1. Portfolio Committee on Water Affairs and Forestry Support Received from DWAF and Amatola Waters Role in Rural Development of Water, Sanitation and Forestry 16-18 OCTOBER 2006

2. Contents Background Services Received from DWAF Contribution to Rural Development – Forestry Contribution to Rural Development – Water Contribution to Rural Development – Sanitation Amatola Water Challenges Questions

3. Our Vision To be the service provider of choice for Local Government in the Eastern Cape, delivering a full range of water services to improve the quality of people’s lives. Our Mandate Amatola Water exists to render water services to water sector institutions, local government authorities and to other customers as defined in the legislation and water service policy of South Africa

4. Background  State owned water utility established in Nov 1997  Operational since 1998 as a Water Board  Designated area of operation = 45 800 sq.km  Area includes BCM, ADM, portions on CHDM, Ukhahlamba and Cacadu DM’s  Head Office located in Vincent, East London  Governed by Board of Directors that includes the CEO  Managed by CEO and 4 Divisional Directors  235 employees  Manage water service assets to the value of R 250 million  Production capacity of 102.74 Mega liters potable water per day.  Secondary services offered to support WSA’s and WSP’s

7. Services received from DWAF Institutional Reform Leadership – DWAF is leading the process in the Eastern Cape in a transparent and inclusive manner Board Training – DWAF have funded the training non-executive board members Co-ordination of Strategic Studies – DWAF are funding and co- ordination the review of the Amatole Water System Reconciliation study

8. Contribution to Rural Development - Forestry No forestry support activities at present

9. Contribution to Rural Development - Water AW produced 22,758 million kiloliters of potable water in the 05/ 06 Estimated 24 % benefited rural poor directly Remaining 76% distributed internally by WSA’s (the ADM & BCM) ADM PIA contract – R71,15 million - 65% focus on water backlog elimination DWAF WSP Transfer – managed CHDM & ADM processes on behalf of WSA’s DWAF Dam Management Contract – R 5.495 million contract to manage 21 dams in Eastern Cape Water Hyacinth Control – DWAF contract to manage Kubusi river, Wriggleswade and Laing Dams Butterworth Emergency Intervention – operated Butterworth water systems during May / June 06 strike action on behalf of the ADM Learnerships – trained 11 females from rural areas as plant operators in 2006, employed 7 after training Education Programme – 1318 school pupils from disadvantaged background toured Nahoon Dam and WTW in 2005 / 06 ADM WSDP Review – in progress at no cost to ADM (R 310 000) ADM Water Demand Management Programme – assisting ADM to develop programme at no cost to ADM (R 320 000) National Water Week – joint planning & participation with DWAF in region MOU’S – signed with Mvula Trust & ADM to co-operate in water sector activities

10. Contribution to Rural Development - Sanitation ADM PIA contract – R71,15 million - 35% focus on sanitation backlog elimination Butterworth Emergency Intervention – operated Butterworth sanitation systems during May/June 06 strike action on behalf of the ADM ADM WSDP Review – includes sanitation planning at no cost to ADM Nxamkwana Sanitation Project – implementation R 7.98 million project to construct 3523 composting toilets in BCM Rural Schools Sanitation Programme – implementing R 48.8 million project to develop sustainable sanitation at rural schools in the Eastern Cape for the Departments of Education and Science & Technology Appointed by DWAF to co-ordinate the National Microbiological Monitoring Programme in the ADM and ORTDM areas.

11. Typical Activities Butterworth Emergency Intervention – June 06 Nxamkwana Sanitation Project - BCM ADM / AW MOU Water Hyacinth Control Water Week Activities – E. Cape DOE / DST Rural Schools Sanitation Programme – E. Cape Education Programme – E. Cape Dam Management – Mnyameni Dam National Microbiological Monitoring Programme – ADM & ORTDM

12. CHALLENGES - TARIFF NEGOTIATIONS Bulk Raw Water Tariff –Price of raw water high for poor province –Results in high tariffs for customers Bulk Treated Water Tariff –Delayed approval by DWAF creates instability in sector 2007/08 Tariff Approval Process –DWAF raw water tariffs due in September 2006 –Tariff negotiations to commence in October 2006 –Final proposal submitted to DWAF on 25 January 2007 –DWAF table in Parliament on 15 March 2007

13. CHALLENGES - DWAF COMPLIANCE AUDIT DWAF Compliance Audit instituted –Consultation process lacking in terms of communication with affected water boards to assist with understanding the reason behind the audit and to make provision for costs –High cost of audit has a large impact on the finances of small water utilities Preliminary information submitted to Auditors for planning purposes Audit to be complete by 25 January 2007

14. CHALLENGES - TRANSFER OF DWAF-OWNED ASSETS Refund of expenditure incurred to refurbish DWAF- owned assets on inception of the water board in 1998 Transfer of assets managed by Amatola Water

15. CHALLENGES - SECTION 78 ASSESSMENTS Amatola Water is not fully part of the programme Some municipalities use Section 78 outcomes as a substitute for Institutional Reform

16. CHALLENGES - INSTITUTIONAL REFORM Desire for Department to play active leadership role in ensuring all roleplayers are in and fully identify with objectives of project.