BOTSHELO WATER

Financial Year 1 July 05 – 30 June 06

“Year of turmoil”

As at 1 July 2005:

• Mr Letimela, the CEO was on permanent study leave

• Gobodo forensic audit was a dark cloud hanging over management

• Mrs Sebekedi, the Chairperson of the Board, was also the Acting CEO

• Two Senior Managers were on Suspension:

• Manager Admin & Finance

• Manager Operations

On 1 September 2005:

On 24 October 2005

• Mr Naraghi – Manager Technical services replaced Mrs Sebekedi as the Acting CEO

• The Board terminated the services of Mr Letimela, the CEO, due to financial irregularities

On 28 November 2005:

• Mr Naraghi – the Acting CEO was suspended due to his unilateral re-appointment of the Tswasa Manager at a remuneration package not agreed to by the Board.

• Mr Janse v Rensburg the Senior Projects Manager, was appointed the Acting CEO

On 31 December 2005Voluntary severance packages were offered to three senior Managers:

• Mr. Ackon: Manager Admin & Finance

• Mr Naraghi: Manager Technical Services

• Mr Makhele: Manager Human Recources

On 20 January 2006• Mrs Sebekedi, Chairperson of the Board, resigned on grounds of poor health.

• Mr Ntefang assumed duties as acting Chairperson of the Board.

On 1 March 2006:

On 24 April 2006

• Mr Ntefang was appointed as the Chairperson of the Board

• Mr Jan vd Merwe, a consultant, was appointed as Acting Financial Manager

On 27 May 2006:

As at 30 June 2006

Botshelo Water received the sad news – the passing of Mr Letimela, the former CEO

Botshelo Water operated with a skeleton Management Team

Key Developments after 1 July 2006• Mr Janse v Rensburg accepted a voluntary severance package and left BW on 31 Oct 2006

• Mr Placid Fernandez was appointed CEO with effect from 1 December 2006

• The tenure of Board of Botshelo Water ended on 31 December 2006

• New members for the Board still to be appointed

NORTHERN CAPE

FREE STATE

GAUTENG

NORTHERN TRANSVAAL

BOTSWANA

NORTH WEST PROVINCEN

WaterboardsGoudveld WaterMagalies WaterNWWSARand WaterWestern Tvl Water Company

Sedibeng

Magalies

RandBW

Botshelo Water COVERS 42% OF THE PROVINCE

Population Served

UrbanRural

Total: 1,096,000

25%

75%

Botshelo Water is a

one stop services- delivery WSP

From “Source to Tap” and “Loo to River” BULK WATER

RETAILRURAL

BILLINGCOLLECTION

COST RECOVERY

RAW WATER

WATER LOSS MANAGEMENT

PROJECTS

ASSET MANAGEMENT

SEWAGE, SANITATION

BW’s STRATEGIC INVOLVEMENTS:

• Cocodile Marico West Catchment Management Agency:

– Served as Deputy Chair of Molopo Water Management Forum

• North West Water Services Forum– Served as a member of the forum which supports the PGDS to develop strategies for water services delivery.

• Provincial Growth and Development Strategy– Served as a member of the Infrastructure and Construction Working Group.

Operations:The Year started with BW operating in 4 WSA’s and one International SchemeTshwane Metro Municipality

– Klipgat STW– Temba STW

Moses Kotane LM– Madikwe Area

Bophirima DM– Kagisano LM– Molopo LM

Operations:

Modiri Molema DM– Mafikeng LM– Ramotshere Moiloa LM– Ditsobotla LM– Ratlou LM

Tswasa Water Scheme – Raw water supply to Gaborone Botswana and Derdepoort Irrigation Farmers

– Molatedi Dam

INFRASTRUCTURE PROJECTS

Dinokana pipeline & new reservoir to augment water supply to Welbedacht – R 8,2 million

Drought relief work in Pella, Madikwe, Siga, Mmatau and Lethlakeng – R 8,1 million

Refurbish two filters at Modimola WTW – R 0,9 million

Operations Bulk water Supplies:

• Mmabatho (Modimola)• Mafikeng (Rooigrond)• Motswedi (Sehujwane Dam)• Kopfontein (Botswana Border)• Molatedi (Molatedi Dam)• Derdepoort (Mooiplaas)• Pella (Pella Dam)*• Madikwe (Madikwe Dam)*

Operated and Maintained 8 Water Treatment Works:

* Handed over to MKLM w.e.f. 1 Jul 06

Operations Bulk water Supplies:

• Itsoseng (Ditsobotla LM)• Dinokana/Lehurutshe (Ramotshere Moiloa LM)

Supply of water without formal treatment:

Retail water supplies:

• Ganyesa (Bophirima DM/Kagisano LM)

• Bray, Tosca & Pomfret (Molopo LM)

• Lehurutshe (Ramotshere Moiloa LM/Modiri Molema DM)• Madikwe (Moses Kotane LM)*

* Handed over to MKLM w.e.f. 1 Jul 06

TSWASA INTERNATIONAL SCHEMEBW operated the Tswasa Scheme.

During the period under review, we supplied:

5,708,350 Mm3 to Derdepoort Irrigation Farmers

4,559,744 Mm3 to Gaborone, Botswana

254,434 Mm3 to Madikwe Game Reserve & other minor consumers

No water releases were made to Derdepoort farmers during Nov 2005 to May 2006 due to restrictions

Operations: Sanitation Services

• Klipgat*• Temba*• Mogwase**

Operated and Maintained the following Sewage Purification Plants:

* Handed over to Tshwane Metro w.e.f. 1 Oct 05

** Handed over to MKLM w.e.f. 1 July 06

Klipgat WWTW

Operations: Sanitation Services

• Thusong Hospital• Gelukspan Hospital• Bophelong Hospital• Mafikeng Airport• Motswedi

Operated and Maintained the following 5 Sewage Purification Plants on behalf of other Government bodies:

TRAINING:

81 Employees (63 Males / 18 Females) received training for developing skills

– R 456,494 was spent

Communication:

BW participates on a monthly program through Radio Motsweding, to interact with the Community on water related issues

Operations Rural Water SuppliesCoupled with rural schemes 2340 boreholes were operated / maintained so as to provide potable water to rural communities

Boreholes QuantitiesWindmills 971Engines 714Hand Pumps 564Electric Motors 91TOTAL 2340

* Some of the windmills supply both domestic and livestock.

Quality of drinking water suppliedTotal volume of water supplied from Treatment Plants: 13.9 Mm3

Number of tests carried out: 1596

Number of failures 39

Of the failures:

30 related to insufficient Chlorine levels*

9 related to Microbial parameter failures*

* Action was taken to disinfect the water

Quality of drinking water supplied

Number of tests carried out in suspected locations: 120Number of failures 66Of the failures:31 had bacterial failure*23 related to Nitrates12 related to Fluorides

BOREHOLES IN THE RURAL AREAS

* Regular monitoring of water quality is required.

ASSET MANAGEMENT:

• BW does not own any Water Services Infrastructure assets

• BW has established a Preventative Maintenance System through the aid of computer software (PRAGMA SYSTEM).

This computerized system helps to effectively plan, monitor, control and report on the assets operated by us.

During the year operations shrunk:

Tshwane MM took over the operation and maintenance of Klipgat and Temba STW’s

On 1 October 2005:

Arrangements were finalised for Moses Kotane LM to take over operations in Madikwe area with effect from 1 July 2006

This 23% shrinking of activities had an increasing effect on the water tariff in the remaining areas as fewer cost centres shared in the Head Office Overhead costs.

The Projects Division had to surrender implementation of new water supply projects to WSA’s

Challenges facing BW as at 30 June 06• Collection of outstanding debts:

– Total owed to BW: R128 mill

– Amount owed by BW to DWAF R 43,4 mill

• Outcome of Sect 78 process for Bophirima DM and Ngaka Modiri Molema DM (former Central DM) which is ongoing will have a great impact on the future role of BW in the Water Industry.

Supply of Potable WaterWater Sales (R Mill)

Amount Billed

Amount Paid

Mafikeng LM 28.3 25.7

Moses Kotane LM 5.0 3.0

Bophirima DM 6.4 3.7

Ditsobotla LM 3.0 0.5

Other Consumers 8.2 3.5

Total 50.9 36.4

R 14,5 Mill (28.5%) short paid by Clients!!

Other Operations   

Rural Maintenance 47.7 43.0

Sewage Recovery 6.4 5.5

Total 54.1 48.5

R 5,6 Mill (10.4%) short paid by Clients!!

BW received a qualified audit report for the year for the following reasons:

• A Loss of R36,3 M was incurred during the year and liabilities exceeded assets by R29,8 M. The ability to continue as a going concern is dependent on the financial support of DWAF

• IAS16 (AC123) & IAS36 (AC128) not followed, Auditors could not confirm the valuation of Property, plant and equipment.

• a Property in BW’s books with a value of R180,618 is registered under Mafikeng Local Municipaliy

KEY ACHIEVEMENTS:• DWAF positive acceptance of the five year

(2006 – 2011) business plan• Service provider agreements with WSA’s:

• between Bophirima DM and BW signed on 31 Oct 05• between Central DM and BW under discussion

• Memorandum of understanding between Midvaal Water Company and BW for the possible utilisation of potable water from the Stilfontein Midvaal Plant to serve CDM areas and even Botswana – signed on 10 February 2006

Other Achievements

• BW received the PMR Diamond Arrow Award in December 2006 in respect of it’s performance during the 2005/06 financial year.

To become the recognised global model for the efficient and effective supply of quality water and sanitation services, whilst recognising the right of all to access basic water services.

Our Dream: