
• Implementation of internship and bursary
  programmes.
• Implementation of Employee Assistance Programmes.
• Completion of drought relief programmes on behalf
  of Municipalities.
• All long-term loans redeemed.
• Continue operating as a sustainable entity.
• Preferred service provider-R760m project with
  existing and new mines in the Rustenburg area.
• Potential for further growth as Rustenburg is one
  of the fastest growing cities.

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CORPORATE STRUCTURETOTAL STAFF COMPLEMENT 349
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MAGALIES WATER SERVICES
Traditional Bulk Services
Value Added Services

• Management, training and support services
• Catchment management services
• Water services in joint venture with WSA
• Water conservation functions
• Billing Services/Cost recovery
• Awareness Campaigns (educational)
• Legalizing of illegal connections
• Operation and Maintenance
• Bottled Water

• Abstraction
• Purification
• Storage
• Distribution
• Scientific Services
• Sanitation

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Magalies Water operate the following
Infrastructure plants
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Sewage Treatment Plants
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ALIGNMENT TO DWAF OBJECTIVES

• Operations and maintenance of water and
  sanitation purification plants that belong to
  different municipalities
• Twinning agreement with Nkana Water in Zambia
• Implementer of DWAF drought relief and
  infrastructure refurbishment.
• Eradication of bucket system and other MDG
  projects

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INFRASTRUCTURE PLAN OVER 3 YEARS.

• Vaalkop extension from 210 to 280ML/D (R640m)
• Vaalkop addition of GAC filters (R20m)
• Vaalkop laboratory upgrade (R1.2m)
• Vaalkop pipeline Cathodic protection (R2.0m)
• Upgrade of Cullinan booster pump station (R0.4m)
• Upgrade of Cullinan bulk pipeline (R1.3m)

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RAW WATER QUALITY AND POTABLE WATER PRODUCED F0607

• Raw water quality in our catchment has continued
  to deteriorate. The following parameters are of
  concern
• Salination increasing salt content
  in water.
• Eutrophication increasing nutrients in water
  that result in algal bloom
• MW has however installed new processes such
  ozonation and GAC filtration.

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RAW WATER QUALITY AND POTABLE WATER PRODUCED F0607

• Total Potable Water samples for F0607 8992 and
  the following compliances were achieved
• SANS 241 Class 1 99.6
• SANS 241 Class 2 100
• The above indicates that MW still produces best
  quality water despite deteriorating raw water
  quality.

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IMPACT OF LOAD SHEDDING

• Loss of revenue
• Increased cost on human utilisation in terms of
  paying over time
• Wastage of water on plant start ups due to
  inferior quality of water produced
• Increased energy costs as pumps use a lot of
  energy on start up
• Pollution of natural resources due to inferior
  effluent or raw sewage discharged into water
  sources.

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CONTRACTS WITH MUNICIPLAITIES

• Rustenburg Local Municipality (RLM)
• City of Tshwane (CoT)
• Madibeng Local Municipality (MLM)
• Modemolle Local Municipality (MoLM)
• Nokeng Tsa Taemane Local Municipality (NTTLM)
• Thabazimbi Local Municipality (TLM)
• Moses Kotane Local Municipality (MKLM)
• Moretele Local Municipality (MorLM)
• Bela Bela Local Municipality (BBLM)

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WATER PRICING

• Consultation process was followed at
  inter-Governmental level with Municipalities,
  National Treasury and SALGA.
• Tariff increases were submitted to the Minister
  for tabling in Parliament.
• Average tariff increases of 5.83 were kept
  within the Government Inflation targets of 3-6.
  
• CPIX at 9.8 in February and impact of rising
  inflation on costs will be absorbed by MW.
• High electricity and fuel costs will have a
  serious impact on the water tariffs.

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FINANCIAL HIGHLIGHTS

• At the end of the 2007 financial year, qualified
  Audit opinion were raised on the following
  items
• - RDP projects performed on behalf of DWAF.
• - Creditors reconcilliations
• - Policy on provision for doubtful debts.
• To adress the above qualifications, the following
  measures were put in place
• - Contracts were obtained from various
  stakeholders
• - Reconcilliations are performed and Creditors
  system is improved to ensure completeness.
• - A policy on Provision for doubtful debts has
  been drafted and approved by the Board.
• There is a general improvement of systems and
  business processes.

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FINANCIAL HIGHLIGHTSfinancial performance
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FINANCIAL HIGHLIGHTSfinancial position
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THANK YOU