Rand Water

Rand Water Footprint

• Rand Water’s capital expenditure programme aligns with national government objectives.

• It also aligns with the Honourable Minister’s performance agreement with the Presidency (12 Outcomes)

• The highest recorded peak daily demand is 4677 Ml per day.• Revenue grew up by 13% to R7.75 billion.• Continued to assist municipalities to improve the blue drop and green drop status.

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Alignment to National Government Objectives: Presidential Outcomes

Performance against Shareholder Compact

National ParliamentDWANational Treasury Auditor General

Shareholder Compact

Honourable Minister, Edna Molewa

Corporate Business Plan

Rand Water Strategy

Vision

Mission

Strategic ObjectivesKPAs

KPIs

Annual Report

Quarterly Reports

Annual Assessment of WaterBoards

Reporting Formats

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Raw Water Source

Vaal River

Grootdraai Dam

Sterkfontein Dam

Wilge River

Vaal River

Bloemhof Dam

Vaal Dam

Ash River

Tunnel

Katse Dam

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Pumping and Distribution Elevation

Tunnel from Lesotho

Vereeniging Zuikerbosch

Vaalriver

Klipriver

RESERVOIRSKlipriviersbergMeyer's HillMeredale

Johannesburg

Pretoria

Zwartkopjes

DalesidePalmietEikenhof

+ 60 km

+ 300m

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Extensive Network at Rand Water’s Disposal

• Rand Water’s pipe network is over 3000 km.

• This also coincides with the residence of 12 million consumers.

• The replacement value of this network is estimated to be over R15 billion.

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Rand Water chose to explore the nature of its future 20 years from now, i.e. what Rand Water and the water sector could look like in the future.

Rand Water of the Future

1st July 20301st July 20251st July 2020Now - 1st July 2015

Technological Innovations

Satisfied Markets Served

Environmental Redress, Sustainability and Leadership

Institutional Reform

Policy and Legislation

Skills development and world leadership

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Rand Water of the Future – Rand Water – 2030Role of Group Strategy – Corporate Performance

Annual determination of Strategic Goals for the organisation

Financial Year Ending 30th June 2012 2013 2014

Number of papers presented to and approved by Board and adopted by relevant stakeholders with regards to organisational preparedness

% Completion of projects (Achievement of milestones on priority 1 and 2 projects)

% Completion of projects (Achievement of milestones on priority 1 and 2 projects)

Establishment of a Rand Water Academy

Number of graduates enrolled by the Rand Water Academy

Number of graduates enrolled by the Rand Water Academy

Establishment of a MOU with a mine with regards to acid mine drainage

Number of plants operated by / with Rand Water in the production of water from acid mine drainage

Number of plants operated by / with Rand Water in the production of water from acid mine drainage

Growth in turnover from other business(Turnover ~ 2010 ~ R10 m) (2011 ~ R74m) (2012 ~ R161m)

Growth in turnover from other business(Turnover ~ 2013 ~ R 378 m)

Growth in turnover from other business (Turnover ~ 2014 ~ R371 m)

Establishment of a Rand Water Innovation Hub

Number of identified Rural District Municipalities supported by Rand Water

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• Natural population growth, inward migration, AIDS, service backlogs, system losses

• Domestic usage – 70% of total

Factors affecting demand growth

• Estimated in 2010 – 11.7 million• Projected for 2030 – 14.7 million• Annual rate of growth (%) continues to decline

Population growth for Rand Water area of

service

• Supply 75% of total demand to three metros – Johannesburg, Ekurhuleni, Tshwane

• Metros forecast ave growth of 2% per annumMajor customers

• Forecast peak day for 2015 – 5300 Ml/d• Forecast peak day for 2030 – 6900 Ml/d• Increase of 1600 Ml/d over 15 years

Growth in demand

Rand Water chose to explore the nature of its future 20 years from now, i.e. what Rand Water and the water sector could look like in the future.

Rand Water of the Future

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There are four potential sites within the bulk supply network for generating power. The four sites are• the Control Works at the raw water canal, and • Klipfontein, • Brakfontein and • Hartbeesthoek Reservoirs on the Palmiet supply system. The project can be strongly financially positive over time and result in the reduction in the cost of energy.

An amount of R400 million has now been included in the 5 year investment forecast, starting in 2011/12, to allow for finalization of institutional methodology and agreement with relevant parties.

Co-generation

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PROJECT RISK MANAGEMENT

THE RAND WATER CASE STUDY

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To be a provider of sustainable, universally competitive water and sanitation solutions for

Africa

OUR VISION

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In the 2012-13 financial year, Rand Water saw an increase of 126ML (126million liters) in demand of portable water a day from its customers ( from an average 3980ML to 4106ML against an installed capacity of over 5300ML ).

To ensure that we continue to meet target volume growth over the next few years, we have committed capital to increase our capacity by 600ML by 2016/17.

We stepped up our investment in infrastructure by 18% to R1.75billion in the 2012/13 financial year, using cash generated from operations to fund the bulk of this spending.

Among the key projects commissioned in the year 2012/13 was the BG3 raw water pipeline augmentation project to increase capacity of the raw water supply system from Vaal Dam to our purification and pumping station

DELIVERING ACROSS THE BOARD

COO Portfolio

Scientific Services Division

Operations Division

Strategic Asset Management

Division

THE COO’S PORTFOLIO

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Strategic Asset Mgt Division

Capital Projects Assets

THE S.A.M. DIVISION STRUCTURE

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INTERNAL CHALLENGES

1. Failure of existing infrastructure • Ageing infrastructure failing to meet growing demand

• RW decided to address the issue by investing in huge Infrastructure revamp program, which entailed a series of projects to be undertaken.

2. Staff Capacity and Capability (required skills set)

• Organizational Redesign exercise in 2010 with the COO’s portfolio being the core, followed by the rest of the business.

CHALLENGES AND MITIGATING MEASURES

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INTERNAL CHALLENGES

2. Staff Capacity and Capability (required skills set) Cont..

• Resulted in a massive recruitment drive in 2010 to obtain the required skills to meet the R11bn capex program (Program managers, Project Managers, Quantity Surveyors amongst other critical skills set. )

• In 2013 Executives approved a productivity assessment to be undertaken as a means of assessing the organizations current performance.

CHALLENGES AND MITIGATING MEASURES

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INTERNAL CHALLENGES

3. Staff attraction and retention• RW continuously bench marks its remuneration packages as a means

of ensuring that it’s in line with the market standards.

4. Integrated network/ system• Interdependent nature of the system

5. Fraud and Corruption• RW has proactive audits undertaken by both the internal audit

department and forensic department. Quarterly reports submitted to Audit Committee and Board

• Active Fraud hot line in place.

CHALLENGES AND MITIGATING MEASURES

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EXTERNAL CHALLENGES1. Delays in obtaining external approvals

• Environmental approvals ,Water use licenses , Servitudes , Rights and land Issues

• An internal agreement exists between our Legal Division and SAM –Assets dept. to ensure that Legal department gets a 5 year plan for projects so that they can initiate the process of obtaining the external approvals.

• The SHEQ department from the risk division is a member of the Asset Committee that plans and prioritizes projects; SHEQ representatives are responsible for identifying all the external approvals that may be required for the identified projects.

CHALLENGES AND MITIGATING MEASURES

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EXTERNAL CHALLENGES

2. Encroachment on RW servitudes and pipeline

• RW has established an internal task team that looks at existing and potential encroachment threats and develops measures to address or minimise the impact of encroachment on the business.

• The RW Security Department regularly patrols the RW infrastructure network.

CHALLENGES AND MITIGATING MEASURES

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EXTERNAL CHALLENGES

3. Emergency projects & unsolicited mandates

• Critical skills burn out

• Continuous reshuffling of limited critical staff

4. Climatic conditions

• The negative impact of unexpected changes in weather patterns on our projects

CHALLENGES AND MITIGATING MEASURES

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EXTERNAL CHALLENGES

5. Contractor Performance

• The need to accommodate emerging contractors (increased micro management of RW’s part)

• Skills challenges for both established and emerging contractors (e.g. design consultants)

6. Manufacturer challenges

• Failure to obtain critical components from suppliers and manufacturers (e.g. Valves and Pumps due to the RW standard and size specifications)

CHALLENGES AND MITIGATING MEASURES

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Experience has taught us that;

• Adequate resources with the correct skills set is critical

• All project designs, whether done internally or externally should be thoroughly reviewed prior to the commencement of the project .

• Early acquisition of servitudes and external approvals (Water licenses & Environmental Authorizations)

• The documentation of lessons learnt for each and every project is important

• The regular review of lessons learnt prior to new project execution is important.

CONCLUSION

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• THANK YOU