presentation of annual report annual report to portfolio committee on water affairs and forestry to...
TRANSCRIPT
Presentation of Presentation of
Annual ReportAnnual Report
to Portfolio to Portfolio Committee on Committee on
Water Affairs and Water Affairs and ForestryForestry
7 May 20087 May 2008
Contents
• Corporate Performance Scorecard
• Financial Performance
• Raw and Potable Water Quality (including Waste Water Effluent Quality)
• Investment Plan
• Water Resources and Infrastructure Management
Strategic Pillar 1: Customer & Growth
Performance Indicators Strategy Output/Targets Performance 2006/7
Strategic Objective: Exceed Customer Expectations
% customers with signed agreements.
Six signed agreements Compliance with water quantity, water quality & pressure requirements per bulk supply agreements
Contractual obligations met
Progress in expanding/growing section 30 activities.
Understanding & resolving water services related customer challenges.Enhancing capacity of customers in delivery of water services
Feedback and assessments from Executive Authority, Portfolio Committee for Water Affairs & Forestry; and National Treasury.
Positive feedback from Executive Authority.Positive feedback from Portfolio Committee for Water Affairs & Forestry.Positive feedback from National Treasury.
Strategic Objective: Growth (Increase Customer Base)
Progress with the implementation of key projects in the Five Year (2008-2012) CAPEX Programme.
Increase system coverage through completion/ commissioning/ delivery of projects.Meet Client’s growth requirements for projected water supply demand.
Performance Indicators Strategy Output/Targets Performance 2006/7
Strategic Pillar 1: Customer & Growth
Strategic Objectives: Contribute to National Development Agenda & Reduction of Backlogs
Performance Indicators Strategy Output/Targets Performance 2006/7
School and Household Sanitation
Increased access to sanitation Water Education Health & Hygiene Awareness
Strategic Pillar 2: Water & Socio-Economic Development
Strategic Objective: Job Creation & Contribution to BBBEE
Number of jobs created through: • School Sanitation• Household Sanitation• Working for Water• Implementing CAPEX
Generate employment, & entrepreneurial opportunities
PPPFA Compliance (BEE Spend) increase % spend on BBBEE
Performance Indicators Strategy Output/Targets Performance 2006/7
Strategic Pillar 3: Finance
Strategic Objective: Reduce the Net Debt
Percentage reduction in debt.
Reduced financial risk and increased financial sustainability
Improved the financial stability by driving sound business principles throughout UW and subsidiaries
DWAF Benchmark ratios:
Net Debt: Equity <1.25
Net Debt: Equity 2.99 Net Debt: Equity 2.60
Debt Service > 1.35
Debt Service. 2.07 Debt Service. 2.14
Debt: Assets < 0.66
Debt: Assets 0.70 Debt: Assets 0.67
Strategic Objective: Contribute to an Affordable Tariff
Constant tariff in real terms.
Affordable tariff : increases aligned to CPIX
Tariff: R 2.819 per kl. Increase of 4.5%
Total cost per kl: R 2.50;
Total cost per kl: R 2.53;
Strategic Pillar 3: Finance
Strategic Objective: Improved Return on Assets
Improvement on Return on Asset
ROA: 16.19%Asset turnover: 0.40
ROA 17.32%.Asset turnover: 0.44
Strategic Objective: Enhance Shareholder Value
Credit rating maintained.
Access to capital markets and competitive funding rates.
Fitch National ratings reaffirmed: AA Long term.F1+ short term.
Improvement on surplus (profit) and accumulated reserves.
Strengthening balance sheet.Surplus: R 242.1m Net Profit %: 20.75
Surplus: R 250.7m Net Profit %: 21.01
Strategic Pillar 4: Environmental Management
• Air Quality and Energy• Eco-efficiency• Green House Gases• Waste• Environmental Health• Water Stress • Biodiversity• Natural Disaster and Vulnerability• Environmental Governance• Science and Technology• Heritage
Environmentally sustainable water utility
Sustainability Policy Finalised
Strategic Objective: Conservation of Natural Resources and Mitigate/Minimise Impacts of all Operations
Performance Indicators Strategy Output/Targets
Performance 2006/7
Strategic Pillar 5: Organisational
Strategic Objective: Strategic Effectiveness
The extent of engagement with the Executive Authority (i.e. DWAF) on substantive issues
Accountability to the Executive Authority & legislature
Performance Indicators Strategy Output/Targets Performance 2006/7
Strategic Objective: Operational Competence
The extent to which Integrated Enterprise Wide risks are managed and mitigated to an acceptable level.
Managed Enterprise Wide Risk
The extent to which the company adheres to Good Corporate Governance (King II Report).
Compliance and adherence to Good Corporate Governance
The extent to which human resources are developed & managed
Employer of choice in the water sector
Progress with implementation of SCM Framework and compliance with the PPP Framework Act
Fair, equitable, effective and transparent procurement.Transformation & empowerment.
Extent of alignment of IS to business needs
Effective IS systems Extent organisation leads and contributes knowledge & innovation in water sector
Centre of functional excellence in the water sector
Implementation of quality management systems
Achieve company ISO 9001 certification by 30 June 2010
Strategic Objective: Functional Excellence
Performance Indicators Strategy Output/Targets Performance 2006/7
Strategic Pillar 5: Organisational
Results From OperationsResults From Operations
WaterWater Volume Sold: up by 3.4%
Water Volume Sold up by 3.4%Water Volume Sold up by 3.4%
Results From OperationsResults From Operations
Revenue R1.2 billion - up by 9.5%
S30 8%
WWW 4% Bulk 88%
Bulk water revenue by customer
Revenue by Segment
COST OF BULK WATER PER KLCOST OF BULK WATER PER KL
2.59 2.54 2.452.36
2.17
IncreaseIncrease in operational efficienciesin operational efficiencies
Results From Operations (cont)Results From Operations (cont)Net profit R250.5m : 82% improvement for the year
Bulk Water Tariff per klBulk Water Tariff per klProposed
Bulk tariff R.c/Kl F'05 F'06 F'07 F'08 F'09Bulk Tariff 1
Base Tariff 2.442 2.579 2.698 2.819 2.960 Tariff Increase 0.137 0.119 0.121 0.141 0.118 New Tariff 2.579 2.698 2.819 2.960 3.078 % Increase 5.6% 4.6% 4.5% 5.0% 4.0%
Bulk Tariff 2 - eThekwiniBase Tariff 2.960 Tariff Increase 0.059 New Tariff 3.019 % Increase 2.0%
CPIx 3.95% 4.59% 6.51% 7.95% (f) 6.1%(f)
(f) denotes forecast
---------- Actual ---------
Cash flow & LiquidityCash flow & Liquidity ■ Solid cash flows from operating activities R724m: increase for the year R80m
Cash flow & Liquidity (cont)Cash flow & Liquidity (cont) ■ R177m capex spend in 2007
Debt ManagementDebt Management ■ Reduced net debt by R267m from R1,923m
to R1,656m
Increase in capital & reservesIncrease in capital & reserves ■ Improved earnings results in reversal of accumulated loss
R’m
Number of people and households without access to basic water services
Water Service Authority
Total Population
Total Pop. below RDP level water
service
% of Pop.
Total Households
Total Households below RDP level water
service
% of House-holds
eThekwini MM 3,100,000** 397,976*** 12.8 721,851* 49,747* 6.9
Ilembe DM 768,669* 469,307* 61.1 193,036* 58,663*** 30.4
Msunduzi LM 530,510** 99,848*** 18.8 130,990** 14,264 10.9
Sisonke DM 416,528* 227,486* 54.6 61,114* 33,377* 54.6
Ugu DM 665,595* 380,153* 57.1 95,085*** 54,308*** 57.1
uMgungundlovu DM
414,740** 87,444**** 21.1 100,665** 15,170**** 15.1
* Population data provided by the WSAs during the backlogs information collection process undertaken in 2006.** Figure provided by the Water Service Authorities during an information reconciliation process in Dec 2004.*** Calculated figure at 7 persons per household as actual household data was not provided.**** Best estimate on historical data as no update provided (In many cases the 2004 data reduced by 20%)
Municipality Population 2007
Households 2007
% Piped-Other
Supply
% River-Stream
eThekwini Metro 3 468 086 833 859 98.3 0.5DC21: Ugu DM 709 918 151 621 75.6 22.1KZN211: Vulamehlo LM 74 017 12 745 61.3 35.1KZN212: Umdoni LM 74 437 16 383 98.3 0.8KZN213: Umzumbe LM 176 287 40 579 53 43.6KZN214: UMuziwabantu LM 104 527 20 313 70.6 27KZN215: Ezingoleni LM 56 369 10 952 86 11.7KZN216: Hibiscus Coast LM 224 281 50 650 89.8 8.5DC22: Umgungundlovu DM 988 837 217 876 92.1 5.9
KZN221: uMshwathi LM 113 054 22 110 78.1 20.1KZN222: uMngeni LM 84 781 21 588 97.5 2.1KZN223: Mpofana LM 31 518 7 801 85.8 10.1KZN224: Impendle LM 39 401 7 338 91.8 4.4KZN225: The Msunduzi LM 616 730 134 390 96.9 1.4KZN226: Mkhambathini LM 46 570 11 970 63.4 31.4KZN227: Richmond LM 56 772 12 679 86.7 11.2DC29: iLembe DM 528 198 124 525 75.5 22.5KZN291: Mandeni LM 122 665 33 702 89.9 9KZN292: KwaDukuza LM 162 055 44 480 94.6 3.1KZN293: Ndwedwe LM 134 322 26 408 53.9 43KZN294: Maphumulo LM 109 157 19 934 37.1 61.2DC43: Sisonke DM 500 082 105 659 63.2 34.2KZN431: Ingwe LM 114 116 22 289 84.1 14.5KZN432: Kwa Sani LM 14 281 4 421 78.1 21.5KZN433: Greater Kokstad LM 46 724 14 321 97.7 1.6
KZN434: Ubuhlebezwe LM 80 905 21 084 59.8 32.4KZN435: Umzimkhulu LM 243 242 43 545 41.2 57.2
Long-term Water Demand Projection vs. Level of Assurance of SupplyTo ensure sufficient potable water is available to address the backlogs within its area, and to meet and stimulate the growth and development that is projected within the region, it is necessary for UW to embark on its ambitious infrastructure development programme.
South Coast PipelineR200 Million
‘61 Pipeline AugmentationR246 Million
Richmond PipelineR100 Million
North Coast Pipeline
R179 Million
Extension to Wartburg Bulk System – R300 Million
‘57 Pipeline Augmentation
R75 Million
KZN Plan – Location of projects
Lower Mvoti (Ngcebo KwaDukuza Scheme)
R253 Million
Durban Heights system R75 Million
Greater Bulwer/ Donnybrook Bulk Water Supply Scheme - R34
Million
Hazelmere WW Upgrade
R64 Million
Midmar WW System R125 Million
0
2000
4000
6000
8000
10000
An
aly
ses
Compliance with SANS 241: 2006 Drinking Water Non-compliance with SANS 241: 2006 Drinking Water
2003/2004927 Ml/day
2004/2005971 Ml/day
2002/2003924 Ml/day
2005/20061019 Ml/day
2006/20071088 Ml/day
Historical Potable Water Quality Compliance
Bulk potable waterworks
Average daily volume treated
(Ml/d)
% Total Supply Volume
Compliance with SANS 241: 2006
Chemical Microbiological
Durban Heights 522 48% 100 100
Wiggins 213 20% 100 100
Midmar 211 19% 100 100
DV Harris 44.2 4.1% 100 100
Hazelmere 38.5 3.5% 100 100
Amanzimtoti 33.5 3.1% 100 100
Umzinto 11.4 1.0% 100 100
Craigeburn Final - - 100 100
Craigieburn-Saiccor 6.2 0.57% 100 92.6
Mtwalume 4.5 0.41% 99.1 100
Ixopo 2.2 0.20% 100 100
Ogunjini 1.3 0.12% 100 100SANS 241 Classification: Excellent water quality: ≥ 99% compliance with Microbiological requirements, ≥ 95% compliance with Class I Chemical requirements and ≥ 97% compliance with Class II Chemical requirements.Poor water quality: < 97% compliance with Microbiological requirements, < 85% compliance with Class I Chemical requirements and <90% compliance with Class II Chemical requirements
Potable Water Quality Compliance of Major Water treatment Works
Pre-feasibility Phase Projects Feasibility/Design Phase Projects
One project area was reported on: Fourteen assessment areas reported on:
One good performance x 1 Five good performances x 5
Nine satisfactory performances
x 9
Construction/Defects Phase Projects Summary
Four assessment areas reported on: A total of nineteen assessments:
Two good performances x 2 Eight good performances
x 8
One satisfactory performance x 1 Ten satisfactory performances
x 10
One unsatisfactory performance x 1 One unsatisfactory Performance
x 1
The environmental problem is either significant or has occurred, or the deadline for remedial action was not met
Progress and/or performance are satisfactory
Good environmental practice or commendable performance from staff, a contractor or consultant
Environmental Assessment of projects in planning, design and construction phases
89.0% 92.9% 93.1% 90.7% 89.9%
11.0% 7.1% 6.9% 9.3% 10.1%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
2002/03 2003/04 2004/05 2005/06' 2006/07'
Compliance Non-Compliance
Historical Effluent Discharge Compliance with Standards
Wastewater Quality Target:
2006/7: 10% wastewater quality failures Actual: 10.1% 2007/8: Maintain or improve on the 2006/7 target
<
<
<
<
<
<
Mearns
Albert Falls
Inanda
Nagle Hazelmere
Shongweni
Henley
Durban
KwaDukuza
Mooi RiverTown
Pietermaritzburg
EJ Smith
Thukela
Mvoti
Mtwalume
Lovu
Mkomazi
Mgeni
IxopoIxopo
Mzinto
Greytown
Mdloti
uMzinto
Nungwane
1
uMsunduzi municipalityeThekwini munic ipality
1River and Impoundment Quality
U nsatisfactory
Satisfactory
Poor
Good
Excellent
N ot Monitored
DAMS
River and impoundment water quality is based on the Umgeni Water "Water Quality Index". This index is calculated using the following variables : Algal count, Chlorophyll "a", E. coli, Turbidity,Conductivity, Nitrate, Free ammonia, Total Phosphorus, Soluble Reactive Phosphorus, Suspended Solids and Total Organic Carbon.
N
10 0 10 20 Kilometers
Map : Water Quality Status of Dams and Water Quality of Rivers (July 2006 - June 2007)
Shongweni Dam
Hazelmere Dam
Midmar Dam Nagle Dam
Henley DamInanda Dam
Nungwane Dam
EJ Smith Dam uMzinto DamIxopo Dam
Mearns Dam Albert Falls Dam
Quality of Raw Water Resources in Umgeni Water Supply Area
Project Name Local Municipality
Number of UnitsOver Multi-(3)
years
Units Completed
2006/07
Estimated Population to
be Served
Swayimane Ward 9 Mshwati 2 271 420 19 195
Swayimane Ward 10 Mshwati 2 607 490 22 228
Swayimane Ward 11 Mshwati 2 072 101 16 077
Magoda Richmond 2 053 285 11 801
Ndaleni Richmond 3 136 498 17 135
Stoffelton Mpendle 1 203 345 8 206
Tendele Mpofana 143 143 2 071
Makholweni Umkhambathini 2 010 368 13 521
Ozwathini Ndwedwe 560 560 5 775
Total - 16 055 3 210 116 009
Household Sanitation
Project Name District Municipalities
Projects Planned FY06/07
Projects Completed
FY06/07
Pupils& Educators
School sanitation phase 3
Ugu, Sisonke & UMgungundlovu
40 39 18 000
Curriculum upgrade
Ugu, Sisonke & UMgungundlovu
32 24 19 200
School Sanitation Phase 3 and Curriculum Upgrade Programmes
■ Continued commitment to a stable and
affordable tariff.
■ Continued focus on debt reduction to
optimal levels and operational efficiencies
■ Commitment to deliver on the capital
expenditure to support customer
requirements and water service delivery
Forward View 2007/2008Forward View 2007/2008
Strategic Challenges
Co-ordination & Integration within the Sector [Alignment of Funding streams]
Institutional Reform [Uncertainty] Increasing water access & coverage [Cost &
topography]Water Resources investments & timeous
availabilityProfitability levels – tariff acceptability by
Municipalities
Acknowledgements1. I would like to acknowledge the sterling contribution by and dedication of current and past
employees of Umgeni Water and the Executive Management team.
2. I would like to thank our Municipal customers - Executive Mayors, Municipal Managers, Technical Directors and Finance Directors - for promoting cordial working relationships and partnerships. Their significant contribution, in the form of untapped insights into community expectations, has been invaluable in shaping Umgeni Water.
3. I would like to thank the Board of Umgeni Water for its leadership, guidance and focus on substantive issues.
4. I would like to thank the Minister of Water Affairs and Forestry, Lindiwe Hendricks, for involving us in the Strategy Planning Session, of the Department of Water Affairs and Forestry in January 2007, and for driving the co-ordinated and integrated water institutions family culture.
5. Thanks to the Chairman of the Water Affairs and Forestry Portfolio Committee, Connie September, and members for driving the focus and effectiveness of the Water Boards.
6. Thanks to the KwaZulu-Natal MEC for Education, Ina Cronje, for affording Umgeni Water the opportunity to assist with the department’s School Sanitation and Curriculum Upgrade programmes.
7. We acknowledge the Director-General of the Department of Water Affairs and Forestry, Jabulani Sindani; the Deputy Director-General (Regions), Thandeka Mbassa, and the Chief Director (KwaZulu-Natal), Vusi Kubheka, for their unstinting support.
Thank you
Questions??