PRESENTATION TO THE WATER AND FORESTRY PARLIAMENTARY PORTFOLIO COMMITTEE

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PRESENTATION TO THE WATER AND FORESTRY
PARLIAMENTARY PORTFOLIO COMMITTEE

• 07 MAY 2008
• SJ SEKGOBELA
• CHIEF EXECUTIVE OFFICER

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ABOUT MAGALIES WATER

• Magalies Water is a state owned entity (SOE)
  established in 1969 in terms of the original
  mandate issued under the Water Act of 1956 and
  later the Water Services Act 108 of 1997.
• The Board operates in four provincial areas of
  North West, Limpopo, Mpumalanga and Gauteng.
• The Board is managed from its headquarters based
  in Rustenburg, North West Province.
• The Board currently serves a number wide range of
  stakeholders, mines, municipalities etc.
• On average the Board processes and distributes
  approximately 400 Ml/d of bulk potable water and
  approximately 50 Ml/d of bulk sanitation to serve
  about 1.5 million consumers and end users.

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Perspective of Magalies Water

• Vision
• To be the leading provider of quality water
  services
• Mission Statement
• Magalies Water shall, pursue and attain its
  vision by
• Optimising operational resources and technologies
• Influencing and contributing to healthy water
  resources
• Ensuring staff equity, competence and capability
• Complying with relevant legislation, standards
  and guidelines
• Building customer and community capacity and
  relationships

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HEAD OFFICE

• Physical Address 38 Heystek Street Rustenburg
• PMG note photos have been removed

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Area of supply
Eastern region
Western region
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Area of Operation

• The operational area covers 34 000 km² through
  abstraction from two major catchments namely the
  Crocodile and Olifants.
• The Board operates in four provincial areas of
  North West, Limpopo, Mpumalanga and Gauteng.

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Governance

• Board appointed by Minister provides strategic
  leadership.
• Responsibilities fulfilled in terms good
  governance.
• Board meeting attendance of 80.
• Board support intellectual contributions to
  SAAWU.

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Achievements highlights

• Appointment and management of bulk water and
  sanitation plants on behalf of municipalities.
• Successful implement of the refurbishment
  programmes of Vaalkop, Rustenburg and Roodeplat
  water supply schemes to an amount of R800m.
• Implementation of internship and bursary
  programmes.
• Implementation of Employee Assistance Programmes.
• Completion of drought relief programmes on behalf
  of Municipalities.
• All long-term loans redeemed.
• Continue operating as a sustainable entity.
• Preferred service provider-R760m project with
  existing and new mines in the Rustenburg area.
• Potential for further growth as Rustenburg is one
  of the fastest growing cities.

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CORPORATE STRUCTURETOTAL STAFF COMPLEMENT 349
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MAGALIES WATER SERVICES
Traditional Bulk Services
Value Added Services

• Management, training and support services
• Catchment management services
• Water services in joint venture with WSA
• Water conservation functions
• Billing Services/Cost recovery
• Awareness Campaigns (educational)
• Legalizing of illegal connections
• Operation and Maintenance
• Bottled Water

• Abstraction
• Purification
• Storage
• Distribution
• Scientific Services
• Sanitation

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Magalies Water operate the following
Infrastructure plants
Name Capacity (Ml/day) Technology
 Vaalkop 1    30 DAF, Ozone, RGS, GAC
Vaalkop 2 3 160 DAF, Sedimentation, RGS, Chloramination
Bospooort 12 DAF, GAC, RGS, Chloramination
Klipdrift 18 DAF, RGS, Chlorination
Wallmannsthal 12 DAF, RGS, Chlorination
Cullinan 14 Sedimentation, RGS, Chlorination
Temba 60 DAF, Sedimentation, RGS, UV, Chlorination
Roodeplaat 60 DAF, Sedimentation, RGS, UV, Chlorination
Kloof 2 Sedimentation, RGS, Chlorination
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Sewage Treatment Plants
Boitekong 8 Activated Sludge
Rustenburg 1 12 Biofilter
Rustenburg 2 15 Activated Sludge
Rustenburg 3 15 Activated Sludge
Monnakato 2 Oxidation Ponds
Lethabong 2 Activated Sludge
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ALIGNMENT TO DWAF OBJECTIVES

• Operations and maintenance of water and
  sanitation purification plants that belong to
  different municipalities
• Twinning agreement with Nkana Water in Zambia
• Implementer of DWAF drought relief and
  infrastructure refurbishment.
• Eradication of bucket system and other MDG
  projects

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INFRASTRUCTURE PLAN OVER 3 YEARS.

• Vaalkop extension from 210 to 280ML/D (R640m)
• Vaalkop addition of GAC filters (R20m)
• Vaalkop laboratory upgrade (R1.2m)
• Vaalkop pipeline Cathodic protection (R2.0m)
• Upgrade of Cullinan booster pump station (R0.4m)
• Upgrade of Cullinan bulk pipeline (R1.3m)

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RAW WATER QUALITY AND POTABLE WATER PRODUCED F0607

• Raw water quality in our catchment has continued
  to deteriorate. The following parameters are of
  concern
• Salination increasing salt content
  in water.
• Eutrophication increasing nutrients in water
  that result in algal bloom
• MW has however installed new processes such
  ozonation and GAC filtration.

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RAW WATER QUALITY AND POTABLE WATER PRODUCED F0607

• Total Potable Water samples for F0607 8992 and
  the following compliances were achieved
• SANS 241 Class 1 99.6
• SANS 241 Class 2 100
• The above indicates that MW still produces best
  quality water despite deteriorating raw water
  quality.

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IMPACT OF LOAD SHEDDING

• Loss of revenue
• Increased cost on human utilisation in terms of
  paying over time
• Wastage of water on plant start ups due to
  inferior quality of water produced
• Increased energy costs as pumps use a lot of
  energy on start up
• Pollution of natural resources due to inferior
  effluent or raw sewage discharged into water
  sources.

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CONTRACTS WITH MUNICIPLAITIES

• Rustenburg Local Municipality (RLM)
• City of Tshwane (CoT)
• Madibeng Local Municipality (MLM)
• Modemolle Local Municipality (MoLM)
• Nokeng Tsa Taemane Local Municipality (NTTLM)
• Thabazimbi Local Municipality (TLM)
• Moses Kotane Local Municipality (MKLM)
• Moretele Local Municipality (MorLM)
• Bela Bela Local Municipality (BBLM)

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WATER PRICING

• Consultation process was followed at
  inter-Governmental level with Municipalities,
  National Treasury and SALGA.
• Tariff increases were submitted to the Minister
  for tabling in Parliament.
• Average tariff increases of 5.83 were kept
  within the Government Inflation targets of 3-6.
  
• CPIX at 9.8 in February and impact of rising
  inflation on costs will be absorbed by MW.
• High electricity and fuel costs will have a
  serious impact on the water tariffs.

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FINANCIAL HIGHLIGHTS

• At the end of the 2007 financial year, qualified
  Audit opinion were raised on the following
  items
• - RDP projects performed on behalf of DWAF.
• - Creditors reconcilliations
• - Policy on provision for doubtful debts.
• To adress the above qualifications, the following
  measures were put in place
• - Contracts were obtained from various
  stakeholders
• - Reconcilliations are performed and Creditors
  system is improved to ensure completeness.
• - A policy on Provision for doubtful debts has
  been drafted and approved by the Board.
• There is a general improvement of systems and
  business processes.

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FINANCIAL HIGHLIGHTSfinancial performance
Item 2007 2006
Sales 145 322 140 108
Cost of sales 89 169 76 054
Gross profit 56 153 64 054
Investment Income 30 717 19 100
Surplus for the year 42 962 28 788
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FINANCIAL HIGHLIGHTSfinancial position
Item 2007 2006
Property, plant and equipment 609 456 608 334
Investments 283 214 271 216
Total Reserves 903 471 860 509
Total Liabilities 85 190 86 795
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THANK YOU