1. PRESENTATION TO PORTFOLIO COMMITTEE ON Briefing by Lepelle Northern Water Board on its 2015/16 Annual Report
30 MAY 2017

2. Contents DWS INTERVENTION PROJECTS
Water supply interventions in Giyani & Nandoni
Water supply interventions in Tzaneen Wards
ANNUAL REPORT 2015/16
Part 1: Overview of financial performance
Part 2: Overview of non-financial performance

3. DWS INTERVENTION PROJECTS
Water supply interventions in Giyani & Nandoni

4. APPROACH TO MOPANI INTERVENTION
Water supply interventions in Giyani & Nandoni
APPROACH TO MOPANI INTERVENTION
The interventions was categorised and prioritised as follows:
Critical/short - term emergency projects milestone
Medium/long – term emergency projects milestone
Other projects milestones

5. Water supply interventions in Giyani & Nandoni
MOPANI CRITICAL/SHORT-TERM PROJECT MILESTONES
ALL EMERGENCY WORKS COMPLETED AND TO BE HANDED OVER TO THE RELEVANT AUTHORITIES
Project
Status
16 Priority Villages Groundwater Augmentation
Completed
Nkhensani Hospital Groundwater Augmentation
Giyani WWTW 1.5Ml/day (package plant)
Giyani WWTW (refurb-existing plant)
Morogholo Transfer Pumpstation
Kremetart Transfer Pumpstation
Khanyisa Booster Pumpstation
Nsami Water Treatment Plant (Refurb of old plant)
Nsami Water Treatment Plant (New)
Kremetart High & Low Reservoirs

6. MOPANI MEDIUM-LONG TERM PROJECT MILESTONES
Water supply interventions in Giyani & Nandoni
MOPANI MEDIUM-LONG TERM PROJECT MILESTONES
Project
Summary Scope
Construction Progress
Completion date
Pipeline A
Length of 37.9 km (incl branches)
92%
30 June 2017
Pipeline B
Length of 81.8 km (incl branches)
93%
Pipeline C1 & D1
Length of 11.3 km (incl branches)
100%
Completed
Pipeline C2 & D2
Length 24km (including branches)
60%
Pipeline D outline
Length of km (incl branches)
88%
Pipeline F1
Length of 45.3 km (incl branches)
62%
Pipeline F2
Length of 21.8 km (incl branches)
99%

7. MOPANI MEDIUM-LONG TERM PROJECT MILESTONES
Water supply interventions in Giyani & Nandoni
MOPANI MEDIUM-LONG TERM PROJECT MILESTONES
Project
Summary scope
Design Progress
Construction progress
Completion date
Giyani Village Reticulations design
Feasibility study, Planning, detail designs, finalize designs, permits and procurement.
100%
The construction to commence on confirmation of funds by DWS and Sourcing of Service Provider/ Contractor.
  To be confirmed
upon finalization of the Contracts
New (Biological Nutrient Removal) BNR plant
Construction of the new 14ML/d BNR plant.
Phase 1 (Movable 1.5Ml/d Package plant completed).
Phase 2 construction to commence on confirmation of funds by DWS and Sourcing of Service Provider/ Contractor
To be confirmed
upon contract
finalization
Nandoni WTW upgrade
Upgrading of the existing WTW
Construction work to commence on confirmation of funds by DWS and Sourcing of Service Provider/ Contractor
To be confirmed upon contract finalization
Command Reservoir – Giyani
Construction of 35ML reservoir
Construction work to commence on confirmation of funds by DWS and Sourcing of Service Provider/ Contractor
Distribution Reservoirs
Construction of 50 elevated steel tanks to be connected to the bulk pipelines

8. OTHER PROJECTS MILESTONES CONT.
Water supply interventions in Giyani & Nandoni
OTHER PROJECTS MILESTONES CONT.
Project
Summary scope
Design Progress
Construction progress
Completion date
Nandoni – Nsami Bulk pipeline
Implementation of bulk pipeline from Nandoni – Giyani
100%
Construction on site suspended due to delays with payments.
30 March 2018
Namakgale WWTW
Upgrade of the Namakgale WWTW
90%
Engineering designs in progress.
 The designs expected to be completed by end June The construction to commence on confirmation of funds from DWS.
Raising of Tzaneen Dam
Raising of Tzaneen dam (3m).
95%
Removal and stockpiling of material from the dam basin and the blasting of the spillway crest in progress.
Removal and stockpiling of the material from the dam basin completed by end March The blasting of the spillway to be completed by July 2017.
New Nwamitwa Dam
Planning and design new Nwamitwa dam.
98%
The construction to commence on completion of the designs, availability of funds and procurement of the Contractor.
To be confirmed upon contract finalization
Nkambako/ Bambanana Bulk pipeline
Implementation of bulk pipeline in Nkambako/ Bambanana
The construction to commence on confirmation of funds by DWS and Sourcing of Service Provider/ Contractor.
To be confirmed
upon contract
finalization

9. OTHER PROJECT MILESTONES
Water supply interventions in Giyani & Nandoni
OTHER PROJECT MILESTONES
Project
Summary scope
Design Progress
Construction progress
Completion date
Boreholes
Revitalization of existing 154 boreholes (with package plants) – Augmentation to the water scheme while the Bulk Pipelines in progress.
100%
96%
The electrification of boreholes is required to complete the remaining scope of work.
Operations and maintenance support
Repairs on existing lines ± 270 km’s
Pump stations = 9
Reservoirs = 14
As and when required
Ongoing

10. Water Supply Status to 55 Villages

11. WATER SUPPLY STATUS PER PIPELINE
Item No.
Bulk Pipeline
Village Name
Availability of Water Supply (Yes/No) 1
PIPELINE F1
Makosha/ KaMakoxa
Yes 2
KaMakoxa1 3
Xikukwani 4
Mavalani/ KaMavalani 5
Mbatlo 6
Xivulani/ Shivulani 7
Nwadzekudzeku/Kanwadzekudzeku
Mninginisi(Block 3) 8 9
PIPELINE F2
Thompson(Block 2) 10
Mhlava Willem 11
Muyexe 12
PIPELINE A
Thomo 13
Khakhala 14
Gawula/ KaGaula 15
Mahlati/ Mahlathi 16
Ndindani 17
Hlomela

12. WATER SUPPLY STATUS PER PIPELINE cont.
Item No.
Bulk Pipeline
Village Name
Availability of Water
Supply (Yes/No) 18
PIPELINE B
Homu 14 A/ Homu
Yes 19
Mapayeni/ Kamapayeni 20
Nwakhuwani 21
Vuhehli 22
Nsavulani/ Kasabulane 23
Phalaubeni/ Phalakubeni 24
Mbaula 25
Makhuvha/ KaMakhuva 26
Mushiyani/ KaMushiyani 27
Xikhumba/ KaXikhumba 28
Xawela 29
PIPELINE C
Siyandhani/ KaSiandana 30
Shamavunga 31
Units A, B and C 32
Hlopekani 33
Unit D 34
Units E and F 35
Kremetart

13. WATER SUPPLY STATUS PER PIPELINE cont.
Item No.
Bulk Pipeline
Village Name
Availability of Water Supply (Yes/No) 36
PIPELINE D
Maswanganyi/ KaMaswanganyi
Yes 37
Bode & Dzingidzingi 38
Sikhunyani/ KaSikhunyane 39
Ngove/ KaNgove 40
Nkomo / KaNkomo B 41
Nkomo A 42
Nkomo C 43
Bambeni 44
Maphata 45
Mghonghoma/ KaMunghonghoma 46
Loloka(Guwela) 47
Mbhedle/ KaMbedlhe 48
Kheyi/ KaKheyi 49
Gidya(Loloka) 50
Guwela 51
Mageva 52
Ndhambi/ kaDzumeri 53
Daniel/ Rababelela 54
Mphagani/ KaMpakani 55
Namenwarhanga

14. Water supply interventions in the Wards
To address the challenges at 5 wards in Tzaneen, bigger water supply systems are being installed within municipalities inline with master plan as opposed to the small schemes which were currently in use.

15. Intervention projects done are as follows
progress of water supply projects at wards 24, 25, 26, 27 and 34 villages within the Greater Tzaneen Local Municipality
Project
Summary scope
Design Progress
Construction progress
Anticipated Completion date
Responsible
Tours bulk water supply(upgrading of tours treatment works
Construction of Pre-Treatment works, 1 flocculation channels , 2 clarifiers, 3 rapid gravity sand filters , 1 new clear water tank , 1 new pump station , 1 chlorine room and access road
100%
85%
(The implementation is moving forward as per implementation plan)
22  June 2017
WSA: MDM
Tours bulk line
Upgrading of Tours bulk line
10% 0%
Delay was due to technical report approval
To be confirmed upon design finalization
Thabina bulk water supply
Construction of water reticulation in Thabina village
98%
23 December 2016
Close out report to be submitted
Lephephane bulk water scheme
Refurbishment of 8 eight boreholes, sitting, drilling and equipping of 5 boreholes, construction of a pump station and a clear water tank and bulk pipe line of 17km
Ongoing
The Contraction is behind schedule due to community strike which resulted in the stopping of the project (Planned program of work was delayed and now revised to March 2017)
Nkambako bulk pipeline
Extension of the Nkambako bulk pipeline
Construction work to commence on confirmation of funds by DWS and Sourcing of Service Provider/ Contractor
To be confirmed upon contract finalization
Implementing Agent – LNW
Intervention projects done are as follows

16. annual report 2015/16 Part 1: overview of financial performance

17. FINANCIAL PERFORMANCE
FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 June 2016
Audited Outcome
2015/16
2014/15
Variance
R'000 %
Revenue
Revenue from exchange transactions ( Primary) 3%
Revenue from non-exchange transactions ( Secondary)
97 330
41%
Expenditure
Employee benefit costs
31%
Operating expenditure
69%
Fair value adjustments
4 067
3639
10%
Finance cost
1 601
1416
11%
Depreciation, amortisation and impairment
29 955
28 096 6%
Loss on disposal of fixed assets
Surplus/(deficit)from operating activities
69 490
32%

18. STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 31 JUNE 2016
2016
2015
VARIANCE
R'000 %
ASSETS
Current Assets
Cash and cash equivalents
79 996
1.73%
Receivables from exchange transactions
56%
inventory
6 145
5 371
12%
Non-Current Assets
Property, Plant and Equipment
14%
Intangible assets
3 415
4 240
25%
Investments
68 228
59310
Total assets
19%
LIABILITIES
Current Liabilities
Payables from exchange transactions
40%
Employee benefits
Finance lease liability
Financial liabilities:
Non-Current Liabilities
65 558
17 584
73%
Financial liabilities
Total liabilities
46%
Total net assets
NET ASSETS
Reserves ( Equity)
Accumulated surplus 0%
Pumping cost reserve ( Reserve)
20%
Net assets ( Equity)
11%

19. Ratios Liquidity The current ratio : 2.4 Cash flow from operations
The cash and cash equivalent at the end of the year amounted to R79,9m
Return on assets
The ratio on return on assets is 12%. This illustrates the entity’s effectiveness in using its investment in assets.
Debtor days in sales
During the period under review, the debtor days’ analysis reflected an increase to 625 days
This is due continuous non-payment by our major customer
Other ratios applicable
Gross Profit Margin is 53%
Debt to equity is 32%
Net profit margin is 23%

20. Expenditure outcome: 31 June 2016
Dashboard as at
31 June 2016
Working days till FY end
Total expenditure to date R %
Programme (R'000)
Budget
Expenditure
Variance
% Spent
Administration
64 270
57 205
7 065
11%
Water Sector Management
Water Infrastructure Management
Regional Implementation and Support
Water Sector Regulation
International Water Cooperation
Total
Compensation of employees on operating expenses
35%
Goods & services on operating expenses
65%
Analysis of current payments

21. Irregular, Unauthorised, fruitless and wasteful expenditure
Analysis:
No Irregular expenditure reported during the 2015/16 financial year
No unauthorized expenditure reported during the 2015/16 financial year
No fruitless or wasteful expenditure relating to current year

23. CONTIGENT LIABILITIES AND ASSETS
2015/16
2014/15
Variance
% Variance
R'000
Contingent liabilities
Total
Contingent assets
6553
3853
2700
70%
Notes
Legal claim :
A service Provider was ordered to pay R3.5 plus interest with legal costs to LNW in respect of lost assets within the organization. The board is of the opinion that this claim is probable to be met in full in the near future.
Land claim :
LNW purchased a farm in 2003 which became a subject of successful land claim . The value of the farm was R2.7m. Land claim Commissioner took possession of the farm in 2005and did not pay any money to LNW . The latter is currently under legal dispute.

24. Analysis: matters relating the audit report per year
2011/12
2012/13
2013/14
2014/15
2015/16
Qualified (9)
Qualified (8)
Qualified (3)
Qualified (2)
Qualified (1)
Unqualified
Emphasis of matter
The accounting authority did not take effective steps to collect all money due to the Lepelle Northern Water, as required in terms of section 51(1)(b)(i) of the PFMA, as 80% of total accounts receivable was provided as doubtful debt.

25. Trend analysis: Matters relating the audit report

26. Action plan Major Finding Root Cause Action
Lepelle Northern Water had receivables for water sales totalling R410 million at 30 June 2016, of which R328 million had been outstanding for more than 90 days. The recoverability of these amounts is doubtful. Management is encouraged to continue with their concerted efforts to collecting long outstanding debt
Non payment by WSA
Signing of the settlement agreement with the affected WSA

28. Explanatory notes PPI no Milestones that were not achieved
Comments on deviations 1
Tolerable organisational Residual Risk
Certain risks identified during the review required budget and was not available at the point in time but allocated for next financial year. 2
Capital projects
DWS did not pay on time the money that was bridge-funded on the directives issued to LNW 3
Debtors day (1102)
Mopani’s old debt still a challenges and recently DWS. 4
Compliance to DWS effluent general standards
Municipality did not approve the budget that was meant to upgrade some of the wastewater works’ capacity to match the high volumes of the influent.
Strategy to overcome under performance
PPI no 1 on attendance of planned training : The strategy to overcome under performance will be to develop a pre-selection of institutions to ensure that training works better.
PPI no 2 on vacancy rate for engineers and scientists:
PPI no 5b on expenditure of departmental budget:
PPI no 6 internal audit plan:

29. THANK YOU