MOHLAKENG PUMP STATION AND ASSOSIATED INFRASTRUCTURE
IMPLEMENTATION READINESS STUDY
August 2015
TABLE CONTENTS
EXECUTIVE SUMMARY ...... 0
1. INTRODUCTION ...... 1
2. SCOPE OF THE PROJECT ...... 1
3. METHODOLOGY FOR THE PROJECT ...... 2
4. BACKGROUND TO MOHLAKENG OUTFALL SEWER PROJECT ...... 2
4.1 Overview of the Project ...... 2
4.2 Westonaria Regional Bulk Sewer Scheme ...... 2
5. PROGRESS ON THE DEVELOPMENT WESTONARIA REGIONAL SEWER SCHEME ..... 3
5.1 Emergency Refurbishment of the Plant ...... 3
5.2 Construction of the Extension of Hannes Van Niekerk ...... 3
5.3 Implementation of Zuurbekom WWTW ...... 3
5.4 Proposal of the Urgent Construction of Mohlakeng Outfall Sewer ...... 4
6. STRATEGIC AND PLANNING ISSUES ...... 4
6.1 Alignment with WSDP and IDP ...... 4
6.2 Existing Water and Sanitation Supply Chain ...... 10
6.3 Alignment with Provincial Growth and Development Strategy ...... 11
6.5 Agreement of Need ...... 12
6.6 Level of Service ...... 12
6.7 Economic Growth Requirements ...... 13
6.8 Functional Criticality of Total Scheme and Specific Components ...... 14
6.9 Extent of the Cost ...... 14
6.10 Available Co-funding ...... 14
7. SOCIAL FACTORS ...... 15
7.1 The benefitting population:...... 15
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7.3 Gini Coefficient ...... 18
7.4 Job creation ...... 19
7.5 Proposed water and sanitation tariffs ...... 20
7.6 Poverty eradication, Social upliftment and Health Improvement ...... 21
7.7 Education Facilities ...... 21
7.8 Health Facilities ...... 22
7.9 Recreational Facilities ...... 22
8. ECONOMIC CRITERIA ...... 22
8.1 Economic Sector Analysis ...... 22
8.2 Gross Value Added (GVA) ...... 23
8.3 Economic Growth ...... 24
8.4 Gross Domestic Product (GDP-R) ...... 24
8.5 Location Quotient ...... 25
8.6 Employment Levels ...... 26
8.7 Disposable Income ...... 29
8.8 Economic Criteria Possible Economic Benefits ...... 30
9. TECHNICAL CRITERIA ...... 33
9.1 Conformity of the Master Plan ...... 33
9.2 Appropriateness and Acceptability of Solution ...... 34
9.3 Appropriate water resource choice & adequate water allocation ...... 37
9.4 Compliance to water demand / water conservation objectives...... 37
9.5 Optimal choice of bulk distribution networks ...... 37
9.6 Proof of best suited technology (pro‟s and con‟s per option) ...... 38
10. INSTITUTIONAL CRITERIA ...... 38
10.1 Asset Ownership ...... 38
10.2 Confidence in Institutional Capacity ...... 38
10.3 Agreement on Infrastructure Ownership ...... 39
10.4 Agreement on Implementation Responsibility ...... 39
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10.5 Confidence in Implementation Capacity ...... 39
10.6 History on past Implementation Quality and Performance ...... 40
10.7 Agreement on Operating Responsibility ...... 40
10.8 Proof of adequate staff numbers and skills level ...... 40
10.9 History on water service interruptions ...... 40
10.10 Commitment for the above by institutional leadership ...... 41
10.11 Approval of Institutional Agreement and cooperation between stakeholders ...... 41
10.12 Cost Recovery System ...... 41
10.13 Water Conservation and Demand performance by institution ...... 41
10.14 Responsibility and accountability ...... 41
10.14.1 The Department of Water and Sanitation ...... 41
10.14.2 The Water Services Authority – Westonaria Local Municipality...... 42
10.14.3 Rand Water ...... 42
11. FINANCIAL CRITERIA ...... 42
11.1 Available funding ...... 42
11.2 Conditions and criteria of the RBIG ...... 43
11.3 Fit for Mohlakeng Outfall Sewer within the RBIG conditions ...... 44
11.4 Budget required ...... 44
11.4.1 Project costing ...... 45
11.4.2 Budget Challenge for Westonaria Local Municipality ...... 46
11.5 Capital and operations cost ...... 47
11.6 Operational and maintenance cost ...... 47
11.6.1 Household information: Pro-Plan ...... 48
11.6.2 Labour cost ...... 49
11.6.3 Rates for basic services ...... 49
11.6.4 Population growth ...... 50
11.6.5 Cost of free basic services ...... 50
11.6.6 Overhead costs ...... 51
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11.6.7 Projected income ...... 51
11.7 Required tariff increase rate ...... 52
11.7.1 Cost to recover ...... 52
11.7.2 Required break even revenue ...... 52
11.7.3 Required tariff increase ...... 53
11.8 Motivation for the project ...... 53
12. LEGAL CRITERIA ...... 54
12.1 Water use license ...... 54
12.2 Environmental Impact Assessment (EIA) and authorization ...... 54
12.3 Land acquisition and servitudes ...... 54
13. SUSTAINABILITY ISSUES ...... 54
13.1 Financial Viability ...... 54
13.2 Operating and Management Capacity ...... 54
13.3 Environmental and Social Acceptability and Impact ...... 54
14. CONCLUSION ...... 54
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EXECUTIVE SUMMARY
The need for additional sewage treatment capacity in Westonaria was identified through an intensive feasibility study completed in 2010. The study identified requirements with regards to the extension of the Hannes van Niekerk Waste Water Treatments Works as well as the need for further capacity in the shape of a new waste water treatment facility on the eastern boundary of Westonaria.
During the design of the extension to the HvN WWTW, completed July 2014, it was found that a large portion of the expected flow from the northern part of the catchment area does not reach the works, due to a suspected leak along the pipeline route caused by sinkhole formation. This sinkhole transformation lead to environmental pollution and a temporary pump station and pipeline was constructed in order to bypass the affected section. The construction of the temporary pump station and pipeline was an emergency solution which needed to be replaced by a permanent solution. A second suspected leak was identified in February 2015 in a position upstream of the emergency pump station and the fielded logging revealed a 18ML/day of effluent. This occurrence necessitated the implementation of the Mohlakeng Outfall Sewer project. It was confirmed that the project aligns with the goals as stated in the WSDP and IDP and that the project meets the need of the area from a strategic, economic and functional point of view.
The social need was quantified by investigating the number of benefitting households and it was confirmed that approximately 55% of the value of the expenditure will be towards the indigent population. Educational facilities that will benefit from the Mohlakeng Outfall Sewer include crèches, primary schools and high schools. Several Clinics in the Westonaria area will be benefitted as well as recreational facilities, such as libraries and sport complexes.
The technical requirements were identified and indicated that the most appropriate solution to the temporary pump station will be to construct a new pump station, situated at Bekkersdal, with a new pipeline along the R28 towards HvN WWTW.
The WLM unemployment rate increased from 24% in 2010 to 29% in 2011. With the increase in unemployment of 5% in Westonaria and the indigent population of 55%, it will not be possible to increase the tariff rate in order to recover any cost in connection with the Mohlakeng Outfall Sewer project.
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Mining is the largest formal employment, representing 78.2% of Westonaria‟s Gross Added Value, and it should be noted that this is a diminishing sector as more and more people are retrenched. Taken this into account it can be anticipated that the unemployment rate will increase even more, leaving the portion of the population that will be able to cover the cost for the Mohlakeng Outfall Sewer at a bare minimum.
Taking in consideration that the majority of the benefiting area and population are indigent the option of obtaining a loan will not be viable due to the fact that the repayment terms will not be reached by the 45% of the population that is not indigent.
The project expected to be funded through Regional Bulk Infrastructure Grant (RBIG) derived from the national revenue. RBIG is a specific purpose capital grant with the objective to supplement the financing of the social component of regional bulk water supply and sanitation infrastructure.
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1. INTRODUCTION
The Department of Water and Sanitation is a water sector leader responsible for ensuring the effective development and sustainable management of the regional water services infrastructure programme. The programme is funded through Regional Bulk Infrastructure Grant (RBIG) derived from the national revenue. RBIG is a specific purpose capital grant with the objective to supplement the financing of the social component of regional bulk water supply and sanitation infrastructure. Critical to the programme is coordinated and integrated planning. This type of planning takes place through a process called Implementation Readiness Study (IRS) process. The IRS process comprises of the four main phases mentioned below: a) Scoping Phase The scoping is preceded by the needs highlighted by the communities from the Integrated Development Planning process. All the relevant background information is documented and assessed in order to confirm the extent and reality of the need. b) Feasibility Phase The phase describes the proposed technical intervention and documents the analysis and methodology on how the proposed solution was determined. Option analysis is undertaken in instances where there are different options so as to illustrate the conclusion to one option. c) Preliminary Design Phase Ppreliminary design of the bulk infrastructure scheme where various technical options are identified and evaluated. The indicative design criteria and design parameters are estimated taking into consideration the demand analysis, water conservation and demand, existing infrastructure, various options and the preferred one. This phase also highlights a budget estimate for the development of the project. d) Implementation Readiness Phase and Report This is a report detailing all the necessary approval requirements regarding, planning and strategic targets, social, economic, technical, financial, and legal and sustainability criteria.
2. SCOPE OF THE PROJECT Based on the above IRS process, the Isiphethu Water Services has been appointed by Rand Water to produce an implementation readiness phase report for Mohlakeng Outfall Sewer. The report articulates whether the project satisfies the criteria for readiness for implementation.
The report coordinates, analyse and conclude on the findings of the previous phases being, scoping and feasibility reports. It highlights and provide direct references to the other reports and their enhancements and conclude on the readiness for the implementation of the Mohlakeng Outfall Sewer.
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3. METHODOLOGY FOR THE PROJECT
The process that has been taken in developing the report includes the following: a) Consultations with stakeholders including the Rand Water (RW), Proplan Consulting Engineers, Department of Water and Sanitation and the Westonaria Local Municipality (WLM). b) Review of the planning documents of the municipality including the Integrated Development Plan (IDP) and the Water Services Development Plan (WSDP) for the Westonaria WLM, c) Review and analysis of the scoping, feasibility and IRS reports for the extension of the Hannes Van Niekerk Waste Water Treatment Works, d) Review and analysis of the Mohlakeng Outfall Sewer scoping and feasibility reports developed by Proplan Consulting Engineers, e) Analysis of the Census Data.
4. BACKGROUND TO MOHLAKENG OUTFALL SEWER PROJECT
4.1 Overview of the Project The Mohlakeng Outfall sewer is a project that is derived from the planning and implementation of the Westonaria Regional Waste Water Treatment Plant. It is envisaged to be a permanent solution; an integral part of the refurbishment and the extension of the Hannes Van Niekerk (HvN) Waste Water Treatment Works (WWTW) and the envisaged new plant called Zuurbekom Waste Water Treatment Works.
4.2 Westonaria Regional Bulk Sewer Scheme The Westonaria Local Municipality in 2007 commissioned a feasibility study to determine the need for a functional Westonaria Regional Waste Water Treatment Works (WRWTPW). The study was completed in 2010. As per the IRS for HvN WWTW dated January 2010, the study investigated the sufficiency of the waste water treatment works in its area of jurisdiction. The findings highlighted the following: a) The design capacity of HvN WWTW was registered to be at 22Ml/day after the plants were evaluated against the backdrop of the effluent quality limits set by the DWS. b) The site of works are underlain by dolomitic conditions. c) There were several housing and industrial developments that would certainly increase the flow of sewer impacting on the capacity of the plant. The majority of the new developments was aimed at the informal sector. d) The project bears a significant regional flavour due to cross border service delivery. e) The sewage infrastructure within the municipal does not only cater for flow from within its boundaries but also accommodates flow from neighbouring municipalities, specifically from Randfontein. f) The residential development of Mohlakeng drains into the HvN WWTW with a flow of 4.28 Mℓ/day being received. g) Extension to the Mohlakeng development is also underway and this will also be included in future planning and construction of the infrastructure within WLM 2
h) It was in 2010 estimated that an additional 41 Mℓ/d of sewage treatment capacity must be catered for in 2015, an additional 64 Mℓ/d by 2020 and an additional 87 Mℓ/d by 2025. i) The challenge is that the flow logging on the outfall sewer from Randfontein to HvN WWTW identified that approximately 11 Ml/day leaking from the pipe and thus not reaching the treatment facility. j) An emergency project was envisaged to address the problem and the recovery of the flow resulting in the capacity of the plant being fully utilized. k) From the geological investigations undertaken on site it is clear that the available suitable land at the HvN WWTW will only accommodate limited extension of the plant to the maximum capacity (37 Ml/day). l) It means only 15 Mℓ/day module could be constructed on the only available land that was identified by the geologist as acceptable. m) Any flow exceeding the plant capacity of HvN WWTW is earmarked to be transferred to the new Zuurbekom WWTW. n) The emergency refurbishment of HvN WWTW, the extension of HvN WWTW, Mohlakeng Outfall Sewer and the construction of Zuurbekom WWTW all forms the WRWWP.
5. PROGRESS ON THE DEVELOPMENT WESTONARIA REGIONAL SEWER SCHEME
5.1 Emergency Refurbishment of the Plant The logging at the outfall sewer between Mohlakeng and the Hannes van Niekerk WWTW established that 11Ml/day of the sewer was lost into the ground. It was later confirmed that about 3 km of the outfall sewer has sustained damage during the formation of a sinkhole. The emergency measures in mind that there would be permanent solution were implemented. About 450mm diameter pipeline was constructed above ground in order to bypass the 3km so as to reduce the environmental pollution, costs and construction duration of the temporary solution. A temporary pump station was also built to assist the flow of the sewer over the affected area.
5.2 Construction of the Extension of Hannes Van Niekerk The extension of the Hannes Van Niekerk from 22Ml/day to 37Ml/day took place from January 2012. The construction took a period of 30 months from January 2012 to July 2014. This is beyond the targeted period of 18 – 24 months. The challenges were experienced with the dolomitic condition of the land, material supply, delays by the electrical contractor and other minor nuances.
5.3 Implementation of Zuurbekom WWTW The feasibility study investigated the suitability and financial situation of six alternative solutions that would cater for the future treatment capacity demands expected in the Westonaria Local Municipality. Alternative 6: Upgrade Hannes van Niekerk (HvN) WWTW up to the maximum capacity the geology allows (37 Ml/day) WWTW and construct a new treatment plant. A new wastewater treatment works (Zuurbekom WWTW) is planned for construction approximately 20 km due east of the HvN WWTW and has been designed to be able to
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accommodate excess flow from HvN WWTW. A new pipeline and pump station will be required for this purpose. The WWTW is planned to be an 80Ml/day to be constructed in modules of 20Ml/day. Any flow exceeding the plant capacity of HvN WWTW including any surplus flow in the west is earmarked to be transferred to the new Zuurbekom WWTW. The designs for the plant are being completed. The phasing of Zuurbekom will be phased accordingly with the construction of the Mohlakeng Outfall sewer.
5.4 Proposal of the Urgent Construction of Mohlakeng Outfall Sewer The latest investigation as indicated in the Mohlakeng Outfall Sewer scoping report revealed that the loss of the effluent has reached a level of 18Ml/day. However, it has not being confirmed of the level of flow into the HvN WWTW. The operational and further leakages resulting in environmental pollution with untreated sewage could lead to formation of further sinkholes that could cause further damage to infrastructure in the area. The challenges are to an extent that there are allegations that the extension of the plant is not functioning. This justifies the need to urgently start with the implementation of the Mohlakeng Outfall Sewer. It is anticipated that the implementation of the Mohlakeng Outfall Sewer will increase the sewer flow and bring the total flow into HvN to a level where the biological treatment process will operate more efficiently, as it was designed.
This Implementation Readiness report is meant to motivate for the Mohlakeng Outfall Sewer.
6. STRATEGIC AND PLANNING ISSUES
6.1 Alignment with WSDP and IDP As cited in the HvN Niekerk IRS report of January 2012, the goals of the WLM as set out in the Water Services Development Plan (WSDP) 2009-2013 is a clear extension of the objectives of the Provincial government. Both the WSDP and the IDP indicates specific aspects relating to water and sanitation as highlighted in the table below.
Table 1: IDP and WSDP Goals and Integration
ISDP priority WSDP objectives related to IDP priority issues issues which impact on water What Where When How services Service Delivery To maintain a positive Residents 3 year Provision of relationship with all Businesses target, free basic customers, focusing on ongoing services. Industries individual needs; Monitoring of Neighbours potable, To maintain acceptable (cross surface and water quality at any border groundwater point in the water services) network; resources To ensure sufficient and Acquire acceptable water necessary
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ISDP priority WSDP objectives related to IDP priority issues issues which impact on water What Where When How services pressure to all funding customers at the point of Improve delivery; productivity To ensure sufficient and acceptable quantities of water to all customers at the point of delivery, including a free basic water amount of 6 kI per month to poor households; Service Delivery To ensure a means of (Cont.) measuring consumption at each connection point according to statutory requirements; To disseminate information about the status and management of water and sanitation through the WSDP; Create and maintain a communication channel between interested, affected and associated groups, individuals from public authorities, water authorities, water industry, suppliers, consultants and research organizations; Integrated Cooperate with the Municipality Continuously IDP, WSDP, Planning other departments to / SDF, PMU coordinate and internal and other integrate planning for clients strategies and service delivery, policies infrastructure planning and operations/maintenanc e Improved Monitor all major water Whole of Continuously Water and Environmental and catchments and Westonaria wastewater Quality Services collection systems; quality and Product Monitor major monitoring groundwater bodies in program Westonaria; Need to communicate Maintain a scientific or to Provincial analytical quality services to monitor and Government and other address water and utility 5
ISDP priority WSDP objectives related to IDP priority issues issues which impact on water What Where When How services wastewater quality; companies the Land owned by mines need for not optimally utilized. electrification Pollution problems are created by informal settlements i.e. air and water pollution. Possible pollution of underground water sources by mining activities. Storm water drainage in Bekkersdal area is severely polluted during heavy rains, which lead to spillages of effluent in the water source. Improved Geotechnical conditions Environmental and within the area have an Quality Services impact on housing and and Product (cont.) development potential. Storm water causes erosion in Bekkersdal, Simunye and Zuurbekom. Develop, Expand, To expand and All serviced Continuously Source funds Operate and upgrade water and areas from possible Maintain wastewater networks sources and Infrastructure continuously in both government urban and rural areas grants to accommodate new Apply the customers and meet equitable the demands of the share existing customer efficiently base, where feasible; Augment To plan, implement capacity and and manage an skills integrated constraints infrastructure where feasible maintenance program by: in the most effective, * training of efficient and economic staff manner possible; * retention of Optimal operation and expertise management of the water connector and * Skills internal services and programs wastewater connector, (SAICE, internal network and PAWS, treatment facilities. USAID, DWAF, etc.)
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ISDP priority WSDP objectives related to IDP priority issues issues which impact on water What Where When How services * Section 78 process
Develop, Expand, Design and Operate and construction of sound Maintain engineering Infrastructure water/wastewater (Cont.) distribution reservoirs, connector, internal network, pump station and wastewater treatment infrastructure in accordance with the required SABS standards; To assess, investigate and develop applicable physical, biological and chemical treatment technologies. Affordable And Productive and cost- All serviced Continuously Increased Financially Viable effective maintenance areas community Services of the water and awareness wastewater facilities; Implement To enhance, encourage prepayment and where appropriate water ensure payment for Align financial services rendered; and technical To improve productivity systems and enhance sustainability by applying suitable service levels and technologies, as well as payment levels People To retain expertise base Within the Continuously Promote Development and To improve awareness Municipality Professional Capacity Building and knowledge of the membership engineering, biological, Attend chemical and physical technical processes in the workshops municipal, industrial and and forums community sectors; Improve equity To encourage and in technical implement technology professions transfer, true Improve empowerment and organisational capacity building; culture and To recognize, support sound human 7
ISDP priority WSDP objectives related to IDP priority issues issues which impact on water What Where When How services and promote skills principles development amongst Incorporate employees; CIDB To manage change, regulations diversity, employment equity and gender sensitivity in the workplace; People To respect, encourage Development and and support personal Capacity Building growth and (Cont.) professional fulfilment of each individual in the Directorate. Optimise Water To identify and All serviced 3-5 year Implement a Resource contribute in the areas plan Water loss Utilisation and undertaking of program Demand research into the Implement Management potential recovery and cost effective beneficial re-Use of ways of water and effluent; utilising To promote water sewage demand management sludge and water conservation by minimising wastage and ensuring the efficient and responsible use of water by all Compliance to To comply Westonaria 1 year Review water Legal and Quality consistently with ongoing services Requirements specific sanitation and bylaws water standards as set Update WSDP by applicable annually legislation and Literature regulations; updates via Execution of Bylaws and PMU applicable legislation Establish PMU regarding industrial effluent and storm water pollution, Knowledge of and compliance with relevant ISO, SANS, CIDB and other quality indicators, standards and guidelines.
From the highlighted items above, it is clear that the correct planning, design and operation of any new waste water treatment facility fits in with the objectives of the local municipality as set
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out in the WSDP. The highlighted items above is further elaborated on applicability in terms of the project: a) To disseminate information about the status and management of water and sanitation through the WSDP The latest WSDP reports the status quo of the water and sanitation management in WLM and the need for the infrastructure required in future. b) Cooperate with the other departments to coordinate and integrate planning for service delivery, infrastructure The project‟s task team include the Department of Planning and Infrastructure, Water and Sanitation and Electricity in WLM. Due to the regional characteristics DWS, Rand Water, Randfontein LM and other interested stakeholders are also part of the task team and are involved in decision making and agreement of the need. c) To expand and upgrade water and wastewater networks continuously in both urban and rural areas to accommodate new customers and meet the demands of the existing customer base, where feasible. This project directly considers the expanding and upgrading of wastewater infrastructure to accommodate new and existing customers d) To plan, implement and manage an integrated infrastructure maintenance program in the most effective, efficient and economic manner possible. Part of the provision of new infrastructure is the implication of associated operation and maintenance requirements. This is dealt with in more detail in the Section reporting institutional arrangements. e) Optimal operation and management of the water connector and internal services and wastewater connector, internal network and treatment facilities. The optimal operation of the treatment facilities is considered as part of the design of the new infrastructure to ensure the most effective delivery and to meet effluent quality requirements set by DWS. f) Design and construction of sound engineering water/wastewater distribution reservoirs, connector, internal network, pump station and wastewater treatment infrastructure in accordance with the required SANS standards. The design and construction of the required infrastructure will adhere to SANS specifications. This will pertain to the excavation, concrete works, steelwork as well as provision of mechanical equipment. g) To assess, investigate and develop applicable physical, biological and chemical treatment technologies. As set out in the section dealing with the technical attributes of the new agreed infrastructure, proven technology will be utilized and new technological advances are considered in the design of the infrastructure.
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h) Productive and cost-effective maintenance of the water and wastewater facilities; The provision of the new and upgraded facilities will be accompanied by a maintenance plan to ensure effective maintenance of the infrastructure. i) To recognize, support and promote skills development amongst employees The provision of new infrastructure will coincide with training and skills development to operate and maintain the infrastructure. j) To respect, encourage and support personal growth and professional fulfilment of each individual in the Directorate. New infrastructure provides opportunities to own and operate items that are providing services to the community. This promotes a sense of contribution and responsibility to employees involved in the operation of these infrastructure. k) To identify and contribute in the undertaking of research into the potential recovery and beneficial re-use of water and effluent; Mohlakeng Outfall Sewer, includes the consideration of effluent reclamation to ensure that the functional capacity of HvN is achieved as set out in the feasibility study for the regional scheme. l) To comply consistently with specific sanitation and water standards as set by applicable legislation and regulations. The special limits set by DWA governs the provision of treatment facilities and will be complied with. m) Knowledge of and compliance with relevant ISO, SANS, CIDB and other quality indicators, standards and guidelines It is noted that the need for and addition of treatment capacity is reported in the latest WSDP and the Infrastructure Development Plan (IDP).
6.2 Existing Water and Sanitation Supply Chain The project team comprises of departments, consultants, specialists and other stakeholders who are coordinated by Rand Water to plan, investigate and take cognisance of the expedition towards implementation.
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Figure 1: Project structure
6.3 Alignment with Provincial Growth and Development Strategy
The WLM is part of the Gauteng Province and as such needs to align its objectives to those of the Provincial Government. In this regard, The Growth and Development Strategy (GEGDS) of the Gauteng Provincial Government (GPG) aims to address the high levels of unemployment and poverty experienced in the Province and to address the uneven and skewed growth experienced in some areas while other communities do not benefit from it.
The GEGDS is based on national policies amongst others the National Spatial Development Perspective and goals adopted at the national Growth and Development Summit, and the following documents underwrite these goals.
Below are some of the comments to the Growth and Development Strategy (site reference).
Table 2: Growth and development strategy FOCUS AREAS DOCUMENTS -Establish integrated planning of all municipal departments WIDP-Westonaria -Retain competitive staff for service delivery Integrated -Encourage community and public participation and feedback Development Plan -Encourage establishment of new businesses WLED-Westonaria -Attract and support local investment Local Economic -Improve and manage local infrastructure Development -Improve and encourage local procurement that will boost business competition -Address needs of the poor Gauteng -Identify and support areas with development potential Development -Build and develop infrastructure in areas that have development potential Strategy
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6.4 Strategic Importance Census records confirm that Gauteng has the highest growth rate in the country (3.8 % from 2001 to 2006) and studies have revealed that migration to Gauteng is a large contributing factor. The occurrence of spatial creep has opened up the possibility of a number of new developments in Westonaria and neighbouring municipalities, specifically Randfontein LM. These developments are in the process of being implemented and has given rise to the need for bulk infrastructure services to cater for these areas. The West Rand District Municipality (WRDM) and its local municipalities are striving for unity by 2016. This is aimed at ensuring the integration of service delivery for the entire region. The Gauteng Global City Region concept has been introduced with its objective to build Gauteng into an integrated and globally competitive region. The meeting of these objectives necessitates the alignment of planning instruments and various sectors in Gauteng. Building on and enforced by these initiatives are the housing development strategy in the WRDM that have identified strategic development areas. Areas in Randfontein such as Mohlakeng and Droogeheuvel that drains towards the Hannes van Niekerk WWTW are included in this list of areas. Also included in this list and identified as a future development node by Westonaria (IDP) is the intersection of the R28 and N12 on the eastern boundary of Westonaria. Identified areas in Randfontein and Westonaria are already the subject of development planning with Mohlakeng, Droogeheuvel and Aureus Industrial park in Randfontein and Protea West Industrial park, Syferfontein and Westonaria South (now Westonaria Borwa). The upgrading of the waste water treatment capacity in Westonaria is thus of significant strategic importance to cater for, and to unlock the full potential of these developments.
6.5 Agreement of Need There is consensus with Randfontein, Johannesburg and Westonaria Local Municipality about the Westonaria Regional Sewer Plant [A meeting well recorded or evidence should be solicited for the agreement on need]. The extension of Hannes Van Niekerk WWTW has been commissioned. The resultant is not close to what is expected due to the loss of 18Ml/day of effluent. In order to realise the functionality and the capacity of the Hannes Van Niekerk WWTW, there should be an urgent permanent solution for the unaccounted loss of sewer.
6.6 Level of Service The Westonaria LM is required by the national sanitation policy to provide residence with basic level of service. The municipality has eradicated all the backlogs for the basic level of service. The intention of the municipality is to provide water borne sewer especially to pre- empt the geological disasters that can arise due to the area being dolomitic. The other factor that is taken into consideration is that high density housing is provided due to shortage of land. Waterborne is hence the best option.
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6.7 Economic Growth Requirements From the HvN Niekerk IRS an assessment of the economic situation in a local municipal area is quite difficult due to the open nature of economic systems. The figures for Gross Domestic Product remains as an indicator of the structure of the local economy, albeit it being quite difficult to find for smaller localised areas. The WLM IDP (2009/2010) reports that the 2002 GDP figures indicated that mining is the predominant sector in the area with a 74 % contribution. The spatial characteristics of Westonaria, with the majority of land being occupied by farmland and agricultural holdings, is evident with 14% GDP contribution relating to “other” sectors which includes agriculture. Manufacturing and trade contributes a further 12 % to the local GDP. A decrease has been experienced in the mining sector in recent years. A recent study by the West Rand District Municipality identified a number of contributing causes for the decline that has been experienced. They were: a) Expensive gold mining technology (depth, machinery equipment); b) High risk and capital outlays for new mining developments; c) High labour and other input costs versus realised productivity levels; and d) Demands of organised labour movement. e) Exogenous factors: f) Fluctuation uncertainty in gold price; g) Competitiveness (production costs, technology) on international markets. h) Other Issues: i) Direct and indirect impact of applicable development policies or the lack thereof; ii) Lack of integrated economic and spatial development planning guidelines; iii) Labour relations; iv) Available skills; v) Exhaustive nature of certain ore bodies; vi) Little utilisation of other mineral resources such as construction material like clay bodies, re-utilisation of slime dams, rock dumps etc.; and vii) Little re-utilisation of phased out mining infrastructure. The recent decline can however not be taken as indicative of situation that can be experienced in the long term. An upward trend can be attained by the realization of a considerable increase in the gold price, more advanced technology and the large gold reserves / resources especially in the greater Westonaria area (Source WLM IDP). The WLM IDP states that Westonaria should get more involved in the tertiary sector economy. This entails the promotion of attracting industries, tourism, hospitality etc. It is expected that the housing developments in the area will attract the formation of SMME‟s and industry to the area. An industrial park in the north east of the municipal area is also in the implementation stages (Protea West Industrial Park). The drive to attract other industries to the area is to a large extent dependant on housing to cater for the influx of people attracted by the creation of
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jobs. These housing developments in turn is dependent on the availability of bulk infrastructure which leads to the conclusion that the provision of additional waste water treatment capacity is paramount to assist the economic growth process in WLM. The drive to cater for residents as per the mandate given to Westonaria LM to address service delivery is the focus of this project. Although it is anticipated that economic growth in the area is experienced, this project are to a large extent driven by the social commitment to deliver services.
6.8 Functional Criticality of Total Scheme and Specific Components The extension of the 22Ml/day Hannes Van Niekerk by 15Ml/day is anticipated to address the capacity challenges established during the feasibility study for the Westonaria Regional Sewer Scheme. The enhanced challenges experienced due to the logged losses of about 18Ml/day have to be addressed to ensure that Hannes Van Niekerk receives the envisaged effluent. Otherwise, the area will experience more disasters from the sinkholes, Hannes Van Niekerk WWTW will be obsolete and there will be no case in constructing Zuurbekom WWTW. However the feasibility study should further review the case in Zuurbekom WWTW as there are potential for the West Rand District Municipality to become part of a metropolitan municipality.
6.9 Extent of the Cost The total estimated project cost amounts to R90 620 020 excluding VAT. As estimated in the Mohlakeng Outfall sewer scoping report, the cost allows for the following components: a) The sewage transfer station, which will include screening, gritting, solid waste management and pumping. It is envisaged that the complete structure will be enclosed to address odour problems b) An 8.35 km long steel pipeline, consisting of a rising main and a gravity section, approximately 600 mm diameter, complete with flow meters, air valves and flow meter and air valve chambers c) Demolition and rehabilitation of the existing emergency pump station, sump and pipeline d) Environmental investigations and water use licence application e) Topographical and geotechnical surveys f) Professional fees
6.10 Available Co-funding The extension of the project has been funded from the Regional Bulk Infrastructure Grant (RBIG). It is envisaged that the next phase being Zuurbekom will also be funded through the grant as the scheme will service mostly the low income households (refer to the social information). The RBIG funding has been used for the extension of Hannes Van Niekerk WWTW. It was envisaged that the Westonaria Local Municipality will fund Zuurbekom however it has been established from the interactions between Rand Water , DWS and the DWS that it is not possible due to lack of affordability. The project cannot be funded from MWIG as the grant is targeted for water projects.
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The project will neither be funded from the Accelerated Community Infrastructure as the cost is far above the financial threshold and availability of the programme. This is exacerbated by the fact that Municipality does not have funding to start the project for the ACIP to be used for acceleration of the project. This situation leaves the Mohlakeng Sewer to be funded from RBIG. The project qualifies as it is an integral part of the Westonaria Regional Bulk Sewer Scheme which provides services to municipalities outside the boundaries of Westonaria. Hence the development of the motivation for RBIG funding to address this emergency project.
7. SOCIAL FACTORS
7.1 The benefitting population: The benefitting population will be the residents of Westonaria, Westonaria South, Elandsfontein, Simunye, Hillshaven, Protea Park, Bekkersdal, Mohlakeng, Kocksoord, Toekomsrus and Aureus & Industrial. These areas fall within the WLM as well as the Randfontein Municipality.
The table below highlights the number of people and subsequently households which will be serviced by the Mohlakeng Sewer Outfall pipeline. A 20 year population growth projection has been calculated at the current growth rate of 0.2%. Table 3: Areas to be affected by the Mohlakeng Sewer Outfall Project Area Population Number of Households
2015 2025 2035 2015 2025 2035
Westonaria (WLM) 8 551 8 724 8 898 3 065 3 127 3 189 Westonaria South (WLM) 6 975 18 389 18 757 2 500 6 590 6723
Elandsfontein (WLM) - 19 725 20 120 - 7 070 7 210
Simunye (WLM) 12 555 12 808 13 065 4 500 4 591 4 683 Hillshaven (WLM) 2 522 4 556 4 647 904 1 633 1 666
Protea Park (WLM) 223 1 074 1 096 80 385 393
Bekkersdal (WLM) 14 925 15 226 15 530 4 326 4 413 4 502 Mohlakeng (RLM) 58 253 59 429 60 617 16 885 17 226 17 570
Kocksoord (RLM) 2 933 13 445 13 714 850 3 897 3 975
Toekomsrus (RLM) 11 385 11 615 11 847 3 300 3 367 3 434 Total 118 322 164 991 168 291 36 410 52 299 53 345
The growth rate calculated is based on historical information and cognisance should be taken that future trends would affect this projection.
It can be deduced from the above table that the population number will increase from 118 322 in 2015 to 164 991 in 2025 and lastly 168 291 in 2035. This means that between 2015 and 2035, the households would have increased by 49 969. It would seem that as a benchmark, the technical input has to accommodate this growth of about 49 969 people by 2035. 15
The WSDP states that there will be new developments within the Westonaria and Randfontein municipal boundaries which will need to be accommodated by the bulk infrastructure requirements. It should be noted that the flow will be draining into the Hannes van Niekerk WWTW.
A new residential development in Mohlakeng will be developed to accommodate 3 160 households. This development is expected to be rolled out over a projected ten year period.
7.2 Number of poor households to be served and the social cost: The Westonaria Local Municipality is regarded as a developmental municipality with an objective of eradicating poverty and unemployment. It becomes essential to provide an analysis of the current poverty situation within the municipality. The poorer areas within Gauteng lie within District Municipalities such as the West Rand District Municipalities. The WRDM poverty index is estimated at 19.7% and the poverty/population proportion is 8.4%. An index for Westonaria Local Municipality is not available. It is however estimated that approximately 40% of the total population lives below the bread line.
Figure 2: Employment Status for the West Rand District Municipality
The Pie Chart above reflects the employment status in West Rand DM as recorded by the Community Survey 2007. As indicated, 51% of the population in West Rand is employed. Not economically active refers to people under the age of 18, who are not ready for the labour market as well as people over the age of 65 who are implied to be retired or are senior citizens. As seen above, this group represents 26% of the total population. There is only 18% of unemployed people in West Rand. This percentage may seem low however, zooming in on Westonaria LM; Global Insight Data indicates an unemployment rate of 29% for the municipality derived from the Census 2011 count.
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Westonaria LM defines a poor household as ―”any household earning less than the amount (R3 500) stated by the Financial and Fiscal Commission from time to time”.
There are currently two (2) policies which are in operation within Westonaria LM, namely a Free Basic Service Policy (FBS) and an Indigent Policy. In terms of the FBS policy, indigent households qualify for 6 kl of water and 50kWh of electricity as part of free basic services.
The Indigent policy was based on geographical area and standard of services rather than on the ability to pay for services. The 2008/09 financial year followed a different approach. Only registered indigents are entitled to FBS and the indigent status will be determined by household income (currently R1 600). The table below represents the breakdown of the population in terms of income level. It indicates that 55 % are classified as indigent.
Table 4: Population breakdown in terms of Income (Source Census 2011) Income level Total % of Total No income 23 024 22.6% R1-R4 800 6 706 9.2% R4 801 – R9 600 8 717 9.8% R9 601- R19 600 12 741 13.4% R19 601- R38 200 18 330 16.4% R38 201 – R76 400 22 577 20.2% R76 401 – R153 800 10 059 9% R153 801 – R307 600 6 036 5.4% R307 601 – R614 400 2 682 2.4% R614 001 – R1 228 800 559 0.5% R1 228 801 – R2 457 600 112 0.1% R2 457 601+ 224 0.2%
The ratio of indigents that will benefit from the increase in demand was determined in order to calculate the Social Cost.
The current indigent figures were obtained from WLM and Randfontein and it is expected that the new developments will be 100 % indigent based on economic forecasts in the area.
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The Table below indicates the calculation of the ratio of the demand increase that will benefit the population of WLM and RLM
Table 5: Ratio of Increase in Demand over a period of 20 years
Increase in Increase in demand demand 2015 2025 2035 over first over last ten ten year year span span (2015- (2025-2035) 2025
Area Househol Daily Households Daily Households Daily ds Flow Flow Flow (Ml) (Ml) (Ml) Westonaria 3 065 2.64 3 127 2.70 3 189 2.75 0.06 0.05 (WLM) Westonaria 2 500 1.44 6 590 3.79 6 723 3.87 2.35 0.08 South (WLM) Elandsfontein - - 7 070 4.07 7 210 4.15 4.07 0.08 (WLM) Simunye 4 500 2.59 4 591 2.64 4 683 2.70 0.05 0.05 (WLM) Hillshaven 904 0.52 1 633 0.94 1 666 0.96 0.42 0.02 (WLM) Protea Park 80 0.07 385 0.33 393 0.34 0.26 0.01 (WLM) Bekkersdal 4 326 2.49 4 413 2.54 4 502 2.59 0.05 0.05 (WLM) Mohlakeng 16 885 9.71 17 226 9.90 17 570 10.1 0.19 0.20 (RLM) Kocksoord 850 0.73 3 897 3.36 3 975 3.43 2.63 0.07 (RLM) Toekomsrus 3 300 1.90 3 367 1.94 3 434 1.98 0.04 0.04 (RLM)
Aureus - 3.00 - 3.48 - 3.55 0.48 0.07 (Industrial) (RLM) Total 10.60 0.72 increase in demand
7.3 Gini Coefficient The Gini coefficient measures the inequality among values of a frequency distribution (for example levels of income). A Gini coefficient of zero expresses perfect equality where all values are the same (for example, where everyone has an exactly equal income). A Gini coefficient of one (100 on the percentile scale) expresses maximal inequality among values (for example where only one person has all the income).
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Table 6: Gini Coefficient HIS Global Insight Development: Gini Coefficient: 2010
Regional eXplorer African White Coloured Asian Total
Gauteng Province 0.58 0.44 0.56 0.54 0.63 West Rand District 0.56 0.43 0.57 0.54 0.62 Municipality Westonaria Local 0.58 0.42 0.58 Municipality
A Gini coefficient of Westonaria is 0.58 which is expressing a less disparity with some mixture of high income people. It means that there is none or minimal social status disparity.
7.4 Job creation Westonaria‟s location, being 60km outside the economic hub of Gauteng places it in a strategic position to attract development. There is easy access to the highways and railway infrastructure. Westonaria intends to use its strategic location in attracting tertiary sector economy. The creation of industries, agricultural production, retail and wholesale storage, production of high value goods as well tourism opportunities ought to be explored. An incentive scheme to new developers can lure investors to the area and thus rewarding businesses for their loyalty
The current unemployment rate for WLM is 29%, according to Census 2011. One of the targets which WLM has set for itself is to halve unemployment to a rate of 14.8% as reported in the 2011/12 4th review of the WLM IDP. It is expected that the creation of jobs will be seen in the short term with the provision of job opportunities through required labour activities as well as on the long term with the provision of businesses and industry requiring employees.
The following table highlights Local Economic Development strategic objective of promoting local economic and social development in an effort to eradicate poverty and facilitate jobs creation. This information was sourced from the WLM IDP (final approved 2014)
Table 7: Local Economic Development Strategic Objectives Strategic Baseline Outputs/plans Performance Target Target focus area 2013/14 indicators 2014/15 2015/16 881 jobs Create jobs Number of job 1000 jobs 1200 jobs Opportunities opportunities (300) 30% of (420) 35% of created through the total job the EPWP opportunities total job Economic Number indigents created creations development that 40% to benefit created 40% benefited from job youth to opportunities benefit youth created
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Strategic Baseline Outputs/plans Performance Target Target focus area 2013/14 indicators 2014/15 2015/16 200 Support small Number of small 300 small 300 small business businesses businesses businesses development supported supported supported through training information and procurement 40% to benefit youth 59 Support Number of 60 70 cooperatives cooperatives cooperatives cooperatives supported through supported Supported training, information and procurement 1 Facilitate Number of 2 investment 2 investment Investments investment agreements agreements agreements signed Signed signed LED Implement LED Number of 8 prioritized 4 prioritised Strategy/Plan Strategy/Plan prioritized LED projects projects projects business business plans implemented plans developed developed 90% Implement Development 100% of 100% of Social programmes planned social planned development planned v/s development social programmes implemented programmes development (%) implemented programmes implemented 60% Implement Percentage of 80% of 80% of Mayoral special planned planned Projects mayoral projects projects projects planned implemented implemented v/s implemented
7.5 Proposed water and sanitation tariffs
South Africa faces similar challenges with regard to water supply as it did with Electricity Service, since demand growth outstrips supply. Consequently, National Treasury is encouraging all municipalities to carefully review the level and structure of their water tariffs to ensure: a) Water tariffs are fully cost-reflective – including the cost of maintenance and renewal of purification plants, water networks and the cost associated with reticulation expansion; b) Water tariffs are structured to protect basic levels of service and ensure the provision of free water to the poorest of the poor (indigent); and c) Water tariffs are designed to encourage efficient and sustainable consumption.
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The Municipality is proposing an 8% to 35% increase in tariffs for water services. The Municipality is charging water using a block tariffs approach (the low tariff will be R11.01 per KL increasing to R14.86 per KL). The tariffs are meant to benefit the poor, as they are presumed to be low users of water, and discourage the over-use of water while promoting water conservation. Indigent consumers should receive 6KL of free use of water.
The proposed waste water services tariffs increase is between 60% and 165%, so that the Municipality can recover all costs relating to operating this service. The Municipality plans to at least break even on this service to ensure that it recovers all costs relating to this service. A R75.00 per suction tariff is also proposed for emptying VIP toilets in informal settlements. This will ensure that the Municipality recovers at least some costs relating to the provision of this service.
7.6 Poverty eradication, Social upliftment and Health Improvement The new developments to be served by the sewage infrastructure from a spatial development perspective are the main drives to create nodes where people can work and live whilst having access to adequate service delivery levels. The residential developments are closely associated with the provision of industrial and commercial areas to be developed in the foreseen future. These associations are as follows: Table 8: Proposed Developments in Westonaria Residential Development Associated Industrial Development Mohlakeng Extension 11 (3 160 erven) Aureus Industrial Park Droogeheuvel (3 160 erven) Koksoord (3 000 erven) Protea Glen (16 000 erven) Protea West Industrial Park Syferfontein (60 000 erven)
7.7 Education Facilities
The following educational facilities will be benefiting from the construction of the new infrastructure:
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7.8 Health Facilities The Westonaria area currently has seven permanent clinics operating between 07h30 and 16h30 daily. These clinics will all benefit from the provision of the new infrastructure construction: 1. Bekkersdal West Clinic 2. Bekkersdal East Clinic 3. Westonaria Clinic 4. Mohlakeng Clinic
7.9 Recreational Facilities
The below tabled recreational facilities have been identified as those which will benefit from the new infrastructure Table 9: Recreational Facilities to Benefit Libraries Sports Complex Bekkersdal Library Hillshaven Recreational Centre Glenharvie Library Kloof Mine Recreation Centre Hillshaven Library Westonaria Sports Complex Westonaria Public Library Libanon Recreational Club Zuurbekom Branch Library
8. ECONOMIC CRITERIA
Communities are empowered through social networks and economic activities. Infrastructure is attributed to economic empowerment which happens through the growth of existing businesses or the establishment of new business ventures. The demand for service by the current business and new/future businesses will be established in trying to determine the economic value of the construction of the Mohlakeng Sewer Outfall.
An economic analysis of WLM will help in determining the following:
a) Number of businesses and industries to be served (by type and water use category including existing and future consumers) b) Expected economic value to be generated by the new businesses c) Number of SMMEs and BEE enterprises to benefit (by type & monetary value/benefit) during project and as an indirect result of the project d) Regional economic benefit from the proposed water users and their value chain integrated development objectives (socio-economic benefits, provincial growth & development objectives, IDPs and associated sector programmes like housing)
8.1 Economic Sector Analysis A normal nation‟s economy is divided into various sectors to define the proportion of the population engaged in the activity sector. The continuum starts with the Primary Sector, then the Secondary Sector and lastly the Tertiary Sector.
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Table 10: Economic Sector Analysis Primary Sector Secondary Sector Tertiary Sector concerns itself with the Manufactures finished This is the service utilization of raw goods. All of industry materials from the manufacturing, provides services to the earth such as processing, and general population and agriculture and mining construction lies within to businesses Extracts or harvests the secondary sector. Activities include retail products from the Activities include metal and wholesale sales, earth. working and smelting, transportation and includes the production automobile production, distribution, of raw material and textile production, entertainment (movies, basic foods chemical and television, radio, music, Activities include engineering industries, theater, etc.), agriculture (both aerospace restaurants, clerical subsistence and manufacturing, energy services, media, commercial), mining, utilities, engineering, tourism, insurance, forestry, farming breweries and bottlers, banking, healthcare, grazing, hunting and construction, and and law. gathering, fishing, and shipbuilding quarrying.
8.2 Gross Value Added (GVA) Gross Value Added (GVA) is a measure in economics of the value of goods and services produced in an area, industry or sector of an economy.
Westonaria‟s Gross Added Value is high in the primary sector with 78.2%, followed by the tertiary sector with 16.7% and less in the secondary sector on 5.1%. The service industry is high as opposed to the potential for manufacturing and raw material. The situation can be turned around to increase the secondary sector so as to increase manufacturing and processing ventures for a job creation economy.
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Energy from the WWTP can be used for the processing of the primary goods. The Municipality can use its own networks to feed in the electricity generated from the WWTP and sell it to consumers.
8.3 Economic Growth
Economic Growth is the increase in the amount of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP. Growth is usually calculated in real terms, i.e. inflation-adjusted terms, in order to net out the effect of inflation on the price of the goods and services produced. In economics, "economic growth" or "economic growth theory" typically refers to growth of potential output, i.e., production at "full employment," which is caused by growth in aggregate demand or observed output.
The growth rates of the Westonaria Local Municipality appeared to be improving from the 1997 and it dipped in 2008. This could be due to the fact that mining is no longer sustainable in the area and several people are out of jobs as there no beneficiation. That means the municipality need to be cautious in terms of the asset creation as some might not be affordable due to low employment rate.
8.4 Gross Domestic Product (GDP-R)
Gross Domestic Product (GDP) is the market value of all officially recognized final goods and services produced within a region / country in a given period. GDP per capita is often considered an indicator of a region / country's standard of living; GDP per capita is
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not a measure of personal income. Under economic theory, GDP per capita exactly equals the gross domestic income (GDI) per capita. It is not to be confused with Gross National Product (GNP) which allocates production based on ownership. Gross domestic product is related to national accounts, a subject in macro-economics.
Table 11: Gross Domestic Product (GDP-R)
Economic: Gross Domestic Product Economic: Gross Domestic Product IHS Global Insight by Region (GDP-R) Current prices (R by Region (GDP-R) Average Annual Regional eXplorer 1000) Growth
2010 2010 Gauteng Province 912 116 438 3.1%
West Rand District Municipality 41 895 035 1.2%
Westonaria Local Municipality 5 921 222 -2.7%
The Average of Gross Domestic Products of Westonaria was -2.7% in 2010, the impact of this indicates less production in the secondary sector – manufacturing of finished goods using the primary product within Westonaria such as raw materials and natural resources to produce secondary products. This is also seen in lower total export (3.6%) as a percentage of the gross domestic product.
There is a need for the Westonaria region to improve their average gross domestic products through an increased manufacturing of finished goods. More entrepreneurs and industrial developments should be encouraged to ensure the improvement in gross domestic products. Westonaria Municipality should seek opportunity / investors to optimise energy efficiency and develop opportunities for energy generation from wastewater and sludge as part of the WLM Wastewater Business
8.5 Location Quotient
The Location Quotient Technique is the most commonly utilized economic base analysis method. It was developed in part to offer a slightly more complex model to the variety of analytical tools available to economic base analysts. This technique compares the local economy to a reference economy, in the process attempting to identify specializations in the local economy. The location quotient technique is based upon a calculated ratio between the local economy and the economy of some reference unit. This ratio, called an industry "location quotient" gives this technique its name.
Location quotient compares the regional share of economic activity in a particular industry to the national share of economic activity in the same industry. The result reveals the degree of regional specialization in each industry. If the location quotient for a particular industry is between zero and one, the region is less specialized than the nation, while location quotients greater than one reveal greater specialization of the industry in the local economy than in the national economy. Also, observing location quotients over time show if an industry is becoming more or less specialized in the region
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The location quotient in Westonaria for an Agriculture and Manufacturing industry is between zero and one, and means that the Westonaria region is less specialized in these industries (Agriculture and Manufacturing) than the nation, while location quotient of Westonaria is greater than one in Mining that reveals greater specialization of the mining industry in the local economy than in the national economy.
8.6 Employment Levels
Employment covers all persons – both employees and self-employed – engaged in some productive activity that falls within the production boundary of the system.
Employees are defined as all persons who, by agreement, work for another resident institutional unit and receive remuneration. Employees are classified here if they are not also in self-employment which constitutes their principal activity: in that case they are classified under self-employed persons
The relationship of employer to employee exists when there is an agreement, which may be formal or informal, between an enterprise and a person, normally entered into voluntarily by both parties, whereby the person works for the enterprise in return for remuneration in cash or in kind.
Self-employed persons are defined as persons who are the sole owners, or joint owners, of the unincorporated enterprises in which they work, excluding those unincorporated enterprises that are classified as quasi-corporations. Self-employed persons are classified here if they are not also in a paid employment which constitutes their principal activity: in 26
that latter case they are classified under employees.
Unemployment: In accordance with the norms established by the International Labour Organisation (thirteenth International Conference of Labour Statisticians), the „unemployed‟ comprise all persons above a specified age who during the reference period were:
„Without work‟, i.e. not in paid employment or self-employment; Currently available for work‟, i.e. Were available for paid employment or self- employment during the reference period; and „Seeking work‟, i.e. had taken specific steps in a specified recent period to seek paid Employment or self-employment. i) Economically Active Population (EAP)
The Economically Active Population comprises all persons of either sex, and above a certain age, who furnish the supply of labour for the productive activities (falling in the production boundary of the system), during a specified time-reference period. It includes all persons who fulfil the requirements for inclusion among the employed (employees or self-employed) or the unemployed.
Table 13: Economically active population
IHS Global Insight Labour: Economically Active Population (EAP) Regional explorer Number & % of EAP, official definition: 2010
Gender Male Female Total Gauteng Province 2,988,428 (55.6%) 2,555,979 (47.9%) 5,544,407 (51.8%)
West Rand District Municipality 231,616 (53.2%) 153,268 37.1% 384,884 (45.4%)
Westonaria Local Municipality 41,502 (74.7%) 16,935 (31.5%) 58,436 (53.4%)
ii) Unemployment Rate
Unemployment rates represent unemployed persons as a percentage of the economically active population. They are usually calculated for sex-age groups and sometimes further cross-classified by other demographic variables such as marital status, qualifications or nationality.
Table 14: Unemployment rate
IHS Global Insight Labour: Unemployment rate, official definition (%) Regional eXplorer 2010
Race Male Female Total Gauteng Province 21.2% 26.8% 23.8%
West Rand District Municipality 18.6% 36.8% 25.8%
Westonaria Local Municipality 12.7% 51.6% 24.0%
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The Unemployment Rate of Westonaria Local Municipality was at 24% in 2011 with most female that are unemployed as compared to male. This may be due to the mining sector as the largest employer in Westonaria.
iii) Formal Employment
Mining is the largest formal employment and it should be noted that this is a diminishing sector as more and more people are retrenched from the sector.
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8.7 Disposable Income
Disposable Income is the amount of money that households have available for spending and saving after income taxes have been accounted for. Disposable personal income is often monitored as one of the many key economic indicators used to gauge the overall state of the economy.
Table 15: Income & Expenditure: Personal & Disposable Income
Income & Expenditure: Personal Income
Annual total personal income (R million, current prices) 2010
Race African White Coloured Asian Total Gauteng Province 230,906 369,216 14,779 17,074 631,976 West Rand District Municipality 15,677 18,596 500 472 35,245 Westonaria Local Municipality 3,052 1,104 15 10 4,182
DPI is calculated as:
Also known as "disposable personal income" (DPI).
i) P er Capita and Per Household Income
Per capita income or average income or income per person is a measure of mean income within an economic aggregate, such as a region or city. It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross National Income) and dividing it by the total population.
Table 16: Income & Expenditure Personal Income Per Capita
IHS Global Insight Income & Expenditure: Personal Income Regional eXplorer Annual per capita income (Rand, current prices): 2010
Race African White Coloured Asian Total Gauteng Province 29,000 176,362 40,592 59,100 59,015
West Rand District Municipality 23,375 122,269 29,562 53,009 41,533
Westonaria Local Municipality 31,467 94,597 38,234
ii) Per capita monthly household income
Per capita monthly household income is total gross earnings of family members in the Household and is divided by the number of family members living in the household.
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Table 17: Income & expenditure: Disposable Income
IHS Global Insight Income & Expenditure: Disposable income
Regional eXplorer Annual total disposable income (R million, current prices): 2010
Race African White Coloured Asian Total Gauteng Province 206,196 306,783 13,003 15,567 541,549
West Rand District Municipality 14,175 15,649 445 432 30,701
Westonaria Local Municipality 2,725 937 14 9 3,685
The estimated average total disposable income of Westonaria is far lower than the average for the district and the province. It is a warning sign that a municipality should take a precaution in over capitalising. It might happen that most assets remain white elephants as they might not be maintained and be functional due to affordability challenges.
8.8 Economic Criteria Possible Economic Benefits
This section deals with the benefits that are to be derived and possible businesses to benefit from the development of the Mohlakeng Sewer Outfall. a) Number of business and industries to benefits
Westonaria Municipal area largely consists of farmland and agricultural holdings but the contribution to the agricultural sector is very limited. Despite the substantial change in the male - female ratio over the period 1980 to 1999, the labour force in Westonaria district is still strongly male dominated, mainly due to the mining sector. The number of industries in Westonaria represents only 6.6% of all industries in the West Rand and accounts for approximately 5% of all employees in the industrial sector. The extent of industrial operations are generally smaller in extent than those found in Krugersdorp and Randfontein with an average of 86 employees per industry compared to 105 and 173 in Krugersdorp and Randfontein respectively. (Source: WSDP 2009-2013)
An industrial customer base of approximately 50 industries is serviced by WLM. In addition, 240 businesses are serviced in terms of commercial services support. The Table below provides a list of some of the industries located in Westonaria. There are no industries with significant water or sanitation requirements.
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Table 18: Industries within Westonaria List of Individual Industries
Venter motors Hawe Concor Holdings Omega Panel Beaters Delheim Butchery Cemar Water Pan Kafee Pottas Bainskloof Motors Panel Beaters Bekkersdal East Clinic Westonaria Shopping SA Breweries Depot Quins Take Aways Grinaker Duraset Mining Westonaria Toyota Zenex Westonaria Monsa Motors Kloof Wholesalers Westvaal Diesel UNA Pizza Meat Mania JJ Wholesalers Eskom HJ Motors Hanzelle Motor
New Industrial developments includes Protea West Industrial Park in Westonaria and Aureus Industrial park in Randfontein. b) Expected economic value to be generated The developments within Westonaria are expected to have a significant impact on the economy of the region. The developments on the eastern boundary (Protea West Industrial Park) and towards the CBD (Westonaria Borwa) will attract significant number of businesses c) Number of SMMEs and BEE Enterprises to benefit A number of SMME/BEE enterprises are located in Westonaria. These will all be benefitting from the new infrastructure. The list provided by WLM, indicates 68 SMME run enterprises registered with WLM. It is foreseen that the new developments such as Syferfontein and Protea Glen will stimulate the economic conditions to such an extent that more SMME run enterprises will be formed in future.
Table 19: List of SMME Enterprises List of SMME Enterprises
Kloof Country Club Lobega Blinds and Chiwawa Building Makgona Tsothle Trading Contractors Business Enterprise Bogadi Legae B&B PE Venter Moeketsi‟s Catering A Re Peleng caterers Raikaga Trading Lehakoe Business Pokhole Business Enterprise Consulting Solutions Nomalungisa and Son Ebodweni Traders Kharena Food & Construction and Gee You Meals Cleaning Projects Mogojes Civil PFGR Trading Nellys Catering Services Construction Lionel Sole Projects Kwapalisi Trading Mamagola‟s General Elvdial‟s Trading Masiqooqaneni Catering Trading Services Bevy‟s Trading Elenty Catering Services Pearladonna Trading Enterprises Vertical Events Liwe Construction Tshabadira Security Talente Catering & Zongi‟s Events and Services Druiping promotions Capstan Trading 362 Chirute Trading KS Mbuku and Sons Phumzile Pamion Maud‟s Caterers Catering Mgauba Cwangu Ntaoleng Curtains and Ndamase Construction Trading and Training catering and Projects Khulicia Catering
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List of SMME Enterprises
Tom Nha Catering Lukhanyiso Building Services Nthabeleng Construction Glodee Trading 129 Construction Thephilus and Zakel Fuza and Associates Kwazekabala Contract Construction Reyashuma Catering Work Ingobozi Promotions and Decorations Mehleng Catering Silungise Cleaning and Ditshitso Construction Soret Trading Projects Honey and Mustard Enterprises Senganga Caterers nad Catering and Cleaning Seetglad Caterinf maintenance Umnotho Wendalo Business Work of Art Trading and Projects Mosotlo Trading Kondelelani Projects Glamour Girls Enterprise Keikanne Cleaning and Nyamka Cleaning and Lapheng Business Catering Development Catering Invaders Vaal Juvenile Troops Mithani Security Magalweni Trading Services
It should be noted that the waste water infrastructure of the above businesses and the envisaged ones has not been determined. However, waste water treatment infrastructure of some sort will be required d) Regional economic benefit i) Economic Potential – Job Creation (Housing)
The construction of the outfall sewer will assist in realisation of the entire capacity. This will signify the increase in the human resources capacity for maintenance and operations.
Based on discussions with Westonaria LM officials a number of developments are expected with a number of them envisaged within the next ten to fifteen years. These developments are reflective of the need for housing due to spatial creep occurring from the eastern more densely populated areas. Due to the extent of these developments, no additional population growth has been accommodated in the demand analysis.
These new developments in Westonaria and Randfontein municipal boundaries that need to be accommodated by the bulk infrastructure requirements are the following:
Westonaria South
A new residential development is being planned that will accommodate approximately 6 500 residential units. This development will also be a destination of residents of the informal area of Bekkersdal being relocated due to the geological unsuitability of the area they are occupying at present.
Mohlakeng: Randfontein
A new residential development will be developed to accommodate 3 160 households. This development is expected to be rolled out in the near future.
The WLM has appointed Rand Water to implement the construction of the Mohlakeng Sewer Outfall. Upon completion, it is expected that Rand Water will handover to WLM who will then be responsible for the operation and maintenance of the outfall sewer and 32
pump station. It is expected that staff ratios will added into the operational costs of the outfall sewer and pump station when hand over to the Municipality is made.
ii) Economic Potential- Job Creation (Airport)
As business markets become national and international in scale, airports are increasingly being viewed as catalysts for local economic development. Their ability to generate jobs and attract new business is being used in many locations as a justification for public investments in new airport construction and expansion. Anticipation of new business activity also calls for appropriate land planning. Yet few types of economic development have been as poorly predicted as development around airports. At some airports, large tracts of surrounding land reserved for development have remained vacant for decades. Unforeseen rapid development around other airports has saturated the area and choked area roads with traffic. In some cases, the area around a new airport has had both situations occur over a period of 25 years.
The actual development of an airport in Westonaria brings promising economic growth through job creation in various sectors. The first sector is the construction which bring jobs through the construction of the airport and roads leading to the airport including the upgrading of existing routes (like the N12 road project which is currently underway). The second is the energy sector which creates employment through the purchasing of aircraft fuel required by the various aircrafts which will be using the airport. Thirdly, is a look into the aerospace industry as airlines would want to purchase and maintain aircraft equipment thus expanding the job opportunities for those in the manufacturing and servicing of aircraft equipment. Lastly, is the tourism industry which will also be boosted as jobs in tourism through hotels and travel agent services/holiday makers will be created.
Furthermore there will be more direct jobs found within the airport boundaries such as those brought by the airlines, catering and retail. SMMEs will be afforded the opportunity to provide goods and services to the airport and notwithstanding the catalytic opportunity created. This catalytic opportunity is the attractiveness of Westonaria and the greater West Rand as a result of the transport links found due to the new airport.
9. TECHNICAL CRITERIA
9.1 Conformity of the Master Plan
Westonaria Local Municipality does not have a Master Plan in place. A WSDP is in place that refers to infrastructure needs and the following goals of the WLM: To maintain acceptable water quality in any point in the water network. To ensure efficient quantities of water to all customers at the point of delivery, including free basic water amount to 6Kl per month to indigent households. To expand and upgrade water and waste water networks to accommodate new customers and meet the demands of the existing customer base. To implement an integrated infrastructure maintenance programme in the most effective, efficient and economic manner possible.
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To assess, investigate and develop applicable physical, biological and chemical treatment technologies. To comply consistently with specific sanitation and water standards as set by applicable legislation and regulations.
9.2 Appropriateness and Acceptability of Solution
The existing outfall sewer that discharges to the Hannes van Niekerk Waste Water Treatment Works (HVN WWTW) crosses a dolomitic area and the pipe has been damaged through sinkhole formation along the route. As a result there is severe leakage, which increases the risk for further sinkhole formation while also constituting an environmental hazard. A temporary above-ground pipeline with a pump station has been constructed to alleviate this problem, but this has to be replaced with a permanent solution in order to increase the flow to Hannes van Niekerk WWTW to improve the performance of the works.
At present the works is often required to operate at below 50% of its design capacity which causes difficulty in the establishment and maintenance of the correct mixed liquor suspended solids concentration levels. An increase in flow will solve this, and will make it easier to operate the works and manipulate the biological process for optimum efficiency. Several options were analysed in order to select the best one to resolve the current problem. This will result to greater customer satisfaction, improve health of the community and enable the municipality to deliver quality service.
The following options were measured with the inclusion of both benefits and disadvantages:
Option 1: Do not address the spillage
Advantages a) Non or low capital expenditure b) Construction of the pump station and pipeline will be differed to the time the Zuurbekom WWTW is constructed c) Possible elimination of the construction of a new pipeline to HvN WWTW Disadvantages a) Ongoing environmental pollution b) Further formation of sinkholes c) Safety hazard
Option 2: Repair the Damaged Pipe Section
Advantages a) Shortest length of pipe to be installed b) Environmental implications will be minimised Disadvantages a) The dolomitic area causes the repair of the pipeline to be dangerous, difficult and costly b) The possibility of transformation of new/different leaks on the same pipeline
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Option 3: Bypass the Damaged Pipe Section
Advantages The damaged pipe section can be bypassed Short lengths of pipes to be installed Lower capital cost Disadvantages All bypassing routes cross dolomitic terrain Construction will be dangerous, difficult and costly The reputation of the current problem in a different position The conditions of the bypassing routes may be worse than the current one Unreliable gravity flow
Option 4: Construct a New Wastewater Treatment Works at Bekkersdal
Advantages a) The northern part of the catchment will gravitate to the Bekkersdal WWTW b) The southern part of the catchment will gravitate to HvN WWTW c) An additional pipeline can be built to carry sewage from Simunye and Waterpan to Bekkersdal WWTW if HvN WWTW reaches full capacity
Disadvantages a) Construction of a new WWTW is costly b) Additional operational expenses c) Underutilisation of HvN WWTW d) Designing and construction of a new WWTW is a time constraint, expected to require 30-36 months
Option 5: Construct a new Pipeline to the Works with a Pump Station at Bekkersdal
Advantages a) The proposed pipeline route carries the lowest risk as it follows established roads b) Gravity lines from the southern part can be connected to the new pipeline c) The proposed position of the pump station belongs to the Municipality d) The pump station will be able to pump to both HvN and Zuurbekom WWTW e) Screening and degritting will be done at the pump station Disadvantages a) Collection and delivery of screening and grit to HvN WWTW b) Longer pipeline route c) Required pumping imply higher capital and operational cost d) The leakage problem is unlikely to be resolved within one year e) When full capacity of HvN is reached the pipeline to HvN will no longer be required f) The raising main must be extended to connect with the line that pumps to Zuurbekom
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Option 6: Construct a new Gravity Pipeline
Advantages a) Lower capital cost due to lower pipe class requirement b) Lower operational cost due to elimination of pumping
Disadvantages a) Unknown geology of the area b) The problem of the damaged sewer will not be resolved c) Two pipelines will be required d) Once Zuurbekom is built the gravity pipeline will become obsolete
Option 7: Upgrade the Emergency Pump Station and Pipeline
Advantages a) Upgrade of the emergency pump station will be at a lower cost that constructing a new pump station and pipeline
Disadvantages a) The emergency pipeline was constructed above ground instead of below ground level b) The addition of screening and degritting will be complicated c) The route of the emergency pipeline crosses a dolomitic area
Option 8: Construct Zuurbekom WWTW immediately
Advantages a) Flow from the northern part of the catchment can be pumped to Zuurbekom directly b) The design and operation of the pump station will be simplified c) The rising main section to HvN WWTW can be eliminated d) Pumping to Zuurbekom only will reduce the number of pump sets required e) The design is almost complete f) The rising main to HvN WWTW can be used as part of the rising main of Zuurbekom WWTW
Disadvantages a) HvN WWTW will be underutilised in the short term b) Construction and commissioning will take 24-30 months c) Carrying lower flow than the ultimate design capacity will resolve in settlement of solids in the pipeline, leading to operational problems d) The Zuurbekom WWTW will be needed within two years and is already behind schedule
Based on the above options discussed to resolve the current problem at HvN WWTW it is recommended that the pipeline be constructed along the route as described in Option 5. This will provide a route with the lowest expected risk of subsidence and associated damage to the pipeline.
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9.3 Appropriate water resource choice & adequate water allocation
The communities that contribute to the sewage flow are Westonaria, Westonaria South, Simunye, Bekkersdal, Mohlakeng, Kocksoord, Toekomsrus and Areus & Industrial, which means that 118 322 people in total are indirectly affected. Although the proposed infrastructure will dissolve the leakage and ensure that the Hannes van Niekerk WWTW operates at full capacity, there will not be any additional water demand as this is not a new infrastructure, but a replacement of a temporary infrastructure.
9.4 Compliance to water demand / water conservation objectives.
The Water Conservation and Water Demand Management Strategy is a fundamental step in promoting water use efficiency and is consistent with the National Water Act (Act 36 of 1998) which emphasises effective management of our water resources.
Water conservation can be better described as the minimisation of water losses, the protection of water resources and the efficient and effective use of water.
Water Demand Management entitles the adaption and implementation of a strategy by a water institution to influence the water demand and usage of water in order to meet any of the following objectives: economic efficiency, social development, social equity, environmental protection, sustainability of water supply and services and political acceptability.
Despite South Africa being one of the driest countries in the world, many municipalities, including WLM do not have a WC/WDM strategy and business plan in place, although many books, publications and software packages have been produced to assist water supply managers. Most of the existing strategies are vague and of little value, and the municipalities do not have the necessary financial, technical and institutional capacity to support such a strategy.
In constructing the Mohlakeng Outfall Sewer the following objectives of the water resource management strategy will be addressed:
Ensure the quality of treated effluent meets the required standards Minimise leaks of the effluent collection system Maximise recycling and reuse of water where it is feasible Promote the reduction of pollution by consumers
9.5 Optimal choice of bulk distribution networks
Taking in consideration that the best solution to the current loss of effluent will be to construct a new pipeline to the Hannes van Niekerk WWTW with a pump station at Bekkersdal, the recommended pipeline route will follow the R28 in a southerly direction to the position directly east of Westonaria and will then turn and follow the existing roads in a westerly direction to HvN WWTW. This route will follow established roads with stable geology conditions. The pipeline will be approximately 8.35km long with diameters of 500mm and 600mm respectively.
The sewer transfer pump station, which will include screening, degritting, solid waste management and pumping, will be constructed next to the R28, West of Bekkersdal.
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Due to previously vandalism and theft is it recommended that the new pump station be manned at all times, which will result in an increase of operational and maintenance cost.
9.6 Proof of best suited technology (pro’s and con’s per option)
Refer to 9.2 on the discussions on disadvantages and advantages on the different options.
10. INSTITUTIONAL CRITERIA
10.1 Asset Ownership
The project will be funded by the Department of Water and Sanitation (DWS) through RBIG. The infrastructure upon completion will be owned by the Westonaria Local Municipality. During the construction phase, Rand Water as the Implementing Agent (IA) will be responsible for the management of the infrastructure.
10.2 Confidence in Institutional Capacity
The Water and Sanitation Division of WLM is structured as illustrated in the organogram below. Figure 3: Organogram of Water and Sanitation Division (WLM)
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The division is headed by the Manager: Water and Sanitation. The green blocks with numbers in brackets indicate the vacant posts which the division has. As evidenced in the organogram, almost more than 40% of the positions are not filled. This shows that the division is not well staffed.
The DWS Green Drop Accreditation process has the following occupational categories as requisite for any municipal department that has wastewater services:
Senior officials and managers Professionals Technicians and associated professionals Clerks and Administration Plant and machine operators Labourers
At present, the Water and Sanitation division of the WLM needs to be fully capacitated with relevant human resources capacity in order for the confidence of the WLM to carry out its functions to be fully restored.
As Rand Water is already maintaining the Hannes Van Niekerk WWTW and that the Mohlakeng outfall Sewer forms part of the HvN WWTW, it is recommended that the responsibilities of Rand Water be extended to include the outfall sewer. The maintenance and operations contract should be reviewed and be updated if necessary.
10.3 Agreement on Infrastructure Ownership
The agreement entered into by the WLM, DWS and Rand Water states that WLM will receive ownership of the infrastructure upon completion of the implementation phase.
10.4 Agreement on Implementation Responsibility
It has been agreed upon by the three parties concerned; namely WLM, DWS and Rand Water clearly states that Rand Water will be the Implementing Agent for the project.
10.5 Confidence in Implementation Capacity
Rand Water has committed to ensuring that the following is met: a) It executes its obligations in compliance with the RBIG Programme requirements including the RBIG Funding Process and the RBIG Project Criteria and specific Project Conditions
b) It will provide Project cash-flow that will be revised annually.
c) Should there be delays; Rand Water will prepare acceleration report documenting the reasons for the delays and the proposed action plan to accelerate the progress.
d) Rand Water shall properly manage the finances of the Project in order to ensure that the total Project cost does not exceed the budget specified in the Project Schedule, as amended by any variation orders approved by the Department.
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e) Rand Water shall keep proper records according to ordinary business practice, the requirements of the DORA and the Department‟s requirements.
f) Rand Water shall, according to the requirements of the Department, RBIG Project Criteria, Project Condition and any formats otherwise applicable, compile regular monthly, quarterly and annual progress reports detailing the status of each of the Projects.
10.6 History on past Implementation Quality and Performance
The completion of the Hannes Van Niekerk Extension at WLM was done in July 2014. The infrastructure was commissioned but not yet handed over. Rand Water has ensured the successful completion of the project, that the Treatment Works is functioning and that the quality of the effluent meets the standard requirements.
10.7 Agreement on Operating Responsibility Should WLM be responsible for the operation of the new pump station and pipeline, the infrastructure will be included in the current asset management plan. The responsible institution for the operation and maintenance of the infrastructure will be determined after agreement has been reached with the interested and affected parties. As required by DWS the institutional arrangements around the eventual operation of the plant needs to be assessed. The WLM is currently operating a sewage treatment plant namely the Hannes van Niekerk WWTW and therefore sufficient skills, although not adequate in quantity, exist in the municipality to be able to operate the new plant. Therefore the WLM is reliant on Rand Water to provide additional people with similar skills to operate the plant whilst transferring skills to the existing human resources and assisting the WLM to fully staff the positions. The means the Build Operate, Transfer of Skills and Transfer of Asset is the most appropriate approach for the project. The current Service Level Agreement between Rand Water and the Westonaria Local Municipality can be considered to be extended in order to cover the Mohlakeng Outfall Sewer. The Asset Management Plan (AMP) will make provision for the new infrastructure.
10.8 Proof of adequate staff numbers and skills level Please refer to the organogram of the Water and Sanitation Division of Westonaria Local Municipality as illustrated in section 10.2 of this report.
10.9 History on water service interruptions The Westonaria sewer system is anticipated to be stressed by several residential and commercial developments being planned within the WLM jurisdiction and the neighbouring municipalities. The challenge is exacerbated by the loss of sewer to about 18Ml/day. The abovementioned challenges will affect the consistency and sustainability of waste water service provision if left unattended. The treatment works will be overloaded if additional developments are added and the treatment works will not be fully functional if the sewerage is lost from the conveyance to the
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works. Hence the need for the Mohlakeng Outfall sewer project to pre-empt the effects of the challenges. The works has already been extended.
10.10 Commitment for the above by institutional leadership The leadership of the WLM, DWS and Rand Water is fully participating in advancing the objectives of service delivery including waste water treatment services. The project although is without committed funding from the WLM it is taken as a strategic project to prevent underground water pollution by preventing effluent losses, protecting environment by avoiding sink holes and providing sustainable waste water services.
10.11 Approval of Institutional Agreement and cooperation between stakeholders Rand Water has provided the Isiphethu Water Services Group assurance that contractual agreements do exist between the three stakeholders. Regular monthly meetings are held with all stakeholders involved including service providers to ensure effective cooperation with the project objectives. 10.12 Cost Recovery System The municipality identifies the indigents, provides free basic services, has a tariff policy and also meters the services. However there is limited information on billing, revenue collection and cost recovery system. The IA for maintenance and operations (Rand Water) should assist in setting up the cost recovery system.
10.13 Water Conservation and Demand performance by institution The WLM according to the Service Delivery and Budget Implementation Plan is committed to the implementation of meters. The identification of the project required for Mohlakeng outfall sewer in order to stop the effluent losses is part of conservation and also to justify the management of the demand for waste water services.
10.14 Responsibility and accountability The Department of Water and Sanitation is the sector leader and the sponsor for the project. Based on the consensus reached, the DWS appointed Rand Water as an Implementing Agent for the extension of Hannes Van Niekerk. It is agreeable that the IA mandate of Rand Water will be extended to the planning and implementation of Mohlakeng Outfall Sewer.
The IA arrangement recognises that the Westonaria Local Municipality is a Water Services Authority and the primary beneficiary of the project and implementation is to take place within the municipal jurisdiction.
10.14.1 The Department of Water and Sanitation
The primary goal of the Department is to implement the RBIG Programme. To this end it will: Receive and assess funding applications and notify suitability for listing on the Project Schedule, in accordance with the principles of the RBIG Project Criteria; Oversee performance and compliance with conditions of RBIG Programme and Project Conditions; and Nominate and manage Rand Water, in consultation with the affected Water Services Authority.
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10.14.2 The Water Services Authority – Westonaria Local Municipality
The Water Services Authority shall: Render all reasonable assistance to Rand Water to enable it to execute its responsibilities under this Agreement, and shall ensure that all matters referred to it for approval are handled in an expeditious manner; Allow Rand Water and its sub-contractors access to all property required to develop and implement the Projects. Provide the reasonable co-operation of all of its employees to Rand Water; Assist the Department in the monitoring of the provision of services by Rand Water. Take full responsibility of ownership and operation of the asset after completion and officially been handed over by Rand Water
10.14.3 Rand Water
The roles and responsibilities of Rand Water are: Rand Water to execute its obligations in compliance with the RBIG Programme requirements, including the RBIG Funding Process and the RBIG Project Criteria and specific Project Conditions. Rand Water will provide Project cash-flow that will be revised annually. Should there be delays; Rand Water will prepare acceleration report documenting the reasons for the delays and the proposed action plan to accelerate the progress. Rand Water shall properly manage the finances of the Project in order to ensure that the total Project cost does not exceed the budget specified in the Project Schedule, as amended by any variation orders approved by the Department. Rand Water shall keep proper records according to ordinary business practice, the requirements of the DORA and the Department‟s requirements. Rand Water shall, according to the requirements of the Department, RBIG Project Criteria, Project Condition and any formats otherwise applicable, compile regular monthly, quarterly and annual progress reports detailing the status of each of the Projects.
11. FINANCIAL CRITERIA
11.1 Available funding
The unique nature and purpose of regional bulk water services infrastructure and the beneficiaries thereof dictates the type of funding that can be utilized. The main drivers are the social and economic components to be funded. Each of these has unique financing options (e.g. grants for social services versus loans and capital contributions for economic service components).
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Key factors influencing the funding options are the socio-economic profile of the consumers, the social objectives of Government as well as the financial status of the relevant municipalities.
In some instances there is also the opportunity for investment funding, mostly via third parties and management agencies.
The type of funding available for bulk infrastructure can be summarized as follows: Public and/or private sector funding Grant, donor and/or loan funding Investor funding (e.g. water board bonds; private equity funds)
However, the social and economic conditions of the WLM as well as other benefitting municipalities envisages that the grant funding be utilised for the Mohlakeng outfall sewer. Sufficient reasons are in the decision to fund the Hannes Van Niekerk WWTW extension fully with the grant as the infrastructure is needed but unaffordable to the WLM and other beneficiaries. The grant relevant for the bulk waste water and its components is the Regional Bulk Infrastructure Grant (RBIG).
11.2 Conditions and criteria of the RBIG This grant is a conditional grant and all funding allocations are subject to the following conditions and criteria:
It is a conditional grant focusing on regional bulk water services. The emphasis is on bulk and water and sanitation infrastructure, including associated actions to ensure sustainable and appropriate services. Only the social component can be funded. A clear perspective on the user profile must be provided (social and economic). The need for and choice of a regional bulk solution must be confirmed and accepted. This requires confirmation of the viability, sustainability, appropriateness and acceptability of the solution. Proposed projects must be “implementation ready”. All preparatory work must be completed and approved, including project specific implementation feasibility study, environmental impact assessments, environmental and water resource licensing, social acceptance, financing and institutional arrangements. Financing plan with associated/co-funding options and agreements must be in place. Co-funding may be required, but NO duplication of funding between alternative grant funds will be allowed. Ownership and commitment for sustainable management must be proven. Priority in terms of national and sector objectives must be motivated. Due to the uniqueness and individuality of each case, nominated proposal will be assessed on merit and associated motivation – no blanket allocation to be made. All funding requests must be preceded by integrated socio-economic and technical development planning, the establishment of effective and acceptable asset management plans and systems, reflecting effective water use, associated operation and maintenance plans, suitable institutional arrangements and appropriate motivation for the required funding. Note – this fund is not to be used to endorse/reward poor asset management. 43
All projects must be aligned with and referenced to the IDP and WSDP. Such alignment will be confirmed by the project specific feasibility studies and checked by the project assessment panel.
11.3 Fit for Mohlakeng Outfall Sewer within the RBIG conditions The total benefiting population for the Mohlakeng Outfall Sewer is represented by 118 322 people and 36 410 households. 55% of the population is indigent and it is expected that all new developments will be 100% indigent based on economic forecasts for the area.
Educational facilities that will benefit from the Mohlakeng Outfall Sewer include crèches, primary schools and high schools. Several Clinics in the Westonaria area will be benefitted as well as recreational facilities, such as libraries and sport complexes. Global Insight Data confirms that the unemployment rate increased from 24% in 2010 to 29% in 2011. With the increase in unemployment of 5% in Westonaria and the indigent population of 55% it will not be possible to increase the tariff rate in order to recover any cost in connection with the Mohlakeng Outfall Sewer project. Mining is the largest formal employment, representing 78.2% of Westonaria‟s Gross Added Value, and it should be noted that this is a diminishing sector as more and more people are retrenched. Taken this into account it can be anticipated that the unemployment rate will increase even more, leaving the portion of the population that will be able to cover the cost for the Mohlakeng Outfall Sewer at a bare minimum. Taking in consideration that the majority of the benefiting area and population are indigent the option of obtaining a loan will not be viable due to the fact that the repayment terms will not be reached by the 45% of the population that is not indigent. No private investor will buy into the project for no Return on Income or return on rates will be received. Taking all of these into consideration it is concluded that the only viable option will be to fund the Mohlakeng Outfall Sewer from the Regional Bulk Infrastructure Grant as the scheme will service mostly the indigent and low income households.
11.4 Budget required
The total estimated project cost amounts to R90 620 020, excluding VAT. This allows for the following components:
• The sewage transfer station, which will include screening, degritting, solid waste management and pumping – the complete structure will be enclosed to address odour problems • An 8.35 km long steel pipeline, consisting of a rising main and a gravity section, approximately 600 mm diameter, complete with flow meters, air valves and flow meter and air valve chambers • Demolition and rehabilitation of the existing emergency pump station, sump and pipeline • Environmental investigations and water use licence application • Topographical and geotechnical surveys 44
• Professional fees
The above is a preliminary concept, and will be refined during the design stage. A cost estimate of the Mohlakeng Outfall Sewer is given below.
11.4.1 Project costing
The budget estimated for the project is outlined below. Table 20: Estimated Budget for the Project Pipeline Rand Pipeline (8 350m x 600 mm diameter @ R1 850/m) 15,447,500 Excavation (8 350m @ R800/m) 6,680,000 Bedding (0.5m x 8 350m @ R80/m) 334,000 Backfill (2.5m x 8 350m @ R80/m) 1,670,000 Flow meter chambers (3 @ R100 000) 300,000 Air valve chambers (15 @ 50 000) 750,000 Air valves (15 @ 5 000) 75,000 Flow meters (3 @ R45 000) 135,000 Sub total (A) 25,391,500 Sewage Transfer Station Civil cost (building + sump, est 600m @ R15 000) 9,000,000 Screening & degrritting (civil & mechanical) 25,000,000 Electrical & instrumental 9,000,000 Sub Total (B) 43,000,000 Rehabilitation Rehabilitation of existing emergancy pumpstation, pipeline removal 3,500,000 Contingencies (@10% of total) 7,189,150 Total construction cost 79,080,650 Professional fees 6,682,670 Studies & surveys 1,336,500 Disbursements 99,000 Construction monitoring 3,421,200 Total estimated cost excluding VAT 90,620,020 VAT @ 14% 12,686,803 Total estimated cost including VAT 103,306,823
According to the feasibility study, compiled by Pro-Plan the estimated time for the completion of the project is 12 months.
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The estimated proportional required funding over the period of the project is indicated below: Table 21: Funding required over the period of Implementation Project period Required project cost Month 1 3,284,587 Month 2 6,012,999 Month 3 10,058,223 Month 4 13,094,063 Month 5 14,253,277 Month 6 13,661,229 Month 7 11,963,770 Month 8 9,828,765 Month 9 7,718,164 Month 10 5,870,496 Month 11 4,365,733 Month 12 3,195,517 Total 103,306,823 11.4.2 Budget Challenge for Westonaria Local Municipality
According to the Westonaria Local Municipality‟s 2014/2015 adjustment budget report the main challenges experienced during the compilation of the budget can be summarised as follows:
The Municipality has cash flow challenges Inability of the Municipality to source revenue Aging, inadequate and limited resources for maintenance of water, sanitation, roads and electricity infrastructure
The budgeted revenue on sanitation rates has increased from R16 million – R24 million per annum, which indicates that the sanitation rates have been increased already significantly. Continuous high tariff increases are not sustainable - as there will be point where services will no-longer be affordable. Expenditure on waste water management has increased from R29.9 million to R32.8 million. This indicates a loss of income of R8.8 million.
Since the capital cost of the project amounts to R103 306 823 (R90 620 020 including VAT) and the Westonaria Municipality already suffers a loss on water and sanitation services the institution will not be able to contribute in the funding of the Mohlakeng Outfall Sewer project.
The repayment of a loan amounted R103 306 823 over a period of 11 years can be calculated as follow: Loan amount R103 306 823 Interest rate 12 % (prime rate plus 2.5% allowance over a period of 11 years) Loan period in years 11 Payments per year 12
Based on the above mentioned information the total loan will be paid back over a period of 11 years by 132 equal instalments of R1 413 018. The accumulated interest for the period will
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amount to R 83 211 580, therefore the total amount of repayment of the loan will amount to R186 518 403.
11.5 Capital and operations cost
Capex, or capital expenditure, is a business expense incurred to create future benefit. Opex, or operational expenses, are those expenses required for the day-to-day functioning of the business, like wages, utilities and maintenance. The table below indicates the capital expenditure required for the project, as well as the projected operational expenses based on an 8% discount rate per annum.
Table 22: Capital Expenditure Required for the Project Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Capex Spend Grant R 51,653,411 R 51,653,411 Opex Spend Grant R 6,198,409 R 6,694,282 R 7,229,825 R 7,808,211 Year 7 Year 8 Year 9 Year 10 Year 11 Capex Spend Grant Opex Spend Grant R 8,432,868 R 9,107,497 R 9,836,097 R 10,622,984 R 11,472,823 Total R 180,709,818 Total Capex Grant Needed R 103,306,823 Total Opex Grant Needed R 77,402,995
11.6 Operational and maintenance cost
The table below indicates the operational expenses, calculated according to operational and maintenance rates provided by the Department of Water and Sanitation. Table 23: Operational Expenses Description Year 1 Year 2 Year 3 Year 4 Year 5 Expected operating cost 882,356.44 952,945 1,029,181 1,111,515 1,200,436 Expected maintenance cost 886,316 957,221 1,033,799 1,116,503 1,205,823 Operational and maintenance cost 1,768,672 1,910,166 2,062,979 2,228,018 2,406,259 Interest 12,137,502 11,526,368 10,837,727 10,061,749 9,187,358 Total expense 13,906,174 13,436,534 12,900,706 12,289,767 11,593,617
Description Year 6 Year 7 Year 8 Year 9 Year 10 Expected operating cost 1,296,471 1,400,189 1,512,204 1,633,180 1,763,835 Expected maintenance cost 1,302,289 1,406,472 1,518,990 1,640,509 1,771,750 Operational and maintenance cost 2,598,760 2,806,661 3,031,194 3,273,689 3,535,584 Interest 8,202,072 7,091,827 5,840,775 4,431,059 2,842,555 Total expense 10,800,832 9,898,488 8,871,969 7,704,748 6,378,139
Total cost 107,780,975 The operational and maintenance cost were calculated according to the following assumptions:
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11.6.1 Household information: Pro-Plan
The total population as per census 2011 and information from the Surveyor-General is estimated to be 118 322 in 2015, 164 991 in 2025 and 168 291 in 2035. The information used for households has been derived from information derived from Pro Plan Consulting Engineers. Table 24 (a)(b)(c): Operational Expenses
2015 Table 24 (a) People per Households Flo (Ml/d) household Population Westonaria 3 065 2.64 2.79 8 551 Westonaria South 2 500 1.44 2.79 6 975 Elandsfontein - - 2.79 - Simunye 4 500 2.59 2.79 12 555 Hillshaven 904 0.52 2.79 2 522 Protea Park 80 0.07 2.79 223 Bekkersdal 4 326 2.49 3.45 14 925 Mohlakeng 16 885 9.71 3.45 58 253 Kocksoord 850 0.73 3.45 2 933 Toekomsrus 3 300 1.90 3.45 11 385 Randfontein: Aureus & Ind - 3.00 3.45 - Total 36 410 25.09 118 322
2025 Table 24 (b) People per Households Flo (Ml/d) household Population Westonaria 3 127 2.70 2.79 8 724 Westonaria South 6 591 3.79 2.79 18 389 Elandsfontein 7 070 4.07 2.79 19 725 Simunye 4 591 2.64 2.79 12 808 Hillshaven 1 633 0.94 2.79 4 556 Protea Park 385 0.33 2.79 1 074 Bekkersdal 4 413 2.54 3.45 15 226 Mohlakeng 17 226 9.90 3.45 59 429 Kocksoord 3 897 3.36 3.45 13 445 Toekomsrus 3 367 1.94 3.45 11 615 Randfontein: Aureus & Industrial - 3.48 3.45 - Total 52 299 35.69 164 991
2035 Table 24 (c) People per Households Flo (Ml/d) household Population Westonaria 3 189 2.75 2.79 8 898 Westonaria South 6 723 3.87 2.79 18 757 Elandsfontein 7 211 4.15 2.79 20 120 Simunye 4 683 2.70 2.79 13 065 Hillshaven 1 666 0.96 2.79 4 647 Protea Park 393 0.34 2.79 1 096 Bekkersdal 4 502 2.59 3.45 15 530 Mohlakeng 17 570 10.10 3.45 60 617 Kocksoord 3 975 3.43 3.45 13 714 Toekomsrus 3 434 1.98 3.45 11 847 Randfontein: Aureus & Industrial - 3.55 3.45 - Total 53 345 36.41 168 291
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The below mentioned assumptions have been made: Interest rate 12% Discount rate 8.0% Population growth rate 0.2%
Rates for maintenance cost and operational cost - Source : Calculated from DWA cost benchmark 2009 (Basic LoS)
Cost description 2009 2010 2011 2012 2013 2014 2015 Total maintenance cost per household 2.81 3.03 3.28 3.54 3.82 4.13 4.46 Total electricity cost per household 15.34 16.57 17.89 19.32 20.87 22.54 24.34
11.6.2 Labour cost - Based on 24 hours operations
Hours per shift 8 Personnel per shift 2 Number of shifts 3 Number of personnel 6 Monthly salary (CTC) 10 000 Total labour cost per month 60 000 The Mohlakeng Outfall Sewer is a completely new pump station and pipeline from a position near Bekkersdal, along a different route with better geological conditions, towards the Hannes van Niekerk Waste Water Treatment Works. No refurbishment will be needed and no water losses will be encountered for it is a total replacement of an asset. According to the free basic services policy only indigent households qualify for 6 Kl of water and 50kWh of electricity per month as part of free basic services. The cost of free basic water services can therefore be calculated as follow:
11.6.3 Rates for basic services - Westonaria tariff structure 2014/2015 2014/2015 2015/2016 In excess of 0Kl up to 6Kl R 10.33 R 11.01 In excess of 6Kl up to 10Kl R 11.15 R 11.88 In excess of 10Kl up to 20Kl R 12.27 R 13.07 In excess of 20Kl up to 30Kl R 13.49 R 14.43 In excess of 30Kl R 14.85 R 15.82
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11.6.4 Population growth
- According to census 2011 Westonaria has a growth rate of 0.2% per annum. Table 25: WLM Growth Rate
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Westonaria 3 071 3 077 3 083 3 090 3 096 3 102 3 108 3 114 3 121 3 127 Westonaria South 2 505 2 510 2 515 2 520 2 525 2 530 2 535 2 540 2 545 6 591 Elandsfontein ------7 070 Simunye 4 509 4 518 4 527 4 536 4 545 4 554 4 563 4 573 4 582 4 591 Hillshaven 906 908 909 911 913 915 917 919 920 1 633 Protea Park 80 80 80 81 81 81 81 81 81 385 Bekkersdal 4 335 4 343 4 352 4 361 4 369 4 378 4 387 4 396 4 404 4 413 Mohlakeng 16 919 16 953 16 987 17 020 17 055 17 089 17 123 17 157 17 191 17 226 Kocksoord 852 853 855 857 859 860 862 864 865 3 897 Toekomsrus 3 307 3 313 3 320 3 326 3 333 3 340 3 346 3 353 3 360 3 367 Total 36 483 36 556 36 629 36 702 36 776 36 849 36 923 36 997 37 071 52 299
11.6.5 Cost of free basic services Indigent population 55% Litres per kilo litre 1 000 Free kilo litres per month 6 Months per year 12 Tariff increase rate per annum 7%
Table 26: Estimated Cost for Free Basic Services Total cost of Total number Indigent Total cost of free free water Description of number of Cost per 6kl Cost per 1kl water services services per households households per annum month Benefitting population Year 1 36 483 20 066 R 11.01 R 1.84 R 220 922 R 2 651 061 Benefitting population Year 2 36 556 20 106 R 11.78 R 1.96 R 236 859 R 2 842 308 Benefitting population Year 3 36 629 20 146 R 12.61 R 2.10 R 253 946 R 3 047 352 Benefitting population Year 4 36 702 20 186 R 13.49 R 2.25 R 272 266 R 3 267 188 Benefitting population Year 5 36 776 20 227 R 14.43 R 2.41 R 291 907 R 3 502 883 Benefitting population Year 6 36 849 20 267 R 15.44 R 2.57 R 312 965 R 3 755 581 Benefitting population Year 6 36 923 20 308 R 16.52 R 2.75 R 335 542 R 4 026 509 Benefitting population Year 8 36 997 20 348 R 17.68 R 2.95 R 359 748 R 4 316 981 Benefitting population Year 9 37 071 20 389 R 18.92 R 3.15 R 385 701 R 4 628 408 Benefitting population Year 10 52 299 28 765 R 20.24 R 3.37 R 582 237 R 6 986 849 Total cost of free water services over a period of 10 years R 39 025 120 The percentage of the indigent population is 55% translating to 90 745 people. The cost to provide free basic services to the indigent people is estimated to R39 025 120 over a period of 10 years.
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11.6.6 Overhead costs All overhead cost for the institution was included in the calculations for operational and maintenance cost for the project. Due to the fact that the Mohlakeng Outfall Sewer will be the solution to the lost effluent and to increase the flow to the maximum capacity of the Hannes van Niekerk WWTW there will not be any additional revenue to be generated. The projected sales was already taken into account with the extension of Hannes van Niekerk WWTW with an additional 15Ml/d.
11.6.7 Projected income The income referred to in this section is not additional revenue as the outfall sewer forms part of the HvN plant. The pipeline will only enhance the service. - This calculation is based on the daily flow per household as supplied by Pro-Plan, with the likelihood of positive impact on revenue generation
Non-indigent population 45% Litre per kilo litre 1 000 Kilo litres per mega litre 1 000 Day per annum 365 Current tariff increase rate per annum 7% Table 27: Estimated Income from the Non Indigent Projected income Description Flo (Ml/d) Flo (Kl/d) Cost per Kl Cost per day Cost per annum (45%) Daily flow Year 1 25.14 25 140.18 R 1.84 R 46 258 R 16 884 145 R 7 597 865 Daily flow Year 2 25.19 25 190.46 R 1.96 R 49 460 R 18 052 976 R 8 123 839 Daily flow Year 3 25.24 25 240.84 R 2.10 R 53 028 R 19 355 318 R 8 709 893 Daily flow Year 4 25.29 25 291.32 R 2.25 R 56 854 R 20 751 611 R 9 338 225 Daily flow Year 5 25.34 25 341.91 R 2.41 R 60 955 R 22 248 632 R 10 011 884 Daily flow Year 6 25.39 25 392.59 R 2.57 R 65 352 R 23 853 648 R 10 734 142 Daily flow Year 7 25.44 25 443.37 R 2.75 R 70 067 R 25 574 451 R 11 508 503 Daily flow Year 8 25.49 25 494.26 R 2.95 R 75 122 R 27 419 391 R 12 338 726 Daily flow Year 9 25.55 25 545.25 R 3.15 R 80 541 R 29 397 426 R 13 228 842 Daily flow Year 10 35.69 35 692.52 R 3.37 R 120 411 R 43 950 127 R 19 777 557 Total projected income over a period of 10 years R 111 369 477 The projected income from the non-indigent population amounts to R111 369 477 over a period of 10 years. This income is projected assuming that all non-indigent people are paying customers.
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11.7 Required tariff increase rate
11.7.1 Cost to recover
The table below indicates the total amount of income to be generated in order to provide free basic services and execute the Mohlakeng Outfall Sewer. Table 28: Estimated Income Required to Provide for Free Basic Services Cost of free basic Description Capital cost of project Total cost to recover services Daily flow Year 1 R 2,651,061 R 9,846,175 R 12,497,235 Daily flow Year 2 R 2,842,308 R 9,865,867 R 12,708,175 Daily flow Year 3 R 3,047,352 R 9,885,599 R 12,932,951 Daily flow Year 4 R 3,267,188 R 9,905,370 R 13,172,558 Daily flow Year 5 R 3,502,883 R 9,925,181 R 13,428,064 Daily flow Year 6 R 3,755,581 R 9,945,031 R 13,700,612 Daily flow Year 7 R 4,026,509 R 9,964,921 R 13,991,430 Daily flow Year 8 R 4,316,981 R 9,984,851 R 14,301,832 Daily flow Year 9 R 4,628,408 R 10,004,821 R 14,633,229 Daily flow Year 10 R 6,986,849 R 13,979,008 R 20,965,857 Total R 39,025,120 R 103,306,823 R 142,331,943
11.7.2 Required break even revenue
The table below indicates the total amount of income to be generated in order to cover the capital expenses relating to the project, supply free basic services and earning income from the 45% no-indigent population Table 29: Estimated Capital Required for Break Even Revenue Description Projected income Cost to recover Total required income Daily flow Year 1 R 7,597,865 R 12,497,235 R 20,095,100 Daily flow Year 2 R 8,123,839 R 12,708,175 R 20,832,015 Daily flow Year 3 R 8,709,893 R 12,932,951 R 21,642,844 Daily flow Year 4 R 9,338,225 R 13,172,558 R 22,510,783 Daily flow Year 5 R 10,011,884 R 13,428,064 R 23,439,948 Daily flow Year 6 R 10,734,142 R 13,700,612 R 24,434,754 Daily flow Year 7 R 11,508,503 R 13,991,430 R 25,499,933 Daily flow Year 8 R 12,338,726 R 14,301,832 R 26,640,558 Daily flow Year 9 R 13,228,842 R 14,633,229 R 27,862,071 Daily flow Year 10 R 19,777,557 R 20,965,857 R 40,743,414 Total R 111,369,477 R 142,331,943 R 253,701,420
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11.7.3 Required tariff increase
The table below indicates the current tariff rates compared to the required increased rates in order to reconcile the cost of free basic services delivery, capital cost of the Mohlakeng Outfall Sewer project and income received from the non-indigent population. Table 30: Comparison of Current Tariffs and Rates for Break Even Required Required break even Description Flo (Kl/d) Cost per Kl break even revenue tariff Daily flow Year 1 25,140.18 R 1.84 R 20,095,100 R 4.87 Daily flow Year 2 25,190.46 R 1.96 R 20,832,015 R 5.21 Daily flow Year 3 25,240.84 R 2.10 R 21,642,844 R 5.57 Daily flow Year 4 25,291.32 R 2.25 R 22,510,783 R 5.96 Daily flow Year 5 25,341.91 R 2.41 R 23,439,948 R 6.38 Daily flow Year 6 25,392.59 R 2.57 R 24,434,754 R 6.83 Daily flow Year 7 25,443.37 R 2.75 R 25,499,933 R 7.30 Daily flow Year 8 25,494.26 R 2.95 R 26,640,558 R 7.81 Daily flow Year 9 25,545.25 R 3.15 R 27,862,071 R 8.36 Daily flow Year 10 35,692.52 R 3.37 R 40,743,414 R 8.95 Total 263,772.70 R 25.35 R 253,701,420 R 67.24 A tariff increase of 165% is required in order to reconcile the cost and projected income of the project.
11.8 Motivation for the project Investigation revealed that the loss of effluent between the temporary transfer station and Hannes van Niekerk WWTW has reached a level of 18Ml/day. This leakage resulting in environmental pollution and the untreated sewage could lead to formation of further sinkholes that could cause further damage to infrastructure in the area.
The non-payment culture in the community and the fact that the indigent population consume more water than the pronounced 6Kl/day makes it extremely difficult to generate income.
In order to generate the required income of R253 701 420 over a period of 10 years the current tariffs will need to be increased to an amount that will not be affordable to any member of the community.
Taken the abovementioned into account as well as the fact that the leakage of the effluent could have been avoided if the area was not dolomitic, it will be recommended that this critical project get funded by the Regional Bulk Infrastructure Grant.
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12. LEGAL CRITERIA
12.1 Water use license
There is currently no water use license which has been approved. An application for one is currently being considered. 12.2 Environmental Impact Assessment (EIA) and authorization
To date no Environmental Impact Assessment was conducted or approved for the Mohlakeng Outfall Sewer scheme. Plans to have Geo-Tech studies done are being considered. The Geo- Tech will confirm the position of the pump and the route of the pipeline.
12.3 Land acquisition and servitudes
The land for the proposed site does fall on land owned by the WLM and thus can be used for the project. Unless if the geotechnical study can later reveal that the targeted positioning is not suitable, then an alternative site will have to be solicited.
Rand Water as the IA will as soon as the geo-technical report has been completed should advice the DWS Infrastructure Directorate to negotiate assistance on the registration of servitudes from the DWS Land Matters Directorate.
13. SUSTAINABILITY ISSUES
13.1 Financial Viability
The project is not a new project but an enhancement of the existing HvN WWTW and the extension thereof. The financial assessments as indicated in Section 11 of this report would require the increase of the tariffs to a level which is unaffordable and might result in non- indigent customers not being able to afford. Hence it is recommended that the project be funded from RBIG.
13.2 Operating and Management Capacity
Refer to Section 10.7 for information in this regard. The Rand Water Maintenance and Operations contract can be extended.
13.3 Environmental and Social Acceptability and Impact
Considerations have to be made in line with Section 12.2 of this report
14. CONCLUSION
The report is about the implementation readiness of the Mohlakeng Outfall Sewer Project. The project is supported by the strategic objectives of the IDP, WSDP and WCDM. The report addresses information on: 54
The origin of the project based on the effluent losses, The linkages of the project with the existing HvN WWTW together with the extension and the envisaged Zuurbekom WWTW, The social factors impacting on the project inclusive of the need, The technical solution opted amongst various options in order to realise the project, The ownership of the project, Maintenance and operations taking into consideration the capacity levels of different institutions, Funding option as informed by strategic imperatives, social and economic factors and the WLM situation, Legislative statuses referring required authorisations of the implementation of the projects, and the sustainability of the project.
The project is eligible to be funded from the RBIG. The project is ready for implementation. However it is imperative that the below mentioned activities be undertaken to ensure the complete readiness of the project: Authorisation to conduct an Environmental Impact Assessment Conducting of the Geo-technical studies Confirmation of the land use for the project Application / confirmation of the water use license Review and confirmation of the maintenance and operation contract between WLM and Rand Water
The report has been compiled by Isiphethu Water Services for Rand Water.
Prepared by:
………………………………………….. ………………………………………… Maryna Swanepoel Date Isiphethu Water Services
Approved and accepted by:
...... ………………………………. Dexter Nbubunga Jabu Maluleke Project Manager Project Manager Rand Water Dept. Water and Sanitation
………………………………………….. ……………………………………. Date Date
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