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ANNUAL REPORT PRESENTATION

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CONTENT. Rand Water profile. Customer Sales profile. Sales trend. Cost of raw water ... Operational costs/kl sold. 1.8. 1.5. 1.2. 1.1. X. Current Ratio. 0.8 ... – PowerPoint PPT presentation

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Title: ANNUAL REPORT PRESENTATION


1
ANNUAL REPORT PRESENTATION
  • Celebrating a decade of water services delivery
    in a democracy

2
ANNUAL REPORT H KASAN
TARIFFS K NAICKER
WATER BOARD ACCOUNTABILITY P CAMAY
3
CONTENT
  • Rand Water profile
  • Customer Sales profile
  • Sales trend
  • Cost of raw water
  • Projected input costs vs CPIX
  • Gross profit
  • Profitability

4
CONTENTCONT
  • Value creation
  • Return on assets
  • Business performance Indicators
  • Performance Highlights
  • Social responsibility trend
  • Future developments
  • Decade of Service Delivery - Review

5
Rand Water profile
  • Largest water utility in Africa
  • Bulk water supply increase to 3 414 M? /d
    (3340M? /d 2003)
  • Supplies 12 million people daily
  • Sole area of service 18 000 km²
  • 13 000 km² joint area of service with other Water
    Boards

6
Rand Water profilecont
  • Turnover R3 258 bn ( R2 884 bn 2003)
  • Assets R5 232 bn (R4 892bn 2003)
  • Staff employed 3 097 (3 108 2003)
  • Corporate ISO 9001 2000 accredited
  • All plants ISO 14001 accredited

7
CUSTOMER SALES PROFILE
8
SALES TREND
9
COST OF RAW WATER
10
PROJECTED INPUT COSTS VS CPIX
11
GROSS PROFIT
12
PROFITABILITY
13
VALUE CREATION
14
RETURN ON ASSETS

15
PROFITABILITY
  • Why generate large surplus (profit) ?
  • Capital investment planned for next 5 years
    R2,5 billion
  • To access funds (debt) at lowest cost to fund
    capital investment
  • No loans from government
  • No guarantees from government
  • Ensure sustainability
  • Not profiteering but recovering cost of capital

16
BUSINESS PERFORMANCE INDICATORS
17
BUSINESS PERFORMANCE INDICATORSCONT
18
BUSINESS PERFORMANCE INDICATORS
19
PEFORMANCE HIGHLIGHTS
33
  • Surplus R375 million
  • Revenue R3 258 million
  • Cash generated from operations
  • Increase in sales

13
9,1
2,2
20
PERFORMANCE HIGHLIGHTScont
2003
2004
  • Customer SLA evaluation
  • Customer Satisfaction Index
  • Training spend ( as of Total Payroll)
  • Designated groups at management
  • BEE spend

89
88
77
77
6,6
7
60
64
42,3
46
21
SOCIAL RESPONSIBILITY TREND
22
FUTURE DEVELOPMENTS
  • RAND WATER SERVICES
  • Providing water services value adding to
    municipalities in South Africa
  • Back-up supply for SASOL R40 million pipeline
  • NEPAD initiatives

23
FUTURE DEVELOPMENTScont
  • INFRASTRUCTURE PROJECTS
  • BRAKFONTEIN/RUSTENBURG 80 KM PIPELINE R450
    million currently doing environmental impact
  • WESTERN HIGHVELD REGION PROJECT
  • R113 million of which R40 million is from Rand
    Water

24
FUTURE DEVELOPMENTSCONT.
  • A total of R2,5 billion capital investment is
    planned over the next 5 years
  • R962 million in infrastructure development
    projects in progress

25
DECADE OF SERVICE DELIVERY - REVIEW
26
DECADE OF SERVICE DELIVERY
  • Participated in Presidential Lead projects
    Winterveldt, Bushbuckridge (R142m)
  • The project facilitated supply through 3 500
    communal standpipes benefiting approximately 1
    million people
  • R215 million worth of projects implemented by
    CBPD
  • Winterveldt sanitation project more than 2 540
    toilets for Winterveldt built (R8,3m) benefiting
    25 000 people

27
DECADE OF SERVICE DELIVERY
  • Integrated Water Demand Management Interventions
    R60 million
  • Established Rand Water Services Pty (Ltd)
  • Launched Rand Water Foundation
  • Significant Transformation within the
    organization
  • Designated group Management level
  • 64 (33 2000)
  • Women representation in management, professional
    and supervisory 28,2 (22 2000)

28
RAND WATER IS
  • IZANDLA ZIYAGAZANA

29
Tariff Setting Accountability
  • Rand Water
  • Water Affairs Forestry Portfolio Committee
  • October 2004

30
ISSUES
  • Municipal Financial Management Act 6 months
    advance notice
  • National Treasury SALGA 40 days for
    consideration
  • Bulk Water Supply Contract prior consultation
    and information sharing
  • Core/Primary activity vs. non-core

31
ISSUES Core vs. Non-core
  • CORE
  • Bulk Water
  • Bulk Sanitation
  • Rand Water Board
  • NON-CORE
  • Retail Water
  • Community Projects
  • Business Devt.
  • Farm Operations
  • Pipe Manufacturing
  • Rand Water Services (Pty) Ltd

32
PROCESS
  • Aug. 2004
  • Sept. 2004
  • Sept. 2004
  • Oct. 2004
  • Oct. 2004
  • Dec. 2004
  • Dec. 2004
  • March 2005
  • DWAF raw water pricing
  • Board prelim. approval
  • Customer Consultation Information Sharing
  • Board prelim. approval
  • Submission to Treasury and SALGA
  • Board final approval
  • Customer Notification
  • Parliamentary approval

33
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34
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35
Water Board Accountability
  • Presentation to the Portfolio Committee

36
Introduction
  • Water Board accountability covered by a number of
    measures
  • Presentation covers the broad requirements of
  • Water Services Act, 1997
  • Public Finance Management Act, 1999
  • Other requirements

37
Water Services Act, 1997
  • Water Services Act, 1997
  • Water Boards are established in terms of the
    Water Services Act, 1997
  • Executive Authority Minister of Water Affairs
    and Forestry
  • Has principal oversight over water boards

38
Water Services Act, 1997
  • The Minister must review the provision of water
    services to water services authorities
  • Makes recommendations to Parliament on the
    establishment, functions and disestablishment of
    water boards
  • Must monitor operational and financial
    performance of water boards

39
Water Services Act, 1997
  • Oversight through Policy Statement
  • In terms of Section 39(1) every water board must
    prepare and adopt a policy statement
  • Policy statement must be submitted to the
    Minister, the relevant Province(s) and must be
    accessible to the Public
  • The Minister can issue a directive for a water
    board to amend a policy statement

40
Water Services Act, 1997
  • Oversight through 5 year Business Plan
  • Section 40 requires water boards to prepare and
    adopt a five-year business plan
  • Business plan must be submitted to the Minister
  • The Minister may require a water board to amend
    its business plan

41
Water Services Act, 1997
  • Oversight through Annual Statements
  • Section 44 requires a water board to issue an
    Annual Report and audited financial statements
  • The Annual Report and audited financial
    statements must be submitted to Parliament
  • Numerous other obligations range from
  • Ring fencing of additional activities
  • Discontinuation and limitations of water services

42
Water Services Act, 1997
  • Policy statements, business plans and annual
    reports appraised annually by the Department of
    Water Affairs and Forestry and findings presented
    to the Minister to inform decision making
    regarding water boards

43
Appointment of Board Members
  • Board members appointed by Minister of Water
    Affairs and Forestry
  • Schedule 1 of the Act provides the procedure for
    the appointment of Board members
  • Constitution of a selection panel
  • Consists of Chief Executive, Provincial
    representative(s), Ministerial representative and
    Person of good repute within service area
  • Call for public nominations for Board members in
    water boards service area
  • Selection panel makes recommendations to the
    Minister

44
Appointment of Board Members
  • Section 35 requires
  • That the Board must be representative of water
    services authorities that receive services from
    the water board
  • Other interests served by the Board are
    represented
  • Broad population is represented
  • Local Government representation determined
    through consultation by the Minister with
    relevant organisations in the service area that
    represent municipalities (the South African Local
    Government Association etc)

45
Appointment of Board Members
  • Previous Rand Water Board consisted of
    representatives from
  • Municipalities
  • Women
  • Men
  • Current Board has Representatives
    municipalities women men
  • Municipalities 7
  • Women 7
  • Men 12
  • One member of Provincial Legislature also
    included

46
Public Finance Management Act, 1999
  • National Treasury also has oversight over
    financial performance
  • Minister of Water Affairs and Forestry given
    executive authority over water boards

47
Recent Developments to Monitor Water boards
  • Shareholders compact in terms of Treasury
    Regulations Act
  • Quarterly reports in terms of Treasury Regulations

48
Shareholders Compact
  • It is a requirement of Treasury Regulations
  • May 2002( Regulation 29.2 )
  • It sets parameters of the relationship
  • Includes performance measures and indicators
    which must be attained by a water board

49
2. Quarterly Reports
  • Are a requirement of Treasury Regulations May
    2002 (Regulation 29.3)
  • The purpose is to monitor and evaluate
    performance as contained in the Shareholders
    Compact
  • To effect timeous corrective action

50
Other Mechanisms to Ensure Accountability
  • New National Task Team led by Department of
    Public Enterprises to strengthen regulatory role
    of government over parastatals
  • Development of mechanism to monitor Board
    performance
  • Ensure good corporate governance
  • Bulk Water Services Model Contract
  • Borrowing Limits set by National Treasury
  • Adherence to King II on Corporate Governance
  • Reporting to Portfolio Committee as and when
    required
  • CE salary

51
THANK YOU
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