PRESENTATION TO PARLIAMENTARY PORTFOLIO COMMITTEE ON WATER AFFAIRS AND FORESTRY 06 th MAY 2008

Contents Area of supply Financial performance State of Water quality Infrastructure roll out plan Challenges Way forward

Area of Supply

Area of Supply /Cont… SCHEME NAMESOURCECUSTOMERCAPACITY Phalaborwa Lepelle (Olifants) River Ø Ba-Phalaborwa Municipality. Ø Mines. 150 ML/Day Politsi Makgobaskloof Dam Ø Greater Letaba Municipality. 7 ML/Day Modjadji Modjadji Dam Ø Greater Letaba Municipality. 3 ML/Day Nkowankowa Letaba River Ø Tzaneen Municipality24 ML/Day Ebenezer Ebenezer Dam Ø Tzaneen Municipality. Ø Polokwane Municipality 48 ML/Day Olifantspoort Lepelle (Olifants) River Ø Polokwane Municipality. Ø Capricorn District. 30 ML/Day Doorndraai Doorndraai Dam Ø Mokgalakwena Municipality. 12 ML/Day Flag Boshielo Flag Boshielo Dam Ø Greater Sekhukhune8 ML/Day

Financial Performance / Results Financial Performance 2005 R’ R’ R’000 Revenue 159,761179,656200,154 Cost of Sales 26,78941,68427,337 Operating expenditure 75,10291,31297,544 Surplus for the year 45,31473,94294,280

Financial Performance / Results/Cont… Financial Performance2005 R’ R’ R’000 Net interest paid7,113(19,103)(8,085) Accumulated reserves(5,064)36,709127,084 Long term loans274,47844,49140,361 Average tariff2,052,162,32 Business Performance2005 Actual 2006 Actual 2007 Actual Gross Margin %83%77%86% Current Ratio Return on Assets %9.0%8.1%11.4%

Financial Performance / Results Cont… Business Performance2005 Actual 2006 Actual 2007 Actual Gross Margin %83%77%86% Current Ratio Return on Assets %9.0%8.1%11.4% Debt-equity ratio101.9%45.8%33.3% Asset turnover Debt ratio50.6%31.4%24.9%

Market Development WATER SERVICE AUTHORITY% MARKETSTATUS Capricorn District Municipality 14% Negotiations are at an advanced stage. Conclusion by January Polokwane Local Municipality 10% Agreement of 25 years has been entered into on 01 February 2005 Mopani District Municipality 22% Negotiations are at an advanced stage. Conclusion by March Greater Sekukhune District Municipality 22% Appointment has been confirmed, finalizing the term of the contract. Vhembe District Municipality 0% Negotiations are at an advanced stage. Conclusion by January Mokgalakwena Local Municipality 6% Agreement of 30 years has been entered into on 01 May 2003.

Water Resource Availability SourceJune 2006June 2007 Ebenezer65%53% Tzaneen67%49% Magoebaskloof100% Blyderivierpoort100%97% Loskop100%76% Flag Boshielo131%76% Doorndraai81%53% Water Sources Sufficiency Below average rainfall in the reporting period than previous No major interruptions in water production and supply Negative impact due to high temperatures and below average rainfall

Service Delivery and Infrastructure Performance / Results Scheme Performance (2007) Raw Water Abstracted (kl/annum) Pumped (kl / annum) Plant Loss%Distribution Loss % Ebenezer Doorndraai Phalaborwa Politsi Olifantspoort Flag Boshielo Modjadji Nkowankowa TOTAL

Service Delivery and Infrastructure Performance / Results Cont… DescriptionPeriodAmountBeneficiaries COMPLETED PROJECTS Tshifudi Regional Water Scheme (Phase 4 )2006– 2007R 7.0m Flag Boshielo West Water Supply Phase R 6.0 m Premier Emergency Water Projects (Greater Tubatse)2006 – 2007R 19 m Nkadimeng Water Supply Phase 32005/06R 5.4m6 257 Olifantspoort South NS7 Phase 42006/07R 0.6m6 900 Sekhukhune Deep Rural Schemes /08R 12 m CURRENT PROJECTS Nkadimeng Water Supply Phase 42007/08 – 2008/09R 5.8 m9 299 Refurbishment of Rural Schemes GSDM2007/08R 14m Flag Boshielo West Water Supply Phase 22008/09 – 2009/10R 6.5 m6 500 Olifantspoort Treatment Plant Upgrade Phase 2 to 60Ml/day2007/08 – 2009/10R 92 m Sekhukhune Deep Rural Household Sanitation2007/08R 0.25m220 (Households) TOTALR m Implementing Agent for Capital Projects

Support to Municipalities Cost Recovery Implementing Agent ( households) Free Basic Water Service Provision ( households) Water Demand Management (Installation of telemetry systems) resulting in water losses averaging 4% on bulk Water Quality compliance with SANS241:2005 (95%) Yard Connections in GSDM Turnaround Strategy Implementation in Phalaborwa and Tubatse Tariff Determination in Greater Tubatse LM Billing and Meter Reading Assistance to Greater Tubatse LM Recommissioning of underground water supply in Lepelle Nkumpi Municipality

Service Delivery and Infrastructure Performance / Results Scheme Available / Installed Capacity (2007) Raw WaterPurificationPumpingDistributionStorage Ebenezer73 Ml/d56 Ml/d72 Ml/d55 Ml/d40 Ml Doorndraai38 Ml/d14 Ml/d16 Ml/d 25 Ml Phalaborwa201 Ml/d76 Ml/d (pot) 72 Ml/d (Ind) 136 Ml/d (Pot) 163 Ml/d (Ind) 136 Ml/d (Pot) 163 Ml/d(Ind) 88.6 Ml (pot) 115 Ml (ind) Politsi6.5 Ml/d6.1 Ml/d6.5 Ml/d6 Ml/d14.4 Ml Olifantspoort44 Ml/d45 Ml/d118 Ml/d113 Ml/d85 Ml Flag Boshielo32 Ml/d8.3 Ml/d8 Ml/d17 Ml/d24 Ml Modjadji10 Ml/d7 Ml/d4.4 Ml/d17.7 Ml/d7.23 Ml Nkowankowa30Ml/d26Ml/d25Ml/d 54.3 Ml TOTAL434.5 Ml/d310.4Ml/d548.9Ml/d548.7Ml/d453.5 Ml/d

Water Quality Monitoring Performance / Results Internal Production Control DWAF monthly monitoring External Laboratory Monthly Monitoring (Wastewater) Parameter Performance (2006/07) PrescribedMinimumMaximumCompliance pH Class 1 Turbidity (NTU)< Class 1 Chlorides (mg/l) Class 1 Total Alkalinity (mg/l as CaCO3)3062 Total Hardness (mg/l as CaCO3)3470 Calcium Hardness (mg/l as CaCO3) 2489 Conductivity (mS/m)150716Class 1 Total Dissolved Solids (mg/l) Class 1 Aluminium (g/l) Class 1

Water Quality Monitoring Performance / Results /Cont… Parameter Performance (2006/07) PrescribedMinimumMaximumCompliance Magnesium Hardness (mS/m)1045Class 1 Ammonia (mg/l) Class 1 Cadnium (g/l) Class 1 Cyanide (g/l)5005.0Class 1 Flouride (mg/l)100.59Class 1 Iron (g/l) Class 1 Lead (g/l) Class 1 Manganese (g/l) Class 1 Zinc (mg/l) Class 1 Sulphate (mg/l) Class 1 Seledium (g/l) Class 1 Phenols (g/l) Class 1 Nitrates (mg/l) Class 1

Service Delivery and Infrastructure Challenges Bulk Ageing Infrastructure Exceeding abstraction Permits (high demands) Overladen treatment plant (upgrades) Poor raw water quality Reticulation Poor cost recovery and water demand management Ageing internal reticulation infrastructure Default of payment by consumers Lack of maintenance Unauthorised / illegal connections

Infrastructure Capacity Challenges and Requirements (Ml/d)

Challenges and Solutions

Infrastructure Rollout Plan DescriptionFunder2007/082008/092009/10 Capital Projects 2007/08 Cathodic Protection Doorndraai and Ebenezer PipelinesLNWR R R Cathodic Protection Olifantspoort PipeilinesLNWR R R Bulk Pipeline Survey PhalaborwaLNWR R R Olifantspoort Upgrade to 60 Ml/d Phase 2DWAF/AngloR R R Supply and Installation of Generators at plantsLNWR R R 0.00 Supply and Installation of Sewerage Package Plant at PolitsiLNWR R R 0.00 Phalaborwa Refurbishment and Capital ProjectsLNWR R R 0.00 Greater Tubatse LM Refurbishment and Capital ProjectsLNWR R R0.00 Implementation of GSDM Rural Water and Sanitation ProjectFlanders/DWAFR R R 0.00 Refurbishment of GSDM Water and Sanitation SchemesLNWR R Upgrading of the Filters at Ebenezer Treatment PlantLNWR R R 0.00

DescriptionPeriodAmountBeneficiaries Upgrading of the Olifantspoort WTW and Pipeline Refurbishment 2007/08 – 2009/10R 92 m Upgrading of the Phalaborwa Scheme (Pipelines, Pumpstations) 2008/09R 5 m Extension of the Flag Boshielo WTW2009/10R 15 m Extension of the Politsi WTW2009/10R 15 m Replacement of substandard lines in Politsi Bulk Network2007/08 – 2008/09R 10.0 m Extension of the Doorndraai WT2009/10R 25 m Replacement of substandard lines in Flag Boshielo2007/08 – 2008/09R 3.5 m Bulk Water pipeline to Burgersfort from Mooihoek Plant2008/09 – 2009/11R 320m Upgrading of Burgersfort Wastewater Plant2009/10R 84m Upgrading of Steelpoort Wastewater Plant2008/09 – 2009/10R 25m2 000 Upgrading Rural Schemes in GSDM2008/09 – 2009/10R 10 m TOTALR 512.5m Rollout Plan……….

Roll out Plan………….. DescriptionFunder2007/082008/092009/10 Capital Projects 2007/08 Ebenezer Refurbishment and Capital ProjectsLNWR R R0.00 Bulk Pipelines Surveys (Own schemes)LNWR R R0.00 Flag Boshielo Refurbishment and Capital ProjectsLNWR R R0.00 Doorndraai Refurbishment and Capital ProjectsLNWR R R0.00 Olifantspoort Refurbishment and Capital ProjectsLNWR R R0.00 Nkowankowa Refurbishment and Capital ProjectsLNWR R R0.00 Politsi Refurbishment and Capital ProjectsLNWR R R0.00 Modjadji Refurbishment and Capital ProjectsLNWR R R0.00 Refurbishment of Bulk Pipeline Olifantspoort to SpeconLNWR R R SUB TOTALR R R

Rollout Plan……. DescriptionFunder2008/092009/102010/11 New Projects Bulk Infrastructre in Burgersfort TownLNW/TUBATSE Olifantspoort Replacement and Refurbishment of Bulk MetersLNW Doorndraai Replacement and Refurbishment of Bulk MetersLNW Ebenezer Replacement and Refurbishment of Bulk MetersLNW Phalaborwa Replacement and Refurbishment of Bulk MetersLNW Flag Boshielo Replacement and Refurbishment of Bulk MetersLNW Replacement and Refurbishmnet of Old Pipelines (Ebenezer)LNW Replacement and Refurbishmnet of Old Pipelines (Doorndraai)LNW Replacement and Refurbishment of Old Pipelines (Phalaborwa)LNW Refurbishment of Bulk Reservoirs (Doorndraai, Ebenezer, Olifantspoort, Politsi, Modjadji, GSDM)LNW SUB TOTALR R R

Capital Infrastructure Plan

Challenges Outstanding WSLAs Debtors outstanding Drinking Water quality (Source compliant and what comes out of the tap should be compliant as well) Ageing Infrastructure Protracted Section 78 processes Water license Increased demand for water Retention of technical capacity

Wayforward -Improve governance -Rehabilitation and maintenance of infrastructure (effective asset management) -Support municipalities with regard to their cost recovery strategies -Capacity building, retention and succession planning -Finalise outstanding Water Service Level Agreements with WSAs -Intensify technical support to municipalities

THANK YOU