1. DWA CONSOLIDATED REPORT ON THE PERFORMANCE OF THE TRANS CALEDON TUNNEL AUTHORITY (TCTA) AND THE WATER RESEARCH COMMISSION (WRC):2011/12 FINANCIAL YEAR Prepared for the Minister of Water and Environmental Affairs and the Portfolio Committee on Water and Environmental Affairs

2. PURPOSE The purpose of this presentation is to provide a consolidated strategic overview of the performance of the Trans Caledon Tunnel Authority (TCTA) and the Water Research Commission (WRC) for the 2011-12 financial year both from an institutional performance and financial performance perspective.

3. Strategic Intent Statement Vision and objectives as outlined in the National Water Resources Strategy 2. Shareholder Compact Minister and conclude a shareholder compact annually (Treasury Regulation 29.2) (Not applicable to CMAs) Documents the mandated key performance measures and indicators to be attained by the CMASs in delivering the desired outcomes and objectives as agreed between the Board and the Minister. Corporate Plan CMASs submit corporate plans and budgets annually to Minister and National Treasury at least one month before the start of financial year (PFMA Sec 52). Ccorporate plan must contain implementation details to attain the key performance measures and indicators outlined in shareholder compact and desired outcomes and objectives outlined in the strategic intent statement. 3 Quartely reporting Annual Reports Entities reporting to Portfolio Committee –once a year. Performance Monitoring & Evaluation The shareholder management process

4. NWRI WB 2+1 WB 2+1 WB 3 WB 3 Reporting and Governance CMA 9 CMA 2 CMA 1 Water board 3 TCTA Minister DWA Institutional oversight (national & regional) DWA Institutional oversight (national & regional) Parliament Public institutions report to the public and Parliament through Annual Reports and Annual Financial Statements and to the Department with quarterly performance reports WRC Minister appoints boards; approves shareholder compact Portfolio Committee reviews reports and plans (hearings, visits) (1) Oversee institutional establishment ; (2) Oversee governance (manage board appointment processes, training etc.); (3) Oversee shareholder compact ; (4) Oversee business plans, quarterly performance reports and financial statements etc. (1) Oversee institutional establishment ; (2) Oversee governance (manage board appointment processes, training etc.); (3) Oversee shareholder compact ; (4) Oversee business plans, quarterly performance reports and financial statements etc. 279 WUAs &Irrigation Boards

5. OVERVIEW OF ENTITIES Trans Caledon Tunnel Authority (TCTA) Bulk raw water infrastructure Project initiation Project management Debt management Structuring and raising project finance Knowledge management Risk management Operation and maintenance Local economic development Tariff setting. The TCTA is a multi disciplinary state owned entity specialising in project financing, implementation and liability management. The TCTA’s products and services are:

6. STRATEGIC INTENT Deliver on all the directives provided by the Minister Ensure that all project activities facilitate social transformation and build sustainable communities by providing jobs and empowering women, and youth and the disabled. Operate the business and its projects and processes in a cost effective manner, Build the knowledge and capability of the organisation Ensure the continuous availability of high calibre human capital for delivering on the organisational mission into the future. The strategic intent of the TCTA is to assist the shareholder (DWA) to realise national development goals. TCTA’s corporate goals are aligned with the strategic agenda of government. The strategic goals for the reporting year were as follows:

7. GOVERNANCE The Governing Board of the TCTA is appointed by the Minister. The current Board was appointed in August 2010 for a four year term. As part of the 13 member board, the Minister appoints two non executive directors, one from DWA and one from NT for the purposes of stakeholder representation.

8. PROJECTS The primary projects which TCTA funds and implements are the following: Lesotho Highlands Water Project (LHWP) – South Africa portion of the Delivery Tunnel North. Berg Water Project (BWP). Vaal River Eastern Subsystem Augmentation Project (VRESAP). Mooi-Mgeni Transfer Scheme Phase 2 (MMTS2). Komati Water Scheme Augmentation Project (KWSAP). Olifants River Water Resource Development Project Phase 2 (ORWRDP2). Mokolo-Crocodile River Water Augmentation Project Phase 1 (MCWAP1). Metsi Bophelo Borehole Project (MBBP). Acid Mine Drainage: pump station and Treatment plant (AMD)

9. ADVISORY SERVICES The TCTA also works closely with the DWA, water boards, municipalities and other entities that are linked to bulk raw water infrastructure. In particular during the reporting period the TCTA provided advisory support to DWA on the Acid Mine Drainage (AMD) project.

10. TCTA PERFORMANCE Deficit 2011/12 The audited results for 2010/11 recorded a R24 million surplus and this has been restated to a deficit of R284 million in the current financial statements. The overall reason for the restatement is a change in accounting policies applied retrospective to 31 March 2011, in accordance with the International Accounting Standards Presentation and Disclosure, related to construction assets previously recognised as property, plant and equipment and intangible assets.

11. TCTA PERFORMANCE( Continued) Borrowing rates/Credit rating The TCTA has gained and maintained market credibility that enables it to access off budget funding for projects at excellent rates. Annual Audit report The TCTA obtained a “clean” audit report of its annual financial statements for 2011/12 financial year.

12. TCTA PERFORMANCE( Continued) FISCAL YEAR 31 MARCH 2012 2012 ACTUAL R million 2011 ACTUAL R million % CHANGE Revenue1 790777130.3 Net deficit40428442.2 Operating expenses511565-9.5 Net finance costs2 7803 091-10.0 Non-current assets26 42827 180-2.7 Long-term obligations 23 73923 955-0.9 Reserves and surplus 5 5755 979-6.7

13. SUMMARY & CONCLUSION TCTA The TCTA is playing an increasing strategic role in the sustainable development and use of raw water resources. Despite the current challenges in its operating macro-economic environment and its multi-project arrangements, the TCTA has reported satisfactory results for the 2011/12 financial year by achieving the majority of its contracted deliverables.

14. OVERVIEW OF ENTITIES Water Research Commission (WRC) The Water Research Commission (WRC) derives its mandate from the Water Research Act, Act no 34 of 1971. In terms of its mandate the WRC is to perform the following functions: Promoting co-ordination, co-operation and communication in the area of water research and development. Establishing water research needs and priorities. Simulating and funding water research according to priority. Promoting effective transfer of information and technology. Enhancing knowledge and capacity building within the water sector.

15. STRATEGIC INTENT The WRC serves as South Africa’s water centred knowledge hub providing the nation with knowledge for sustaining its most precious resource, water. The WRCs strategy for knowledge creation and its research portfolio is underpinned by its four main key strategic areas (KSAs) these being: Water resource management Water linked ecosystems Water use and waste management Water utilisation in agriculture

16. GOVERNANCE The Governing Board of the WRC is appointed by the Minister for a four year term and is the Accounting Authority (AA) for the institution in terms of the PFMA. The governing board is constituted of independent non executive members with the exception of the Chief Executive and the Director General of the Department of Water Affairs who serve in an ex officio capacity.

17. WRC PERFORMANCE Revenue 2011/12 During the year under review the WRC continued to leverage levy income by striving to obtain funds from other sources to support water research. Indicator2011/12 Budget 2011/12 Year- end Actual Levies as % of total income86%83% Other sources of income as % of total income 14%17% Leveraged income as a % of other income * 80%79% Income Indicators *Leveraged income includes all other income with the exception of interest received

18. WRC PERFORMANCE (Continued) Research Spend (Allocation)

19. WRC PERFORMANCE (Continued) Research Spend (% utilized) KSA Planned % allocation of funds % of fund utilised for research projects Water Resource Management 26 (28)28 (31) Water-Linked Ecosystems14 (13)17 (20) Water Use and Waste Management 33 (36)34 (29) Water Utilisation in Agriculture 27 (23)21 (20) The actual % of funds utilised for research projects in each of the KSAs, relative to the allocated funds is summarised in the table below. (2010/11 data in brackets)

20. WRC PERFORMANCE (Continued) Annual Audit The WRC obtained a “clean” audit report of its annual financial statements for 2011/12 financial year. Statutory Compliance The WRC complied with all statutory reporting requirements for the reporting period including strategic plans, business plans, budget, quarterly reports and other relevant statutory submissions.

21. WRC PERFORMANCE (Continued) Research Portfolio During the year under review, the WRC managed 322 research projects at various stages of project life cycle, of which about 79% (259 projects) were active projects. In addition 133 reports were published Financial Year2011/122010/11 Total No of projects322328 No of active projects258259 No of new projects7477 No of finalised project9676 No of solicited projects101109

22. SUMMARY & CONCLUSION WRC The commission is a unique, valuable and strategic research entity that plays an important role in the water sector and water research by establishing needs and priorities, stimulating and funding research, promoting the transfer of information and technology, and enhancing knowledge and capacity building in the water sector. The commission has reported satisfactory results for the 2011/12 financial year.

23. THANK YOU !!!!