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Bulk Water Sales

Contractual obligations with customers

All agreements between customer institutions and Amatola Water are circumscribed by requirements set out in the Water Services Act, the National Water Act, and other relevant local government legislation. The legislation provides for water board business relationships to be concluded with the recognized water services authorities that have been tasked with the administration of water services delivery.
 
Amatola Water regularly reviews its current capacities and assesses the needs of District and Local Municipalities to ensure any opportunity to expand its primary business of bulk potable water production is identified and pursued. Amatola Water regularly invests considerable effort to initiate, deliberate and conclude supply relationships and underlying agreements with both district and local municipal entities. The outcome of this local government partnership activity is outlined below:
 
Amathole District Municipality
Amatola Water provides bulk raw and potable water services to the Amathole District Municipality (ADM). The water board had, in line with the SALGA/South African Association of Water Utilities (SAAWU) guidelines, negotiated a two year supply agreement with Amathole District Municipality, signed on 19 March 2004. This agreement has been extended for a further two years from 10 April 2006 to April 2008 and it was extended during February 2008 for a further 2 years until April 2010, pending the outcome of the water service provision Section 78 Assessment.
 
Buffalo City Municipality
Buffalo City became a Water Services Authority in July 2003, following the announcement of powers and functions by the Minister of Provincial and Local Government. At the time of the pronouncement, Amatola Water has already entered into a 30-year supply contract (with an escape clause) with Buffalo City Municipality. At present, Buffalo City is conducting a water service provision Section 78 Assessment. The draft Section 78.1 assessment of internal options has been completed. Input from organized labor is being sought. It is expected that a decision to proceed on whether to with the Section 78.3 assessment of external provision options will be taken by the recently elected Council in due course. Once the Section 78 Assessment has been completed and approved by its Council, Buffalo City may require the current bulk supply agreement to be reviewed.
 
Supply Agreements with other Local Municipalities
Amatola Water has no other bulk water supply agreements except for the Amathole District Municipality and Buffalo City Municipality.