1. LEPELLE NORTHERN WATER
Presentation to Parliamentary Portfolio Committee on Water Affairs and Forestry
19th MARCH 2007

2. STRUCTURE OF PRESENTATION
Area of supply
Background
Achievements
Market development
Challenges
Way forward

3. AREA OF SUPPLY
The Board will be expanding into all Water Service Authorities – to capture 100% market share

4. AREA OF SUPPLY Cont… SCHEME NAME SOURCE CUSTOMER CAPACITY 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
3 ML/Day
Nkowankowa
Letaba River
Ø      Tzaneen Municipality
24 ML/Day
Ebenezer
Ebenezer Dam
Ø      Tzaneen Municipality.
Ø      Polokwane Municipality
48 ML/Day
Olifantspoort
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 Sekhukhune
8 ML/Day

5. Background (Recent appointments)
New board appointed in December 2006
CE appointed Feb 2007
CFO appointed March 2007
Recruitment of GM Operations to be finalised April 2007

6. ACHIEVEMENTS 2004 R’000 2005 2006 Revenue 159,757 159,761 179,656
Financial Performance
2004
R’000
2005
2006
Revenue
159,757
159,761
179,656
Cost of Sales
27,956
26,789
41,684
Operating expenditure
64,169
63,414
73,386
Surplus for the year
37,064
45,314
73,942

7. ACHIEVEMENTS 2004 R’000 2005 2006 Net interest paid 20,364 7,113
Financial Performance
2004
R’000
2005
2006
Net interest paid
20,364
7,113
(15,804)
Accumulated reserves
(24,236)
(5,064)
50,460
Long term loans
297,477
274,478
44,491
Average tariff
1,919
2,072
2,163

8. ACHIEVEMENTS 2004 Actual 2005 2006 Gross Margin % 83% 77%
Business Performance
2004
Actual
2005
2006
Gross Margin %
83%
77%
Current Ratio
1.84
1.74
2.11
Return on Assets %
9.1%
10.0%

9. ACHIEVEMENTS 2004 Actual 2005 2006 Debt-equity ratio 116.6% 102.5%
Business Performance
2004
Actual
2005
2006
Debt-equity ratio
116.6%
102.5%
39.9%
Asset turnover
0.21
0.28
WACC %
20.4%
24.0%
42.3%

10. MARKET DEVELOPMENT WATER SERVICE AUTHORITY % MARKET STATUS
Capricorn District Municipality
14%
Negotiations are at an advanced stage. Conclusion by January 2007.
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 2007.
Greater Sekukhune District Municipality
Appointment has been confirmed, finalizing the term of the contract.
Vhembe District Municipality
25%
Mokgalakwena Local Municipality 6%
Agreement of 30 years has been entered into on 01 May 2003.

11. CHALLENGES Rehabilitation and refurbishment of infrastructure.
Continuous increase in demand for water.
Outstanding debts (Ba-Phalaborwa)
Protracted section 78 process
Capacity constraints

12. WAY FORWARD Improved governance
Improvement and expansion of infrastructure
Implement turn-around strategy for Ba-Phalaborwa
Finalise population of the structure
Finalise outstanding Service Level Agreements with WSA’s
Improve relations with all stakeholders in the sector

13. THANK YOU