1. Water and Sanitation: Water Services Development Plan (WSDP) 2007/08 - Executive Summary Rev 1Date: 16 March 2007 Presented by: J de Bruyn Head: WSDP

2. CRITICAL CHALLENGES Eradicate sanitation services backlog Keep pace with basic services to cater for influx Intensify Water Demand Management strategy Treated effluent quality (not complying with DWAF standards) Greywater runoff (greywater management) Provide infrastructure for City development Maintain existing infrastructure Financial sustainability High financial requirements Cost recovery and debt management Fair, cost-reflective tariffs that encourage water saving Increase efficiency Institutional arrangements

3. To become a leader in the provision of equitable, sustainable, people-centred, affordable and credible water services to all VISION OF WATER SERVICES

4. EQUITABLE To provide access to a basic water supply to all informal settlements by 2008 (Achieved in 2005/06) To provide access to a basic sanitation service to at least 70% of all informal settlements by 2010 SUSTAINABLE The availability and reliability of water resources is ensured at all times The supply of safe drinking water that meets quality standards is ensured at all times The protection of the environment is improved by ensuring that by 2010, 90% of treated effluent is in compliance with 1984 DWAF standards STRATEGIC GOALS

5. PEOPLE-CENTRED To ensure that at least an 80% level of satisfaction of all customers with the provision of basic water services is reached To create an environment that develops and utilises the skills, competencies and innovation potential of all employees in order to meet the objectives of the organisation To create an enabling environment that ensures development of meaningful relationships with all stakeholders AFFORDABLE To establish fair tariff that ensures all residents have access to basic water and sanitation services, including indigent households. CREDIBLE To ensure the implementation of international best management practices in the provision of water services. To become the preferred water services institution for all customers STRATEGIC GOALS

6. ERADICATE BASIC SERVICES BACKLOG Backlogs in informal settlements Substandard access to sanitation - approx 30 000 New technologies being investigated Huge strides made in 2005/06 35 000 hh received basic water - backlog eradicated 17 050 hh received basic sanitation Mainly informal areas, but some in unserviced rural farm population Backyard dwellers considered to be serviced from main dwelling Solutions being implemented: Emergency level of service to 95% of the ~ 170 informal settlement areas Upgrading informal settlement services continually Identify additional / external funding sources

7. ERADICATE BLACK BUCKET Black buckets in formal areas 3 outstanding houses will be upgraded in 2007 Black buckets in informal areas 2 857 at 2 857 households Will be eradicated over a 5-year programme Related better technologies such as chemical toilets & Hundred-litre containers 7 462 chemical toilets in use, serving 37 300 households 1 049 Hundred litre containers in use, serving 5 200 households Will continue to be used as emergency services

8. COSTING OF BASIC SERVICES INFORMAL SETTLEMENT SANITATION BACKLOG

9. COSTING OF BASIC SERVICES BASIC SERVICES FOR INFORMAL SETTLEMENT INFLUX

10. COSTING OF BASIC SERVICES SERVICING HOUSING DEVELOPMENTS

11. PROGRAMME FOR BASIC SERVICES Amounts in Rand Million

12. WATER DEMAND MANAGEMENT Principles: Water is a strategic, scarce resource that cannot be wasted Measure and account for all usage (UAW currently approx. 19%) Reduce unconstrained water demand by 20% by 2010 or better 20% reduction = 2% pa growth = Low water demand curve future infrastructure planning based on this goal attempt to better this and achieve 1% pa growth - will postpone costly infrastructure as at 30 June 2006 28% below unconstrained demand curve 13% below low water demand curve!

13. Intensify implementation: Implement ALL WDM strategies in parallel with water resource strategies Re-use treated effluent as an additional resource - generate further income Reduce losses especially non-revenue demand Water leaks projects Pressure Reduction projects Flow limiters to defaulters High Benefit/Cost ratio (R750 each) Can make major impact on Debt growth, Payment ratio WATER DEMAND MANAGEMENT

14. 11 YEARS OF DAM LEVELS % OF STORAGE CAPACITY

15. BULK WATER DEMAND CURVES

16. WATER RESOURCES DWAF “Reconciliation” Strategy for Western Cape Draft far advanced Water resources sufficient to 2013 (with Berg River Scheme) Sources of Raw water: 70 - 75% from DWAF (Western-Cape Water System) 30 - 25% from own sources Groundwater resources currently only 1% of total yield Under investigation Table Mountain Group Aquifer Option (groundwater) - exploratory drilling phase to be complete by 30 June 2008 Desalination Option (seawater) - negotiations with V&A Waterfront progressing slowly

17. EXTENT OF TMG AQUIFER Study area

18. BULK WATER INFRASTRUCTURE Northern areas under stress during peak demand Northern area bulk infrastructure augmentation scheme Reservoir and WTP originally planned to start early in 2007/0 Capital requirement 2007/08 to 2009/10: R40MR350MR500M Delay in EIA process by 6 month Delays increase the probability of water restrictions in the northern area Critical to secure funding immediately

19. WATER BULK WATER INFRASTRUCTURE

20. SUSTAINABLE ENVIRONMENT (WATER BODIES) Aim to achieve 1984 standard for Treated Wastewater Discharge Need extensive upgrading of various Works Receiving water quality rivers and water bodies need to be protected In our favour: limited use made of water from rivers around City short run-off distances to the ocean Health must not be compromised Solutions being implemented: Develop strategy for compliance Improved operations Develop system for grey water runoff from standpipes

21. FINAL EFFLUENT QUALITY - % COMPLIANCE

22. PROVIDE INFRASTRUCTURE FOR CITY DEVELOPMENT High demand for new housing and commerce needs infrastructure as an enabler Limited finances Solutions being implemented: Partnership approach with developers Development contributions agreement for each area Identify external funding sources (MIG etc) Integrated planning to be improved

23. MAINTAIN EXISTING INFRASTRUCTURE Too little maintenance Deteriorating infrastructure Major pipe collapses, mainly sewers Infrastructure efficiency compromised Service interruptions More expensive to replace ultimately Solutions: Provide sufficient operational budget Address critical staff shortages at operational level Alternative service delivery options

24. HIGH CAPITAL REQUIREMENT

25. OPERATING BUDGET REQUIREMENT

26. HIGH FINANCIAL REQUIREMENT Under IDP Strategic Focus Area : Sustainable Infrastructure Objective 3.1 “improved leveraging of the available funds without compromising the Council’s ability to sustain service delivery”

27. COST RECOVERY, DEBT MGT & TARIFFS City’s Credit control policy will be updated for 2007/08. Continue to: Manage debt Maximise income Write off debt that has resulted from previous water leaks in low income and indigent areas Ensure majority private dwellings in low income and indigent areas have minimal leaks and use only free portion - minimise future debt and need for credit control action Cape Town tariffs low in comparison to other cities Tariffs need to increase, but remain fair to different user categories

28. INCREASE EFFICIENCY New organisational structure Reduce duplication and fragmentation Optimise for service delivery Staff training Improved coordination and integration Improved financial management - additional specialised staff requirement approved Optimise systems and processes Measurement, Balanced Scorecard, SDBIP, Performance indicators Benchmarking against peers : SALGA, CWMF and SAAWU

29. ESTABLISH NEW INSTITUTIONAL ARRANGEMENT National Restructuring of the Water Services Industry Legal requirement and Council resolution dated June 2004 Aim to improve operational & financial management and attract capital Municipal Systems Act, Section 78(1) requires choosing model: internal ring-fenced business unit, or Municipal Entity, or Regional Municipal Utility Is this all – Wouter Loots mentioned 6 options??? IDP Objective 3.2 under Strategic Focus Area Sustainable Urban Infrastructure - develop alternative service delivery (ASD) and infrastructure funding or investment mechanisms. ASD mechanisms include: Partnerships Concessions (BOTT) Equity investments Realistic tariffs and levies

30. Thank you Let us work together for a better city