Magalies Water Poised for Growth - Through Robust Governance - | April 2021 - Inside Education.
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April 2021 | April 2021
Photo by: Eddie Mtshweni
Magalies Water
Poised for Growth
Through Robust Governance
1.
April 2021
Investing in Highly Skilled Personnel
Pays Off For Magalies Water Board
Thebe Mabanga
The Magalies Water
Photo by: Eddie Mtshweni
Board has spent the
past five years refining
its strategy, capital ex-
penditure programme
and governance sys-
tems and is now poised
for its next phase of
growth. This is demon-
strated by the fact that
in the 2019/2020 fi-
nancial year, the organ-
isation met 38 of its 41
Key Performance Indi-
cators.
Magalies Water CEO
Sandile Mkhize attri-
butes the recent suc-
Magalies Water Board Chief Executive Officer
cess to teamwork and
Sandile Mkhize
having the right and
suitably skilled profes-
sionals at the right po- The Water Board is Magalies Water Board
sition. “The Magalies now set to embark on supplies seven munic-
Water Board has been a five-year strategic ipalities, several com-
on a strong upward journey during which mercial customers and
trajectory over the past it hopes to expand its water service author-
few years” says Mkhize, footprint and infrastruc- ities. The municipali-
who points to the finan- ture by being allowed to ties are spread across
cial, technical, strategic raise alternative sourc- Gauteng, the Bojanala
and governance perfor- es of funding in order District in the North
mance. to spend R 5 billion on West and Limpopo. The
infrastructure. municipalities include
2.
April 2021
the City of Tshwane and of Human Settlements, from the same institu-
Moretele Local Munici- Water and Sanitation tion. Mkhize also holds
pality, the Rustenburg as well as the Cooper- an MBA from Milpark
Local Municipality as ative Governance and Business School and a
well as Modimolle, Traditional Affairs in the Management Advanced
Mokgopong and Mo- North West province. Programme from Wits
ses Kotane. There is Business School. He
also the Bela Bela and Mkhize leads a highly has also completed a
Thabazimbi Local Mu- skilled 8 person execu- Senior Executive Pro-
nicplaities that the en- tive and brings a wealth gramme from Harvard
tity covers. of experience and a Business School and a
Its commercial cus- solid academic back- Diploma in Advanced
tomers include the ground to a role he has Project Management
Royal Bafokeng busi- occupied since 2016. from Damelin.
ness empire, including He holds a BSc in
its administration and chemistry and microbi- One of the entity’s re-
Platinum Mine, the Si- ology from the Univer- cent notable achieve-
yanda Bakgathla Plati- sity of KwaZulu-Natal. ment on governance is
num Mine, a Glencore He also holds a B-tech achieving a clean audit
smelter and chrome in Biochemistry from for the 2019/2020 fi-
mines. the Durban Universi- nancial year. Mkhize
ty of Technology and traces this accomplish-
The Water Authorities a Masters in Environ- ment back to 2011,
include the Department mental Biotechnology
Photo by: Eddie Mtshweni
Magalies Water Board headquarters in
Rustenburg, North West
3.
April 2021
Photo by: Eddie Mtshweni
Magalies Water CEO Sandile Mkhize
when Magalies Water which still had adverse 3 years until best prac-
obtained unqualified findings. “We found tices are entrenched.
audits over a 10-year that the supply chain
period. structure was not opti- Magalies Water Board’s
mal” says Mkhize. The next challenge is to
The company spent a Supply Chain Division now grow its revenue
number of years ad- has since been restruc- from the R834 million
dressing findings from tured and has suitable to over R1 billion with-
both the Auditor Gen- personnel appointed. in the next few years.
eral and the company’s Mkhize says they have
own internal audit divi- The task team then had a two-pronged ap-
sion. For the 2019/20 to work through both proach. “The first is to
financial year, Magalies internal audit and AG’s improve efficiency in
Water then set up a findings until all errors current operations to
Clean Audit Task team were satisfactorily elim- increase revenue [and]
led by the CFO Mathsi- inated to obtain the reduce costs” he says
diso Tabane and com- thumbs up from the AG. noting how this in-
prising senior manag- But how will this clean cludes improving reve-
ers and members of the audit be maintained? nue collection.
Board’s Audit and Risk “That is the most diffi-
Committee. cult task,” says Mkhize. Of the R834 million,
He notes that the board R738 million (or 88%)
The last area to be tack- has decided not to dis- comes from the sale of
led to achieve a clan band the Clean Audit water. Other incomes
audit was supply chain, Task Team for another come from items
4.
April 2021
such as management changed in 1994 at the KPIs that Magalies
and tender fees as dawn of democracy to Water Board could not
well as cost recovery include the supply to meet is the average
income of R524 000. residential customers. debtor days, which
Analysing water sam- 80 % of its income now Magalies had targeted
ples at the Magalies comes from municipal- to have an average of
Water Board laborato- ities, while industrial 50 days but could only
ry in Brits brought in customers account for manage 85 days as
about R 880 000 in 20%. municipalities default-
the last financial year. ed.
Government grants This is why the state of
and subsidies come to municipal finances is Mkhize says they have
R51 million, or about an area the entity mon- regular engagements
6,1 % of total revenue, itors closely. “It is a ma- with municipalities to
showing that the entity jor concern” says Mkh- look for ways to assist
is sufficiently self-sus- ize “Municipal finances them. Assistance can
taining. are under strain, and take the form of pay-
this shows in current ment discounts, or In-
The Magalies Water payment patterns” he terest freeze, or allow
Board was established notes that even munic- them to keep the cur-
in 1969 to specifically ipalities who were reli- rent account up to date
supply mines on the able payers prior to the while freezing historical
platinum belt with Covid 19 outbreak are debt.
water. Its mandate was now lagging. One of the
What makes municipal
support more important
Photo by: Eddie Mtshweni
is that the North West
province is predomi-
nantly rural with poor,
indigent households
who are supplied with
free basic services in-
cluding water and the
cost carried by the mu-
nicipality.
The second part of
Magalies Water CEO Sandile Mkhize with Board
Chairperson Pinky Mokoto growing revenue is in-
frastructure expansion.
5.
April 2021
The Science Laboratory.
Magalies Water has guide to developing connected to water and
set a capital expendi- new projects and refur- sanitation facilities and
ture budget of R 5 bil- bishing existing infra- they benefit from free
lion over the next five structure. Through the basic water supply.
years. Mkhize says this Master Plan, Magalies
will be partly funded Water has been able to He also notes that apart
by the water board’s grow its asset base from from supplying mining
own revenue but also R 1 billion to R 3 bil- and light manufactur-
through partnerships lion, with about R 1,7 ing industries, they also
and they have roped in billion, or just over half, support the tourism in-
the National Treasury’s attributable to pipelines dustry, which is crucial
Government Technical and reservoirs. to the province but cur-
Advisory Centre to help rently reeling from the
them structure Public Mkhize is satisfied that effects of Covid 19.
Private Partnerships the water board is meet-
(PPPs). ing both its commercial Under Mkhize and his
and social mandate. He executive team’s lead-
In 2013, Magalies Wa- points out that people ership, the entity is set
ter adopted an Infra- in towns and rural vil- for an exciting period of
structure Master Plan, lages where their infra- growth.
which has been the structure traverses are
6.
April 2021
Robust project pipeline
requires funding
Thebe Mabanga
The Klipdrift Water Treatment
Works Upgrade
The Magalies Water In the 2013/2014 fi- 2 and 3, the Klipdrift
Board has a robust nancial year, the Water Water Treatment Works
pipeline of projects that Board adopted its Infra- Upgrade, the More-
will need the board to structure Master Plan. tele South Bulk Water
aggressively raise fund- Under the Master Plan, Supply Scheme, the
ing over the next few Klipvoor Bulk Water
years. This is to help Magalies Water identi- Supply Scheme as well
the entity build on proj- fied a total of five ma- as the Wallmannsthal
ects that were success- jor projects, at times Water Treatment Works
fully delivered over the broken into phases to Upgrade. The identified
past few years to build upgrade its infrastruc- and completed project
and maintain its infra- ture. These are Pilanes- staddle the entity’s sup-
structure. berg Bulk Water Supply ply area of Gauteng, the
Scheme, Phases 1, Bojanala District in
7.
April 2021
The Wallmannsthal Water Treatment
Works Upgrade
the North West and Magalies water contrib- completed at a cost of
Limpopo. uted R 335 million to R222, 5 million in Oc-
the total cost, or 20%. tober 2018. It services
The first phase of the The department of Wa- about 23 000 house-
Pilanesberg Water ter and Sanitation con- holds in Mabersksraal
Supply Scheme was tributed R 555 million, village in the Moses Ko-
completed at a cost of or 33% while the mines tane Local Municipality,
R 1,68 billion. It en- contributed the balance North West. The Klip-
tailed the construction of R 800 million, or drift Water Treatment
of a 43 km pipeline 47%. This is the fund- Works was upgraded at
and a 50 Million litres ing model that Magalies a cost of R323 million,
Mafenya reservoir in Water currently uses on also around October
its South Section. The all its projects. The en- 2018. The entity has
North section required tity has now applied to about ten unfounded
new pipeline plant up- the National Treasury to projects for which par-
grade, a new reservoir be allowed to raise debt tial funding was allocat-
and pump station. The on open market to con- ed by Magalies Water
projects benefits more tribute more to project or no funding is yet in
than 180 000 house- funding. place.
holds across four mu-
nicipalities including Other completed proj-
Rustenburg and Thaba- ects include Tuschen-
zimbi and three plati- komst Ruighoek Pipe-
num mines. line and Pump-Station,
8.
April 2021
Magalies Water Board Runs A Tight
Ship Despite Covid19 Challenges
Thebe Mabanga
The interim board of
Photo by: Eddie Mtshweni
the Magalies Water
has succeeded in lead-
ing the entity through
an exponential growth
phase, despite the
Covid19 storms. Pin-
ky Mokoto has been
the interim chairperson
tasked with leading the
board and reflects sat-
isfactorily on their term
in office. “Magalies Wa-
ter continues to grow
exponentially as an or-
Magalies Water Chairperson Pinky Mokoto
ganisation” she says in
the entity’s annual re-
port, noting its revenue The aim is to be five goals in health and
growth from trading ac- achieved through in- safety compliance were
tivities from R721 mil- vestment in systems, met, most notably dis-
lion to R789 million as processes and infra- infection efficiency.
well as its surplus from structure that ensures
R121 million to R169 the continuous, reliable The next two goals are
million from an asset supply of clean and the provision of reliable
base of R3,5 billion, safe potable water. and sustainable water
which is the result of a services to customers,
successful investment Under the cur- and all four goals were
programme. rent board’s leader- met and the manage-
ship, Magalies Water ment of customer and
Magalies Water Board’s achieved 93 % across stakeholder relations,
main strategic goal is to a broad range of areas, where four KPIs were
be a leading provider of starting with the goal realised. The Water
quality water services to provide quality pota- Board also succeeded
in the country. ble water, where all in achieving its goal of
9.
April 2021
The Cullinan Water Treatment Plant
profitability and positive water. Mokoto highlights this
financial returns as well important [part] of the
as contributing towards Mokoto notes that the service delivery leg of
the development and lockdown brought by Magalies Water man-
transformation agenda. Covid19 had partic- date.
ularly severe impact
The outbreak of the during the last quarter This requires water
Covid19 pandemic in of the financial year. boards to be innova-
March last year brought “Moving forward, the tive to improve efficien-
to sharp focus the need impact could be felt on cy. The other area was
for clean, reliable water the overall productivi- that of maintenance for
supply but also threat- ty of the organisation, continuous operations.
ened Magalies Water projected revenue fig- This required the wa-
Board growth trajecto- ures spiralled down, ter agency to operate
ry. Mokoto says for our liquidity position either a higher number
Magalies Water, the became weakened, our of shifts or longer hours
pandemic presented appetite for investment with fewer workers.
operational challenges. was also negatively Covid19 posed a threat
Firstly, parts of the oper- impacted upon.” At to operations since in
ations can only be per- the height of Covid19, some cases, mainte-
formed manually and Magalies Water found nance work took longer
with onsite presence. itself supplying 26 wa- to complete. Mokoto
This include monitoring ter tanks to schools and says Covid19 requires
of plants and delivery of communities in need, the organisation and
10.April 2021
workers to be more ef- with commercial cus-
ficient and extract more Despite these challeng- tomers, most notable
value from limited re- es, the entity still man- the mines that they ser-
sources. aged to obtain a clean vice.
audit. “This success
Another area that has is a direct result of the Mokoto says for the
been heavily impacted hard work and dedica- short term, Magalies
by Covid19 has been tion by Magalies em- Water Board will use its
revenue collection, as ployees with the strong investment surplus to
municipal finances support and guidance grow the organisation.
came under strain and by the board” Mokoto For the 2019/ 2020
some customers lagged says. financial year, the sur-
on payment. To address plus for the year stood
this, Mokoto says Mag- Magalies Water Board at R 169 million, up
alies Water Board will funds its operations from R 121 million
embark on aggressive from its own revenue from the previous year.
collection drive while and funds its capital The surplus will come
engaging municipali- projects from its own under pressure this
ties and departments resources, the Regional year due to the antici-
like Co-operative Gov- Bulk Water infrastruc- pated effect of Covid19
ernance and Traditional ture Grant from the De- on revenues. The sur-
Affairs about the need partment of Water and plus come from a total
to assist municipalities Sanitation as well as revenue of R834 mil-
meet their obligations. through partnerships lion, less expenses of
Photo by: Eddie Mtshweni
The Magalies Water Board
11.April 2021
R665 million. The ex-
Photo by: Eddie Mtshweni
penses includes R480
million on cost of water
sales and R96 million
in staff costs for the en-
tity’s 288 employees.
Magalies Water’s other
strategic goal is to in-
crease its footprint to
cover as much, if not
all, of the North West
province, from its cur-
rent base of Bojanala
District. Magalies Water
has also applied to ex-
tend its footprint in Lim-
popo to include Lepha-
lale, which includes the
Medupi power station,
which would be a lu-
crative customer.
The North West prov- Magalies Board Chairperson Pinky Mokoto
ince is currently ser-
viced by four water
boards, including Rand as being to strengthen gent areas. This means
Water and Sedibeng partnerships, including that it must supply the
Water, and in addi- negotiating to provide water through capped
tion to Magalies Wa- water in niche areas tariffs and to offer com-
ter. Mokoto says taking with clean energy sup- munity assistance, in-
over the other areas pliers who require ex- cluding supplying tanks
would entail a transfer tensive water use to op- in areas and schools
of assets at a reason- erate their technology. that are needy. Mag-
able cost for the trans- Mokoto points out that alies also provides com-
fer to be facilitated by a crucial part of the en- munity education on
national government tity’s social mandate is water use and conser-
supplying water to mu- vation. “We also assist
She now sees the enti- nicipalities located in communities through
ty’s next challenge mostly rural and indi the employment of lo-
12.April 2021
The Vaalkop Water Treatment Plant
cals in our infrastruc- mostly poor but require be sustainable without
ture projects” water the most. This is bailouts from govern-
why Mokoto sees the ment. “Magalies Water,
The biggest challenge expansion of Magalies as a self-funded entity,
that Magalies Water footprint as being crit- achieved its noble goals
faces is the shortage ical to address these without reliance on the
of funds for invest- issues through increase fiscus and through col-
ment in its R5 billion in revenue and access laboration with stake-
capital expenditure to water bodies. holders for the benefit
programme over the of our communities
next five years as well Mokoto emphasises in our supply areas”
as shortage of quality that it’s important for Mokoto says.
raw water to supply to state owned entities
communities who are like Magalies Water to
13.April 2021
World class facility to
keep water safe
Thebe Mabanga
Photo by: Eddie Mtshweni
Paki Dikobe Quality Assurance Officer
The Magalies Water and Wallmansthal to the beginning of 2019
Board owns a state-of- ensure that they com- in partnership with the
the-art scientific test- ply to South Africa’s Department of Water
ing laboratory in Brits, national water drinking and Sanitation has a
North West, which it standards, Sans 41. capacity to conduct 40
uses to ensure that The laboratory is also 000 tests annually. It
the water it supplies is set to provide services is a strategic asset for
clean and safe but also ranging from water Magalies Water Board
helps farmers and in- quality testing and and a revenue earner.
dustrial users in its sup- sampling, research and In the 2019/2020 fi-
ply area test their own monitoring of drinking nancial year, lab anal-
water samples. water supplies, process ysis brought in R 880
monitoring of water and 000.
The lab tests water from wastewater works and
Magalies Water Board environmental monitor- The laboratory has the
for treatment plants in ing of rivers and dams. capability to conduct
Cullinan, outside Pre- The facility, which was both chemical and mi-
toria, Klipdrift, Vaalkop formally launched at crobiology tests. For
14.April 2021
Photo by: Eddie Mtshweni
Magalies Water Board’s
Lerato Mabiletsa
chemical testing, water has capabilities to test sophisticated means.
is tested from the ba- the water for any oth- Water is commonly
sics of taste, smell, and er metals in may con- tested for E. Coli, which
colour. This used to be tain, even at ultra-low must be totally absent
done physically but is levels of concentration. from drinking water. It
now fully mechanised, The test for metal is is then tested for the
with specialised equip- conducted by spraying presence of Chlorophyl,
ment for each of the droplets through UV the green in leaves and
tests. lighting. algae, which is toler-
able in low amounts.
Water is then tested for In the microbiology sec- The most common
mercury, whose pres- tion of the laboratory, types are Chlorophyl A
ence is lethal for human water can be tested for and 565.
consumption. This test a wide range of micro- The lab can then test
is again on dedicated organisms using meth- for more than a dozen
specialised equipment. ods including filtration other types of microor-
The laboratory also but also through more ganisms such as
15.April 2021
Photo by: Eddie Mtshweni
Mmabatho Morake, Assistant Hydro
Parasitology Lab
coliforms, including Farmers also bring wa- and a B-Tech in Water
faecal coliforms and ter samples from bore Care. In a career span-
might be found even in holes for testing while ning some 21 years,
treated sewerage water, industrial users can she has worked for the
Salmonella as well as also make use of the Council for Scientific
yeast and moulds. The laboratory to test for and Industrial Research
laboratory also pos- water suitability for use (CSIR) and the Tshwane
sesses capability of an- as an input. University of Technolo-
alysing any discovered gy. Akinwekoni leads
microorganism down The laboratory is man- a team of bright sparks
to its genetic composi- aged by Dr Vhahan- and energetic water sci-
tion in separate isolat- gwele Akinwekomi, entists, most under the
ing, testing, and read- who is the Scientific age of 35. Paki Dikobe,
ing section for DNA to Services Manager. She the Quality Assurance
assess its origin and holds a BSc. Honours Manager at the lab says
prevalence in a water in Chemistry, a B-Tech they appreciate the im-
stream. in Project Management portance of producing
16.April 2021
Photo by: Eddie Mtshweni
Paki Dikobe Quality Assurance Manager
consistently accurate can be increased if re- hosts school tours to
results for Magalies quired. provide career guid-
Water and other cus- ance, along with the
tomers. The lab re- The lab also under- rest of Magalies Water
ceives weekly samples takes an outreach and Board.
from Magalies Water educational function. At
various water treatment its opening its hosted
plants and stations. 300 maths and science
Frequency of testing learners and regularly
17.April 2021 18.
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