Rand Water Parliamentary Portfolio Committee Water Affairs Forestry

Rand Water Parliamentary Portfolio Committee Water Affairs & Forestry Presentation of Annual Report

Snapshot • Revenue - R 4, 119 bn (R 3, 672 bn~2006) • Total Assets - R 6, 257 bn (R 5, 387 bn~2006) • All Rand Water financial reports are unqualified • Staff Employed - 2900 • Corporate ISO 9001: 2000 accredited • All plants ISO 14001 accredited

Rand Water Geographical Footprint Consumers - 12 million Supply Area - 18 000 km 2 Total Pipeline Length Total Number of Reservoirs - 3 400 km - 54

Performance Highlights • Profit 25. 3% • Revenue 12. 2% • Cash generated from operations 17. 8% • Sales volume 2. 7%

Performance Highlights 2007 2006 • Customer Satisfaction Index: 76% • Training spend (as % of Total Payroll) 7% 76% 7% • Employment equity at management level 75% 64% • BEE spend 60% 64%

Corporate Social Involvement • Water related and non-water related • The focus area and allocation of funds ( ~ Approx R 2. 5 m) Focus Area Type of Support Spent HIV/AIDS Home based care R 780 000 Special needs institutions Training equipment R 493 000 People with Disabilities Resource provision R 335 000 Women Empowerment Shelter provision R 304 000 Care of the Elderly Support to institutions R 284 000 Partnerships Partnering with organisations R 420 000 Health Grants to organizations R 80 000

Corporate Social Involvement • This is water related activities in partnership with different stakeholders Summary of Job Creation and Local Supplier Support Gender Jobs Created % Male 224 48 Female 267 52 Total 513 100 Project funds spent on local labour and suppliers Items Funds Spent % Traditional Suppliers 468 000. 00 4 PDI Suppliers 10 000. 00 52 Total 10 468 000. 00 100

Corporate Social Involvement • This is water related activities in partnership with different stakeholders Project Description Area Water pipeline Reinforcement Winterveldt R 7 000 CT Winterveldt Sanitation Winterveldt R 7 500 000 CT Emfuleni Leaks Repairs Bekkersdal R 1 900 000 Emfuleni, RWF Tshwane- Leaks Repairs Mamelodi R 1 500 000 CT, RWF DACEL-Alien Plant Removal Elandsfontein R 1 665 000 GDACEL-Alien Plant Removal Mogale City R 1 485 000 GDACE KZN Donga Rehabilitation Bergville R 4 825 000 DEAT HIV/Aids Mainstreaming National R 1 754 000 DWAF Water Sector Monitoring National R 7 200 000 DWAF Bushbuckridge Water Supply Kumani Village R 1 900 000 BBR Rand Water Golden Gate Freestate R 2 000 RW Siluma Wetland Gauteng R 5 550 000 RWF Blesbokspruit Nigel R 1 265 000 RWF Sri Lanka Water Service Support Sri Lanka R 3 850 000 DWAF TOTAL Project Value R 46 383 000 Funder

Energy Crisis Impact • Request by Eskom to cut usage by 10% • Active engagement with Eskom: • Cooperation but on our terms • Water quality and reliability problems • Active/Dynamic pumping and reservoir management – to encourage savings • Essential services exemption • Still finding ways of saving on electricity usage – energy efficiency programme

CONSULTATION • SALGA: • • • Use of surplus to reduce tariff Supported Capital Programme Value chain sustainability • National Treasury: • Inflation target • Explore feasibility of further reduction

Allocation of surplus : Project Overview Forecast Cashflow Significant Capital Projects (R m) Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 A Augment infrastructure 5720 439 395 470 529 B Renovation & replacement 1370 148. 6 271 344 323 310 C Total 7090 569 710 739 793 839

Allocation of surplus • Central to our operations - pipelines • Generally very old – mostly in excess of 80 years • Significant amounts being spent on augmentation and refurbishment to ensure operational sustainability • Increased expenditure due to escalation • Reserves will be used to smooth the tariff and cater for new schemes

Projects plan - Process Steps • Additional water supply scheme due to development. • Planned programme of renovation to existing infrastructure • Analyses of latest estimates of future water demand growth patterns depending on development statistics.

Projects plan - Process Steps • Condition assessment of current infrastructure. • Annual infrastructure recommendations combine : - extra capacity for 15 year demand growth - renovation to maintain existing capacity

How are costs determined • Estimates for these projects are done by escalating similar work already completed. • By enquiring from the market what the current costs for the work are.

Water Quality Full adherence to SANS 0241 (based on a WHO standards)

Water Quality - Cont

Fit with overall DWAF Strategy • Emfuleni Sanitation • Delmas involvement • Western Highveld Involvement

Challenges : Sanitation & Environmental Pressures • 85 per cent of local municipalities within Rand Water’s catchment area have challenges with meeting DWAF’s effluent management standards • This increases Rand Water’s purification cost • This ultimately places greater pressure on Rand Water’s tariff increments One solution is to roll out the Emfuleni Regional Sanitation Scheme