Operation Gcin’amanzi (OGA) – Overview of the Technical, Social & Sustainability aspects of OGA

1. Operation Gcin’amanzi (OGA) – Overview of the Technical, Social & Sustainability aspects of OGA Lesego Lebuso: Divisional Manager - New Services Development (NSDD) JW & PROJECT OVERVIEW Nico Singh: Prepayment Manager - NSDD TOTAL PREPAYMENT METERING BECAUSE EVERY DROP MATTERS

2. VISION AND MISSION OF JW • Vision: To become the leading water utility in South Africa. • Mission: To provide all the residents of Joburg with access to quality water and sanitation, JW will: • Deliver a sustainable, affordable and cost effective service, • Upgrade services in Low Income Areas • Create a Customer-focused culture, • Build capacity through the development of our employees, • Improve protection of the environment.

3. CUSTOMERS PROFILE

4. JW CHALLENGES • Provide affordable, cost effective and sustainable services to low income, new areas and informal settlements. • Decrease high UFW (>70%) in low income areas resulting from deemed consumption billing system and poor infrastructure (Operation Gcin’amanzi).

5. PROBLEM STATEMENT • Problems are complex and multi-dimensional • These dimensions are interrelated and interdependent • Only a holistic, integrated approach that simultaneously and proactively addresses all dimensions to the problem will result in success and long term sustainability of the services of water and sewerage in Soweto

6. BACKGROUND • Bulk purchases indicate an average formal erven in Soweto supplied is 61Kl per month • Survey results point to defective plumbing, leaking secondary mains and ill use by residents • Current billing of 20Kl levied as deemed consumption • Average consumption for non-purchasing ervens ± 4 Kl • Average consumption for purchasing ervens ± 11.5 Kl • Fixing the problems will benefit customers and service provider

7. BROAD STRATEGY AND APPROACH • Soweto the area of highest priority as result of greatest water supply and UFW problem • Once-off intervention project involving a variety of intervention measures • Implementation period planned for 4 years • Phased project with a Prototype Phase mainly to test methodology defined in planning phase • Selected prototype area where greatest impact can be achieved • As critical component of this project, a free-payment metering programme is included

8. PAST EXPERIENCE • In Mogale City > 20 000 meters operated successfully despite older generation meters installed • Pilot project – Stretford Ext 4, Orange Farm Experience: • JW has successfully commissioned 1389 meters over a period of 22 months • Few technical teething problems – mainly valves • 70-80% of residents consume less that 6Kl • Community buy-in and ownership in place after full consultative process

9. TOTAL TECHNICAL & SOCIAL INTERVENTION

10. TOTAL TECHNICAL & SOCIAL INTERVENTION Preliminarystage • Identify prototype area • Accurately establish ‘before’ information • Identify and consult with decision makers and political structures • Establish a representative steering committee Community liaison • Undergo a consultation process with the community leaders and community • Conduct a Marketing and Communications Campaign • Undergo an Educational Programme and Awareness Campaign • Institute the signing of consumer water and sewer agreements • Consolidate all customer records

11. TOTAL TECHNICAL & SOCIAL INTERVENTION • Perform a House-to-house survey of existing plumbing • Train semi-skilled PDI’s, Plumbers and Contractors • Do leak detection of all existing mains not being upgraded • Replace secondary water mains (where necessary) including Zone Meters • Replace House Connections • Rehabilitate private plumbing fixtures • Provide metering infrastructure and metering devices • Monitor, evaluate and ensure sustainability (AFTERCARE) • Monitor and evaluate attainment of objectives - KPIs • Implement sustainability initiatives • Reallocate Operations and Maintenance staff

12. EXISTING WATER CONNECTIONS Road House House House House Steelmidblockmains toilet toilet toilet toilet Tap Tap Tap Tap toilet toilet toilet toilet Tap Tap Tap Tap House House House House Road

13. NEW WATER CONNECTIONS Road New water mains House House House House • . • . • . • . • . • . • . • . Steelmidblockmains Tap toilet toilet toilet toilet Tap Tap Tap • . • . • . • . • . • . • . • . Tap Tap Tap toilet toilet Tap toilet toilet House House House House New water mains Road

14. SCOPE OF WORK • June 2004 – 800 stands • June 2005 – 26 664 stands • June 2006 – 75 197 stands • June 2007 – 58 891 stands • Forecast saving of 32 – 35 kl/ stand/ month • Total expected saving of R158m p/annum after project completion

15. INTERVENTION PROGRAMME Social interventions • Educate community on the scarcity of water • Create awareness on water conservation • Educate community on water cycle • Obtain buy-in from customers of their water consumption • Tariffs and FBW education • Educate customers on their rights and obligations

16. PUBLIC PARTICIPATION • Ward Committee briefings and workshops • Public Meetings • Targeted sectoral information sessions held with sectoral stakeholders • Consumer education workshops and study tours • Door-to-door campaign • Consumer information packs • Establish and Capacitate Water Committee

17. ISD PROGRAMME Challenging component of project as it deals with the human aspect to facilitate behavioural change which has no specific time frame: • Full co-operation from ward councilors, ward committees and other recognized community based structures • Regular public meetings to enhance community buy-in as public participation is an ongoing process • Customer satisfaction surveys • Minority opposition experienced - despite this there is community buy in and support is currently at 90%.

18. BENEFITS OF THE PROJECT FOR THE COMMUNITY • Once-off repair of household plumbing fixtures, free of charge • Ownership of consumption • More affordable services and lowering of billed amounts • Better, more consistent service delivery (Building Customer Relations) • Eradicating Arrears - Debt Write-Off & Indigent Policy • Reduction in credit control action • Creation of employment opportunities • Creation of vending opportunities through SMMEs • Creation of regional economic efficiencies

19. FREE-PAYMENT TECHNOLOGY & TOTAL METERING SYSTEM

20. FREE-PAYMENT METERING • Metering required in terms of Water Services Act (1997) • Convenient and accurate way to dispense FBW (Monthly or Daily option) • Empowers the customer to collectively BUDGET FBW and purchased water credits - Manage own consumption in real time • No need for a deposit for water connection • Offers a real practical way of accommodating the indigent • Eliminates many of the problems / disputes associated with conventional metering -meter reading, billing and revenue collection

21. THE CHALLENGES • Total of 162 000 properties to be equipped with free-payment • Ideological debate around the concept of prepayment and acceptance of user-pay principle. • Project scheduling allowing for multiple contracting and procurement for Super-Blocks( ± 90 000 meters) • Free-Payment technology • STS2 enhancement or an urgent alternative. • SANS 1529-9 (Nov 2003) - Strict Compliance • Meter Technology for JW Customer • Affordability for the consumer • Vandalism, Tampering and Illegal Connections

22. THE TOTAL FREE-PAYMENT PROCESS Distributor Cash Deposit Customer pays Cash Bulk Credits 6 Data 1 1 Data 7 8 Credits Downloaded Credits Used Up 4 2 JW Satellite Office Aftercare Support (Technical and Customer care) Into Meter Token 3 Customer Complaints JW Call Centre 5

23. PREPAYMENT BUSINESS UNIT PREPAYMENT MANAGER OPERATIONS MANAGER: PREPAYMENT PROJECT INSPECTOR: PREPAYMENT PREPAYMENT: STORE MAN PREPAYMENT: ADMINISTRATIVE SUPERVISOR PREPAYMENT I.T. ADMINISTRATOR GENERAL ADMINISTRATIVE ASSISTANT PREPAYMENT METER INSPECTORS X5 GENERAL WORKER SUPER BLOCKS 4, 5, 6 AND 7A SUPERBLOCK 1 SUPERBLOCK 2 SUPERBLOCK 3 Customer Agent X3 Data Capturer X2 Customer Agent Assistants: SUPPORT X 6 Customer Agent X3 Data Capturer X2 Customer Agent Assistants: SUPPORT X 6 Customer Agent X3 Data Capturer X2 Customer Agent Assistants: SUPPORT X 6 Customer Agent Assistants: Installation X40 Admin Ass: Data X1 Customer Agent Assistants: Installation X40 Admin Ass: Data X1 Customer Agent Assistants: Installation X40 Admin Ass: Data X1 Customer Agent Assistants: People center X4 Admin Ass: Payments X 1 Customer Agent Assistants: People center X4 Admin Ass: Payments X 1 Customer Agent Assistants: People center X4 Admin Ass: Payments X 1 Admin Ass: Stores X 1 Admin Ass: Stores X 1 Admin Ass: Stores X 1 PREPAYMENT: AFTERCARE (SB 1, 2 & 3) + 4, 5, 6 & 7a Customer Agent Assistants: AFTERCARE X 20 Customer Agent Assistants: AFTERCARE X 20 Customer Agent Assistants: AFTERCARE X 20

24. E-TECHNOLOGY ENVIRONMENT In-house KPI Program that deals with: • O & M data – Maintenance KPI’s • System Characteristics – Efficiency & Effectiveness • Survey and O & M – assess the installation and implementation issues. • Common Distribution/Database Structure (CDS) • PREPAYMENT MMS / HANSEN INTERFACE E.g. No water - response time is within 24hrs from official log of Call) • ISD - PREPAYMENT DATABASE

25. BASIC FREE-PAYMENT EQUIPMENT Free-Payment Meter InformationTransfer Unit Meter Management System Portable Vending Unit

26. VENDING OPERATOR SPECIFICATION • Limited to existing small and micro businesses • Currently using the COJ Cash Office – familiarity • Individual vendor locations will be restricted to the service-provided area of JW and within an approximate 2 kilometre radius around his/her business location to ensure: - Consumer convenience, and - Reasonable income per vendor. • Commission percentage payable is 10% reviewed on an annual basis. • Current Vending Systems are proprietary • Currently initiated the development of a CDS

27. TYPICAL INSTALLATION TYPES USED X Not Recommended- Ground Level Preferred - Above Ground level

28. SPLIT SYSTEM with SMART CARD TYPICAL INSTALLATION TYPES USED

29. PERIPHERALENHANCEMENTS

30. JW DESIRED METER FEATURES Currentmeterfeatures/enhancements developed by JW in conjunction with Meter Suppliers: • Individualized ITU • Displays “FREE” when in FBW • VOLUME (Liters) of FBW remaining • FBW supply options ~ 200l/day or 6kl/month • TRANSFERRED CREDIT from token • ACCUMULATED CREDIT on meter • The VOLUME (Liters) based on the ACCUMULATED CREDIT and CURRENT TARIFF • LOW CREDIT Warning CURRENT TARIFF Price (R/Kl)

31. METER FEATURES cont… • The CURRENT VOLUME reading • The PREVIOUS MONTH end reading (Proprietary) • Battery warning (Flat/Low/) ~ 5-6 years battery life • POSSIBLE LEAK detection • TAMPER status • Option to LOCK meter (Proprietary)

32. TARIFFS - AFFORDABILITY • Subsidized tariff structure – Combine Water and Sanitation • Affordable sliding scale tariff structure replacing flat rate -Increases as your water usage increases • The FBW applies to both water and sanitation services • Three categories of customers with three different cost structures (Residential, Commercial and Institutional) • Debt Write-Off and Indigent policy • Only an Annual Increase

33. CUSTOMER COMMENTS • “The consultation process being done is intense. We are always having meetings in our areas” Clr. Vuyisile, Ward 29, Soweto. • “When are you (Johannesburg Water) going to start this project in informal settlements, as they are the people who need it most.” Mboneni, Soweto. • “We are eight at home and my granny is only paying about R 30.00 for water every month compared to the R 128.44 she used to pay before this project started.” Sibongile, Phiri, Soweto. • “My dad is staying in Phiri. I used to give him R 300.00 – R 400.00 for paying the flat rate and now he is using about R 90.00” Madoda, Vosloorus. • “We love prepaid meters as we are saving a lot. This project creates work as well.” General Ndala, Soweto.

34. CUSTOMER COMMENTS… • “Ever since JW started putting prepaid meters in Phiri, I have been hearing complaints from a small number of community members. I do not understand why they are complaining. I have not experienced any problems since they gave me my meter in February 2004. I receive 6kl monthly and they changed my old toilet bowl for a new one. They also gave me a 20L bucket to help my family measure the water we use daily. I have not paid for water in four months. I think the people complaining do not want to become responsible citizens of this country. We must all start saving water”. Sakhile Phambo • “I think pre-paid is fine but it depend on you, how do you save water and people must start to use water wisely.” M. Maphathe, 121B, Phiri. (5 people) • “The problem is that every after three weeks we buy water and I think that is not fair.” L. Ndlodu, 70B, Phiri. (7 people with 1 backyard rooms)

35. Post UFW for APRIL 2004 (Phiri - Block B) is 6.7%

36. THANK YOU