DWA CONSOLIDATED REPORT ON THE PERFORMANCE OF THE TRANS-CALEDON TUNNEL AUTHORITY (TCTA) AND

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 Portfolio Committee on Water and Environmental Affairs 23-24 April 2013

2. PURPOSE The purpose of this presentation is to provide a strategic overview of the performance of the TCTA and the WRC for the 2011-12 financial year, both from an institutional performance and financial performance perspective

3. THE SHAREHOLDER MANAGEMENT Performance Monitoring & Evaluation • Quarterly reporting • Annual Reports • Entities reporting to Portfolio Committee –once a year

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

5. TCTA STRATEGIC INTENT 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: • 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, 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

6. PRIMARY PURPOSE OF TCTA The primary purpose of TCTA is to raise finance and manage the repayment of the debt for each project on behalf of DWA. DWA cannot do this as a Government Department cannot borrow money

7. RANGE OF TCTA’S ACTIVITIES • TCTA is a multi disciplinary state owned entity specialising in project financing, implementation and liability management. • TCTA’s products and services are as follows: • Project Management and Implementation of bulk raw water infrastructure • Project design • Project construction • Environmental compliance • Land acquisition • Operation and Maintenance (Outfall tunnel North of LHWP) • Debt management • Structuring and raising project finance • Knowledge management • Risk management • Operation and maintenance • Socio-economic transformation • Tariff setting

8. TCTA 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 National Treasury for the purposes of stakeholder representation.

9. TCTA’s CURRENT MANDATE AND DIRECTIVES • Lesotho Highlands Water Project – South Africa portion of the Delivery Tunnel North • Lesotho Highlands Water Project – fulfilling all South African financial obligations to the Government of Lesotho • Advisory services to water management institutions, water boards and DWA • Berg Water Project • Vaal River Eastern Subsystem Augmentation Project • Mooi-Mgeni Transfer Scheme Phase 2 • Komati Water Scheme Augmentation Project • Olifants River Water Resource Development Project Phase 2 • Mokolo-Crocodile River Water Augmentation Project Phase 1 • Metsi Bophelo Borehole Project • Acid Mine Drainage: pump station and neutralisation plant • Refurbishment of Mooi-Mgeni Transfer Scheme – Phase 1

10. PROGRESS AGAINST MANDATE AND DRIECTIVES

11. PROGRESS AGAINST MANDATE AND DRIECTIVES

12. PROGRESS AGAINST MANDATE AND DRIECTIVES

13. FINANCE

14. PROJECT SURPLUSES AND DEFICITS Each project is accounted for separately. Throughout the project life-cycle, the projects reflect net surpluses and deficits depending on the phase and repayment profile of the project At the end of the debt repayment period these balance themselves off to zero

15. DEBT CURVE ON LHWP

16. REATIONSHIP WITH WATER TRADING ACCOUNT The physical assets are recognised in the books of the Water Trading Account as well as the liability for the Water Trading Account to pay tariffs to TCTA TCTA reflects a financial asset in its books representing the future tariff payments to be received from DWA over the projects debt repayment period A close working relationship has been forged between TCTA and the Water Trading Account, with tangible strides made in improving customer billing and leverage on expertise

17. TCTA AS A GOING CONCERN TCTA is satisfied that given the certainty of cash-inflows from the Department of Water Affairs, that TCTA will have sufficient resources to continue in operational existence for the foreseeable future and for this reason the going concern basis continues to be adopted in preparing the financial statements for the ended 31 March 2012

18. TCTA BONUSES

19. TCTA JOB CREATION

20. TCTA: SUMMARY & CONCLUSION 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.

21. WRC OVERVIEW • The 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

22. WRC 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

23. WRC 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.

24. Income Indicators *Leveraged income includes all other income with the exception of interest received 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.

25. WRC PERFORMANCE (continued) Research Spend (Allocation)

26. WRC PERFORMANCE (continued) Research Spend (% utilized) The actual % of funds utilised for research projects in each of the KSAs, relative to the allocated funds and is summarised in the table below. (2010/11 data in brackets)

27. WRC PERFORMANCE (continued) Annual Audit • The WRC obtained an unqualified audit report of its annual financial statements for 2011/12 financial year.

28. WRC PERFORMANCE (continued) • Statutory Compliance • The WRC complied with all statutory reporting requirements for the reporting period including: • strategic plans • business plans • budget • quarterly reports • other relevant statutory submissions

29. 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.

30. WRC BONUSES

31. WRC JOB CREATION 2011/12 506 students on funded projects 6 new appointments at the WRC

32. WRC ACHIEVEMENTS AGAINST KNOWLEDGE GENERATION INDICATORS

33. WRC ACHIEVEMENTS AGAINST KNOWLEDGE GENERATION INDICATORS (cont)

34. WRC ACHIEVEMENTS AGAINST KNOWLEDGE DISSEMINATION AND CAPACITY BUILDING INDICATORS

35. WRC ACHIEVEMENTS AGAINST FINANCIAL INDICATORS

36. WRC ACHIEVEMENTS AGAINST SUPPORT SYSTEMS & PROCESSES INDICATORS

37. WRC: SUMMARY & CONCLUSION 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.

38. THANK YOU !!!!