ANNUAL REPORT FOR 2020 / 2021 FINANCIAL YEAR
1. FINANCIAL ANALYSIS
The 2020 / 2021 Financial Statements have been compiled by external Auditors, PKF (PE), as a running business and is attached hereto.
The income for the year was R58,414,717.00 of which R24,582,513.00 was paid to the Department of Water and Sanitation for water use charges.
The difference was used for daily expenses of the Association.
Budgets have been done in a conservative manner, which included the building of reserve funds for capital and major maintenance expenditure.
The influence of the current economic situation on the Association has been counteracted to a large extent by intense management and stringent financial control.
2. POOL SYSTEM – 2020 / 2021
Into the Pool 280.40 Ha (18 Users)
Water bought 280.40 Ha (22 Users)
Amount in the Pool R642,155.20
Less 10 % Admin Fee R 64,215.52
------------------
Amount available for
distribution R577,939.68
Amount Credited R577,939.68
------------------
Additional Income R 0.00
Income from application fees R12,740.20
Tariff per Ha (Sliding scale not applied) R 2,061.13
The water use charges for 2020 / 2021 was R2,290.14 / ha for the year, and the credit tariff paid to users who placed water in the pool amounts to R2,061.13 / ha.
Temporary Transfers
Income from application fees R42,741.92
Total number of transfers 52
Total hectares transferred 816.40 Ha
3. FINANCIAL SUSTAINABLE PROVISION
3.1 RESERVE FUNDS
The bulk of the Association’s reserve funds is invested with Momentum to provide capital growth as well as interest and dividend income. These funds are available within days, should it be needed for unforeseen emergencies or capital expenses.
Sufficient funds are kept in the Association’s FNB Money Market accounts to cover contingencies, day to day expenses as well as maintenance to dams, syphons, valves, computerized systems, office upgrades and housing, as budgeted. Any unused funds are invested during the year for relative short periods of time.
Interest is received on investments.
3.2 SUNDRY DEBTORS AND CREDITORS
Sundry Debtors to the amount of R5,864,615.00 were outstanding of which R5,586,126.00 were the outstanding water use charges handed to the attorneys for collection. The bulk of the amount consisted of new licenses approved by DWS. A total of R6,289,885.00 was outstanding at year end regarding Billing Agent Commission.
3.3 GENERAL
The Association, some time ago, adopted a resolution that the Contingency Reserve Fund should be at least 10,0 % of the total income. In spite of undertaking a vast amount of maintenance work, this percentage only slightly decreased from 37.8% to 37.3%.
The aging canal system of the Association necessitates more frequent repairs, gradual upgrading and replacement of sections of canals. For this reason, and the fact that failures can occur unexpectedly in spite of regular inspections, it is necessary that reserves continue to be accumulated, to act immediately in such an event, as well as to counteract any sudden increases in charges to the water user.
The favorable position currently enables the Association to do planning and urgent maintenance to the ageing canal infrastructure.
OPERATIONAL
4. OPERATION AND MAINTENANCE
4.1. SUPPLY SYSTEM
The Department of Water and Sanitation is still attending to the rehabilitation of the canal break on the Veeplaats Main which occurred in May 2017. The Association is in talks with the Department for a potential tie-in date and tie-in duration. Construction on the main canal limits the Association to supply only 65 % of the main canal’s capacity and operations have been adjusted to accompany this limitation.
Substantial infrastructure maintenance was conducted by the Association during the previous dry period. The Association implemented a project to reline a 1.1 km of canal along Hartmanskrans in an effort to reduce the risk of failure. Failing infrastructure in general was also identified for possible replacement. A 150 m section of the Comley branch canal was replaced with a new 600 mm diameter concrete pipe, while a 340 m section of leaking concrete pipe along the Addo 2.3 system was replaced with a 315 mm diameter PVC pipe.
The dry period also saw the Association make use of contractors to replace 1,668 m² of main canal concrete panels with the approval of the Department of Water and Sanitation. The panels were identified to resolve significant leaks, as reported by users, and also to eliminate the risk of failure.
An annual tender contract was implemented in which contractors were able to assist with vegetation control and canal seal work. Over the dry period, these annual tender contracts contributed towards over 40 km of joints and cracks being sealed and over 85 km of vegetation being cleared or controlled. These figures exclude work done by employees of the Association and work done outside of the dry period.
The Association would like to thank the users for their assistance in canal maintenance, the reporting of faults and supply issues, and for various other contributions. The Association would also like to remind the users of the following:
4.2. DAMS
Rainfall recorded at Darlington Dam and throughout the valley for the 2020 – 2021 water year remained below average confirming the current drought experienced within the province. The recorded rainfall figures are listed in Table 5.1.
The Association conducts quarterly visits to Darlington Dam and can report that although one sleeve valve has been replaced, other sleeve valves remain in either a leaking or non-operational state. The faulty Stoney flood gates of the dam’s main spillway also limits the full supply capacity to 44.6 %. The level of Darlington Dam is closely monitored by the Association and daily correspondence with operators upstream of Darlington Dam is conducted to ensure satisfactory levels. The dam balance summary for Darlington Dam is listed under Table 5.2.
The Department of Water and Sanitation has replaced the gearbox of one of the butterfly valves of Scheepersvlakte Dam, but are yet to install one vacant butterfly valve. The Association has also reported to the Department that the sluice gates of the dam’s outlet is not in an operational state. On site discussions indicated that these issues should be addressed once the Nelson Mandela Bay Metro’s supply from the west is reinstated and Scheepersvlakte Dam could be drawn empty.
4.3. ORANGE RIVER WATER
The lack of inflow to Darlington Dam via the Sundays River has proven that the Lower Sundays River Water User Association is completely dependent on the Orange/Fish transfer scheme. The scheme supplies water from the Gariep Dam to Darlington Dam and enables the Association to supply the Nelson Mandela Bay Metro, Kirkwood, Addo and Patterson with bulk water during a period of extreme drought.
The Gariep and Vanderkloof dams are both in a very healthy state of capacity having overflowed earlier this year. The levels of both these dams are listed in Table 5.3.
The Department of Water and Sanitation is planning to rehabilitate a slipped embankment on the Orange/Fish transfer scheme near Cookhouse upstream of Darlington Dam. It is currently not known when construction will commence or what the potential implications of construction would be the users downstream. The Association will however do everything in its powers to minimize disruptions to the water supply downstream of Darlington Dam and inform the users timeously as new information becomes known.
4.4. WATER SUPPLY TO NELSON MANDELA BAY METRO
The severe drought and lack of supply from the west has contributed to the Nelson Mandela Bay Metro’s increased abstraction from Scheepersvlakte Dam. Historically the abstraction from Scheepersvlakte Dam has increased every year over the past few years and the 2020 – 2021 water year saw the Nelson Mandela Bay Metro pass the 60 million m³ mark (see Table 5.4).
The Nelson Mandela Bay Metro has also, as a result of its dependency on supply from the Scheepersvlakte Dam, requested that the main canal only be dry every second week during winter works. This request was granted by the Association and implicated the winter works period to be prolonged to include the month of August.
4.5. AUTOMATED SYSTEM
The Association currently makes use of 19 remote electronic measuring devices to monitor and measure flow along the system. These devices are located from Darlington Dam to Korhaans Drift Weir and Barkley Bridge which covers the system in its entirety. These devices allow the Association to accurately determine the volumes of water distributed in the system, as prescribed by the Department of Water and Sanitation, and allow for relatively quick response and control to any irregular flows in the system.
In an effort to increase the efficiency and reliability of water distribution, the Association is currently in the process of implementing a system to remotely control main canal offtakes from the office. This forms part of a long-term plan of increasing control, reliability and response time, as well as reducing risk in water supply operations. An offtake has been identified to test a proposal as a pilot project.
The water use efficiency report was generated using the remote measuring devices described above and is listed under Table 5.5. The report reveals an average loss of 10.5 % which is well within the international standard. The report is also submitted to the Department of Water and Sanitation timeously.
Water requests - ALL HOURS
Water aanvraag - ALL URE
086 010 6200
Box 10, Sunland 6115
Tel: +27 42 234 0038
Fax: +27 42 234 0022