MAGALIES WATER
PRESENTATION TO PARLIAMENTARY PORTFOLIO COMMITTEE ON WATER AFFAIRS AND FORESTRY
12 October 2005

CHAIRPERSON'S REMARKS


To the Honourable Minister of Water Affairs Ms B Sonjica, Chairperson of the Portfolio Committee Ms C C September, honourable members of the Committee, invited guests, ladies and gentlemen, I extend my sincerest greetings from the Board of Magalies water.


The Board of Magalies Water was originally established by Government Notice 234 of 1969, with various subsequent amendments to both its name and its area of supply.


1. INTRODUCTION


Magalies Water's commitment to provide efficient, sustainable water services to the ever-growing demand within the Board's area of operation in the North West, Limpopo, Gauteng and Mpumalanga regions is inculcated in the Board's overall corporate Objectives, Vision, Culture and Corporate Philosophy.


As we celebrated ten years of democracy in 2004, the year under review saw Magalies Water experiencing further significant growth in various areas of service delivery, especially the Bulk, Scientific Services and Retail Operations. Additionally, during the year, the Board conducted a Strategic Review of the Organisational Structure, Goals and Strategic Imperatives. This was done to ensure alignment with the legislative requirements, customer needs and expectations, corporate governance and the Strategic Framework for Water Services (SFfWS) Policy which was signed into policy by the previous Minister of Water Affairs and Forestry.


Magalies Water provides water services to a wide range of stakeholders that include municipalities, urban, pen-urban and rural communities, mines, state entities and commercial industries across an area of 34 000 km2 in four provinces. Magalies water manages around 35000 individual households under contracts from the municipalities. As a result, this provides Magalies Water with a regional focus in the provision of water services.


2. OVERALL BUSINESS PERFORMANCE


The financial year under review has seen Magalies Water exceeding delivery expectations in both the primary activities of bulk water supply and retail activities of expansion of the reticulation services in partnership with Municipalities and DWAF. To this end, bulk, retail and scientific operations have significantly been enhanced through cooperative partnerships with our stakeholders.


Magalies Water has exceeded several of the Key Performance Benchmarks and targets that it has set for itself in the year 2004 - 2005. These benchmarks were attained in areas such as water quality revenue, and debt management. The challenge however still exists as far as cost recovery in the retail environment is concerned. Further initiatives are constantly being pursued with Municipalities in order to jointly deal with cost recovery whilst ensuring continuous provision of water to affected communities and consumers.


Retail activities that also include authorization of illegal connections and cost recovery have been vigorously pursued through the partnership with and cooperation of the Municipalities. Magalies Water continues to positively plough back to the communities through contributions to the Municipalities. To this effect, we are committed to achieving sustainability in the conduct of our business to optimally deliver water services to the growing communities whilst at the same time ensuring that the environment is protected and to discharge our social commitment to the communities we serve.


Agreements and Memoranda of Understanding have since been concluded or are in the process of being concluded with most of the Municipalities for the provision of Water Services to them, i.e. the City of Tshwane Metropolitan Municipality (CTMM), Moses Kotane, Madibeng- Moretele, Rustenburg-, Nokeng Tsa Taemane, Belabela-, Modimolle and Thabazimbi Municipalities in all the three provinces of Gauteng, Northwest and Limpopo.


Endeavours to obtain medium to long-term agreements with Local Municipalities in which Magalies Water operates have been pursued as win-win strategies that will ensure sustainable quality water services delivery to all stakeholders. This, we believe will contribute towards the fulfilment of the national agenda of a better life for all. Magalies Water has been largely successful in concluding contracts based on the current SMWU/SALGA agreed model bulk contract.


During the year under review, Magalies Water established a Safety, Health and Environmental Policy and Program that will cover a 5 year period of phased implementation. Through this endeavour, Magalies Water has now been ISO 14001 certified. This marks a significant milestone in our endeavour to be an environmentally responsible corporate citizen.


The corporate social investment (CSI) initiatives of Magalies Water entail primarily investments in education, welfare and development, poverty alleviation projects and sanitation development.


2.1 Retail Water Supply and Sanitation


The management of rural, urban and pen-urban schemes, involving internal reticulation, constitutes the Retail Operations of the Board. Magalies Water is actively involved in all aspects of retail operations and is committed to support Water Services Authorities in providing retail services. An agreement has been concluded with the City of Tshwane Metropolitan Municipality for the provision of all retail services within the areas of Temba/Hammanskraal. The Board is actively assisting the Local Municipalities with tariff selling and development of bylaws. The Board will continue with its efforts to improve communication with the Water Service Authorities and to build partnerships with them.


Several rural, urban and per-urban schemes have been taken over from North West Water Supply Authority since 1997 and are operated and maintained by Magalies Water. The rural system comprises a substantial number of boreholes, pumps, storage facilities and basic level of service reticulation, supplying water to small communities, schools, hospitals and farmers.


Magalies Water is currently involved in retail sanitation management on behaif of CTMM in the Temba, Hammanskraal and Babelegi industrial areas.


The Board is acting as implementing agent on behalf of Bolanala Platinum District Municipality for the Community Water Supply and Sanitation Programme (CWSS) as well as the Rural Water Supply Programme for the installation and management of retail sanitation.


2.2 Bulk Sanitation Services


Magalies Water, together with ABSA and Bigen Africa successfully concluded a contract with the Rustenburg Water Services Trust, for the provision of bulk sanitation and potable water services functions on behalf of the Rustenburg Local Municipality. In respect of bulk sanitation services, Magalies Water manages the operation and maintenance functions of the Rustenburg Sewage Treatment Works and the Boitekong Sewage Treatment Works.


3. GOVERNANCE, REPORTING LINES AND PUBLIC ACCOUNTABILITY


Magalies Water is committed to the highest standards of Corporate Governance. Good corporate governance is promoted and exercised as a means of promoting efficiency, effectiveness, excellence and public accountability. Magalies Water has committed itself to building and maintaining transparency in all corporate practices, including customer care. Magalies Water subscribes to the national principles of "Batho Pele"


4. INSTITUTIONAL REFORMS


During the previous year, general discussions ensued regarding the transformation of the Water Sector in South Africa. The Strategic Water Framework Policy provided a basis for the reform initiatives. Magalies


Water fully supports the initiative to transform the sector since this will ensure that sector skills, capabilities, attributes and experiences of Water Utilities can be pooled and leveraged to serve more efficiently the South African population.


To this effect, Magalies Water signed a Cooperation Agreement with Rand Water and Ikangala Water. This Agreement is aimed at unlocking value in the three organisations through management of water resources in an integrated manner in order to ensure efficient, affordable, economical and sustainable access to water in the defined area of Agreement.


5. BUILDING PARTNERSHIPS


The Board considers itself a relevant vehicle to reach as many South Africans without access to water and sanitation services as possible in a continuously sustainable manner. Thus, the board positively approaches all Municipalities around its areas of operations to extend water services delivery to all affected communities. The need to become a full service provider of water services has also seen Magalies Water expanding into the Sanitation Services. All these initiatives position the board as a significant regional water services provider. As a full affiliate of the South African Association of Water Utilities (SAAWU), Magalies Water has been instrumental in providing significant input through SAAWU into such areas as the institutional reform process, SETA inputs, and other water sector debates and initiatives.


6. TRANSFORMATION


As a 35 year old entity, Magalies Water has undergone and continues to undergo drastic transformation in order to align with the objectives of the government and national interests. The board has accelerated and exceeded its targets regarding transformation initiatives during the year. It is pleasing to note that such endeavours can only encourage the board to sustain the transformation in a manner that will promote conciliation. Following the Strategic Planning session conducted during the year, the Board has been able to streamline its operational activities whilst at the same time achieving transformation goals. Whilst every endeavour is made to ensure that the board meets and exceeds its targets, some challenges still remain particularly in the employment of physically disabled and women. The Board is however on course to meet these goals in the new year.

7. HIV/AIDS


The board is mindful of the impact of the HIV/AIDS pandemic that currently affects the country. To this effect the Board has established an HIV/AIDS Committee, Policy and Charter all of which promote nondiscrimination in application. Voluntary Testing, educational campaigns and intensive awareness programs in conjunction with the Department of Health are being undertaken to educate Magalies Water staff. The impact of the pandemic on our staff has not been determined yet.


8.CONCLUSION


The year under review has clearly demonstrated that water services provision cannot be just about asset and infrastructure management. The water services function today entails building communities, ensuring customer relationships, responding immediately to stakeholder concerns as well as developing requisite skills to advance effective, efficient and affordable service delivery.


To this effect, the Board will continue to advance the programs that will ensure attainment of the delivery of the Millennium Development Goals (MDG's), government's 2008 and 2010 goals for basic water and sanitation, as well as the fulfillment of the constitutional mandate of the Strategic Framework for Water Services in South Africa. The Board continually endeavours to ensure lower costs for water services provision, consistent quality maintenance, environmental accountability and socially responsible community investments.


9. ACKNOWLEDGEMENTS


I would like to take this moment to thank the Chair and members of the portfolio committee for granting us this opportunity to present the Magalies Water case to your esteemed selves.


Thank You


Mr N PRETORIUS: Board Member