DPLG PORTFOLIO COMMITTEE RAND WATER Performance 2004/05 DPLG PORTFOLIO COMMITTEE 7 March 2006

“Rand Water reports yet another solid performance” a trend that now enables the company to reduce its borrowings by 53% and pronounce its readiness for growth FOCUS: People Planet Profit

Organisational Performance Corporate Accolades Financial People Customers Employees Transformation Aid/HIV in the workplace Environment and Sustainability

2005 Corporate Achievements Triple certification - Corporate ISO 9001:2000, ISO 14001 and OHSAS 18001 Gold award annual Gardenex Exhibition PMR Silver Arrow Award (SOE’s) Khuza awards in association with Kellogg’s Star-in-you (best campaign directed at kids) Listing by Corporate Research Foundation - One of the Best Companies to Work For Bronze medal under Public and Utility sector - at Rand Easter show exhibition

Financial Surplus: R502 m(R375 m:2004) Revenue: R3,457(R3,258 m:2004) 34% Surplus: R502 m(R375 m:2004) Revenue: R3,457(R3,258 m:2004) Cash generated from operations: R824m(R686m:2004) Increase in sales: 3,452Ml/d(3,414Ml/d:2004) BEE Performance Top 100 suppliers profile 48% BEE (42%: 2003/04) Spend R 403 million (R263 million : 2003/04) 6.2% 20% 1.1%

Raw water costs as % of total cost

Appropriation of Funds Net Surplus R502 m Debt Service (Interest) R152 m Provision for Debt Redemption R176 m New Capital works R169 m Contribution to Rand Water R5 m Foundation & CSI programs Net surplus funds after appropriation Nil

Training and development 2004/ 2005 2003/ 2004 Training spend (as % of Total Payroll) Training spend (expenditure in Rm) Training hours/employee Apprentices and Interns 8.8 7.1 40.8 34.5 189 66 93 67

Transformation Category ACI management Females at management ACI All levels Female all levels Disability 2005 2000 59.36% 34.09% 32.52% 7.16% 81.11% 75.41% 21.48% 6.34% 3.51% 0.39%

Managing HIV/Aids in the workplace Maintaining health after infection through treatment, care and support by access to Aid-for-Aids Aid for Aids is a service ensuring specialist medical care and counseling for affected employees and their families R25 000 each beneficiary for treatment annually

Managing HIV/Aids in the workplace Our approach targets prevention through: VCT campaigns:1587 staff members participated Monthly educational campaigns Peer education employees per peer educator(1:40) Participation in national campaigns -16 days of activism, World Aids day, Condoms week.

Impact assessment study

Maintenance Excess of 3 800km pipelines 56 reservoirs with 5 845,1Ml total storage capacity Capital infrastructure investment budget - R 1 billion over 5 years For 2004/2005 spend R302 million R130 million for replacement and refurbishment R70 million to be spent over five years on further pipeline integrity investigation

Environment Steam boiler plant at Zwartkopjes closed down Management of forums in the Upper Vaal Water Management area Established the reservoir website(www.reservoir.co.za) with over 110 hits for 2004/05

Environment Actively involved in 13 Catchment Areas and 11 forums Gaseous emission reduced by 99.5% Zwartkopjes- 3574.9mg/m Vereeniging-159.92mg/m Implemented R19 million worth of projects to remove alien vegetation

Corporate Social Responsibility

Corporate citizenship

: Like our water…… Our performance continues to flow up to new heights. Financially we are in our strongest position ever, yet we continued to invest more money in our future. Through training and development of our people, maintenance of equipment and assets, and investments in our communities, we are committed to create a prosperous future.

Key Strategic Issues Capital Expenditure over next 5 years The CPIX dilemma Water pricing and affordability Municipal capacity Skills shortages Bulk Contracts Water Usage and Water Savings – keeping water affordable

Water Losses: Phase 2 Lesotho ? 2005 2007 2017 2025 2023 Phase 1 debt to be paid off Water Demand Management – R3b Augmentation date is creeping back – R30b Decision Time for Lesotho Phase 2 R3bn needed now to save R30b in 2017 Possible Debt overlap

Water Losses Gauteng – R3,14 m / day (R94,2m/month) Unaccounted for water: Inefficient use Wastage Theft Leaks At municipal level – between 15% and 50%

Price of Water Water Value Chain (2005/06): Raw Water (5,7%) - DWAF Bulk Water (5,3%) – Rand Water Retail Water (?%) – Municipalities Challenge: to make water affordable to end communities Effective regulation across the value chain is needed

ERADICATING WATER AND SANITATION BACKLOG IN RAND WATER AREA OF SERVICE

TOWARDS ACHIEVING THE MDG’S R/W has embarked on a programme with the following objectives: Understanding the inadequacy of water service provision in and around our AOS Growth projections- population and demand Assessment of current capacity

HOW? Our strategy is three pronged: Addressing backlogs in water and sanitation in our AOS and beyond Delivery in water and sanitation working directly with Municipalities Delivery in water and sanitation working with DWAF to capacitate municipalities in improving service

PREVIOUS INTERVENTIONS Reduction of unaccounted for water Odi from 48% - 29% Harrismith from- 23%- 18% Tshwane - R34 million Madibeng - R2m Emfuleni- R12m

PREVIOUS INTERVENTIONS Increase access to water Odi from 29 000 to 65 000 households Mabopane & Garankuwa from 66% - 80% Harrismith from 71% to 77% Reduce unpaid for water volumes Odi informal villages from 42kl to 12kl Urban areas from 36kl to 17 kl

(2004/05) INTERVENTIONS Increased participation and efforts to expand water supply to areas of need: The beneficiaries were Sasol R40 million pipeline project implemented and managed by Rand Water Bushbuckridge - 100 000 people now access water within 200m of walking distance.

ACCESS TO WATER Western Highveld region scheme continued - A R110m project with R40 m contribution from Rand Water Beneficiaries - 510 000 people from 77 000 households in: Kungiwini, Thembisile and Nokeng tsa Taemane

SANITATION Total spend for 2004/05 was R10,6 million Winterveldt 518 toilets built (2989 since 2003) Hygiene workshops with 4 333 attendees Bekkersdal Hygiene workshops with 2400 attendees

SANITATION Harrismith A total of 138 buckets were removed and replaced with a full water borne system at R264 000.00 Water meters, supplied by Amanziwethu, were installed in 18 homes

LEAKS REPAIRS Repaired leaking pipes and toilets for 1 845 families in Tshwane (Mamelodi and Eersterust) R 1,6 million spend created temporary employment for 62 locals Accredited training for 32 locals on plumbing

REALITIES ON THE GROUND Whilst these programmes are still being implemented, reality on the ground reveals the following: 1 million people close to our AOS with no adequate access to water and sanitation. Delmas- 50 000 WHR – 350 000 Balfour District – 35 000 Eastern Free State- 40 000

CHALLENGES Despite expertise and capacity at R/W Municipalities do not take advantage of the provision to appoint organs of state (like R/W) to assist them to improve service delivery Legislative framework Conferring the status of Water Services Authorities on Municipalities

In absence of adequate funding the net results are: CHALLENGES FUNDING IS THE BIGGEST CHALLENGE In absence of adequate funding the net results are: cost of water become excessive and unaffordable Need to address proper sanitation will be left neglected Uprisings and protests seen currently South Africa’s MGD’s wont be met

WAYFOWARD PARTNERSHIP IS THE KEY. Rand water’s role Rand Water has sufficient capacity and expertise to : meet the need and address the challenges both in infrastructure and water quality issues extend its services beyond its AOS

WAYFOWARD Government’s role To release funding- estimated at R 900 million is needed to address the backlog Local government role (Municipalities) Take advantage of policies allowing them to utilise state own entities and tap into Rand Water’s skills and capacity

CONCLUSION Our aspiration to be the leader in the water industry encourages us to keep striving for continuous improvement

“in partnership lies our success” Izandla Ziyagezana “in partnership lies our success” Thank You