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Annual Report 2009-2010

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Annual Report 2009-2010 2 Annual Report 2010 3 Table of Contents Page Section 1 – Organisational Overview 1. Map of the Magalies Water Area of Supply 4 2. Magalies Water’s Mandate 5-7 3. Chairperson’s Report 8-10 4. Chief Executive’s Report 11-12 5. Corporate Governance 13-17 5.1 Financial Misconduct 16 5.2 Risk Management 16 5.3 Directives from the Minister 17 6. Organisational Performance Highlights 17 Section 2 – Performance to Achieve Strategic Objectives 7. Performance to Achieve Strategic Objectives 18-40 Section 3 – Audit Reports 8. Report of Independent Auditors 42-47 9. Report of the Audit and Risk Committee 2010 48 Section 4 – Financial Statements 10. Magalies Water Annual Financial Statements 50 for the Year Ended 30 June 2010 - Statement of Financial Position 53 - Statement of Comprehensive Income 54 - Statement of Changes in Net Assets 55 - Cash Flow Statement 56 - Accounting Policies 57-60 - Notes to the Annual Financial Statements 61-69 - Schedule of Operating Expenses 70 - Annexure to the Financial Statements 71 Key MW = Magalies Water CoT = City of Tshwane RLM = Rustenburg Local Muncipality WTP = Water Treatment Plant WWTP = Wastewater Treatment Plant CSI = Corporate Social Investment EIA = Environmental Impact Assessment GDACE = Gauteng Department of Agriculture, Conservation and Environment TRU = Transformer Rectifier Unit RWST = Rustenburg Water Services Trust Organisational Overview 2 3 4 1. Map of the Magalies Water Area ofSupply 1. MapoftheMagaliesWater West, Gauteng and Limpopo Provinces. The Municipalities located in the Magalies Water area of supply are indicated on the map above. map the on indicated are supply of area Water North the Magalies in the in undertaken located are Board the of Municipalities The activities Provinces. supply water Limpopo bulk and main Gauteng The West, kilometers. square 42,000 spans supply of area Water’s Magalies Magalies Water Magalies Water Magalies Water Magalies Water Magalies Water Magalies Water Magalies Water Magalies Water Magalies Water Magalies Water Magalies Water Magalies Magalies Water Modimolle Municipality Donkerpoort Dam · Thabazimbi Municipality Warmbad Dam Molatedi Dam Bela Bela Municipality Moretele Municipality Moses Kotane Municipality Klipvoor Dam Rust der Winter Dam Houwater Dam Vaalkop WTP Monnakato WTP Vaalkop D+$am +$ Kudube WTP Local Municipality of Madibeng Lethabong WTP Lee+$uwkra+$al Dam +$Roodekopjes Dam LeKgroemndellenboog Dam Water TreMatamriecnot P Blaonst veld Dam Nokeng tsa Taemane Municipality Lindley'spoort Dam Bospoort WTP Wallmannthal WTP Bospoor+$t Dam +$ Magalies Water Brits WTP +$ Roodeplaat WTP *# Bon Accord Dam Rood+$eplaat Dam *# Others Cullinan WTP Kloof WTP City of Tshwane Dams +$ +$ Hartebeespoort WTP Pipeline Kosterrivier Dam *# Towns KgetlengRivier Municipality Rustenburg Municipality Hartebeespoort Dam MW Boundary Rustenburg Municipality Olifantsnek Dam Buffelspoort Dam Moretele Municipality Rustenburg Municipality Rietvlei Dam Kgetleng River Municipality Bronkhorstspruit Dam Local Municipality Madibeng Moses Kotane Municipality Thabazimbi Municipality Modimolle Municipality Bela Bela Municipality City of Tshwane Nokeng Tsa-Taemane Ekurhuleni Municipality Ekurhuleni Metropolitan Magalies Water Magalies Water Magalies Water Magalies Water Magalies Water Magalies Water Magalies Water Magalies Water Magalies Water Magalies Water Magalies Water Magalies Magalies Water Value Add To Core Function Figure 1 Catchment Raw Water Storage Industrial Final Effluent Use Abstraction Solid Disposal Treatment Process Water Treatment Treatment Process Bulk Storage Wastewater Effluent Distribution to Customers Households Magalies Water’s involvement in the water management value chain is depicted by Figure 1 above 2. Magalies Water’s Mandate The mandate of Magalies Water is derived from Section 29 of the Water Services Act (Act 108 of 1997), which provides that: “The primary activity of a Water Board is to provide water services to other water services institutions within its service area”. Magalies Water also provides other water related services to other water services institutions in accordance with Section 30 of the Water Services Act (Act 108 of 1997). Magalies Water Overview Magalies Water was established in 1969, mainly to supply the needs of the platinum mines in the Rustenburg and Thabazimbi areas. For this purpose, the Vaalkop Water Treatment Plant was constructed next to the Vaalkop Dam with an initial capacity of 18 Ml per day. Growth in water demand in the area of operation has resulted in the growth of the organisation’s infrastructure and footprint in order to supply bulk water to new demand areas. Currently, our infrastructure traverses three provinces - the North West, Limpopo & Gauteng Provinces. The Board currently owns and operates the Vaalkop, Wallmannsthal, Klipdrift and Cullinan Water Treatment Plants, together with bulk reservoirs and pipeline infrastructure. The Board also operates the Temba and Roodeplaat Water Treatment Plants on behalf of the City of Tshwane (CoT), and the Bospoort and Kloof Water Treatment Plants, as well as Rustenburg, Boitekong, Monakato and Lethabong Wastewater Treatment Plants on behalf of the Rustenburg Municipality. Figure 2 shows details of the infrastructure operated by Magalies Water. 5 Figure 2: Infrastructure operated by Magalies Water Plant Ownership Catchment System Design Capacity [Kl/day] Capacity Utilisation (%) Potable Water Crocodile River system (Vaalkop, Vaalkop WTP MW 210000 84* Hartebeespoort, and Roodekopjes Dams) Temba WTP CoT Leeukraal Dam – Apies River 60000 91 Roodeplaat WTP CoT Roodeplaat Dam – Elands River 60000 81** Klipdrift WTP MW Roodeplaat Dam – Pienaars River 18000 113* Bronkhorstspruit Dam – Wilge River Cullinan WTP MW 16000 68 system Walmannsthal WTP MW Roodeplaat Dam – Pienaars River 12000 100* Bospoort WTP RLM Bospoort Dam – Hex River 12000 97 Kloof WTP RLM Dorpspruit River 2000 28 Wastewater Rustenburg WWTP RLM 36000 89** Boitekong WWTP RLM 8000 133** Lethabong WWTP RLM 1500 112** Monakato WWTP RLM 0,900 100** Legend: * There are plans to increase the capacity of these Plants NB: Vaalkop Plant’s extension is at an implementation stage while Wallmannsthal and Klipdrift Plants are at a feasibility stage ** The decision to address capacity constraints rests with the respective Municipalities 6 2. Magalies Water’s Overview (continued) Staff Complement The total staff complement of Magalies Water is 383 and is divided between section 29 and 30 activities: Figure 3: Magalies Water Staff Complement Section 29 Water Treatment Services 215 Section 30 Madibeng Local Municipality 23 Moretele Local Municipality 11 Rustenburg Local Municipality Municipal Services 3 Water Treatment Services 11 Wastewater Treatment Services 33 City of Tshwane Metropolitan Municipality Municipal Services 60 Water Treatment Services 27 Total Section 30 employees 168 Total number of employees 383 Vision, Mission and Corporate Values Values Vision Service Excellence We endeavour to maintain service excellence and unparalleled To be the leading provider of quality water services. delivery through innovation, entrepreneurship, creativity and Mission commitment. Professionalism The Mission of Magalies Water is to deliver and supply affordable, We are deeply committed to maintain and exceed all performance reliable, and good quality water and related services to all benchmarks in a responsible manner. stakeholders through: Integrity • Optimising operational resources and technologies We seek to deliver value by maintaining trustworthy, long-lasting • Influencing and contributing to an eco-efficient environment associations with all our stakeholders in order to foster open and • Complying with employment equity and supporting human balanced relationships. resource development • Complying with relevant legislation, standards and guidelines Customer Care • Building customer and stakeholder relationships We are deeply committed to improving customer care and services • Contributing to the building of sustainable communities and throughout all our operational areas. economic development Social Responsibility We seek to deliver and create sustainable improvements in the quality of life of all our stakeholders through corporate social investment and community participation. Developmental Orientation We seek to deliver to and contribute to government objectives. 7 3. Chairperson’s Report Professor Mohammed Jahed Chairperson Reflections on the Global Economic Going forward, South Africa will still maintain its ability to spend on Environment infrastructure development and water remains a critical focus area of such activity. Effective water and sanitation delivery is one of the Government’s key priority areas. The country’s continuing focus on Over the past year, we have witnessed a global fiscal fall-out in the infrastructure development will ensure that we experience essential world’s economy created mainly by the bubble of assets, such as growth, that we create vital jobs and that we provide quality essential property, effectively bursting. Although this has negatively affected services for our people. the economies of Europe and the US, there has also been an adverse effect in terms of their ability to support the developing world. The result has been a global fiscal crisis that has impacted on economies Our Role in the Community around the world including South Africa, impacting on jobs, growth and inflation. In spite of this, our country has weathered the storm The Board of Magalies Water was established in 1969, mainly
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