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Annual Report 2013/14

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Annual Report 2013/14 VISION We aspire to be a leader in utility services MISSION To provide sustainable water and wastewater management services in a cost effective and environmentally friendly manner to the economy. VALUES Botho Batho Pele Therisanyo Botswerere/Quality Kgetsi ya Tsie /People First /Consultation /Team Work We display a strong We understand and We value open and We provide a high We believe in work ethic and respect exceed expectations free exchange of views quality of products working together to for people by putting the and ideas and service delivery to accomplish more customers first our customers 1 WATER UTILITIES CORPORATION ANNUAL REPORT 2013/14 2013/14 THEME WATER & ENERGY: “Understanding the impact of water and energy on humankind” 60% of Botswana’s population is supplied from ground water 13 potable water treatment plants nationwide, 365KM 2Ml - 92Ml NSCI Water capacity Transfer Scheme 2 dams with a combined capacity of 7416 MCM 2 wastewater treatment plants & several ponds 0VER 330 000 WATER CONNECTIONS NATIONWIDE 3 WATER UTILITIES CORPORATION ANNUAL REPORT 2013/14 Table of contents Performance Highlights 01 Five Year Performance at a Glance 03 Corporate Profile, Governance 06 Structure & Strategy Board Chairman Statement 08 Board of Directors 12 Corporate Governance 14 Chief Executive Officer Statement 18 Corporate Management Team 21 Water Sector Reforms Programme 24 Operational Highlights 28 Corporate Social Responsibility 30 and Stakeholder Management Annual Financial Statements 34 Acronyms 64 4 WaterShare every drop and is save life. the future. If we all play our part as individuals, our efforts can go a long way and lighten the burden associated with water shortages. Play your part consistently and make water conservation a way of life. 5 WATER UTILITIES CORPORATION ANNUAL REPORT 2013/14 Operational Highlights IN 2014 compared to A NET LOSS P346.6 NET LOSS OF P191.1 MILLION million in 2013 FEES FOR NEW POTABLE WATER TOTAL WATER SALES CONNECTIONS REVENUE REVENUE P20.0 P948.1 P915.0 million million million IN 2014 TRANSLATING TO A in 2014, A 19.9% increase IN 2014, AN 18.8% INCREASE 36.5% INCREASE FROM P14.7 FROM P790.8 MILLION IN FROM P770.5 MILLION IN MILLION IN 2013. 2013 2013. RETURN ON WATER DSC EQUITY QUANTITY COVENANT (4.87) (7%) 5.8% times DETERIORATION IN 2014 DESECREA IN WATER SALES compared to (1.77) TIMES FROM (4%) IN 2013 QUANTITY FROM 75 600CTM IN 2013. IN 2013 TO 71 200CTM IN 2014 6 Five Year Performance at a Glance 2013/14 2012/13 2011/12 2010/11 2009/10 restated restated P’000 P’000 P’000 P’000 P’000 Income, cash flow & value added statements Water sales 914,994 770,471 571,296 571,904 560,337 Total revenue 948,061 790,778 579,685 578,543 561,107 Operating expenses 1,076,400 957,200 947,035 495,494 319,526 Depreciation and amortisation 224,276 184,790 186,558 119,058 86,903 Net Finance charges 33,703 28,111 13,731 14,457 14,682 Net (loss) / surplus (346,559 ) (191,062 ) (541,595 ) 21,809 161,414 Net cash (outflow) / inflow (254,840 ) (302,249 ) (102,647 ) 52,502 154,403 Financial Position Operating assets 5,040,805 4,620,261 4,444,660 3,544,677 2,620,435 Development Expenditure 771,775 625,866 538,249 110,234 115,304 Government equity 4,975,050 4,374,297 4,089,391 2,364,477 1,410,577 Interest subsidy reserve 12,493 10,984 9,213 7,421 - Reserves 448,146 796,214 989,047 1,532,434 1,518,046 Long term borrowings 480,494 515,036 549,212 577,720 599,721 Retirement benefit asset / (obligation) (1,351) (21,611 ) (3, 920 ) 33,045 28,925 Water sales quantities (TCM) 71,200 75 600 66,000 61,672 58,455 Ratios Return on equity -7 % -4 % -16 % 1 % 11 % Return on capital employed -6% -4% -12% 1% 6% Return on net operating assets -7% -4% -14% 1% 6% Debt service cover (times) -4.87 -1.77 -10.66 0.83 4.14 Debt/Equity Ratio 0.10 0.12 0.18 0.24 0.43 Statistics Annual Inflation (%) (Attribute) 4.40 % 7.30 % 7.20 % 8.50 % 6 % Prime lending rate (attribute) 9 % 11 % 9.50 % 11 % 11.50 % 7 WATER UTILITIES CORPORATION ANNUAL REPORT 2013/14 Corporate Profile 330 000 C ONNECTIONS FROM 80 000 IN 2009 Gaborone Dam This involved planning, constructing, Following the commencement of the P5.0 billion operating, treating, maintaining and implementation of the Water Sector WORTH OF property, PLANT AND distributing water resources in the Reforms Project, the Corporation’s EQUIPMENT country’s urban centres and other customer base has grown significantly areas mandated by the Minister from 80 000 at the beginning of the responsible for water, as well as the reforms in 2009 to just over 330 000 supply of bulk water to the Department at 31st March 2014. The Corporation The Water Utilities Corporation of Water Affairs and the various Local presently supplies over 76 million cubic (WUC) is a parastatal organisation, Authorities for distribution to villages metres of potable water annually to its wholly owned by the Botswana and other smaller settlements in the total customer base. country. Government. It was established With a property, plant and equipment in 1970 by an Act of Parliament In the forty four years since its inception, value of over P5.0 billion, the (Laws of Botswana Cap 74:02) the Corporation’s mandate has expanded Corporation’s infrastructure includes to supplying potable water to all urban nine dams, the Gaborone, Nnywane, with a mandate to manage a centres and villages in the country, as Bokaa, Shashe, Letsibogo, Ntimbale, single project for the supply and well as managing wastewater under Dikgatlhong, Thune, Lotsane as well as distribution of water in what the Water Sector Reforms Programme the North South Carrier Scheme which (WSRP). The programme resulted from comprises a 365km long pipeline, water was then called the Shashe a study to rationalise the water sector treatment plants and associated pump Development Area. in Botswana and ensure uniform service stations. levels for all. The implementation of the Water Sector Reforms Project effected in May 2009 and was scheduled for completion in 2014. 8 Governance Structure & Strategy BOARD Chief Executive Officer Corporation Internal Audit Secretary Director DCE DCE Technical & (Operations) & Support Services Water Resources Human Technical Regional Regional Resources & Finance Services Operations Operations Infrastructure Administration Director Director Director (S) Director (N) Director Director In keeping with its vision “We aspire to be a leader in utility services” the Water Utilities Corporation needs to be able to satisfy an increasingly discerning customer and ensure compliance with internationally accepted corporate governance practices. To this end the Water Utilities Corporation identified key strategic objectives to guide its activities, business focus and the allocation of resources for its planning period 2012-2015. These are: 9 WATER UTILITIES CORPORATION ANNUAL REPORT 2013/14 Governance Structure & Strategy [continued] Strategic Intent: Achieve financial sustainability 1 Strategic themes: • To reduce debt • To identify new product lines to increase revenue • To have a tariff structure that reflects WUC’s operations • To identify areas for cost containment in line with enhancing WUC’s image Strategic Intent: Strategic Intent: Leadership effectiveness Stakeholder relationship management Strategic themes: Strategic themes: • To improve the performance culture sustain • To increase stakeholder satisfaction vide able of the organisation ro nvironm w • To improve staff morale and p d e ent a To an al te e ly r motivation : iv fr a N ct W ie n 2 fe : e a n d 6 f N d O s w I e O p l t I y in ut i a S s S r i r m l e s o I e it t S c d y a I V t e a n a s w o n n e e a M i l e r b t r v e e a i t r c o e m s t h a e n a e g c o Strategic Intent: e n m o m Business model and e n y t operating model alignment and s e r v 3 i optimisation c Strategic Intent: e Strategic themes: s Infrastructure development • To develop and implement a Rural Water Strategic themes: Supply Services Policy • To develop short, medium and long term • To develop and implement a capital programmes to ensure water business model security • To align existing policies with the operating model 5 Strategic Intent: Water supply and demand management Strategic themes: • To meet water demand • To reduce water losses 4 10 Water Sector Reforms Programme Timeline with milestones 2009 2010 2010 2011 2012 2013 2014 May Phase 1 May Phase 2 October Phase 3 Phase 4 Phase 5 Phase 6 2 villages taken 50 villages taken 100 villages 221 villages The final but 1 Take over of Original over. over. Phase 1 & 2 taken over for taken over for phase of the Maun and Scheduled wastewater both potable both potable and takeover surrounding Project takeover. and wastewater. wastewater. completed. 77 villages on April completion date. villages taken 2 April 2013 over. marking the The project was completion of the ahead of the takeover. scheduled 2014 completion date. 11 WATER UTILITIES CORPORATION ANNUAL REPORT 2013/14 Board Chairman’s Statement 1 088 000KM LENGTH OF potable water NETWORK IN GABORONE 713 916KM Some Board Members and I assumed office at a time when the Corporation LENGTH OF MAJOR TRANSFER WATER was in the middle of a transformation, SCHEMES following the completion of the takeover of water service delivery services and wastewater management I am pleased to present this, the from the Department of Water Affairs and Local Authorities under the Water th 44 Annual Report of the Water Sector Reforms Programme.
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