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TRANSCRIPT
Leonard RadzumaActing CEO
04 May 20171
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Strategic Overview
Pre-determined Objectives (2017-18)
Current Directives on Projects (2017-18)
Scorecard 2017-18
Budget 2017-18
Discussion & Clarifications
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Vision
To be the Leader in the Sustainable Supply of
Water in the Southern Africa Region
Mission
To facilitate water security through the planning,
financing and implementation of bulk raw water
infrastructure, in the most cost-effective manner
that benefits water users
Who is TCTA?
State-owned Water Infrastructure Entity (SPV)
Established in 1986 to fund and implement
RSA portion of LHWP
Mandate expanded to undertake liability
management on LHWP
Now a multi-project entity, to fund &
implement bulk raw water infrastructure
Reports to Minister of Water & Sanitation
Shareholder’s Compact: agreement with
Minister on the expected performance targets
Quarterly Reports to the Minister from Board
What do we do?
Project structuring
Project funding
Project implementation
Liability management
Tariff setting
Advisory services
Knowledge management
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Deliver to Ministerial directives relating to the planning, financing
& implementation of bulk raw water infrastructure, in accordance
with specifications & within agreed timelines & budget.
Ensure that all project activities facilitate social transformation &
build sustainable communities by providing jobs & empowering
women, youth & the disabled.
Operate the business & its projects & processes in a cost-
effective manner, conscious of the imperatives of public finance
management.
Build the knowledge & capability of the organization to support
other water institutions, in pursuit of greater efficiencies in
overall water management & water services delivery.
Ensure the continuous availability of high-calibre human capital
for delivering on organisational mission into the future.
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Outcome Government outcomes TCTA contribution
4 Decent employment through
inclusive economic growth.
Providing cost-effective water
infrastructure as an enabler of economic
growth & jobs.
5 A skilled and capable workforce. Developing entrepreneurship in small
businesses and up-skilling the workforce
to enable South Africa to compete in
world markets.
6 Efficient, competitive and
responsive economic infrastructure
network.
Providing a comprehensive financial and
implementation package to ensure the
most cost-effective solution.
7 Vibrant, equitable and sustainable
rural communities with food security
for all.
Supporting other water sector institutions
to enable them to deliver on their
mandate.
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Outcome Government outcomes TCTA contribution
8 Sustainable human settlements and
improved quality of household life.
Providing affordable infrastructure.
9 A responsive, accountable, effective
and efficient local government
system.
Supporting other water sector
institutions to enable them to deliver on
their mandate.
10 Environmental assets and natural
resources that are well protected
and continually enhanced.
Contributing to the development of
knowledge in the sector (desalination,
water re-use).
12 An efficient, effective and
development-orientated public.
A comprehensive internal training
programme to enable TCTA to deliver
quality products in the most efficient
manner.
Provision of economic opportunities to previously disadvantaged individuals, through preferential procurement.
Development of black businesses through enterprise development, particularly women, youth and people with disabilities.
Job creation and employment of local citizens.
Skills development.
Provision of bursaries to deserving students from previously disadvantaged backgrounds.
Poverty alleviation.
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Under Directives from the Minister, develop infrastructure to meet social and economic demands in the country by:
Raising finance for the construction of infrastructure in the most effective manner.
Developing infrastructure on time, within budget, to the appropriate standard and in a sustainable socio/environmental manner.
Managing the funding and debt on the infrastructure projects in a manner that achieves cost-effective funding, taking into account current and projected market conditions as well as risks.
Undertaking operation and maintenance of designated projects in accordance with DWS specifications.
Ensuring that Acid Mine Drainage is treated to the correct standard before discharging to the environment.
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T C T A
Management of bulk raw water infrastructure projects
Implementation & Funding MandatesAdvisory & New
Mandate
DWS
New:
Mzimvubu
Potential:
Mkhomazi-
KZN;
Berg River
Voelvlei-WC
LHWP
Explicit
Governm
ent
Guarante
ed
+ R 36
billion
1986
2001
BWP
User tariffs
+ R 1,4
billion
2003
-2008
VRESAP
+ R 3,3
billion
2005
-2010
MMTS2
+ R 2 billion
2008
-2016
User tariffsUser tariffs
• Fund
• Risk
mngmnt
• O&M of
assets
• Implement
• Fund
• Risk
mngmnt
•Implement
• Fund
• Risk
mngmnt
• Implement
• Fund
• Risk
mngmnt
2043 2028 2029 2033
Construction info:
CommencedCompleted
Peak of debt
Revenue Recourse
Mandate Activities
Repayment of debt
ORWRDP2B+C
Construction
cost
+ R 10 billion
2C: 2010-15
2B: 2015-21
• 2C: Fiscus
• 2B: User-
funded
• Implement
• Fund
• Risk
mngmnt
2041
KWSAP
+ R 2 billion
2009
-2013
User tariffs
• Implement
• Fund
• Risk
mngmnt
2033
MCWAP 1& 2
Construction
cost
+ R 11 billion
Phase 1:
2011 - 2015
Phase 2:
2017- 2022
User tariffs
& fiscus
• Implement
• Fund
• Risk
mngmnt
2042
AMD
Cost R11 bn
(debt: see
LHWP)
STS: 2013-17
LTS: 2017-21
Part-fiscus,
Part-user
funded
• Implement
Short-term
& Long-
term solution
See LHWP
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Objectives Measures Targets
Ensure financial
sustainability of the
organisation
Cost-effective financial
management in corporate
operations
Actual spend on operational costs is between 90-
100% of budgeted operational costs
A reserve fund of between R30.1 and 34.5 million
created from operational budget savings by 31
March 2018
Sufficient revenue
collected to meet
obligations
An amount of between R5.31 (volumes
2 644mcm) - R5.59 billion (volumes 2 785mcm) is
collected by 31 March 2018.
Capital expenditure
(excluding LHWP2)
(assuming all planned
projects executed
according to expected
timelines. Otherwise
figures to be adjusted in
consultation with the
Board)
Between 90 and 100% of planned expenditure:
R2.36 billion by 31 March 2018
Development of
Sustainable Business
Model
Model approved by Board and recommended to
Minister in October 2017
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Objectives Measures Targets
Manage the
implementation of
projects to meet the
objectives
Achievement of
critical project
milestone dates within
the approved Project
Charter budget
ORWRDP-2C: Ready for Operation is achieved in the
period November and December 2017 (subject to
contractual extensions of time)
MCWAP-2: Final Inception Report submitted in March
2018 (subject to appointment of PSP by October 2017)
AMD-LTS: Final conceptual design and optimisation of
the scheme completed in March 2018 (Subject to the
appointment of PSP in June 2017)
AMD-LTS (EIA): The specialist studies and draft EIA
scoping report complete by March 2018
Mzimvubu Water Project
All Projects
Projected completion within approved project
contingency provision.16
Objectives Measures Targets
Operation and
maintenance of
designated projects
in accordance with
DWS requirements/
specifications
On the Acid Mine
Drainage project,
maintaining or
reducing of water
levels within the mine
voids
In the financial year, treating an
average volume of water in the
Western Basin of between 30 –
33 Ml/d
The water level in the Central Basin
is lowered to between 135 to 140 m
below shaft collar by 31 March 2018
The water level in the Eastern Basin
is lowered to between 10 – 15 m
below ECL by 31 March 2018
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Objectives Measures Targets
Structure project funding
and secure institutional
arrangements and
request necessary
authorisations to allow
funding to be raised
• ORWRDP-2B: Obtain a
borrowing limit
• The borrowing limit is
obtained In the period in the
period December 2017 to
January 2018
• Mzimvubu Water Project:
Submit final funding strategy
to DWS
• The final funding strategy is
submitted to DWS for
approval in May 2017
• AMD-LTS : Negotiate
agreements for use of AMD
water
• Agreements submitted to the
principals for signing in
March 2018
• AMD: Signed AMD Income
Agreement with DWS
• AMD Income Agreement
signed in December 2017
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Objectives Measures Targets
Raise funding for
implementation of
infrastructure (funding
is available for project
implementation
• ORWRDP-2B: Obtain fiscal
funding commitment
• R90m - R117m committed
by DWS in June 2017
• ORWRDP-2B: Availability of
R250 million short-term
funding (dependent on
approval of borrowing limit)
• Agreements effective by Feb
- Mar 2018
• MCWAP: Availability of R100
million bridging facility
(dependent on approval of
borrowing limit)
• Bridging facility available
Feb - Mar 2018
• Vaal River System: funding
facilities available to meet
the 2017/18 R3 200 million
funding requirements for
LHWP and AMD
• Programme Memorandum
for issue of new bonds
registered by June 2017
(subject to signing of
guarantee by Minister of
Finance)19
Objectives Measures Targets
Manage debt within
the approved
borrowing limit and
ensure debt will be
repaid within the
contractual debt
repayment period
• Debt managed within
approved borrowing limits, in
respect of TCTA’s
obligations emanating from:
o VRS
o BWP
o VRESAP
o KWSAP
o MMTS-2
o MCWAP-1
• Debt managed within the
borrowing limits and all
payment obligations are met
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Objectives Measures Targets
Proactively engage
DWS to ensure
positive project
outcomes
• Favourable resolution of critical
project matters identified during the
year
• Favourable resolution of
critical project matters by 31
March 2018, with focus on:
project pipeline, tariff
collection and alignment with
the stakeholder management
strategy
Coordinate and
monitor the efficient
implementation of the
projects within SIP-3
and SIP-18
• Effective coordination of Strategic
Integrated Projects
• Satisfactory feedback from
key partners on the
effectiveness of coordination
with feedback based on the
adequacy of reports on
program progress, quality of
quarterly Project Technical
Forums, and timeousness of
engagements to address and
escalate challenges
Facilitate socio-
economic
development and
transformation
through TCTA
projects
• Achievement of transformation
objectives in terms of BOE JV
participation contract awarded in
the financial year
• Achievement of between 26 to
30% participation
Objectives Measures Targets
To improve the
internal control
environment with
respect to internal
business processes
• Identification of gaps and
weaknesses within internal
control environment
• Unqualified audit opinion
with no repeat findings in
management report from
external auditor
• Satisfactory addressing of
strategic risks
• 66 to 80% of strategic
risks satisfactorily
addressed
• Achievement against IT
strategy and plans
• Integration of three key
business systems
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Objectives Measures Targets
Position TCTA as a
thought leader in critical
aspects of water
security
• Contribution of innovative
papers to reputable technical
publications and conferences
• Four thought-leading
papers written and
submitted
Ensure organisational
culture is in support of
business strategy
• Assessment of employee
engagement
• Survey report with
recommended actions
plan delivered to
EXCO by 30
November 2017
Improvement of
succession planning
within the organisation
• Succession cover ratio (ready
within 12 months) for critical
positions
• 35% cover ratio of
critical positions
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Partnering the stakeholders to address current water deficiencies
Establishment of intergovernmental partnerships and strengthening of relationships with DWS
Optimisation of resources in an enhanced work environment
Business process improvements
Exploring other business opportunities
Enhancement of the TCTA brand
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Actual/Forecast
2016/17Budget 2016/17 Budget 2017/18
Tariff Receivable ( 5 616,26) ( 5 242,78) ( 5 626,44)
Running Expenditure
1 671,61 1 733,66 2 142,74
Operating Inflows/Outflows ( 3 944,65) ( 3 509,12) ( 3 483,70)
Total Finance Charges (incl. AG8) (1 116,32) 2 850,55 (6 809,58)
Net Working Capital Cash (in)/outflows ( 5 060,97) ( 658,57) (10 293,29)
Capital Refinancing 799,67 3 585,37 2 708,43
Fixed Assets 13,68 22,22 10,28
Capital Expenditure 1 040,73 4 880,46 3 393,62
Non cash flow items and accruals ( 3 239,92) (102.27) (9 030,45)
TOTAL FUNDING REQUIREMENT 33,03 7 931,75 4 866,73
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