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Capital Expenditure Programme
Rand Water Capital Expenditure Programme John Critchley Tariff consultation 22 October 2014
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CONTENT Demand growth forecast 2. Augmentation & renewal plan to 2030
3. Capital budget
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Background Customer base Historical growth Projected growth
Several decades of growth in the 3 to 6% per annum Resulted in increase from 1000 Ml/d in 1965 to 4000 Ml/d now Growth started to decline from about 1990 Growth in decade to 2011 averaged 2.5% Projected growth Continued decline in annual growth rates Decline in both ‘natural’ population growth and inward migration Expect drop from current 2% pa to 1% pa by about 2035 Projecting further, could peak by about 2070
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Demand Growth Projection to 2035 Factors affecting growth
Domestic usage = 70% of total Natural population growth, inward migration, system losses Major customers play dominant role Projected growth in demand Projected demands contractually based on customer forecasts Projected population growth of 3 million from 2010 to 2030 Based on AADD of 4200 Ml/d for 2014 and 1.75% annual growth: Year 2020 2025 2030 2035 Average Demand (Ml/d) 4700 5100 5500 5900
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Demand growth versus raw water
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Demand growth scenarios and risks
Response to Limitations Potential for deferred capital expenditure, but: Major projects have long lead times Some existing infrastructure approaching full utilisation at peak periods Require ‘headroom’ to take major infrastructure out of service for renewal Location, location, location! WDM initiatives not intended to prevent development Mismatch between areas of saving and development nodes Response First see effectiveness of WDM initiatives by location Complete current projects but defer future projects
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Corporate Systems Note: Primary = Raw Water + Vereeniging + Zuikerbosch Rand Water Eikenhof Supply System Zwartkopjes Supply System Palmiet Supply System Mapleton Supply System Booster Systems Primary Systems Vereeniging Purification System Zuikerbosch Purification System Raw Water Supply System
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Corporate Systems Booster Primary
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City of Tshwane Palmiet system Eikenhof system Mapleton system Zwartkopjes system Primary systems Vaal Dam
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Augmenting for 2015 to 2030 cycle
Projected growth in peak day demand = 1600 Ml/d over 15 years Growth split between four booster systems Primary systems 1600 Ml/d growth Palmiet system Ml/d growth Mapleton system 300 Ml/d growth Eikenhof system Ml/d growth Zwartkopjes system 300 Ml/d growth Northern Jhb Tshwane Ekurhuleni Central Jhb Southern areas North west Jhb West Rand Rustenburg Eastern Tshwane Ekurhuleni Mpumalanga
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Peak demand by pumping station
Design capacity Projected peak day demands (Ml/d) (including WDM savings - indicative) 2020 (2025) 2025 (2030) 2030 (2035) 2035 (2040) Primary Systems Zuikerbosch 3900 4300 4800 5300 5800 Vereeniging 1400 1300 Booster systems Palmiet 1870 2000 2190 2380 2570 Mapleton 960 990 1080 1180 1270 Eikenhof 1470 1610 1750 1880 Zwartkopjes 800 760 780 840 880
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CONTENT Demand growth forecast 2. Augmentation & renewal plan to 2030
3. Capital budget
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Augmentation & Renewal Planning
Increase capacity to meet future demands (quantity & quality) 20 year view of projects based on 35+ year view of demands Projects connected to customers per system Renewal Extend life of existing assets (replace, refurbish, upgrade) Integrated Many projects combine augmentation and renewal (eg pipelines) Integrate at plant, site and system level
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Capital expenditure – top 15 projects
Spend R(m) Augment Renew 2009 5-year 2015 AWS 1 Zuikerbosch scheme (System 5) 2770 58 Δ # 2 O6 Palmiet - Klipfontein augmentation 972 350 3 Co-generation 422 142 4 B1, B2 pipelines refurbishment 325 25 5 Zuikerbosch filter house 1 upgrade 250 6 B17 Zuikerbosch - Palmiet pipeline 223 7 H39 Klipfontein - Brakfontein pipeline 221 85 8 Zuikerbosch - Chlorine plant 4 replacement 203 9 Vereeniging - Zwartkopjes system 201 10 B16 Zuikerbosch - Slangfontein pipeline 200 11 Kensington - Yeoville system 190 12 Panfontein upgrade 185 13 300 Ml reservoir storage (Soweto) 171 14 Palmiet Engine Room 1 upgrade 170 15 Replace M1 pipeline 163 Total 6,666 911 51% 34%
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Asset Portfolios Buildings and property Civil structures Pipelines
Mechanical Electrical Process Automation
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Infrastructure renewal
Asset category Replacement value (Rbn) Design life (yrs) Annual renewal allocation (Rm) Pipelines 46 65+ 600 Civil 12 50 to 100 70 Mechanical 9 30+ 115 Process 7 15 to 20+ Buildings 4 80+ 35 Electrical 1 20 to 30+ 25 Automation 5 to 10+ 10 Total 80 970
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Infrastructure augmentation
Providing for 2015 to 2030 augmentation cycle Augment primary capacity, with associated major pipelines and booster pumping capacity Package of linked major projects for backbone infrastructure 2009 Additional Water Supply (AWS) Scheme Anchor project for the 2009 AWS Scheme Purifies and pumps into the network additional 1200 Ml/d after completion of phase 2 Station 5 at Zuikerbosch
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Augmenting for 2015 to 2030 cycle
Projected growth in peak day demand = 1600 Ml/d over 15 years Growth split between four booster systems Primary system – 1600 Ml/d growth Palmiet system – 600 Ml/d growth Mapleton system – 300 Ml/d growth Eikenhof system – 400 Ml/d growth Zwartkopjes system – 300 Ml/d growth Northern Jhb Tshwane Ekurhuleni Central Jhb Southern areas North west Jhb West Rand Rustenburg Eastern Tshwane Ekurhuleni Mpumalanga
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Primary Systems – 1600 Ml/d growth from 2015 to 2030
Additional Purification Plant – 1200 Ml/d capacity Additional raw water pipelines and purification plant upgrades Purification plant upgrades Vereeniging and Zuikerbosch B19 raw water pipeline R65 million budget for 2014/15 Station 5 at Zuikerbosch 1200 Ml/d capacity in two phases R58 million budget for 2014/15 BG3 raw water pipeline 9 km x 3500 mm Complete
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Augmenting for 2015 to 2030 cycle
Projected growth in peak day demand = 1600 Ml/d over 15 years Growth split between four booster systems Primary system – 1600 Ml/d growth Palmiet system – 600 Ml/d growth Mapleton system – 300 Ml/d growth Eikenhof system – 400 Ml/d growth Zwartkopjes system – 300 Ml/d growth Northern Jhb Tshwane Ekurhuleni Central Jhb Southern areas North west Jhb West Rand Rustenburg Eastern Tshwane Ekurhuleni Mpumalanga
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Palmiet System – 600 Ml/d growth from 2015 to 2030
Additional Engine Room – 600 Ml/d capacity Total 150 km of pipeline between 600 mm and 2100 mm diameter Diepsloot H39 Klipfontein – Brakfontein pipeline R85 miilion budget for 2014/15 B17 Zuikerbosch - Palmiet pipeline R223 million budget for 2014/15 O6 Palmiet - Klipfontein pipeline R350 miilion budget for 2014/15 Engine Room 3b at Palmiet station 600 Ml/d operational capacity R99 million budget for 2013/14 Zuikerbosch Purification & Pumping Station
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Palmiet Augmentation Pipelines for augmentation Item Description
Existing lines augmented Diameter (mm) Length (km) Required (year) 1.1 Zuikerbosch to Palmiet pipeline B4, B6, B10 2100 46 2017 1.2 Slangfontein cross connection B9 1300 3 2015 1.3 Klipfontein to Brakfontein pipeline (partial) H12, H21, H27 1700 14.7 1.4 Palmiet – Klipfontein pipeline (phase 1) O2 18 1,5 Palmiet – Klipfontein pipeline (phase 2) O2, part O5 1800 6 2025 1.6 Kwaggaspoort – Gomsand pipeline H22, H28 1000 9.7 1.7 Shamrock Road – Northridge pipeline G28 1200 3.2 2014 1.8 Northridge – Airfield pipeline H3 900 5.8 1.9 Brakfontein – Lyttelton pipeline H12 portion 1500 26 2022 1.10 Lyttelton – Kwaggaspoort p/line H14 portion 1.11 Brakfontein – Kwaggaspoort pipeline H25, H30 21 2027 1.12 Kwaggaspoort – Hartebeesthoek pipeline H22, H28, H42 15 2032 1.13 Hartebeesthoek – Rosslyn pipeline H18, H29 ptn 1400 7 2030 1.14 Rosslyn – Soshanguwe pipeline H16, H29 ptn 8 1.15 Kensington – Yeoville pipeline New route Palmiet Augmentation
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Palmiet Augmentation Pipeline for renewal Age (yrs) Length (km)
Diameter (mm) Anticipated renewal plan (subject to final assessment) G17 South Hills – Germiston 68 10 940 Renovate if steel quality good If replaced increase diameter to 1200mm G18 South Hills - Wychwood 60 9 1140 If replaced increase diameter to 1400mm G19 Meyer’s Hill – South Hills 59 2 1240 G25 Klipriviersberg – Butcher’s Hill 48 5 1450 Refurbish in phases H3 Signal Hill - Northridge 70 50 710 Replace and increase diameter to between 1000mm and 1200 mm diameter H4 Wychwood – Hurlevale 7 If replaced increase diameter to 1000mm J4 Main Reef Road – Knights Road 1,5 400 Replace and increase diameter to 600mm J5 Main Reef Road – Signal Hill 76 13 610 Replace and increase diameter to between 700 mm and 1000 mm diameter J6 Keswick Road – Churchill Avenue 65 2,2 760 Replace and increase diameter to 1000mm J7 Keswick Road duplication 0,9 730 Abandon O2 Palmiet - Klipfontein 42 33 1800 Palmiet Augmentation
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10 year renewal plan for Palmiet ER 1
Objective Maintain design capacity (455 to 500 Ml/d), and standby capacity of 200 Ml/d Summary plan Major replacement programme over next 5 years, excluding building Last assessments Integrated PPCA – October 2013 (see document ……) Asset Portfolio Summary of assets Results of latest assessment Renewal proposals Estimated cost Buildings Brick building with RC sub-structure, pump room, control room, loading bay Building in fair condition and expected to exceed design life Maintenance only Civil Structures Pump plinths Good condition Dependant on pumpset replacement Pipelines 700 mm diameter steel suction lines 600 mm diameter steel delivery lines Some corrosion noted Refurbish during shutdowns for pump replacement Electrical Motors Switchgear Incomers Motors in fair condition Switchgear in fair condition Replace motors and switchgear with pumps Mechanical 7 x 91 Ml/d capacity two stage pumps, 204 m duty head Suction & delivery isolating valves Overhead crane – 10T capacity Pumps beyond useful life, overhaul not practical Valves in fair condition Replace pumps in 2017 Refurbish valves with pipelines Process Not applicable N/A Automation Control desk PLC panels Automation not to current RW standards Upgrade to current standards, existing project ……. Objective Maintain design capacity with slight increase from 455 Ml/d to 500 Ml/d, and standby capacity of 200 Ml/d Summary plan Major replacement programme over next 5 years, excluding building Last assessments Integrated PPCA – October 2013 (see document ……)
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Augmenting for 2015 to 2030 cycle
Projected growth in peak day demand = 1600 Ml/d over 15 years Growth split between four booster systems Primary system – 1600 Ml/d growth Palmiet system – 600 Ml/d growth Mapleton system – 300 Ml/d growth Eikenhof system – 400 Ml/d growth Zwartkopjes system – 300 Ml/d growth Northern Jhb Tshwane Ekurhuleni Central Jhb Southern areas North west Jhb West Rand Rustenburg Eastern Tshwane Ekurhuleni Mpumalanga
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Mapleton System – 300 Ml/d growth from 2015 to 2030
Additional Engine Room – 300 Ml/d capacity Total 90 km of pipeline between 1000 mm and 2100 mm diameter R5 Vlakfontein – Mamelodi pipeline R22 million budget for 2014/15 L17 Van Dyk’s Park – Brakpan Res pipeline S4 van Dyk’s Park – Rynfield pipeline M1 pipeline replacement Central Johannesburg Engine room at Mapleton station 300 Ml/d additional capacity B16 Zuikerbosch – Slangfontein pipeline
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Soweto priority for WDM
Southern and Central areas – 300 Ml/d growth from 2015 to 2030 Western and North Western areas – 400 Ml/d growth from 2015 to 2030 Lanseria H40 Weltevreden – Cosmo City pipeline C6 Zwartkopjes – East Rand pipeline replacement Soweto priority for WDM A6 Vereeniging – Zwartkopjes pipeline replacement B1, B2 pipeline refurbishment
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CONTENT Demand growth forecast 2. Augmentation & renewal plan to 2030
3. Capital budget
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Capital budget for 2014/15 Annual budget 2014/15
Augmentation projects – R1,6 billion Renewal projects – R1 billion Current replacement value – R80 billion Annual budget 2014/15 Forecast average demand growth of 1.75% per annum to 2030 Equates to about R1,4 bn per annum Theoretical augmentation spend Should spend 1% - 2% pa on renewal Equates to R0,8 – R1,6 billion per annum Theoretical renewal spend
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5-year Capital Expenditure (2015/19) forecast of R13 billion for continuing business
System Augmentation (Rm) Renewal (Rm) Total Eikenhof 492 694 1186 Mapleton 956 734 1690 Palmiet 2,106 929 3,035 Primary systems 3,641 2,096 5,737 Zwartkopjes 453 954 1,407 7,647 (59%) 5,406 (41%) 13,053 (100%) Note: the share of spend going to renewal of existing infrastructure has increased from 30% to 40% over the recent past. It is intended to increase this share further to ensure continued functionality of ageing infrastructure
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Capital expenditure split between main plant categories
Continuing business Note: reservoir spend will increase towards the end of the 5 year business planning horison
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Capital expenditure forecast
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20 Year View of Projects (as per IAMP)
2014 2034 Timing subject to WDM success Priority score Palmiet BG4
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THANK YOU
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