1. PRESENTATION TO THE WATER AND FORESTRY PARLIAMENTARY PORTFOLIO COMMITTEE 07 MAY 2008 SJ SEKGOBELA CHIEF EXECUTIVE OFFICER

2. ABOUT MAGALIES WATER Magalies Water is a state owned entity (SOE) established in 1969 in terms of the original mandate issued under the Water Act of 1956 and later the Water Services Act 108 of 1997. The Board operates in four provincial areas of North West, Limpopo, Mpumalanga and Gauteng. The Board is managed from its headquarters based in Rustenburg, North West Province. The Board currently serves a number wide range of stakeholders, mines, municipalities etc. On average the Board processes and distributes approximately 400 Ml/d of bulk potable water and approximately 50 Ml/d of bulk sanitation to serve about 1.5 million consumers and end users.

3. Perspective of Magalies Water Vision “To be the leading provider of quality water services” Mission Statement Magalies Water shall, pursue and attain its vision by: Optimising operational resources and technologies Influencing and contributing to healthy water resources Ensuring staff equity, competence and capability Complying with relevant legislation, standards and guidelines Building customer and community capacity and relationships

4. HEAD OFFICE Physical Address: 38 Heystek Street Rustenburg [PMG note : photo’s have been removed]

6. Area of supply Western region Eastern region

7. Area of Operation The operational area covers 34 000 km² through abstraction from two major catchments namely the Crocodile and Olifants.34 000 km² The Board operates in four provincial areas of North West, Limpopo, Mpumalanga and Gauteng.

8. Governance Board appointed by Minister provides strategic leadership. Responsibilities fulfilled in terms good governance. Board meeting attendance of 80%. Board support intellectual contributions to SAAWU.

9. Achievements & highlights Appointment and management of bulk water and sanitation plants on behalf of municipalities. Successful implement of the refurbishment programmes of Vaalkop, Rustenburg and Roodeplat water supply schemes to an amount of R800m. Implementation of internship and bursary programmes. Implementation of Employee Assistance Programmes. Completion of drought relief programmes on behalf of Municipalities. All long-term loans redeemed. Continue operating as a sustainable entity. Preferred service provider-R760m project with existing and new mines in the Rustenburg area. Potential for further growth as Rustenburg is one of the fastest growing cities.

10. CORPORATE STRUCTURE TOTAL STAFF COMPLEMENT: 349

11. MAGALIES WATER SERVICES Abstraction Purification Storage Distribution Scientific Services Sanitation Management, training and support services Catchment management services Water services in joint venture with WSA Water conservation functions Billing Services/Cost recovery Awareness Campaigns (educational) Legalizing of illegal connections Operation and Maintenance Bottled Water Traditional Bulk ServicesValue Added Services

12. Magalies Water operate the following Infrastructure plants NameCapacity (Ml/day) Technology Vaalkop 1 30 DAF, Ozone, RGS, GAC Vaalkop 2 & 3 160 DAF, Sedimentation, RGS, Chloramination Bospooort 12 DAF, GAC, RGS, Chloramination Klipdrift 18 DAF, RGS, Chlorination Wallmannsthal 12 DAF, RGS, Chlorination Cullinan 14 Sedimentation, RGS, Chlorination Temba 60 DAF, Sedimentation, RGS, UV, Chlorination Roodeplaat 60 DAF, Sedimentation, RGS, UV, Chlorination Kloof 2 Sedimentation, RGS, Chlorination

13. Sewage Treatment Plants Boitekong8Activated Sludge Rustenburg 112Biofilter Rustenburg 215Activated Sludge Rustenburg 315Activated Sludge Monnakato2Oxidation Ponds Lethabong2Activated Sludge

14. ALIGNMENT TO DWAF OBJECTIVES Operations and maintenance of water and sanitation purification plants that belong to different municipalities; Twinning agreement with Nkana Water in Zambia; Implementer of DWAF drought relief and infrastructure refurbishment. Eradication of bucket system and other MDG projects

15. INFRASTRUCTURE PLAN OVER 3 YEARS. Vaalkop extension from 210 to 280ML/D (R640m) Vaalkop addition of GAC filters (R20m) Vaalkop laboratory upgrade (R1.2m) Vaalkop pipeline Cathodic protection (R2.0m) Upgrade of Cullinan booster pump station (R0.4m) Upgrade of Cullinan bulk pipeline (R1.3m)

16. RAW WATER QUALITY AND POTABLE WATER PRODUCED F0607 Raw water quality in our catchment has continued to deteriorate. The following parameters are of concern: 1.Salination: increasing salt content in water. 2.Eutrophication:increasing nutrients in water that result in algal bloom MW has however installed new processes such ozonation and GAC filtration.

17. RAW WATER QUALITY AND POTABLE WATER PRODUCED F0607 Total Potable Water samples for F0607 = 8992 and the following compliances were achieved: 1.SANS 241 Class 1 = 99.6% 2.SANS 241 Class 2 = 100% The above indicates that MW still produces best quality water despite deteriorating raw water quality.

18. IMPACT OF LOAD SHEDDING Loss of revenue; Increased cost on human utilisation in terms of paying over time; Wastage of water on plant start ups due to inferior quality of water produced; Increased energy costs as pumps use a lot of energy on start up; Pollution of natural resources due to inferior effluent or raw sewage discharged into water sources.

19. CONTRACTS WITH MUNICIPLAITIES Rustenburg Local Municipality (RLM) City of Tshwane (CoT) Madibeng Local Municipality (MLM) Modemolle Local Municipality (MoLM) Nokeng Tsa Taemane Local Municipality (NTTLM) Thabazimbi Local Municipality (TLM) Moses Kotane Local Municipality (MKLM) Moretele Local Municipality (MorLM) Bela Bela Local Municipality (BBLM)

20. Consultation process was followed at inter-Governmental level with Municipalities, National Treasury and SALGA. Tariff increases were submitted to the Minister for tabling in Parliament. Average tariff increases of 5.83% were kept within the Government Inflation targets of 3%-6%. CPIX at 9.8% in February and impact of rising inflation on costs will be absorbed by MW. High electricity and fuel costs will have a serious impact on the water tariffs. WATER PRICING

21. At the end of the 2007 financial year, qualified Audit opinion were raised on the following items: - RDP projects performed on behalf of DWAF. - Creditors reconcilliations - Policy on provision for doubtful debts. To adress the above qualifications, the following measures were put in place: - Contracts were obtained from various stakeholders - Reconcilliations are performed and Creditors system is improved to ensure completeness. - A policy on Provision for doubtful debts has been drafted and approved by the Board. There is a general improvement of systems and business processes. FINANCIAL HIGHLIGHTS

22. FINANCIAL HIGHLIGHTS financial performance Item 2007 2006 Sales145 322140 108 Cost of sales 89 169 76 054 Gross profit 56 153 64 054 Investment Income 30 717 19 100 Surplus for the year 42 962 28 788

23. FINANCIAL HIGHLIGHTS financial position Item 2007 2006 Property, plant and equipment609 456608 334 Investments283 214271 216 Total Reserves903 471860 509 Total Liabilities 85 190 86 795

24. THANK YOU