1. James Ndlovu CEO 6 April 2016 1

2. 2  Strategic Overview  Annual Performance Framework (2016-17)  Scorecard 2016-17  Budget 2016-17  Discussion & Clarifications

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4. 4 Vision To be the Leader in the Sustainable Supply of Water in the Southern Africa Region Mission To facilitate water security through the planning, financing and implementation of bulk raw water infrastructure, in the most cost-effective manner that benefits water users

5. Who is TCTA? State-owned Water Infrastructure Entity (SPV) Established in 1986 to fund and implement RSA portion of LHWP Mandate expanded to undertake liability management on LHWP Now a multi-project entity, to fund & implement bulk raw water infrastructure Reports to Minister of Water & Sanitation Shareholder’s Compact: agreement with Minister on the expected performance targets Quarterly Reports to the Minister from Board What do we do? Project structuring Project funding Project implementation Liability management Tariff setting Advisory services Knowledge management 5

6.  Deliver to Ministerial directives relating to the planning, financing & implementation of bulk raw water infrastructure, in accordance with specifications & within agreed timelines & budget.  Ensure that all project activities facilitate social transformation & build sustainable communities by providing jobs & empowering women, youth & the disabled.  Operate the business & its projects & processes in a cost- effective manner, conscious of the imperatives of public fin mgt.  Build the knowledge & capability of the organization to support other water institutions, in pursuit of greater efficiencies in overall water management & water services delivery.  Ensure the continuous availability of high-calibre human capital for delivering on organisational mission into the future. 6

7. Out- come Government outcomesTCTA contribution 4Decent employment through inclusive economic growth Providing cost-effective water infrastructure as an enabler of economic growth & jobs 5A skilled and capable workforceDeveloping entrepreneurship in small businesses and up-skilling the workforce to enable South Africa to compete in world markets 6Efficient, competitive and responsive economic infrastructure network Providing a comprehensive financial and implementation package to ensure the most cost-effective solution 7Vibrant, equitable and sustainable rural communities with food security for all Supporting other water sector institutions to enable them to deliver on their mandate 7 7

8. Out- come Government outcomesTCTA contribution 8Sustainable human settlements and improved quality of household life Providing affordable infrastructure 9A responsive, accountable, effective and efficient local government system Supporting other water sector institutions to enable them to deliver on their mandate 10Environmental assets and natural resources that are well protected and continually enhanced Contributing to the development of knowledge in the sector (desalination, water re-use) 12An efficient, effective and development-orientated public A comprehensive internal training programme to enable TCTA to deliver quality products in the most efficient manner. 8 8

9.  Skills development.  Job creation and employment of local citizens.  Poverty alleviation.  Provision of economic opportunities to previously disadvantaged individuals through preferential procurement.  The development of black businesses through enterprise development, particularly for women, youth and people with disabilities. 9 9

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11. Under Directives from the Minister, develop infrastructure to meet social and economic demands in the country by:  Managing the funding and debt on the infrastructure projects in a manner that achieves cost-effective funding, taking into account current and projected market conditions as well as risks;  Developing infrastructure on time, within budget, to the appropriate standard and in a sustainable socio/environmental manner;  Ensuring that Acid Mine Drainage is treated to the correct standard before discharging to the environment;  Raising finance for the construction of infrastructure in the most effective manner. 11

12. Project Progress as of 31 March 2016 Planned Milestones for 2016/17 Management of debt and other financial obligations on the Vaal River System Outstanding debt of R 19 963 million A debt increase of R3 836 million resulting in a projected outstanding debt of R23 799 million Advisory Services to Water Management Institutions, Water Boards and DWS  Strategic Integrated Programme No.3  Strategic Integrated Programme No.18 Strategic stakeholder engagements with five water sector institutions At least five appointments by water institutions to provide advisory services 12

13. Project Progress as of 31 March 2016 Planned Milestones for 2016/17 Acid Mine Drainage: Pump Stations and Treatment Plant  Western Basin Discharge of effluent in accordance with standards set in directive Upgrade of plant to increase pumping to 50 Ml/day  Central Basin Treatment of 72 Ml/day of AMD under interim operations Appointment of an O&M Operator, and ongoing supervision of operations  Eastern Basin 100% completion of the treatment plant Discharge of effluent in accordance with standards set in directive Appointment of an O&M Operator, and ongoing supervision of operations 13

14. Project Progress as of 31 March 2016 Planned Milestones for 2016/17 Berg Water Project Outstanding debt of R 886 million Debt reduction of R89 million, resulting in an outstanding gross debt of R770 million Vaal River Eastern Subsystem Project Outstanding debt of R 3822 million Debt increase of R 131 million, resulting in an outstanding gross debt of R 3 953 million 14

15. Project Progress as of 31 March 2016 Planned Milestones for 2016/17 Mooi Mgeni Transfer Scheme – Phase 2 Outstanding debt of R 1878 million A debt decrease of R82 million, resulting in an outstanding gross debt of R1796 million  Augmentation of the Transfer Scheme Completion of pipe laying: 14.5 km out of 14.5 km Trial operation & defects notification period Project close-out Amendment to directive to include construction of a potable water pipeline for Umgeni Water Completion of pipe laying: 8.3 km out of 8.3 km Defects liability period 15

16. Project Progress as of 31 March 2016 Planned Milestones for 2016/17 Olifants River Water Resources Development Project (Phase 2C) Completion of pipe laying: 40 km out of 40 km Trial operation & defects notification period Komati Water Scheme Augmentation Project: Pump station and Pipeline Outstanding debt of R 1265 million Debt increase of R62 million, resulting in an outstanding gross debt of R1327 million 16

17. Project Progress as of 31 March 2016 Planned Milestones for 2016/17 Mokolo and Crocodile River Water Augmentation: Pump Station & Pipeline Outstanding debt of R 1473 million Debt increase of R67 million, resulting in an outstanding gross debt of R1540 million  Phase 1 o Augmentation of existing Scheme Completion and declaration as operational Defects liability period 17

18. Project Progress as of 31 March 2016 Planned Milestones for 2016/17 Olifants River Water Resources Development Project (Phase 2B) Charter & Project Implementation Plan approved Record of Implementation Decision issued by DWS Institutional arrangements concluded Finalize design & tender documentation Kriel Pipeline Design completed and contract with contractor finalized Environmental authorisation and land acquisition Complete implementation and commissioning Registration of permanent servitudes 18

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20. ObjectivesMeasuresTargets Ensure cost-effective management in corporate operations  Efficiency in the management of operational costs Operational costs managed within Board approved budget Finance and implement projects in the most cost- effective and sustainable manner New Projects Development of a sustainable funding model Conclusion of Institutional arrangements Raising of finance  Timeous development of a sustainable funding model and of Institutional arrangements  Cost-effective finance raised Existing Projects  Delivery of water in accordance with DWS requirements  Treatment of acid mine drainage to the required standard before discharge to the environment  ORWRDP 2C: Ready for trial operation Aug 2016  ORWRDP 2B: Tender documentation approved as per Project Plan  MCWAP 2A: Tender documentation approved as per Project Plan  AMD-LTS: Tender documentation approved as per Project Plan (subject to directive issued)  AMD-STS: Plant operation within water quality and quantity specifications  Quality of effluent is in accordance with directive from DWS 20

21. ObjectivesMeasuresTargets Advisory  Effective coordination of Strategic Integrated Projects Satisfactory feedback from key partners on the effectiveness of coordination Treaty Functions for LHWP  Operations & Maintenance of Outfall Tunnel North in accordance with best practice Effective implementation of the Operation and Maintenance plan Facilitate socio- economic development and transformation through TCTA projects  Achievement of transformation targets in terms of small enterprise development, job creation and preferential procurement 100% achievement of the following:  Enterprise development spend target  Preferential procurement spend target  Local employment target Manage project debt cost-effectively within prevailing conditions Effective management of all outstanding project debt Debt per project managed within projection 21

22. Objectives MeasuresTargets Provide advisory support to other water sector institutions  Proactive engagement with water sector institutions, including DWS At least 5 appointments by water institutions to provide advisory services Improve the livelihoods of communities directly impacted by construction projects  Development of a Social Pact for each impacted community Social Pacts and Plans are in place for projects 22

23. ObjectivesMeasures Targets Ensure an efficient operating environment for the business  Achievement of continuous improvements in key business processes  Implementation of ICT Enterprise Architecture Progressive TQM implementation, focusing on core functions (ISO 9001 &14001) Successful implementation of the following: o Treasury Management System (TMS) o Enterprise Resource Planning (ERP) o Project Management System (PMS) 23

24. ObjectivesMeasuresTargets Forge synergistic partnerships for skills development in the water sector Position TCTA as a thought leader in critical aspects of water security  Development of a seminal partnership on skills development  Contribution of innovative paper to technical publications and conferences Signed Agreement of Cooperation At least three thought- leading papers written and submitted 24

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26.  Sustainability of relationships with critical stakeholders, including inter-governmental partnerships  Enhancement of the TCTA brand  Business process improvements  Optimization of core business processes in Supply Chain, Human Resources and Finance, through implementation of an Enterprise Resource Planning solution  Consolidation of IT infrastructure and systems, including disaster recovery  Reinforcement of knowledge and advisory capability, in line with the role of thought leadership 26

27. 27 Actual/Forecast 2015/16 Budget 2015/16Budget 2016/17 Tariff Receivable ( 4 948,92) ( 4 752,26) ( 5 242,78) Running Expenditure 1 465,11 1 624,91 1 733,66 Operating Inflows/Outflows ( 3 483,81) ( 3 127,35) ( 3 509,12) Total Finance Charges 2 760,73 3 046,93 3 516,72 Net Working Capital Cash (in)/outflows ( 723,08) ( 80,43) 7,60 Capital Refinancing 303,39 2 359,43 3 585,37 Fixed Assets 16,65 31,23 22,22 Capital Expenditure 2 502,55 2 677,48 4 880,46 Non cash flow items and accruals ( 347,36) 617,86 563,90 TOTAL FUNDING REQUIREMENT 2 424,73 4 369,85 7 931,75

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