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4th September 2008
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TCTA was responsible for the debt management and funding of the water transfer part of the project, as it delivered on its mandate for development of the infrastructure for phase 1b of the project in 2001.
TCTA acting CEO Johann Claassens stated that the agency and the government were currently in negotiations on key issues, largely based on the experienced gleaned from phase 1 of the project.
“The government decided some two years ago to undertake the feasibility study for phase two, and that feasibility study has now been substantially completed,” stated Claassens.
He explained that there were essentially two options available for the augmentation of the Vaal system, which was the key water supply system in South Africa. These were phase 2 of the LHWP, and the other was the Tugela-Vaal system.
“Now, for South Africa, we need to decide which is the best option, but we also need to take into account the expectations of the government of Lesotho, so these are the negotiations that are currently taking place, and I believe that the decision on which project should be implemented first, could be taken either later this year, or early next year,” Claassen said.
The decision would be based on which was the most economically beneficial, although ultimately, in time, both of the schemes would likely be delivered.
Revenue from the sale of raw water from the LHWP came to R2,08-billion, compared with R1,95-billion in the previous year. “The revenue was based on a bulk raw water tariff of R1,47/m3 (from R1,40/m3 in 2007), and the net higher revenue was owing to a 4,8% increase in the water tariff and a 2,01% increase in water volume,” said Claassens.
At its year-end results presentation in Johannesburg on Thursday TCTA reported that it had recorded a R1,59-billion operating surplus in the 2007/8 financial year – a 10% increase on the prior reporting period.
The company’s debt book stood at about R23-billion, which was made up of R19,8-billion for the LHWP, which was expected to be repaid by 2025; the Berg Water project (BWP) with R1,1-billion to be repaid by 2028, and R2,2-billion for the Vaal River Eastern Subsystem Augmentation Project (Vresap) to be repaid by 2029.
TCTA indicated that its funding requirements for the next three years were in the region of R3,92-billion, although this was not cast in stone as this sum was only for the already mandated projects of LHWP (R3,56-billion), BWP (R157-million) and Vresap (R203-million), and there were other projects which might be mandated in the interim.
TCTA said its operating expenses came down by R8-million and totalled R492-million for the reporting period.
BERG WATER PROJECT
Regarded as the company’s current flagship project, Claassens stated the project was completed in time and within budget, and was currently 100% full after a good rainy season in the Western Cape.
“The dam augments the supply of water to the City of Cape Town by 18%,” said Claassens, and added that the project had won two awards, one for engineering excellence, and one for environmental management in project execution.
VAAL RIVER EASTERN SUBSYSTEM AUGMENTATION PROJECT
One of South Africa’s largest water supply projects, the Vresap project would supply water from the Vaal dam to a diversion structure at Knoppiesfontein, from where it would be discharged into either the Trichardsfontein or Bosjesspruit dams, near Secunda, in order to supply water to Sasol and Eskom.
Water delivery was expected to start by December, and commissioning and testing had already started, said TCTA head of engineering David Keyser. A pipeline of 121-km has been laid, and a high-lift pump station and associated infrastructure, including a temporary pump station, had been substantially completed.
This project experienced delays at the start, and has since experienced further delays, meaning that the permanent abstraction works would only be completed by 2010. “The redesign of the cofferdam, because of the unexpectedly high water level of the dam during the early construction period, and the worse-than-expected geotechnical conditions at the abstraction works, was the main delay in the completion date,” said Claassens.
The price tag for this project has also lifted by R200-million, with an approved revised budget of R2,7-billion.
MOOI-MGENI TRANSFER SCHEME
In November 2007, TCTA received a new mandate from the Minister of Water Affairs and Forestry to fund and implement phase 2 of the Mooi-Mgeni transfer scheme. The project, involving the construction of a dam at the Mooi river near Rosetta in KwaZulu-Natal, and associated water transfer infrastructure, would cost an estimated R1,7-billion.
Water delivery was expected to start by mid-2012. “Currently, it is in its preparatory phase, the project will, when completed, yield 60-million cubic metres a year of water for supply, and on sale by the KwaZulu-Natal based Umgeni Water to its municipal customers,” said Claassens.
This project did not yet feature as one of the projects on the TCTA three-year funding requirement budget.
Edited by: Mariaan Webb
