Table of Contents General Information ________________________________________________________________ i List of Abbreviations ________________________________________________________________ 1 Scope and Boundary of the Annual Report _______________________________________________ 2 Strategic Overview of Bloem Water ____________________________________________________ 3 Legislative Mandate _________________________________________________________________ 5 The Board _________________________________________________________________________ 6 Executive Management _____________________________________________________________ 11 Foreword by Chairperson ___________________________________________________________ 12 Chief Executive’s Overview __________________________________________________________ 14 Organisational Overview ____________________________________________________________ 16 Corporate Governance _____________________________________________________________ 19 Corporate Social Responsibility _______________________________________________________ 29 Stakeholder Relations ______________________________________________________________ 31 Risk Management and Fraud Prevention _______________________________________________ 33 Directives by the Minister ___________________________________________________________ 35 Financial Overview _________________________________________________________________ 37 Operations and Maintenance ________________________________________________________ 46 Engineering and Projects ____________________________________________________________ 69 Leadership and Human Resources _____________________________________________________ 83 Financial Statements _______________________________________________________________ 91 Report on Performance against the Strategic Plan 2014/15 ________________________________ 144 GENERAL INFORMATION General Infor mation REGISTERED NAME: BLOEM WATER PHYSICAL ADDRESS: 2 Mzuzu Street, Pellissier BLOEMFONTEIN POSTAL ADDRESS: P.O. BOX 30121, 9322 BLOEMFONTEIN FREE STATE PROVINCE SOUTH AFRICA TELEPHONE NUMBER/S: (051) 403-0800 FAX NUMBER: (051) 422-5333 EMAIL ADDRESS: [email protected] WEBSITE ADDRESS: www.bloemwater.co.za EXTERNAL AUDITORS: KPMG COMPANY SECRETARY: Ms. Noxolo Maduba Bloem Water Annual Report 2014/15 Page i LIST OF ABBREVIATIONS List of Abbreviations BW Bloem Water BBBEE Broad Based Black Economic Empowerment CEO Chief Executive Officer CFO Chief Financial Officer PFMA Public Finance Management Act TR Treasury Regulations WTW Water Treatment Works PCP Pre-stressed Concrete Pipeline DWS Department of Water and Sanitation DHS Department of Human Settlement SOP Standard Operating Procedures HCD Human Capital Development ABET Adult Basic Education and Training IWA International Water Association WRC Water Research Council WSP Water Safety Plan Bloem Water Annual Report 2014/15 Page 1 SCOPE AND BOUNDARY OF THE ANNUAL REPORT Scope a nd Boundary of the Annual Report SCOPE AND BOUNDARY OF THE ANNUAL REPORT The annual report covers the activities and results of Bloem Water for the period 1 July 2014 to 30 June 2015. The Financial Statements included in this report have been prepared in accordance with the SA GAAP and the requirements of the Public Finance Management Act (No 1 of 1999) (PFMA). The annual report is prepared in accordance with the recommendations of King lll and the National Treasury Guide on the preparation of Annual Reports for Public Entities. Statement from Governing Board acknowledging its responsibility for ensuring the integrity of the report The Board acknowledges its responsibility to ensure the integrity of the integrated annual report. The Board has accordingly applied its mind to the annual report and in the opinion of the Board; the report addresses all material issues, and presents fairly the performance of the organisation and its impacts. The report has been prepared in line with best practice pursuant to the recommendations of the King III Code (principle 9.1). The annual report was approved by the Board and signed on their behalf on 25 September 2015 by: _______________________ Dr Limakatso Moorosi Chief Executive Mr Tefetso Phitsane Chairperson of the Board Bloem Water Annual Report 2014/15 Page 2 STRATEGIC OVERVIEW OF BLOEM WATER Strategic Overview of Bloem Water VISION Assuring sustainable provision of water services, for life. MISSION To create a leading, value-driven, effective and responsive Institution using adaptive best practice methods in anticipating tomorrow’s challenges today. VALUES Bloem Water commits itself to the following values that guide and direct all interactions with internal and external stakeholders: • Corporate Social Responsibility • Governance • Equality • Responsiveness STRATEGIC GOALS & OBJECTIVES • Develop, operate and maintain infrastructure to ensure sustainable water service delivery. • Manage financial affairs to meet current and future obligations • Securing the supply and quality of raw water resources • Achieving an aligned and efficient institution through optimization of all business processes and systems • Engaging in strategic partnerships with all relevant stakeholders BLOEM WATER STRATEGIC GOALS & OBJECTIVES ALIGNED WITH GOVERNMENT ALIGNED OUTCOMES Bloem Water Bloem Water Strategic Goals Ministerial Outcomes Objectives Strategic Objective a) Uninterrupted water supply to our MO B 1 customers. Contribute to an efficient, competitive and b) Implementation of sustainable/ approved response economic infrastructure network Develop, operate CAPEX plan MO A and maintain c) Quality Water that exceeds minimum infrastructure to standards Environmental assets and natural resources ensure sustainable d) Build R&D and innovative capability (grow that are well protected and continually water service intellectual capacity) enhanced delivery. e) Expand the business of Bloem Water in the water value chain MO D f) Reduce levels of unaccounted-for water Responsive, accountable, effective and efficient local government system Bloem Water Annual Report 2014/15 Page 3 STRATEGIC OVERVIEW OF BLOEM WATER Bloem Water Bloem Water Strategic Goals Ministerial Outcomes Objectives Strategic Objective a) To seek optimal funding solutions for MO B 2 CAPEX Contribute to an efficient, competitive and b) Develop alternative revenue streams in the response economic infrastructure network Manage financial water value chain MO A affairs to meet c) Reduce levels of unaccounted-for water current and future d) Improve financial ratios Environmental assets and natural resources obligations e) Ensure proper financial management that are well protected and continually enhanced MO D Responsive, accountable, effective and efficient local government system Strategic Objective a) Identify/secure additional/ alternative water MO B 3 sources for BW to meet future demands Contribute to an efficient, competitive and b) Improve access to water for rural response economic infrastructure network Securing the development and productive use c) Expand BW involvement in catchment MO A supply and quality management activities of raw water Environmental assets and natural resources d) Increased contribution to water resource resources that are well protected and continually management issues enhanced e) Promote water conservation and water demand management MO F f) Mitigate climate change impacts and Create a better South Africa and contribute to minimise the environmental impacts of BW a better and safer Africa and world activities MO G Vibrant, equitable and sustainable rural communities Strategic Objective a) Ensure full legislative/policy compliance MO E: Decent employment through inclusive 4 b) Ensure corporate BBBEE targets are met economic growth c) Obtain unqualified audit MO F: Create a better South Africa and Achieving an d) Effective Internal Controls and Risk Management contribute to a better and safer Africa and aligned and world e) Improved corporate governance efficient institution f) Contribute to job creation through inclusive through MO G: Vibrant, equitable and sustainable rural economic growth optimization of all communities g) Improve knowledge, skills and capacity business processes and systems h) Ensure provision of Local Government MO C: Sustainable human settlements and support improved quality of household life i) Contribute to national/ international water agenda. Strategic Objective a) Build strategic partnerships with all key MO E: Decent employment through inclusive 5 stakeholders economic growth b) Strengthen relationship with DWS regional MO F: Create a better South Africa and Engaging in office c) Ensure customer satisfaction contribute to a better and safer Africa and strategic d) Promote the brand of Bloem Water world partnerships with all relevant MO G: Vibrant, equitable and sustainable rural stakeholders communities Bloem Water Annual Report 2014/15 Page 4 LEGISLATIVE MANDATE Legislative Mandate Water Boards derived their mandate as per their establishment in terms of Section 28(a) of the Water Services Act No 108 of 1997. As a Schedule 3B, a National Government Business Enterprise, Bloem Water is required among others to comply with the Public Finance Management Act No 1 of 1999 as amended by Act 29 of 1999, the National Treasury Regulations, the Municipal Finance Management Act, No 56 of 2003. Bloem Water is legislated through the following legislation: • Water Services Act. 108 of 1997; • the provisions of the Shareholder Compact; • Public Finance Management Act (No.1 of 1999 as amended by Act 29