1 / 24

PRESENTATION TO PCWEA – 17 APRIL 2013

PRESENTATION TO PCWEA – 17 APRIL 2013. OVERVIEW. Established in 1997 by the Minister of Water Affairs and Forestry in accordance with the Water Services Act. Mandated to provide water services to other water service institutions.

janelle
Download Presentation

PRESENTATION TO PCWEA – 17 APRIL 2013

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. PRESENTATION TO PCWEA – 17 APRIL 2013

  2. OVERVIEW • Established in 1997 by the Minister of Water Affairs and Forestry in accordance with the Water Services Act. • Mandated to provide water services to other water service institutions. • Currently operates in the Bushbuckridge Local Municipality and part of the Mbombela Local Municipality in Nsikazi area within the Ehlanzeni District Municipality. • Area Ml/day Population • Bushbuckridge Local Municipality Area (BLM) (8 PWTW) 96 454 817(Census 2011) • Two Plants owned by DWA and Six plants owned by BLM • Mbombela Local Municipality Area (MLM) (6 PWTW) 71 568 647(Census 2011) • ( MLM) (1WWTW) 3.5 • All Plants owned by MLM • BOARD OF DIRECTOR • The term of the current board of directors is from February 1, 2010 – March 31, 2014.

  3. ACHIEVEMENTS FROM TURN AROUND STRATEGY

  4. Debt owed by WSAs to BW • Bushbuckridge Local Municipality • R240,2 mil – June 2012 • Escalated by R31,8 mil since June 2011 and R72 mil since June 2010 • BLM signed acknowledgement of debt of R190 mil and agreed to be pay R95 mil on instalments • Instalments of R5 mil per month ring-fenced debt starting January 2012 • Only R13,8 mil of R30 mil historic debt paid to date • Additional R25 mil paid in December 2012 towards historical debt • Credit control measures put in place including appointment Debt collectors • Disestablished Bohlabela District municipality • R26,4 mil – From July 2006 to June 2012 (No interests included) • Debt collectors appointed to collect this debt • Mbombela Local Municipality • R14 mil – June 2012 • Debt settled in full (late payment) • R18 million grant from DWA

  5. Supply Contracts • BLM • A three years Bulk supply contract be signed and to be reviewed in 2014 • A possible extension to a five year contract • A committee of officials established to jointly manage the contract • MLM • Parties to agree on Key deliverables before end of financial year • A draft contract offer made by MLM, being discussed by BW • DWA – Institutional Oversight consulted during the formulation of the draft contract

  6. Capital Infrastructure Projects • A 20 years Capital Infrastructure Plan being compiled, to be completed June 2013 • Challenges faced due to short term contracts with WSAs. • Cogta-MP • BW entered into agreement to implement projects on behalf of Cogta-MP to the • value of R23 mil • Projects completed as agreed with Cogta-MP and the receiving municipalities • 5% agency fee was paid to BW for implementation of the projects • DWA-MP • BW entered signed agreement to implement projects on behalf of DWA-MP to the • value of R4,5 mil • Projects completed as agreed with DWA-MP and the receiving municipalities • 5% agency fee to be paid to BW for implementation of the projects • A water purification package plant was implemented in Albert Luthuli LM(Carolina Town) to the value of R1,1 mil under the Rapid Response project.

  7. Metering/Illegal connections • Metering • BW completed a study with the intention to address metering challenges in BLM • Study recommends the establishment of 20 new metering points • DWA approved R2,5 million grant to address the new metering points • Rand Water appointed as implementing agent to install new meters • A steering committee comprising of BW, Rand Water and BLM established to oversee the implementation of this project • Illegal connections • The study Identified the existing illegal connections • The report discussed with BLM and decision to be taken on which illegal connections to formalized or removed • BLM to fund the metering/formalization of illegal connections • Other projects funded through DWA grant • Telemetry and Scada system • Blue Drop certification • Refurbishment and pumps replacement • A total of R18 millions already transferred

  8. ANNUAL FINANCIAL STATEMENTS

  9. 2011/12 Annual Financial Statement 8% Growth in revenue to R131.5 million 11% Increase in EBITDA to R22.8 million 1% reduction of direct operating cost 7% increase of the tariff to 3.70 46% recovery of the historic debt of R30 million as per agreement 87% recovery of invoiced amount in Mbombela Local Municipality 60% recovery of the invoice in Bushbuckridge Local Municipality

  10. 2011/12 Annual Financial Statement Continues…………. • In order to ensure that sufficient cash is collected to cover its budgeted expenses, the board will • Increase the minimum monthly payments owing by BLM from R6.3 million to R8.5 million. • Reduce the water pressure to the BLM when the municipality fails to pay agreed amounts. • Employ the services of debt collectors in order to recover the amounts outstanding by the BLM.

  11. AUDIT REPORT

  12. 2011/12 Independent auditors’ report • Independent Auditor’s Report • BW Audited by Independent Auditors : KPMG Inc • BW received an UNQUALIFIED AUDIT opinion with emphasis of matter • Emphasis of Matter • The net loss of R49.9 million for the year ended 30 June 2012 – Going concern • Report on other Legal and regulatory requirements • Predetermined objectives • - Performance information – No material findings • Compliancewith Laws and regulations • - Non compliance with Sec 51(1)(a) of the PFMA – Material misstatement that was corrected – R1.9 million • Internal Controls • - Accounting Authority did not review and monitor compliance with applicable laws and regulations

  13. PERFORMANCE AGAINST STRATEGIC OBJECTIVES

  14. 2010/11 Annual Performance Results • Provide bulk water and sanitation services • 1.1 Reliability of supply • - Increase the volumes of water supplied by 1.66% • -Managed to achieved average unaccounted for water of 6.2% • 1.2 Water quality • - 98% compliance to SANS 0241 for potable water due to old infrastructure • -No out break of water-borne diseases reported • 2. Entrench sound financial management and corporate governance • 2.1. Financial Management • - Increased revenue by 8% in BLM • - 60% recovery of revenue on invoices in BLM~ based on flat rate payment agreement • -87% recovery of revenue on invoices in MLM • -46% recovery of R30 million historic debt per contract • - Unqualified audit report • 2.2. Corporate governance • - 87% attendance of planned Board and Board committee meetings • Optimize stakeholder interaction and engagement • 3.1 Stakeholder relations • -Improve stakeholder relations engagements • 3.2. Business Development • -SLA signed with BLM

  15. 2010/11 Annual Performance Results…. 4. Optimise human capital investment 4.1. Human resources - 1.5% staff leaving the institution - 29% implementation of Employment Equity plans-

  16. CAPITAL INFRASTRUCTURE EXPENDITURE

  17. 2011/12 Capital Infrastructure Expenditure • Grant funding from Cogta-MP and DWA • 95% of projects completed within schedule:

  18. 2013/14 Tariff Structure

  19. 2013/14 TARIFF STRUCTURE • Consideration of Eskom Increases • No material impact on the tariff • Initial BW estimates was 16% • 9.6% increases was effected but no material changes • Complied with Regulatory frameworks • Water Services Act, 108 of 1997 s10 Norms and standards for tariffs • Municipal Finance Management Act No. 56 of 2003Section 42 • Comments from Stakeholders • Bushbuckridge Local Municipality – Accepted the 12.5% increase • National Treasury – Commented on 12.5% increase; Raised concerned on debt recovery • SALGA – Commented on 12.5% increase; • Mbombela Local Municipality Tariff • Charging rates per management contract • Tariff based contract is being finalized with MLM • Charge within BLM rate for the first year of the contract

  20. 2013/14 TARIFF STRUCTURE Continues

  21. 2013/14 TARIFF STRUCTURE Continues Final Tariff after consideration of Eskom 9.6% increase Propose 12%

  22. Bushbuckridge Water Strategic Plan (TO FOLLOW)

  23. Challenges • Board vacancies hampers smooth operations of Board committees • Deteriorating financial condition of BLM impacting on financial viability of BW. • Escalating debt for Bushbuckridge local municipality • Failure to attract suitably qualified personnel to fill vacancies. • Inability to meet CSI project targets due to cash flow constraints • Backlog in refurbishment and maintenance due to cash floe constraints

  24. Thank you

More Related