Provincial water utility Amatola Water recorded an increase in its primary business providing 39 million kilolitres of potable bulk water to its customers, mainly the Amathole District Municipality (ADM) and Buffalo City Municipality (BCM) in the 2009/2010 financial year.

The 0.2 percent is an increase of about 68 000 kilolitres from 2008/2009’s 38.9 million kilolitres provided to the two municipalities. The low increase was mainly due to the drop in off-take to BCM which stood at 2.1 percent. However, bulk potable water increases were recorded to ADM and individual consumers. Bulk raw water supply increased by 5.7 percent.

Announcing the utility’s financial results on Monday, Amatola Water chief executive Nomonde Mnukwa says the efficiency of the utility is demonstrated by its ability to consistently increase water volumes and exceed national water quality standards. Water quality compliance from all its plants stands at over 99 percent compared to the 96 percent national standard. Production and network losses stand at 4.93 percent and 5.59 percent compared to industry standards of seven percent and 12 percent respectively.

In 2009/2010, the utility was awarded the prestigious Blue Drop award for the Laing, Peddie and Nahoon Water Treatment Works (WTW).  The Blue Drop aims at building public confidence in the quality of drinking water. The Butterworth Waste Water Works also received the WISA Wilson’s award for the second most improved waste water works in South Africa.

“The efficiency and growth of our primary business is because the utility has been able to improve its efficiencies across all its production facilities. This has also allowed the utility to focus on its secondary business which includes operations, sanitation services, maintenance, water purification, conservation, demand management and distribution infrastructure. These services allow the utility to have a direct impact on communities.

“For example early in the year, Amatola Water completed the R27 million Department of Water Affairs (DWA) rural schools sanitation project in Chris Hani District Municipality (CHDM) which resulted in 80 schools receiving sanitation services,” says Mnukwa.

The CHDM project is in addition to the Department of Education and the Department of Science and Technology’s rural school sanitation projects valued at R40 million and R8,8 million respectively.

Amatola Water services in the review year extended to municipalities providing sanitation and infrastructure services to ensure they meet their goal of providing safe and healthy water and sanitation services.

“The utility is currently helping BCM provide sanitation services to Nxamkwana villages outside Mdantsane. The R4, 5 million first phase of the project resulted in 500 toilets being constructed in Ntlabathi and Nxamkwana. Mabaleni and Mbolompeni villages received sanitation services in the R4 million second phase.

“The utility is due to launch the third phase of the R18 million Nxamkwana project which will see 2 132 households in seven more villages receive toilets,” explains Mnukwa.

The utility was also appointed by the Department of Public Works to connect six rural police stations to water sources. Amatola Water spent R6 million connecting police stations in Committees Drift, Tyefu, Punzana, Tsholomnqa, Izele and New Bethesda in ADM. The utility laid 10 kilometres of pipeline and installed five elevated water tanks.

These interventions bring fruition to the utility’s ambitious expansion plan to operate throughout the Eastern Cape over the next 10 years.

Already Amatola Water has merged with the Albany Coast Water Board and increased its service area to 47,515 square kilometers from about 43,800 square kilometres. This has consolidated the utility’s vision of being the leading bulk water service provider in the Eastern Cape.

“Now, Amatola Water’s operations cover close to 125,100 square kilometres or three quarters of the province’s 170, 000 square kilometres.

“The expansion will help municipalities provide water and sanitation services. This will result in Amatola Water consolidating its core business by upgrading the infrastructure of its plants,” Mnukwa adds.

She says the expansion will be funded by a mix of income sources such as the Amatola Water reserves, services income, government grants and capital from the market. Revenue currently stands at around R240 million, slightly down from 2008/2009’s R250 million. This is expected to grow to R1, 3 billion by 2020. The expenditure will also be controlled by demand. The utility has recorded a 184% growth in revenue in the last four years. Its revenue grew from R88 million in 2006 to R250 million in 2008/2009.

While the utility can boast an unqualified audit opinion, the financial statements reflect a R17, 6 million deficit as a result of a R12 million impairment by a local municipality. This will not have a dampening effect on the otherwise solid financial position of the utility. Moreover, a national directive to cut its annual bulk water tariff by 36 percent eroded the primary revenue growth.

“The good news is that this is not a reflection of the beginning of a downward spiral, but rather an indication of the turbulent economic conditions that prevailed in the review period,” says Mnukwa.


About Amatola Water

Amatola Water is a national government water utility operating in the water sector.  It is mandated under the Water Services Act (Act 108 0f 1997) to offer bulk water services (both potable and untreated water), waste water treatment and other related services to the public benefit.

Amatola Water’s gazetted area has recently been extended by the Minister of Water Affairs and Environmental Affairs as per Government Gazette No.33006 dated 12 March 2010. Since 2008, its gazetted service area has increased from about 43,800 square kilometres to 47,515 square kilometres. The utility’s current operational area is closer to 125,100 square kilometres of the 170,000 square kilometres that constitute the Eastern Cape.

 
For more information contact:
Connie Buso
Amatola Water
Tel. 043 707 3700
Email. cbuso@amatolawater.co.za

 
For Amatola Water media relations:
Lunga Mtshizana
SMG Africa
Tel. 043 726 8833
Cell. 083 618 7557
Email. lunga@thinksmg.com