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PRESENTATION TO THE WATER AND
FORESTRY PARLIAMENTARY
PORTFOLIO COMMITTEE
07 MAY 2008
SJ SEKGOBELA
CHIEF EXECUTIVE OFFICER
ABOUT MAGALIES WATER
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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.
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:
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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
HEAD OFFICE
Physical Address: 38 Heystek Street Rustenburg
[PMG note : photo’s have been removed]
Area of supply
Western
region
Eastern
region
Area of Operation
• The operational area covers 34 000 km²
through abstraction from two major
catchments namely the Crocodile and Olifants.
• The Board operates in four provincial areas of
North West, Limpopo, Mpumalanga and
Gauteng.
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.
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.
CORPORATE STRUCTURE
TOTAL STAFF COMPLEMENT: 349
MAGALIES WATER SERVICES
Traditional Bulk Services
• Abstraction
• Purification
• Storage
• Distribution
• Scientific Services
• Sanitation
Value Added Services
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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
Magalies Water operate the following Infrastructure plants
Name
Capacity
(Ml/day)
Technology
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
Vaalkop 1
Sewage Treatment Plants
Boitekong
8
Activated Sludge
Rustenburg 1
12
Biofilter
Rustenburg 2
15
Activated Sludge
Rustenburg 3
15
Activated Sludge
Monnakato
2
Oxidation Ponds
Lethabong
2
Activated Sludge
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
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)
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.
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.
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.
CONTRACTS WITH MUNICIPLAITIES
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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)
WATER PRICING
• 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.
FINANCIAL HIGHLIGHTS
• 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
financial performance
Item
2007
2006
Sales
145 322
140 108
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
FINANCIAL HIGHLIGHTS
financial position
Item
2007
2006
Property, plant and equipment 609 456
608 334
Investments
283 214
271 216
Total Reserves
903 471
860 509
Total Liabilities
85 190
86 795
THANK YOU