2014/18 - Amatola Water

1 2014/18 BUSINESS PLAN3 Chapter 1 Foreword Chapter 2 Introduction Chapter 3 Policy Statement Chapter 4 Self Appraisal of Business Achievements and Strategic Plan Chapter 5 Directives by Minister Chapter 6 Participation in Companies, Trusts, Joint Ventures and Transactions Chapter 7 Water Resource Development Chapter 8 Bulk Potable Water Plan Chapter 9 Bulk Waste Water Treatment and Disposals Chapter 10 Retail and Industrial Water Supply Chapter 11 Other Activities Chapter 12 Human Resource Development Plan Chapter 13 Environmental Management Programme and Plans Chapter 14 Water Conservation and Water Demand Management Chapter 15 Financial Plan Chapter 16 Bank Account Details Chapter 17 Analysis of Risks Chapter 18 Declaration of Disclosure Chapter 19 Shareholders Compact Annexures Annexure A Service Area Map Annexure B Scheme Layout Plan Annexure C Key Statistics Annexure D Strategic Plan and Corporate Scorecard Annexure E Major Dam Yields Annexure F High Level Organogram Annexure G Financial Model Annexure H 5 Year Capex Programme Annexure I Bank

2 Account Details 1 3562728294461636475869093103104107108 120121122126145146147165167 Contents1 Amatola Water is in year two of its new long term strategic plan with a 20-year timeframe as aligned to the country s National Development Plan. Central to this strategy is the refocus of Amatola Water s core mandate to Section 29 activities. Good progress has been made in implementing the strategy, with primary business in 2012/13 compared to 41% primary of 2011/12. Further progress is underway in the current financial year and so far Amatola Water is on target to achieve its five-year goal of 70% primary and the 20 year goal of 90% primary Water is expanding its role to Water service delivery and contribution to community livelihoods and sustainability in its gazetted area by upgrading six of its plants and related bulk infrastructure in these regions. These upgrades are underway and will be completed over the next two years, resulting in increased production capacity from 112 mega litres to mega litres.

3 This is a key catalytic project in terms of the refocus on the Section 29 Water supports the Department s Institutional Reform and Realignment (IRR) initiative and the ability of this initiative to truly change the bulk Water , bulk sanitation and Water resource infrastructure management in the Eastern Cape Province in a way that will transform Water services delivery. The Board comprehensively performed and submitted to the Minister of Water and Environmental Affairs a Due Diligence report on the Southern Water Utility as per the directive from the with DWA on numerous initiatives within the Province has impacted positively on services on the ground. The significant progress on the King Sabata Dalindyebo Presidential Intervention (KSD PI) combined with the master planning for the OR Tambo District Municipality (ORTDM) is a good example of this.

4 As part of its contribution to a decent standard of living for all South Africans, Amatola Water continues to advocate the design standard of approximately 750 per household per day on all infrastructure projects to align with the intent of the National Development Plan. The Ntabelanga Dam and related infrastructure on the Mzimvubu system will have a significant positive impact on the eastern region of the Province. Most relevant to Amatola Water is the opportunity to supply quality potable Water to three district municipalities, namely the OR Tambo, Joe Gqabi and Alfred Nzo district municipalities in the region of a 98% assurance of supply. In a significant step to redress previous inequalities, this project will allow the communities in these areas access to services at a consistent high standard for generations to come. In addition to delivering on its core mandate Amatola Water understands it must do so in a responsible manner and thus continues to improve its governance with progress made to achieve unqualified audit opinions and a surplus of R 25 million in the latest audited financial results.

5 Amatola Water presents the 2014/18 business plan to the Department for consideration and invites it to enter into a social compact to accelerate the transformation of the Eastern Cape Province bulk Water service provision MsiwaActing Chief ExecutiveForeword by the Chief ExecutiveChapter 12 Amatola Water is on target to achieve its 5 year goal of 70% Primary and 20 year goal of 90% Primary Business3 IntroductionEstablishmentAmatola Water is a national government business enterprise ( Water board) operating in the Water sector. As an essential service utility, it is mandated by the Water Services Act (Act 108 of 1997) to offer services in bulk Water supply (both potable and untreated Water ), waste Water treatment and other related services, to the public benefit. The organisation was established by the Minister of Water and Environmental Affairs as a Water board in terms of section 108 (2) of Water Act, 1956 (Act No.)

6 54 of 1956), by the notice in the Government Gazette, on 14 November 1997 which was superseded by the Water Services, Act 108 of 1997. In terms of this and ensuing legislative provisions, Amatola Water operates as a Schedule 3(b) national government business enterprise, as recognised under the provisions of the Public Finance Management Act (PFMA). Amatola Water commenced formal trading in April 1998, with a directive from the Department of Water Affairs (DWA) to provide improved and extended Water services to enhance the quality of life and socio-economic potential of the people of the Eastern Cape July 1998, operational control of various Water services facilities that had previously been operated by Eastern Cape homeland governments and by departments of central Government together with attendant personnel was vested with Amatola Water in terms of a Transfer Agreement concluded between the Water board and the , Mission and Organisational Values Amatola Waters vision, mission and values are reviewed annually to ensure alignment to its mandate and shareholders strategic intent.

7 Vision To lead sustainable bulk Water services in the Eastern Cape .Mission Amatola Water strives to contribute to the public health and community livelihoods by providing bulk potable Water , bulk sanitation to Water Service Authorities and managing Water resource management infrastructure Chapter 24 Values We are inspired by an unwavering commitment to empower our stakeholders through the consistent demonstration of:ResponsibilityExcellenceIntegrityAcco untability Amatola Water recognises the importance of living out core values in the implementation of its mission to ensure the realization of its vision. Basing every decision and action on these values is deemed vital to Amatola Water s overall success, growth and financial strength, now and into the AreaAmatola Water s gazetted service area includes most the Amathole and Chris Hani District Municipalities, the Ndlambe Municipality and smaller portions of the Cacadu and Joe Gqabi District Municipalities.

8 Amatola Water s gazetted area incorporates 47 515km of the Eastern Cape Province. Annexure A contains a map detailing Amatola Water s current service area. Annexure B contains a map detailing the scheme polygons of bulk infrastructure operated by the organisation. Annexure C provides key statistic for the region where Amatola Water StatementAmatola Water developed its Policy Statement as a separate document in accordance with the requirements of the Department of Water Affairs (DWA). The approach of separating the Business Plan and the Policy Statement into two documents and submitting both simultaneously for appraisal is continued by Amatola Water for the 2014 / 2015 year. Chapter 36 Strategy and Self Appraisel of Business AchievementsStrategyStrategic DirectionAmatola Water developed a new 20 year strategic direction for the organisation in the previous year.

9 As an entity of the state, the new direction is based on what Amatola Water believes to be its role and purpose of formation assisting the state to achieve its objectives. In this process of alignment Amatola Water has adopted a 20 year timescale for its long term strategic goals, as the state has done in documents such as the National Development Plan. These 20 year strategic goals give Amatola Water its long term direction within which the next 5 year strategic goals and objectives are set. Detailed planning is then done for the 5 year window within the direction of these 20 year strategic a unique post democracy rural Water board Amatola Water believes this new strategic direction will allow it to perform the function it was created for in a manner that successfully contributes to government providing the quality of life of the citizens within the Eastern 4b of the Constitution states that Local Government, in respect to Water and sanitation, is responsible for: Water and sanitation services limited to potable Water supply systems and domestic waste- Water and sewage disposal system.

10 With local government mandated for the distribution of potable Water , the abstraction of raw Water and production of potable Water is the mandate of the Water Board. Institutional Reform and Realignment and the thinking around a Provincial Water Enity has further emphasis this thinking. As such Amatola Water s strategic direction is that of the provision of potable Water and sanitation services through bulk infrastructure. In the past Amatola Water has been drawn into assisting Water service authorities with Water services delivery in many different areas and activities which has resulted in a 50/50 split between its Primary and Secondary businesses (sec 29 and sec 30 activities as per the Water service act). Strategically focusing, on the reason for its formation as state entity, Amatola Water 20 year strategic goal is to have a 90/10 split between these activities.