Assuring reliable and adequate water services supply across municipal boundaries to enhance long-term service delivery to all consumers.
To be a leader in provision of bulk
water services in the Eastern Cape
Amatola Water strives to excel in contributing to the
socio-economic development by providing bulk water services in the Eastern Cape in an ethical and sustainable manner.
• Professionalism • Accountability • Excellence • Innovation • Stakeholder-focus • Team orientation • Integrity
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14 October 2021View Media Centre
I would like to acknowledge the outgoing Chairperson Ms Nokulunga Mnqeta for her stewardship in this organisation. Her leadership has been characterised by tireless efforts to increase the credibility and visibility of the organisation. The relationship forged with the stakeholders will never go unnoticed and will prosper the organisation.
The performance achieved during the financial year is a clear indication of the effectiveness of the implementation of the Amatola Water Turnaround Plan. It affirms the commitment by Amatola Water to ensure that the communities in the Eastern Cape have access to basic water services as this is a right enshrined in the Constitution of the Republic of South Africa.
As a Board, our key concern is to ensure Amatola Water has the necessary resilience to deliver on its vision to be a trusted leader that provides bulk water services in the Eastern Cape Province. The achievement of 86% of the targets in the shareholder compact compared to the 58% achievement in the previous financial year is satisfying since it is a demonstration of our strength and fortitude to respond to the challenges during the year under review.
The result is that Amatola Water has created value which has contributed to the socio-economic development by delivering on its mandate without compromising on the water quality standards at all plants; ensuring uninterrupted water supply to communities; managing the financial, environmental and social impact of water losses and unaccounted water below the target of 14%; while investing in infrastructure water projects that have created 568 temporary jobs; and increasing the spending on companies with more than 50% black ownership.
The year under review has been characterised by challenges in the operating environment where low economic growth, negative climate change, and increased levels of unemployment and labour unrest. Amatola Water addressed these challenges by adhering to the fundamental business principles which have underpinned the implementation of the following TAP initiatives:
• Appointing key and critical staff with skills and abundance of experience in finance, supply chain management and infrastructure project management
• Reconnecting with internal and external stakeholders through robust and proactive engagements on the challenges facing the organisation
• Reviewing and developing organisational policies to create a stable environment for achieving good governance outcomes
• Stabilising the financial environment by implementing a focused 10-pillar Financial Recovery Plan.
Several engagements and surveys with various stakeholder groups during the year were conducted and the general feedback from stakeholders is increased in satisfaction levels. As reflected in the surveys which were conducted during the year.
The high levels of historic municipal debt by Amathole District Municipality and Makana Local Municipality required the organisation to engage with the Department of Human Settlements, Water and Sanitation, National Treasury and the Department of Cooperative Governance and Traditional Affairs. The high levels of historic debt have not negatively impacted on service delivery. Alternative solutions continue to be explored to recover the debt in the short-to-medium term.
The organisation has emerged from a difficult financial position in the previous year which threatened its financial viability and sustainability.
Amatola Water reported a surplus of R135 million and an increase its cash reserves of R640 million including an improvement in the financial ratios for 2018/19 financial year.
This financial position creates a baseline for ensuring that the organisation meets the demands for efficient and effective service delivery. The Board, through its oversight function, will monitor the implementation of the Financial Recovery Plan and assure improvements in supply chain management, debt management, revenue management and financial controls.
Similarly, Amatola Water is committed to zero-tolerance in respect of fraud and corruption, and continues to improve its internal controls and systems including raising its alert levels at all times so that fraud and corruption are detected and appropriately addressed.
The Board sets the right tone in this area by implementing consequence management against those individuals who have transgressed.
The governance structures of the Board are subject to review. The review ensures a sound governance culture and supports the Board in discharging its responsibilities. The Board’s main objective is to achieve a clean audit outcome that builds public confidence. A testament to this goal is that the entity, for seven conservative years, has achieved an unqualified audit opinion.
On behalf of the Amatola Water Board, I wish to express our sincere gratitude to the Honourable Minister of Human Settlements, Water and Sanitation for her ongoing guidance and support.
We also thank the Portfolio Committee members for their support and cooperation.
Other stakeholders whose support we have valued include corresponding entities and departments within national and provincial government with whom we enjoy strong relationships and to which we are committed to strengthening.
The Board also wishes to express its appreciation to the Chief Executive, her management team and all the
Amatola Water staff for their dedication and hard work, often under difficult conditions.
The importance of the work the Amatola Water is doing cannot be overstated, and it would have impossible without the extraordinary efforts of the men and women who selflessly serve this organisation.
In the coming year, we will continue to focus on fulfilling our vision of being a trusted and leading bulk water services provider in the Eastern Cape Province.
Mr Maxwell Sirenya
Interim Board Chairperson
Date: 25 October 2019
CHIEF EXECUTIVE’S REPORT
During the year under review, Amatola Water achieved an unprecedented performance level by realising 86% of the targets in terms of the shareholder compact and 83% in terms of the corporate scorecard. This translates into a percentage increase of 28% and 26% on the shareholder compact and corporate scorecard, respectively.
This has been made possible by the continued oversight and direction given by the Board, which complemented an administration that is not only committed to the turnaround, but also honouring the
value that must be created for our stakeholders. Despite the historic challenges that led Amatola Water to a performance decline, the administration continued to be resilient in executing the mandate.
A major improvement in the current financial year was evident in the financial and stakeholder scorecard performances, both of which were critical to the sustainability of Amatola Water.
Amatola Water has experienced the challenges of poor internal and external stakeholder relationships in the past. Proactive labour engagement, accelerated project implementation and robust communication with stakeholders have impacted positively on stakeholder relations. In the year under review, the media perception of Amatola Water evolved from neutral and negative to positive and neutral.
Amatola Water closed the year with a surplus which provides Amatola Water with a good baseline to robustly implement its Financial Recovery Plan so that the surplus can be leveraged to build sufficient reserves for the future. The reserves will also assist in investing in major capital upgrades that will enhance the volumes of water supply, in line with the growth strategy of Amatola Water.
We are proud to achieve yet another unqualified audit opinion. Notwithstanding the remaining findings, the administration shall continue to strive for a clean audit by clearing of all historical findings.
Ms Vuyo Zitumane
Date: 25 October 2019
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Established in terms of the Water Services Act (Act 108 of 1997) and accountable to the Minister of Human Settlements, Water and Sanitation as its executive authority. Our primary function is the provision of bulk water supply and sanitation services, as well as offering a variety of other services.
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