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PORTFOLIO COMMITTEE 5 May 2010

O V E R B E R G W A T E R. PORTFOLIO COMMITTEE 5 May 2010. INDEX. AREAS AND MUNICIPALITIES SERVED, ACHIEVEMENTS AND CHALLENGES Relationship with Municipalities Non-Financial Performance Audit Report Income Statement Balance Sheet Financial Indicators & -Ratios

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PORTFOLIO COMMITTEE 5 May 2010

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  1. O V E R B E R G W A T E R PORTFOLIO COMMITTEE 5 May 2010

  2. INDEX AREAS AND MUNICIPALITIES SERVED, ACHIEVEMENTS AND CHALLENGES Relationship with Municipalities Non-Financial Performance Audit Report Income Statement Balance Sheet Financial Indicators & -Ratios Bulk Water Sales & Revenue Bulk Water Tariffs Expenditure (Bulk Provision) Reserve THE TARIFFS PROPOSED BY THE DEPARTMENT ON BULK WATER Graphic presentation of tariffs Principles of tariff structure Process

  3. AREAS AND MUNICIPALITIES SERVED, ACHIEVEMENTS AND CHALLENGES

  4. RELATIONSHIP WITH MUNICIPALITIES ACHIEVEMENTS CHALLENGES

  5. NON-FINANCIAL PERFORMANCE • Serious work injuries → zero • Absenteeism → 2,7% • Staff turnover → 9% • Labour unrest → zero • Water quality → Class 1 (SANS 241, 2006) • Water loss → 4,8%

  6. AUDIT REPORT • Unqualified Audit • Positive report on systems & procedures • Relevant legislation adhered to

  7. INCOME STATEMENT • Consolidated Income Statement • Income from and expenses financed through •  Bulk Water Sales •  Retail Water Sales (as secondary activity) •  Other Secondary Activities •  Reserve R’000 Total Income: R25 017 Total Expenses: R22 613

  8. INCOME STATEMENT (continue) R’000 Net Income: R2 404 INSTALLMENT DWA LOAN R1 203 CHANGES IN WORKING CAPITAL R1 088 CONTRIBUTION TO RESERVE R 0 ( R113 ) - shortfall To be financed through reserve

  9. BALANCE SHEET CAPITAL EMPLOYED R74 139 EMPLOYMENT OF CAPITAL

  10. FINANCIAL RATIO’S & -INDICATORS

  11. WATER SALES & REVENUE (Bulk Provision) BULK WATER SALES : VOLUME (2,1%) (0,6%) 4 259 546 4 171 830 4 148 761 BULK WATER SALES : R 7,1% 4,3% 11 746 761 10 971 913 10 521 641

  12. BULK WATER TARIFFS 2008/2009 2007/2008 R 2,83 2006/2007 R 2,63 7,7% R 2,47 6,5%

  13. EXPENSES (Bulk Provision)

  14. RESERVE IN INVESTMENT IN CASH R’000 TOTAL: R 24 906 RESERVE FOR INFRASTRUCTURE REFURBISHMENT : R18,8 MILLION 5 YEAR INFRASTRUCTURE REFURBISHMENT PROGRAMME R45 MILLION

  15. 2. THE TARIFFS PROPOSED BY THE DEPARTMENT ON BULK WATER

  16. Graphic presentation of tariffs Principles of tariff structure Process

  17. SLIDING SCALE BULK WATER GRAPHIC PRESENTATION OF TARIFFS PER HOUSEHOLD PER MONTH (VAT excluded) Availability Fee: Caledon – R136 920 / per month VAT excluded Heidelberg/Slangrivier – R47 220 / per month Witsand – R13 475 / per month

  18. PRINCIPLES OF TARIFF STRUCTURE • Availability fee of 30% of allocation. • Sliding scale tariff – the higher the water use, the higher the unit cost of the tariff. • The use on the sliding scale is based on the number of households as supplied by and agreed with the municipality. • The tariff structure supports WC/DU. • A too high choice of allocation by the Municipality will result in a higher unit cost if the consumption is low. • The lower the consumption, the lower the unit cost. • The effective cost of water and the water tariff is therefore in the hands of the Municipality – it requires careful and sound planning and management from their side. • At the same time Overberg Water has much more clarity and lower risk.

  19. PROCESS • Prescribed Process • Consultation Process • Response from National Treasury & Salga • Viability as result of tariff proposal • Impact on end users

  20. THANK YOU

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