MHLATHUZE WATER - PowerPoint by KitA23

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									     MHLATHUZE WATER

 PRESENTATION OF THE 2006/2007
ANNUAL REPORT TO THE PORTFOLIO
          COMMITTEE
                    Presented by:
              Ms Dudu Myeni (Chairperson)
     Mr Lawrence Nachito (General Manager: Finance)

                      07 May 2008
OPERATIONAL AREA

Mhlathuze Water operational area
covers 4½ WSA’s in KwaZulu-Natal
   Umkhanyakude District Municipality
   Zululand District Municipality
   uThungulu District Municipality
   uMhlathuze Local Municipality
   Northern of Ilembe District Municipality


                                               2
ALIGNMENT TO DWAF
STRATEGY
ACCESS TO WATER SERVICES
   Regional bulk supply in Mandlakazi/Hlabisa
    area
   Provision of water and sanitation to schools

QUALITY OF PURIFIED WATER
   National water quality reporting system
   ASGISA
   Skills development at technical level
   Customer care
                                                   3
…/cont.
   Provision of operational and management
    services to district municipalities
       Umkhanyakude District Municipality
       Gert Sibande District Municipality
       Service Level Agreements signed with WSA in
        operational area
       Supply Agreements signed with all customers


ENERGY
   Energy supply to critical installations agreed
    with supplier and these installations would not
    be load shedded.
                                                      4
STRATEGIC DIRECTION

 To form strategic partnerships with WSA’s
 To establish strategic networks with all role
  players
 To support and assist WSA’s to meet their
  mandates
 To assist DWAF with water and sanitation
  provisions


                                                  5
BUSINESS DEVELOPMENT &
PARTNERSHIP OPPORTUNITIES

 KZN regional bulk water supply
 Provincial project with DLGH. Water
  supply to Mandlakazi / Hlabisa Area
 WfW contract with DWAF for 3 years

 Water and sanitation project schools
  (Phase 1 = R48mil)


                                         6
WATER QUALITY

 SANAS; SABS 241 standard (2004)
 Physical quality – 99% compliance

 Bacteriological quality – 99% compliance

 Log data into National Water Quality
  Register
 National Microbial analyses program for
  bacteriological quality


                                             7
INFRASTRUCTURE
DEVELOPMENT
   Replacement section of waste-water disposal
    system (R150mil)
   Upgrade of water treatment plant (R112mil)
   Refurbishment of water transfer scheme (R5,2mil)
   Refurbishment budget provision for various
    installations approved (R16,9 million)
   Assessment of pipeline integrity in progress
   Tariffs set for replacement and refurbishment of
    infrastructure

                                                       8
REPRESENTATIVITY OF BOARD
& EXECUTIVE MANAGEMENT
BOARD                BLACK    WHITE   INDIAN
            EQUITY
                      8         1       1

                     FEMALE   MALE
            GENDER
                      5         5
EXECUTIVE




                     BLACK    WHITE   INDIAN
            EQUITY
                       3        2        0

                     FEMALE   MALE
            GENDER
                       0        5



                                               9
TARIFF 2008/09

 Approved by National Treasury
 Discussions held with customers that if
  electricity cost increase relevant would be
  passed onto customers




                                                10
FINANCE REPORT

AUDIT ISSUES
   Consortium of new External Auditors, KPMG/Sizwe
    Ntsaluba, appointed for the FY2006/07 audit
   Financial statements were prepared in accordance with
    SA GAAP, Water Services Act and the PFMA.
   MW received a Qualified Audit opinion for the
    FY2006/07 on the basis of a Special Purpose Entity,
    MW Lessor Trust, which was set up to finance a DWAF
    Emergency Transfer Scheme in 1996. The last audited
    financials of the Trust were in February 2005. The
    purpose for which the Trust was set up ended on 1July
    2007 and MW is in the process of dissolving it.
                                                        11
…/cont.

    There was a prior year restatement of
    the FY2005/06 financials in order to
       • Comply with disclosure requirements
       • Correct seven prior year errors noted




                                                 12
INCOME STATEMENT
   Operating income before finance costs increased
    by 3% from FY2005/06 to FY2006/07
   Operating costs to Total income decreased from
    76% in FY2005/06 t0 73% in FY2006/07. This is
    in line with the Board’s strategy to streamline and
    contain costs.
   Net finance costs reduced by 38% from
    FY2005/06 to FY2006/7 due to;
      The redemption of loans (R45,1million) in
        FY2006/07
      The renegotiation of interest rates with the loan
        providers. (DBSA reduced their interest rate from
        16.5% to 13%) .
                                                            13
FINANCE RATIOS

                     Target    FY2006/07   FY2005/06


Debtors’ days        45 days   90.8 days    96.8 days
Current ratio          2:1       1.6:1        1.4:1
Quick ratio            1:1        1:1         0.9:1
Debt /Equity ratio      1<        1.7          1.9

Return on Assets       10%       12.9%       14.1%


                                                        14
CAPITAL EXPENDITURE
Actuals (in R000’s)                 FY2006/07   FY2005/06
Richards Bay Effluent                  46 899       5 812
disposal
Water Schemes                           4 297       2 045


CAPITAL BUDGET          FY2007/08   FY2008/09   FY2009/10


Water Schemes             155 576      69 863      99 367
Connection                  1 482     119 518      82 000




                                                            15

								
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