BUSINESS PLAN 2016/17

Transcription

1 BUSINESS PLAN 2016/17 FINAL APPROVED BY BOARD 25 APRIL 2016 Version: 25 April 2016 Page 1

2 Providing Water. Providing Life. JOHANNESBURG WATER BUSINESS PLAN SIGN-OFF PAGE Managing Director: Johannesburg Water Mr Lungile Dhlamini... Date Member of Mayoral Committee: Environment, Infrastructure & Services Department Councillor Matshidiso Mfikoe... Date Version: 25 April 2016 Page 2

3 List of Acronyms AMI Advanced Metering Infrastructure MFMA Municipal Finance Management Act, 2003 AET Adult Education and Ml Megalitres Training BBBEE Broad Based Black MNF Minimum Night Flow Economic Empowerment BCM Business MOE's Municipal Owned Entities BI Business Intelligence MTEF Medium, Term Expenditure Framework BP Business Plan NGO Non- Governmental Organisation BSC Balanced Scorecard NQF National Qualification Framework BTE Biogas to Energy NRW Non-Revenue Water CAPEX Capital Expenditure OHS Occupational Health & Safety CDS Common Distribution System OIDC Operations Integrated Dispatch Centre CEPE Civil Engineering O&M Operation and Maintenance Potential Emerging CIDB Construction Industry PIP Priority Implementation Plan Development Board CoJ City of Johannesburg PWD People with Disability CRC Current Replacement RPL Recognition of Prior Learning Cost CSA Capacity Support Agent RUL Remaining Useful Life DIIR Disabling Incident Injury SANS South African National Standard Rate DR Disaster Recovery SCM Supply Chain Management DRC Depreciated Replacement SDA Service Delivery Agreement Cost EAM Enterprise Asset Management SDBIP Service Delivery Budget Implementation Plan EE Employment Equity SDG Sustainable Development Goal ERM Enterprise Risk Management SHSUP Sustainable Human Settlement Upgrade Programme EPWP Expanded Public Works SLA Service level Agreement Programme FSW Field Service Worker SMART Specific, Measurable, Achievable, Relevant & Timebound FY Financial Year SME Small Medium Enterprise GDS 2040 Growth & Development Strategy 2040 SMME Small Medium and Micro-sized Enterprise H/H Households STS Standard Transfer Specification IAMP Infrastructure Asset SWM Smart Water Meter management Plan IT Information Technology SWOT Strengths, Weaknesses, Opportunities & Threats ICT Information communication Technology TCTA Trans Caledon Tunnel Authority Version: 25 April 2016 Page 3

4 IDP Integrated Development UFW Unaccounted For Water Plan ISO International Organisation of Standardisation URWH Urban Rainwater Water Harvesting JW Johannesburg Water UN United Nations KPI Key Performance VIP Ventilated Improved Pit-latrine Indicator l/c/d Litres per capita per day WC-WDM Water Conservation & Water Demand Management WWTW LED Light-emitting Diode WWTW Wastewater Treatment Works LoS Level of Service Version: 25 April 2016 Page 4

5 TABLE OF CONTENTS EXECUTIVE SUMMARY... 7 CHAPTER 1: CORPORATE PROFILE AND INTRODUCTION ABOUT JOHANNESBURG WATER PESTEL ANALYSIS SWOT ANALYSIS INTRODUCTION KEY ACHIEVEMENTS AND HIGHLIGHTS CHAPTER 2: GAME CHANGER COMMUNICATION AND DEVELOPMENT APPROACH TO COMMUNICATION COMMUNICATIONS CUSTOMER CARE STAKEHOLDER MANAGEMENT CHAPTER 3: FLAGSHIP PROGRAMMES JOZI@WORK GREEN AND BLUE ECONOMY CORRIDORS OF FREEDOM CHAPTER 4: ACCELERATION OF SERVICE DELIVERY SERVICE DELIVERY PROVISION OF BASIC SERVICE WATER PROVISION OF BASIC SERVICE SANITATION CHAPTER 5: PRIORITY IMPLEMENTATION PLANS AND OTHER DAY-TO-DAY OPERATIONS PRIORITY IMPLEMENTATION PLAN, (PIP) DAY-TO-DAY OPERATIONS CHAPTER 6: SUSTAINABLE DEVELOPMENT GOALS CHAPTER 7: CAPITAL INVESTMENT PROGRAMME PROJECT: WATER PIPE REPLACEMENT WWTW INFRASTRUCTURE UPGRADE AND RENEWAL SEWER NETWORK PIPE REPLACEMENT AND UPGRADING PROGRAMME WATER NETWORK UPGRADING STORAGE CAPACITY AUGMENTATION - RESERVOIRS CHAPTER 8: RISK AND COMPLIANCE MANAGEMENT CHAPTER 9: FINANCIAL PLAN CHAPTER 10: MANAGEMENT AND ORGANISATIONAL STRUCTURES HUMAN CAPITAL ATTRITION SKILLS DEVELOPMENT RECRUITMENT EMPLOYMENT EQUITY CHAPTER 11: SUPPLY CHAIN MANAGEMENT Version: 25 April 2016 Page 5

6 11.1 IMPROVED BUSINESS PROCESSES ENTERPRISE AND SUPPLIER DEVELOPMENT IMPROVE CONTRACT MANAGEMENT AND GOVERNANCE OF SCM CHAPTER 12: INFORMATION, COMMUNICATION AND TECHNOLOGY ANNEXURE A: SUMMARY OF JOHANNESBURG WATER CAPITAL PROGRAM ANNEXURE B: ORGANOGRAM ANNEXURE C: FINANCIALS ANNEXURE D: ANNUAL CORPORATE BALANCED SCORECARD ANNEXURE D: QUARTERLY TARGETS ANNEXURE D: KPIS CALCULATION AND DEFINITIONS Version: 25 April 2016 Page 6

7 Executive Summary Johannesburg Water (JW) has developed the 2016/17 Financial Year ( FY) Business Plan (BP) with an approach of completing programmes that were developed in the 2012/16 Integrated Development Plan (IDP) as well as the new programmes developed in the subsequent years in particular what now is termed the House model. The stakeholder relations and communication have been elevated in alignment with the City of Johannesburg (CoJ) where they are now regarded as game changers. The BP has taken into account the CoJ 10 priority programmes, in addition to the 10 priorities, JW will continue to focus on the implementation of CoJ flagship programmes, which form part of the strategic agenda of the city namely the House. The flagship programmes are named below: Corridors of Freedom Smart City Jozi@Work Green and Blue Economy The enablers to achieve the set outcomes is the capital and operating budgets of R737 million and R612 million respectively as per Annexure C. It should however be indicated that the aforementioned budget were rebased from the three-year approved budget. The total average tariff increase for all services provided would be approximately 13.9%. A new water restriction tariff has been introduced in the current financial year. The aim of these tariffs is to encourage residents to save water. The tariff is applicable for consumption over 20kl per month JW is well resourced with a workforce of 2540 to respond to service delivery imperatives and the Human Resources Department supports the business in achieving its plans through a number of strategic initiatives namely Skills Development, Recruitment, Employment equity, Talent Management and Succession Planning. The 2015/16 financial year (FY) has seen a greater focus on Information, Communication and Technology (ICT) within the company which has led to a review and development of a new ICT strategic plan to support the company in the next three years. A Corporate Governance Framework has been developed with reference to King III and the Municipal Corporate Governance of Information and Communication Technology Policy. The purpose of the Framework Policy is to institutionalise the corporate governance of ICT in JW. Whilst there are many governance mechanisms in place in JW, the framework will ensure ICT investments are better aligned with the company s business objectives. The year will see the delivery of existing projects coming to realisation and a number of initiatives centred on improved communications with citizens and utilisation of technologies to deliver business process efficiencies. JW has adopted an entity wide risk management approach, which has been rolled out at a strategic level, and across all business units for identification of strategic, operation, fraud and compliance risks. The company will continue to mitigate the seven strategic risks to ensure achievement of objectives in this plan. Version: 25 April 2016 Page 7

8 The plan contains a number of programmes which are vehicles to deliver the objectives that the company is committing to. The Annual Corporate Balanced Scorecard in annexure D is a tool used to measure performance at strategic level; it is underpinned by Service Delivery Budget Implementation Plans (SDBIP) for each department whereby performance of these programmes at operational level is being managed. Version: 25 April 2016 Page 8

9 Chapter 1: Corporate Profile and Introduction 1.1 About Johannesburg Water Johannesburg Water SOC Ltd (JW) was incorporated on 21 November 2000 and commenced business on 1 January JW is a municipal entity, wholly owned by the City of Johannesburg (CoJ) and is mandated to provide water and sanitation services to the residents of Johannesburg. The company s strategic objectives are linked to the shareholder objectives through the Service Delivery Budget Implementation Plan (SDBIP) and cluster plans whereby JW is assigned to the Sustainable Services cluster. In addition, the relation between the company and the shareholder is governed through the Service Delivery Agreement (SDA) which is reviewed from time to time. The entity provides water and sanitation services to an area stretching from Orange Farm in the south to Midrand in the north, Roodepoort in the west and Alexandra in the east. The company operates within operating regions (as depicted in the map on Page-6 below), with ten network depots and six wastewater treatment plants and employs people. The entity supplies 1,574 Ml/day of potable drinking water, procured from Rand Water, through a distribution network of 11,896 km, 116 operational reservoirs and water towers, 35 water pump stations. The spent wastewater is then collected and reticulated via 11,786 km of wastewater network, 37 sewer pump stations and treats 973 Ml/day of sewage at its six wastewater treatment works of which two of its biogas-to energy plants which convert methane gas to energy are located. Vision Johannesburg Water s vision is to be a world class African water and sanitation utility. Mission Johannesburg Water s mission is to provide all the people of Johannesburg with access to quality water and sanitation services by: delivering a sustainable, affordable and cost effective service upgrading services in marginalised areas creating a customer-focused culture values and develops its employees to build a sustainable capacity safeguarding the health and safety of Johannesburg Water employees, contractors and the general public improving the protection of the environment managing assets and leveraging on technology to enhance the level of security and quality of supply Version: 25 April 2016 Page 9

10 Organisational Values Teamwork Accountability Cost Effectiveness Communication Customer Service 1.2 PESTEL Analysis The situational analysis as undertaken in table 1 below helps to identify the key external (macro environment level) forces that might affect JW, identify the external factors that may change in the future, and also to understand the overall picture surrounding the company. Table 1: PESTEL Analysis Political Economical Social Technological Environmental Legislative Alignment Unemployment Population Rate of Quality, Enforcement to National Levels are growth rate technological environmental of municipal developme high is change standards by-laws nt Plan Rising cost of increasing Research and Growth in Education of Formulation living and new Consumer development water Demand consumers of tangible price engagemen Basic Acid Mine on recent outcomes increases. ts infrastructure Drainage and revised by end of New taxes Consumer level by-laws political imposed awareness Communication Compliance term. Water Tariffs Immigration infrastructure to Acts needs, create and Access to new relevant to sustainability emigration technology JW s whilst rates business affordable to lower classes Labour costs are rising Version: 25 April 2016 Page 10

11 External factors Internal Factors 1.3 SWOT Analysis The SWOT analysis, as reflected in table 2 below, guides JW to identify the positives and negatives inside the organisation and outside of it, in the external environment. The analysis has been undertaken to develop full awareness of JW s current situation to strengthen both strategic planning and decisionmaking. Table 2: SWOT Analysis Strengths Industry Knowledge Committed Personnel Disaster management mechanism Risk Resilient Weaknesses Aging Workforce Consumer engagements Inadequate integrated planning Management Accountability Opportunities New Technology Good Governance Structures Threats Rising water demands Cash flow and liquidly problems Staff productivity levels as a result of e.g.( country economic status, etc) Aging infrastructure Version: 25 April 2016 Page 11

12 1.4 Introduction The company s strategic objectives are linked to the shareholder objectives through the Service Delivery Budget Implementation Plan (SDBIP) and cluster plans. In addition, the relationship between the company and the shareholder is governed through the 30-year Service Delivery Agreement (SDA) which is reviewed from time to time. It is against this backdrop that this plan has been developed in alignment with the Integrated and Development Plan (IDP) as well as the House model which is depicted in figure 1 below. Figure 1: The "House" Model In 2011/12 a new cluster approach was put in place. This was intended to cover the outcomes as stated in the Joburg 2040 Strategy and to provide political leadership, guidance and oversight towards implementation of coordinated and integrated service delivery. The following four clusters were put in place: Sustainable Services, Economic Growth, Human and Social Development and Good Governance respectively. JW is assigned to the Sustainable Services cluster and focus areas of this cluster are indicated in figure 2. Version: 25 April 2016 Page 12

13 Figure 2: CoJ Clusters Resource management of water & energy Sustainable human settlements Mass public transport and nonmotorized transport Climate change resilience Waste minimisation Informal settlement upgrade Activist government Job intensive economic growth Small business, entrepreneurship and informal economy Competitive support Smart City Financial sustainability Sustainable services Economic growth Clean, accountable and productive ggovernance Civic collaboration and participation Citizen and customer care Governance Human and social development Cohesion and inclusion Community safety HIV/AIDS and non-communicable diseases ECD, ABET and learning Food security and poverty support The work of the Sustainable Services cluster intervenes directly in the physical adaptation and transformation of the CoJ, with the prime objective of progressively creating a metropolitan environment that is resilient, livable and sustainable both for Johannesburg and the greater city-region of which it forms part. This mandate is captured in the outcomes of the Joburg 2040 Strategy, and its related outputs. Version: 25 April 2016 Page 13

14 1.5 Key Achievements and Highlights A key focus for JW over the past years has been planning for a sustainable future by securing water needs, investing in infrastructure to service growth and demand, reducing our carbon footprint, reduction of water losses and managing water demand. Table 3 below reflects the highlights of achievements and targets of for 2014/15 FY. Table 3: Past Performance Highlights Against s IDP Programmes /Priorities Developmental Service Delivery Key Performance Indicator 2014/ /15 Actual 2015/ /16 Q2 Actual Total BBBEE procurement recognition spent from Qualifying Small Enterprises Exempted Micro Enterprises 135% 117% % No of jobs created based on EPWP Reliable Services Water burst Restored within 48 hours as a ratio of jobs completed Sewer blockages cleared within 24 as a ratio of jobs completed 95% 81% 95% 82.30% 95% 93% 96% 93.35% Effluent Quality 97% 92% 97% 79.26% Basic services *Informal Household with access to water -LOS1 *Informal Household with access to sanitation- LOS % 94.01% 96.14% 94.01% 44.11% 44.60% 46.37% Demand Side Management % NRW 35% 35.8% 32% Note: * denotes the calibrated figure in relation to census Version: 25 April 2016 Page 14

15 Chapter 2: Game Changer Communication and Development 2.1 Approach to Communication Communications has been agreed as the most important game changer and there is a need for a radical Shift in how communications is conducted within the organisation. Johannesburg Water has become communication-centric in how everyone does his or her work. Johannesburg Water strives for close collaboration with the political principals to support them to fulfil their responsibility to communicate with the public effectively. Johannesburg Water advocates truthfulness, accuracy, honesty, and reason as essential to the integrity of communication and has developed a strategy as indicated in table 4 below to enable it to implement activities that will:. Improve the awareness and appreciation by the citizens regarding the activities and services of the company; Improve the trust and confidence in the company by its customers based on real service delivery experiences and perceptions; help the company achieve its organisational objectives; engage effectively with stakeholders; demonstrate the success of our work; ensure citizens understand what we do; change negative behaviour and perceptions where necessary; To articulate a singular view of the CoJ Proactively create awareness about JW s Vision & Strategy & Programmes in line with City Priorities; Use the media to educate residents on water conservation and reflect contributions made to service delivery through infrastructure upgrades and renewals; and Mobilise the residents of the city to support JW programmes and pay for service. 2.2 Communications The organisation has identified key stakeholders who drive the brand awareness, perceptions, and customer experiences that affect the reputation of the organisation. The communication with various stakeholders across the city and be improved. The different communication platforms that JW use prove to be popular and effective. The website has an average of 2 million hits per month as the most of the users accessing the latest information on service interruptions update. The website will be made more interactive to attract even more regular users. Version: 25 April 2016 Page 15

16 The same applies to the social media platforms. The entity will increase the engagements with the customers from forty to seventy per day. The anticipated number of followers on Twitter by the end of the 2016/17 FY should be Continued public education on the correct use of sanitation and water infrastructure will continue in 12 areas with a target of persons reached. The success of this intervention should have a bearing on the reduction of sewage blockages. Similarly the campaign to reduce the amount of water used in ten high water use suburbs should result in a ten percent reduction. 2.3 Customer Care Customer Care forms an intrinsic part of JW business in that feedback is received on the service provided to customers before, during and after using the services. The annual Customer Satisfaction Survey to determine customer satisfaction levels and identify key drivers for work on customer complaints and issues emerging from the survey is the main tool used to receive the feed. As part of customer care company will also ensure notification of customers on planned and unplanned service disruptions via social media, the website and sms notification. This will be complimented with update via the media and ward councillors. 2.4 Stakeholder Management The organisation is committed to honesty and integrity in developing effective relationships with our stakeholders. In orders to serve these stakeholders in an ethical and social manner, JW has adopted the model of corporate social responsibility. The organisation will improve stakeholder consultation by having semester forums with key stakeholders to inform and educate them about various services that JW provides. Regular engagements with communities are imperatives and monthly educational tours to JW facilities will be implemented. Table 4: Communications and Stakeholder programmes Priority Objective Customer and Stakeholder Perspective Project Performance Indicator Annual 30 Jun 2017 Customer Satisfaction Survey Customer satisfaction level index on water & sanitation related services 70% All Regions Version: 25 April 2016 Page 16

17 Priority Objective Water Conservation & Water Demand Management Project Performance Indicator Annual 30 Jun 2017 Increased bulk sms consumer database Customer engagement Increase followers on social media Stakeholder engagement with Priority Stakeholders Campaigns to reduce water demand and abuse of infastructure Number of customers on SMS service interruptions notification database increased Engagement of clients on social media Regions All regions 70 engagements per day Number of followers on Twitter followers Meetings with Top 100 and Effluent User customers Contact sessions with Ward Councillors Semester Monthly Public Education and 15% awareness on the correct use of toilets in targeted areas reduction sewage blockages Litres/person/day campaign 10% reduction water use in in All regions All regions All regions To be determined in July 2017 To be determined in July 2017 Version: 25 April 2016 Page 17

18 Chapter 3: Flagship Programmes 3.1 aims to address the hardships caused by unemployment and very low-income employment. The sufferings caused by unemployment, along with the social devastation wrought by poverty and chronic illnesses such as AIDS, constitute South Africa s most pressing social security concerns. Not far behind them, however, is the misery of the poverty associated with low-wage, precarious employment, like much of that in the informal sector. Those among the unemployed who are destitute must be a priority as well as the working poor when rolling capital projects in these communities. The programme will mainly focus on 5 programmes being Pipe Replacement Contractor Development, Retrofitting and Leaks Repairs; Operation and Maintenance of Water and Sewer Infrastructure, War on Leaks and Cistern project. These programmes will be rolled out completely different from the conventional way in that they will also demonstrate a shift of doing things within the organisation by adopting methodologies that are inclusive to the communities where projects are being rolled are adopted. In the 2016/17 FY, JW has planned to support a total of 166 Small Medium Enterprises (SMEs) while decent jobs will be created by the same period. It is envisaged that a total of R177 million of capital budgets and R92 million of operational budgets will be spent on Jozi@Work projects in 2016/17 FY. The programme will target unemployed youth and women. Table 5 provide overall Jozi@Work plan per each programme. Brief summary detail of each programme is provided below. Table 5: Jozi@Work Plan Jozi@Work Wave-Two Outputs (2016/17 FY) Jozi@Work programme No. of Entities Entities owned by Youth Entities owned by Women No. of Jobs Capex Budget (R m) Opex Budget (R m) Pipe Renewal Nil All Region O&M Nil 15 A,D,E Leak Repairs & Retrofitting War Leaks Cistern Project On and G Nil D and G Nil 30 All Nil 40 D Version: 25 April 2016 Page 18

19 Wave-Two Outputs (2016/17 FY) Installation of Nil 7 C and G Basic Services Total budget Pipe Replacement Contractor Development Programme In its endeavour to reduce unemployment within the CoJ, JW did embark on learner contractor development programme in partnership with National Department of Public Works. The programme targeted a total of 65 small micro enterprises (SMEs) with Construction Industry Development Board (CIDB) grading of 1 Civil Engineering Potential Emerging (CEPE). The programme intention is to train all 65 SMEs over three year period so that they can elevate their CIDB grading to 4 CE upon the exit from the programme. While recruitment of learner contractors was done in 2014/15 FY, construction did commence in 2015/16 FY with 1 st Trial contract. The SMEs will be allocated and implement their second projects in 2016/17 financial year. Water and Sewer Networks Repairs and Maintenance JW do experience a large number of pipe failures, blockages and bursts on both water and sewer mains especially hotspot areas like Ivory Park, Alexandra, Diepsloot, Orange Farm and sections of Soweto. As a result of high level of water pipe burst and sewer pipes blockages JW run the risk of not adhering to its customer charter with regards to response time. In an effort to mitigate the identified risk, the company intends to expand its repairs and maintenance programme that has been implemented in Alexandra Township always referred to as Alex Model. The programme intends to appoint local as and when contractors with the necessary expertise to attend to infrastructure failures on the water and sewer infrastructure on behalf of the company. The purpose of this programme is to ensure that problems are attended timeously, with the added benefit of local business opportunities which leads to addressing unemployment in these targeted areas. The programme intends to support 25 SMEs contractors in 2016/17 FY from the local communities with relevant CIDB grading. It is anticipated that 175 decent jobs will be created. Installation of Basic Services By June 2015 CoJ water and sanitation backlog were and households respectively. 100% of all these backlogs are in informal settlements, where poverty and unemployment is high. Version: 25 April 2016 Page 19

20 JW will use this programme to contribute in creating decent jobs and improve the livelihood of the masses trapped in poverty. Through this programme JW intend to appoint local SMEs to install communal stand pipes and Ventilated Improved Pit-latrines (VIPs) throughout the city. Based on the allocated budget, it is envisaged that for water the backlog will be cleared within three years starting in 2016/17 FY, while it will take longer on sanitation. Local contractors will be assisted by Capacity Support Agents (CSAs), who will be appointed by JW as mentor. It is anticipated that within the next three years 11 local SMEs will be appointed and 110 decent jobs will be created. It should however be noted that the number of local SMEs and jobs to be created will increase if funding increases. War on Leaks War on Leaks programme was launched on the 28 August 2015 in Eastern Cape Province by the President of the Republic of South Africa. The programme has the following main objectives: Reduce high level of water losses and create awareness to the public on how to conserve and save water and, Train artisans and plumbers over three year period through repairing of leaks. In an effort to curb high level of water losses within the CoJ, JW initiated Urban Rainwater Water Harvesting (URWH) focusing only at schools in 2014/15 FY. However through intensive assessment of URWH it was decided that War on Leaks programme will be more beneficial in reducing water losses. JW War on Leaks programme will focus on repairing leaks at schools within the city. The programme commenced in the 2015/16FY and has targeted a total of 500 schools for the FY. In 2016/17 FY a total of 600 schools will be covered. 24 local SMEs will be sourced to implement the project. It is envisaged that the programme will create 144 decent jobs. Sourcing of all SMEs will be done through Jozi@Work regional steering committees. The appointed SMEs will be trained by the CSAs. Jozi@Work in Other Services within JW ed subcontracting will see the main appointed contractor on selected capital projects being utilised to empower SMEs that would have been procured through the Jozi@Work initiative. Unbundling of the chemical toilet contracts has also been identified as potential job creator, whereby the current model will be phased out and contracts will be re-organised to include more suppliers at various categories of supply. It is anticipated that more local contractors will benefit as opposed to the current arrangement whereby less than 5 suppliers have been appointed. Version: 25 April 2016 Page 20

21 In order to increase job creation opportunities reinstatement of civil infrastructure in areas not used by vehicles, standpipe maintenance in informal settlements and water infrastructure chamber maintenance is also identified as potential job creators through initiatives. This will be implemented by appointing main specialised contractors as CSAs that will then in turn appoint, supervise and mentor local contractors. These projects should support a total of 18 (SMEs) from the local communities. 3.2 Green and Blue Economy The organisation is committed to protect the environment by implementing stricter standards and limit the amount of pollution allowed, and can try to heal the environment and do what is necessary to restore it back to a balanced state. The Green and Blue economy are methods aimed at resource preservation. CoJ is focusing on building a greener city with an intention of reducing carbon emissions, minimising waste impacts and protection of the natural environment and related ecosystem goods and services. While rolling these projects sustainable jobs will be created. Cistern Project On average South Africans have 6 litres cisterns in their homes, while old townships have even bigger cisterns (9 litres). The project intends to replace 6-9 litres cisterns with 4.5 litres throughout the city. In 2015/6 FY cisterns will be replaced in Soweto, while in 2016/17 FY the project will be rolled-out to other areas within the city(e.g. Orange Farm, Alex). The programme intends to use local SMEs who will be sourced through Jozi@Work steering committees. In 2016/17 FY 14 SMEs will be appointed and 210 jobs will be created. It should be noted that over three year period 64 local SMEs will be supported while jobs will be created. JW will also commence with drop a block initiative in 2016/17. This initiative involves placing a block in a cistern to reduce volume of water that is used per flush. This requires cisterns of more than 7 litres wherein a block will be placed to reduce the volume of water by 2 litres. In-pipe turbine JW is implementing a Design, Build, Operate and Maintain project of an in-line pipe turbines plant to generate 3 MW electricity on Linbro PRV Station site within the CoJ The project is a two phases approach, with phase one expected to be the delivery of 0.2 MW by the end of April 2017 and the second phase being the delivery of the balance (2.8 MW) beyond June The operation and maintenance agreement will be a performance based and is envisaged to run for three years commencing from the successful completion and commissioning of the plant. Version: 25 April 2016 Page 21

22 Biogas to Energy The initial Biogas to Energy installation was completed in 2012 at Northern wastewater treatment works (WWTW) and is capable of producing 1.1MW of power for the wastewater treatment plant, around 12.5% of the wastewater plant s power requirements. The installation included an upgrade of four existing anaerobic digesters, installation of digester gas conditioning and compression system, upgrade of the gas storage tank and installation of three Combined Heat and Power (CHP) units of 376kW electrical power (kw) each. The capacity of the installation is 1.2 MW-e renewable electricity and that can reduce t CO₂ emissions. Since inception 6,832MWh electricity was generated with 7,037 tons of CO₂ Greenhouse gas offset. The Northern WWTW biogas to energy project could be expanded to around 4.5 MW supplying 50-60% of the total plant energy requirement. This expansion can be realised as soon as a project for refurbishment of existing anaerobic digesters which is currently taking place is completed. Driefontein WWTW was upgraded to a 55Ml/d facility with the installation of digestion as part of the upgrade. The second biogas to energy installation was part of this upgrade and included two CHP units of 376kW electrical power (kw) each. Commissioning of this CHP plant is planned for middle Performance of the these plants (Northern Works and Driefontein Works) will be closely monitored in 2016/17 FY in order to give an indication of future installations at Bushkoppie, Goudkoppies and Olifantsvlei Works. This expansion is planned and will follow once the digester capacity and optimisation on sludge thickening at these Works are installed. The digester upgrade commenced in the 2015/16 FY at Olifanstvlei and should be completed in the 2017/18 FY at Goudkoppies. Eco Buildings All new Johannesburg Water buildings will be based on eco designs and materials. Energy efficient fittings like solar power geysers and Light-Emitting Diode (LED) lights will become standard requirements of the new buildings. Johannesburg Water is in the process of compiling a tender document for refurbishment of 22 depot and wastewater treatment sites over the next 3 financial years. Retrofitting of these buildings with energy efficient fittings is included in the brief of the refurbishment project. 3.3 Corridors of Freedom The Corridors of freedom is one of CoJ special programmes that is design to correct the imbalances of the past prior to A corridor of freedom programme is geared toward ensuring that high density human settlements are developed within the CoJ. Version: 25 April 2016 Page 22

23 This initiative will ensure that people come closer to the City or working zones, while also being provided with mobility through public transport (Rea-vaya). In support of corridors of freedom JW has identified various capital projects that are geared to support the expected population and economic activities within the corridor. The company will provide additional water supply infrastructure and sanitation services capacity to support higher density settlements. The initial plan was to commence with projects construction in 2015/16 FY after corridors needs analysis were done in 2014/15 FY. However due to rebased budget, only detailed designs have started in 2015/16 FY and construction work will commence in 2016/17 FY. The summary below provides detailed projects per corridor which JW will implement in support of the programme, while Table 6 provides project impact and potential return on investments. Turffontein Corridor It should be noted that construction work in this corridor will commence in 2016/17 FY as detailed design would have been done in the 2015/16 FY. Under Turffontein corridor JW will implement the following projects. Construction of 2.2 kilometres of water mains upgrade. Construction of 2.5 Megalitres Forrest Hill water tower and pump station. Upgrading of approximately 5.1 kilometres of collector sewers. Louis Botha Corridor JW has identified the following projects to be implemented in support of Louis Botha corridor of which its implementation will start in 2016/17 FY: Construction of pressure management zones Construction of 37 Megalitres Linksfield reservoir Construction of 1.4 kilometre of bulk water mains upgrade. Upgrading of 5.4 kilometres of collector sewers. Empire Perth Corridor With Empire Perth the following project will be implemented: Construction of 7.2 kilometres of water mains upgrade 26 Ml reservoir and a 2 Megalitres Hurstill/Brixton water tower. Upgrading of 5.1 kilometres of collectors sewers. Version: 25 April 2016 Page 23

24 Table 6: Corridors of Freedom Projects Corridor Programme Programme Impact Return on Investments Water Additional water demand of kilolitres/d and storage, bulk Improved infrastructure to support additional Upgrade: upgrading of R 99.7 million for extra population of households equivalent within the corridor Louis Botha Sewer Upgrades: Meet additional sewer generation of kilolitres/d through collector sewer to the value of R 28.2 million Improved infrastructure to support additional households equivalent within the corridor Empire Perth BWW Water Upgrades Northern Works current capacity of 460 Megalitres can accommodate additional 26 Ml to be generated from the corridor Meet additional water demand of kilolitres/d and storage including bulk upgrading to the value of R million to support projected additional population of Treatment service continuity Improved infrastructure to support additional households equivalent within the corridor Sewer Upgrades Meet additional sewer generation of kilolitres/d through collector sewer to the value of R 8.4 million Improved infrastructure to support additional households equivalent within the corridor Bushkoppies Wastewater Treatment Works Bushkoppies Works capacity of 248 Megalitres can accommodate additional 20 Megalitres generated from the corridor Improved infrastructure to support additional households equivalent within the corridor Turffontein Water Upgrades Sewer Upgrades Goudkoppies Wastewater Treatment Works Meet additional water demand of kilolitres/d and storage including bulk upgrading to the value of R 31.8 million to support projected population of Meet additional sewer generation of kilolitres/d through collector sewer upgrading to the value of R 12.4 million Goudkoppies Works capacity of 130 Megalitres can accommodate additional 16 Megalitres generated Improved infrastructure to support additional households equivalent within the corridor Improved infrastructure to support additional households equivalent within the corridor Treatment service continuity Version: 25 April 2016 Page 24

25 Chapter 4: Acceleration of Service Delivery 4.1 Service Delivery The foundation of the House model is the core mandate, which relates to acceleration of service delivery to meet service delivery standards. Within JW the core mandate refers to all initiatives that support the achievements of the flagship programmes as well as the roof of the House, Communication and Development such as operations, and all organisational wide support functions. JW will proceed with implementation of productivity initiatives. The impact of this programme will be improvement in response time, service delivery and increase in the number of jobs completed by each operation team per day. The water team is expected to complete 6 jobs per team per day and the sewer teams 5 jobs per team per day 4.2 Provision of Basic Service Water Basic water service (LoS1) in informal settlements has been provided to of the households with a coverage of 94.01%. These means that the remaining households are being provided water services at nominal service (water tankers) and require to be upgraded to LoS1. The plan for 2015/16 FY is to provide access to basic water to households thereby increasing the coverage to In 2016/17 FY based on the allocated budget the plan is to upgrade households to LoS1 (basic service level) and will result in coverage being increased to which is equivalent to 97.84% in informal settlement. 4.3 Provision of Basic Service Sanitation Basic sanitation service (LoS1) in informal settlements has been provided to of the household equivalents with a coverage of 44.60%. The balance of households (backlog) are being provided with a nominal service (chemical toilets) and they require to be upgraded to LoS1. During 2015/16 FY an additional households are being upgraded to Los1 (basic service level) which will result in coverage being increased to which is equivalent to 46.38% in informal settlement. In 2016/17 FY, the plan is to upgrade 600 households to LoS1 (basic service level) and this will result in the coverage being increased to which is equivalent to 46.80% in informal settlement. The low coverage is attributed to budget reduction from R37 million to R7 million. Version: 25 April 2016 Page 25

26 Chapter 5: Priority Implementation Plans and other Day-to-day Operations 5.1 Priority Implementation Plan, (PIP) PIP: Resource Sustainability IDP Programme: Water Demand Management Project: Soweto Infrastructure Upgrade and Renewal Project Retrofitting & Leaks Repair The project objective is to reduce the current high level of Non-Revenue Water (NRW) through the upgrading and renewal of the existing water reticulation pipelines (secondary mains), retrofitting of internal property leaks, installation of water meters and educating consumers on water conservation. In 2016/17 FY, JW intends to complete the remaining scope of Soweto Infrastructure Upgrade and Renewal project. Upon completion a total of properties will be retrofitted and meters installed which include the replacement of old water mains. The Soweto revenue collection has improved from R 3.5 million in 2012/13 FY to R 9.1 million by end of June The company has planned to expand this project to other areas within the city, which include Orange Farm, Eldorado Park, Noordgesig, Westbury, Alexandra, and Ivory Park. The investigation has commenced in these areas with detail designs expected to be completed in 2016/17 FY. This will be followed up by the implementation of the project on a phased approach with secondary mains (replacement and upgrades) being the first phase to be followed by retrofitting and metering. The roll-out of this project will be through Jozi@Work programme whereby local contractors will be appointed to execute the work and formal training and mentoring will be provided which includes guidance on registration with construction industry development board. The project will also focus on installation of Standard Transfer Specification (STS) prepaid Meters so to enhance the revenue, reduce billing errors and improve customer relations. Table 7 below indicates programmes that are aligned to the SDBIP and the performance targets of these programmes. The table indicates the baseline at the beginning of the IDP term, the last audited outcomes of 2014/15 and targets for 2015/16 and 2016/17 respectively. Version: 25 April 2016 Page 26

27 Table 7: SDBIP Implementation Plan Key Priority Financial Sustainabili ty & Resilience Long term impact (Joburg 2040 related output) Financial sustainabl e and resilient city IDP program me Water Demand Managem ent Key Performan ce Indicator (2013/16) % Non- Revenue Water (NRW)\red uced to % Bad debts reduced to Audit opinion achieved % meters correctly read on a monthly basis, per CoJ s billing system Baselin e (2012/1 3) Actual 2014/15 financial year 40.7% 35.8% NRW reduced to 18 % Bad debts reduced to Unqualif ied audit 91% % meters correctly read on a monthly basis, per CoJ s billing system 19.5% Bad debts reduced to Unqualifi ed Audit Opinion 90.9% meters correctly read on a monthly basis, per CoJ s billing system 2015/16 financia l year 32% NRW reduced to 12% Bad debts reduced to Clean Audit Opinion 95% % meters correctly read on a monthly basis, per CoJ s billing system 2016/17 financia l year 30% NRW reduced to 16.5 % Bad debts reduced to Clean Audit Opinion 95% % meters correctly read on a monthly basis, per CoJ s billing system 2016/17 Budget (per programme) Capex R,000 Opex R, % NRW reduced to Nil 16.5% Bad debts reduced to Nil 2016/17 target (Tangible, measurable targets that fulfil requirements of being SMART) Q1 Q2 Q3 Q4 Annual target N/A 98% meters correctly read on a monthly basis, per CoJ s billing system 31% NRW reduced to 16.5% Bad debts reduced to Annual target 98% meters correctly read on a monthly basis, per CoJ s billing system 30.5% NRW reduced to 16.5% Bad debts reduced to Annual target 98% meters correctly read on a monthly basis, per CoJ s billing system 30% NRW reduced to 16.5% Bad debts reduced to Clean Audit Opinion 98% meters correctly read on a monthly basis, per CoJ s billing system Version: 25 April 2016 Page 27

28 Key Priority Sustainable Human Settlement Upgrade Programme Long term impact (Joburg 2040 related output) Unlock Socio economic developm ent IDP program me Quality services Key Performan ce Indicator (2013/16) % sewer blockages cleared within 24 hrs of notification Baselin e (2012/1 3) 84% sewer blockag es cleared within 24 hrs of notificati on Actual 2014/15 financial year 92.7 % sewer blockage s cleared within 24 hrs of notificatio n 2015/16 financia l year 95 % sewer blockag es cleared within 24 hrs of notificati on 2016/17 financia l year 95 % sewer blockag es cleared within 24 hrs of notificati on 2016/17 Budget (per programme) Capex R,000 Opex R, % sewer blockag es cleared within 24 hrs of notificati on 2016/17 target (Tangible, measurable targets that fulfil requirements of being SMART) Q1 Q2 Q3 Q4 95 % sewer blockag es cleared within 24 hrs of notificati on 95 % sewer blockag es cleared within 24 hrs of notificati on 95 % sewer blockag es cleared within 24 hrs of notificati on Sustainable Human Settlement Upgrade Programme From informal settlement s to interim sustainabl e settlement Provision of Basic Services % of Water bursts restored within 48 hrs. of notification % HH in informal settlements with access to water at minimum LoS1 91% Water bursts restored within 48 hrs. of notificati on 80.7 % of Water bursts restored within 48 hrs. of notificatio n 85.45% % HH in informal settleme nts with access to water at minimum LoS1 95 % of Water bursts restored within 48 hrs. of notificati on % HH in informal settleme nts with access to water at minimu m 95% of Water bursts restored within 48 hrs. of notificati on % HH in informal settleme nts with access to water at minimu m % of Water bursts restored within 48 hrs. of notificati on % HH in informal settleme nts with access to water at minimu m 95 % of Water bursts restored within 48 hrs. of notificati on 96.20% HH in informal settleme nts with access to water at minimu m 95% of Water bursts restored within 48 hrs. of notificati on 96.50% HH in informal settleme nts with access to water at minimu m 95 % of Water bursts restored within 48 hrs. of notificati on 97.84% HH in informal settleme nts with access to water at minimu m Version: 25 April 2016 Page 28

29 Key Priority Long term impact (Joburg 2040 related output) IDP program me Key Performan ce Indicator (2013/16) % HH in informal settlements with access to sanitation at minimum LoS1 Baselin e (2012/1 3) Actual 2014/15 financial year 40.21% % HH in informal settleme nts with access to sanitation at minimum LoS 2015/16 financia l year % HH in informal settleme nts with access to sanitatio n at minimu m LoS 2016/17 financia l year % HH in informal settleme nts with access to sanitatio n at minimu m LoS 2016/17 Budget (per programme) Capex R,000 Opex R, % HH in informal settleme nts with access to sanitatio n at minimu m LoS 2016/17 target (Tangible, measurable targets that fulfil requirements of being SMART) Q1 Q2 Q3 Q % HH in informal settleme nts with access to sanitatio n at minimu m LoS 46.80% HH in informal settleme nts with access to sanitatio n at minimu m LoS HH in informal settleme nts with access to sanitatio n at minimu m LoS Active & engaged Citizenry Reduce recurring sewer blockages in intervened areas, and promote Health conditions Stakehold er Engagem ent Number of households reached by the Awareness programme s rolled out in Ivory Park, Diepsloot, Diepkloof, Orange farm, Alexandra, Noordgesig Vlakfontein Pilot Project conduct ed in Ivory Park more than 2300 househo lds reached Conducte d monitorin g and evaluatio n of the 2013/14 public educatio n interventi on. Conduct 3 rd Phase of extensiv e public educatio n. Reduce water loss and minimis e sewer infrastru cture abuse in identifie d hot spots Number of househo lds reached by the Awaren ess program mes Number of househo lds reached by the Awaren ess program mes 120 Number of househo lds reached by the Awaren ess program mes 200 Number of househo lds reached by the Awaren ess program mes Version: 25 April 2016 Page 29

30 Key Priority SMME Developme nt & Entreprene urship Long term impact (Joburg 2040 related output) Improve quality of services Higher contract turnover IDP program me Stakehold er Engagem ent Contractor s Developm ent Key Performan ce Indicator (2013/16) % customer satisfaction index improved to Number of registered contractors on pipe replaceme nt programme to complete second projects and submit portfolio of evidence to CIDB for grading Baselin e (2012/1 3) Actual 2014/15 financial year New 66% customer satisfacti on index improved to 2015/16 financia l year 70% custome r satisfact ion index improve d to 2016/17 financia l year 70% custome r satisfact ion index improve d to 2016/17 Budget (per programme) Capex R, Opex R, No target measur ed annually 2016/17 target (Tangible, measurable targets that fulfil requirements of being SMART) Q1 Q2 Q3 Q4 No target measur ed annually No target measur ed annually 70% custome r satisfact ion index improve d to 0 AT AT 50 register ed contract ors on pipe replace ment program me to complet e second projects and submit portfolio of evidenc e to CIDB for grading Version: 25 April 2016 Page 30

31 Key Priority Green Economy Long term impact (Joburg 2040 related output) Reduced energy costs and decrease carbon emissions IDP program me Biogas To Energy in WWTWs Key Performan ce Indicator (2013/16) Number of work entities supported Tons of Carbon gas offset in Greenhous e Emissions Baselin e (2012/1 3) Actual 2014/15 financial year Jozi@ work entities supporte d tons of Carbon gas offset in Green house Emission s 2015/16 financia l year 114 Jozi@ work entities support ed 6671 tons of Carbon gas offset in Green house Emissio ns 2016/17 financia l year 166 Jozi@ work entities support ed 4671 tons of Carbon gas offset in Green house Emissio ns 2016/17 Budget (per programme) Capex R, Opex R, /17 target (Tangible, measurable targets that fulfil requirements of being SMART) Q1 Q2 Q3 Q Jozi@ work entities support ed Nil 1168 tons of Carbon gas offset in Green house Emissio ns 2376 tons of Carbon gas offset in Green house Emissio ns 100 Jozi@ work entities support ed 3544 tons of Carbon gas offset in Green house Emissio ns 166 Jozi@ work entities support ed 4671 tons of Carbon gas offset in Green house Emissio ns Version: 25 April 2016 Page 31

32 5.2 Day-to-Day Operations Table 8 below reflects day to day interventions that support the IDP Programmes and GDS outcomes. Table 8: Day-to-Day Operations Key Key Baseline 2016/ /17 target Programmes Performance (2014/15) 2016/17 Budget (per (Tangible, measurable targets that fulfil requirements of being 2014/15-16/17 Indicator financial programme) SMART) (2013/16) year Capex Opex Q1 Q2 Q3 Q4 R 000 R 000 Pipe Replacement Length of water pipeline replaced 139 km water pipeline replaced 105 km water pipeline replaced km water pipeline replaced 35 km water pipeline replaced 70 km water pipeline replaced 105km water pipeline replaced Pipe Replacement No of bursts per 100km/length 273 bursts per 100km/length 273 bursts per 100km/length bursts per 100km/length 273 bursts per 100km/length 273 bursts per 100km/length 273 bursts per 100km/length Sewer Pipe Replacement & Upgrade Length of sewer pipe line replaced 40 km sewer pipe line replaced 61 km sewer pipe line replaced km sewer pipe line replaced 20 km sewer pipe line replaced 40 km sewer pipe line replaced 61 km sewer pipe line replaced Quality of Water Percentage compliance with drinking water quality standard on E. Coli (SANS % compliance with drinking water quality standard on E. Coli (SANS % compliance with drinking water quality standard on E. Coli N/A 99% compliance with drinking water quality standard on E. Coli 99% compliance with drinking water quality standard on E. Coli 99% compliance with drinking water quality standard on E. Coli 99% compliance with drinking water quality standard on E. Coli Version: 25 April 2016 Page 32

33 Key Key Baseline 2016/ /17 target Programmes Performance (2014/15) 2016/17 Budget (per (Tangible, measurable targets that fulfil requirements of being 2014/15-16/17 Indicator financial programme) SMART) (2013/16) year Capex Opex Q1 Q2 Q3 Q4 R 000 R 000 (SANS 241 (SANS 241 (SANS 241 (SANS 241 (SANS 241 Human Capacity Building Total training expenditure as percentage of identified ratio of total payroll 1.52 Total training expenditure as percentage of identified ratio of total payroll 1.50 Total training expenditure as percentage of identified ratio of total payroll Total training expenditure as percentage of identified ratio of total payroll 0.7 Total training expenditure as percentage of identified ratio of total payroll 1.0 Total training expenditure as percentage of identified ratio of total payroll 1.5 Total training expenditure as percentage of identified ratio of total payroll Version: 25 April 2016 Page 33

34 Chapter 6: Sustainable Development Goals Sustainable development is defined as development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Sustainable development calls for concerted efforts towards building an inclusive, sustainable and resilient future for people and planet. For sustainable development to be achieved, it is crucial to harmonize three core elements: economic growth, social inclusion and environmental protection. To this end, there must be promotion of sustainable, inclusive and equitable economic growth, creating greater opportunities for all, reducing inequalities, raising basic standards of living, fostering equitable social development and inclusion, and promoting integrated and sustainable management of natural resources and ecosystems. On 25 September 2015 at the United Nations summit, countries including South Africa adopted a set of 17 Sustainable Development Goals (SDGs) to end poverty, protect the planet, and ensure prosperity for all as part of a new sustainable development agenda. They seek to build on the Millennium Development Goals and complete what they did not achieve, and they are integrated and indivisible and balance the three dimensions of sustainable development: the economic, social and environmental. It is important to note in a review of long term strategic planning for the CoJ, that South Africa will be expected to deliver on these goals, targets and indicators, which in turn cascades down to municipalities in their focus on service delivery and sustainability. Each goal has specific targets to be achieved over the next 15 years. For the goals to be reached, everyone needs to do their part: governments, the private sector and civil society. It is against this backdrop that Johannesburg Water commits to conduct its business in a manner that support the attainment of the following 7 SDGs which are applicable to the nature of the business, namely; Goal 5 : Gender Equality Goal 6 : Clean Water and Sanitation Goal 8 :Decent Work and Economic Growth Goal 9 : Industry, Innovation and Infrastructure Goal 11: Sustainable Cities and Communities Goal 12: Responsible Consumption and Production Goal 13: Climate Change Version: 25 April 2016 Page 34

35 The following section discusses the company responses to the aforementioned seven SDGs and their performance measured as per table 10. Goal 5: Achieve gender equality and empower all women and girls While the world has achieved progress towards gender equality and women s empowerment under the Millennium Development Goals (including equal access to primary education between girls and boys), women and girls continue to suffer discrimination and violence in every part of the world. Gender equality is not only a fundamental human right, but a necessary foundation for a peaceful, prosperous and sustainable world. Providing women and girls with equal access to education, health care, decent work, and representation in political and economic decisionmaking processes will fuel sustainable economies and benefit societies and humanity at large. The company aims to end all forms of discrimination against women through the implementation of the Employment Equity Plan. The objective of the plan is to provide advancement opportunities for members from designated groups, especially females and People with Disabilities (PWD) who are suitably qualified by ensuring proportional representation in the occupational profiles of Johannesburg Water in line with set targets, this will ensure women s full and effective participation and equal opportunities at all levels within the organisation. Goal 6: Ensure access to water and sanitation for all Clean, accessible water for all is an essential part of the world we want to live in. There is sufficient fresh water on the planet to achieve this. But due to bad economics or poor infrastructure, every year millions of people, most of them children, die from diseases associated with inadequate water supply, sanitation and hygiene. Water scarcity, poor water quality and inadequate sanitation negatively impact food security, livelihood choices and educational opportunities for poor families across the world. The organisation plans to continue rolling out water standpipes to achieve universal and equitable access to safe and affordable drinking water for all. In addition, Ventilated Improved Pit-latrines will be rolled out to achieve access to adequate and equitable sanitation and hygiene for all and end open defecation, paying special attention to the needs of those in vulnerable situations. JW will work towards improving river water quality by reducing pollution caused by blocked sewers, minimising release of untreated wastewater at our Wastewater Treatment Works (WWTW) and substantially increasing recycling treated effluent and safe reuse. Although potable water is provided by the bulk service provider, the organisation will ensure that the distribution thereof is conducted in a manner that doesn t compromise its quality from point of sale to the taps of consumers. The Water Conservation Water Demand Management (WC/WDM) programme will be accelerated in order to increase water-use efficiency to address water scarcity and substantially reduce the number of people suffering from water scarcity. Version: 25 April 2016 Page 35

36 Goal 8: Promote inclusive and sustainable economic growth, employment and decent work for all The creation of quality jobs remains a major challenge for almost all economies now and will remain so well beyond 2015 especially the city of Johannesburg with a high Gini coefficient of 0.64 as indicated in figure 3, well above the distress level of 0.4 identified by the United Nations (UN). Figure 3: Gini Coefficient Sustainable economic growth will require societies to create the conditions that allow people to have quality jobs that stimulate the economy while not harming the environment. Job opportunities and decent working conditions are also required for the whole working age population. Persistence of youth unemployment, income inequality and poverty remains. CoJ unemployment rate at 25% (official definition) and 30% (broader definition); youth most affected. Through the EPWP and Jozi@Work programmes the company will create job opportunities as well as decent jobs while promoting inclusivity to the mainstream economy. We will also continue supporting entrepreneurship, creativity and innovation, and encourage the formalisation and growth of SMMEs, including through access to financial services. In creating decent jobs focus will be given for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value. Version: 25 April 2016 Page 36

37 Goal 9: Build resilient infrastructure, promote sustainable industrialization and foster innovation Investments in infrastructure transport, irrigation, energy, water and information and communication technology are crucial to achieving sustainable development and empowering communities in many countries. It has long been recognised that growth in productivity and incomes, and improvements in health and education outcomes require investment in infrastructure. Inclusive and sustainable industrial development is the primary source of income generation, allows for rapid and sustained increases in living standards for all people, and provides the technological solutions to environmentally sound industrialisation. Through the Asset Management Plan the organisation will develop and upgrade quality, reliable, sustainable and resilient infrastructure to support economic development and human well-being, with a focus on affordable and equitable access for all. The emphasis should be placed that upgraded infrastructure should be sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes. Goal 11: Make cities inclusive, safe, resilient and sustainable Cities are hubs for ideas, commerce, culture, science, productivity, social development and much more. At their best, cities have enabled people to advance socially and economically. However, many challenges exist to maintaining cities in a way that continues to create jobs and prosperity while not straining land and resources. Common urban challenges include congestion, lack of funds to provide basic services, a shortage of adequate housing and declining infrastructure. The CoJ has identified sustainable human settlements as a key priority for this term of office. Among these is the CoJ s commitment to providing basic services and infrastructure to all settlements, regardless of the settlement s state of formality. The City is re-stitching itself through corridors of freedom in order to reverse apartheid s spatial planning. Goal 12: Ensure sustainable consumption and production patterns Sustainable consumption and production is about promoting resource and energy efficiency, sustainable infrastructure, and providing access to basic services, green and decent jobs and a better quality of life for all. Its implementation helps to achieve overall development plans, reduce future economic, environmental and social costs, strengthen economic competitiveness and reduce poverty. This goal is aligned to goal 6, 8 and 9 and as such the programmes of the aforementioned goals namely water demand management, asset implementation plan, access to basic services, EPWP and Jozi@Work will be responding to this goal. Version: 25 April 2016 Page 37

38 Goal 13: Take urgent action to combat climate change and its impacts Climate change is now affecting every country on every continent. It is disrupting national economies and affecting lives, costing people, communities and countries dearly today and even more tomorrow. Communities are experiencing the significant impacts of climate change, which include changing weather patterns, rising sea level, and more extreme weather events. The greenhouse gas emissions from human activities are driving climate change and continue to rise. In response to this challenge JW has recognised the use of biogas as a means of contributing towards the reduction of greenhouse gas emissions. In this case Methane gas which is a byproduct at the WWTW is converted to energy and that energy fed back to the plant s grid. This initiative also aligns to the Green Economy program. Table 9 indicated the potential energy to be generated by this process. Table 9: Potential for Heat Generation Works Flow treated (m 3 / day) Sludge produced (dry tons) Actual power required (MW) Potential electrical capacity (MW) Potential heat generation (MWh / d) Driefontein Northern Olifantsvlei Goudkoppies Bushkoppie Total Version: 25 April 2016 Page 38

39 SDGs Goals Table 10: SDGs Key Performance Indicators (KPIs) Indicator Measure Baseline 2014/15 FY Goal 5 Female representation Number of female employees as a percentage of total staff complement Goal 6 Drinking water quality Percentage compliance with drinking water quality standard on E. Coli (SANS 241) Access to water in informal settlements Access to sanitation in informal settlements Percentage informal households with access to water at minimum LoS1 Cumulative performance Percentage informal households with access to sanitation at minimum LoS1 Cumulative performance 2016/17 FY % % % % Goal 8 Jobs created Number of Jobs created based on No EPWP Jozi@Work Number of entities No supported Jozi@Work - Number of jobs created No Goal 9 Water and sewer Length of water pipeline replaced km infrastructure development Length of sewer pipeline replaced km Goal 11 Roll-out of Corridors of Water mains Construction of 2.2 Design Implement N/A freedom infrastructure in Louis Botha, Empire-Perth kilometres of water mains upgrade Construction of 2.5 Ml water tower and Design Implement N/A and Turffontein corridors pump station. 26 Ml reservoir and a 2 Ml water tower. Design Implement N/A Upgrading of approximately 5.1 Design Implement N/A kilometres of collector sewers. Goal 12 Water use efficiency HH water consumption l/c/d Water losses NRW % Infrastructure development Capex Budget Spend % Goal 13 Greenhouse gasses offset Tons CO₂ offset in greenhouse gas emissions from WWTW from Biogas Projects Environmental pollution Aggregated % of all WWTW final effluent compliance Units of measure Tons % Version: 25 April 2016 Page 39

40 Chapter 7: Capital Investment Programme Over and above the identified Flagship Programmes, the capital projects supports the CoJ 2040 Growth and Development Strategy (GDS 2040) outcomes as well as CoJ Priorities adopted at the Mayoral Lekgotla in 2013, such projects form part of the cluster Priority Implementation Plans, referred to as PIPs. The capital programmes have also taken into account the national outcomes below for 2014 to 2019 as published in the Medium Term Strategic Framework: Outcome 2: A long and healthy life for all South Africans. Outcome 4: Decent employment through inclusive economic growth. Outcome 5: A skilled and capable workforce to support an inclusive growth path. Outcome 6: An efficient, competitive and responsive economic infrastructure network. Outcome 8: Sustainable human settlements and improved quality of household life.. Outcome 10: Environmental assets and natural resources that are well protected and continually enhanced. JW capital programme relates to infrastructure projects that support the City s flagships Programmes as well as infrastructure management which provide suitable capacity and efficient infrastructure to CoJ water demand. The CoJ has made a commitment to invest approximately R110 billion in infrastructure over 10 year period. JW s infrastructure commitment for the same period amounted to R25 billion of which R2 billion had been spent by June In 2015/16 FY a further R792 million will be spent of which 45% (R352 million) had been spent by end December JW s 3-year period proposed budget from 2016/17 FY to 2018/19 FY amounts to R3.1 billion (refers to table 11 and figure 4 below) Table 11: 3 year Capital plan Category 2016/17 R /18 R /19 R 000 Corporate Requirements 33,000 8,500 8,500 Water Demand Management 62, , ,000 Operate and Maintain 43,000 61,000 71,000 Upgrading and Renewal 293, , ,377 New Infrastructure 31,000 36,000 18,000 Planning and Engineering Studies 25,000 20,000 28,000 Information Technology 6,000 20,000 25,000 Marginalised Areas Program 90, , ,000 Bulk Wastewater 153, , ,789 Total 736,636 1,235,494 1,143,666 Version: 25 April 2016 Page 40

41 In line with GDS 2040 outcomes, JW has set a series of high level capital projects and interventions that seek to increase the current infrastructure capacity in order to meet CoJ economic development s needs (See annexure A). The new Lanseria (50 Ml) wastewater treatment work is one of the major capital projects, of which technical design has commenced in 2015/16 FY, the project is planned to be completed in 2019/20 FY. Upon completion the project will provide additional capacity to households equivalent. This project will also relieve the current pressure on Northern WWTW, while also unlocking economic developments, which will results in job creation. Pipe Replacement (Upgrade and Renewal) forms part of the key capital programmes that Johannesburg Water will continue to implement in 2016/17 FY. In order to reduce NRW, pipe replacement has been identified as key programme to assist in combating physical losses. The PIP section provides more detail with regards to the set targets for 2016/17 FY. Figure 4: Capex per programme 7.1 Project: Water Pipe Replacement JW s aging network has consumed 52% of its life on average, which implies that there is only 48% remaining useful life. In order to improve the water network s remaining life Johannesburg Water had planned to replace a total of 900 kilometres of water pipes by June However, based on rebased budgets, it is estimated that only 540 km will be achieved as some of the projects have been deferred. Based on the revised target (540 km), JW pipe replacement achievement is 59% (321 km s) by end June It should be noted that this initiative is geared towards reduction of physical losses within the CoJ. Table 12 shows the revised three year plans and regions to be covered, with 114 kilometres planned for the current year 2015/16 FY, while 105 kilometres have been planned for the 2016/17FY. Version: 25 April 2016 Page 41

42 Table 2: 2015/16 FY 2017/18 FY Water Pipe Replacement Plan PIPE REPLACEMENT PROGRAMME SUMMARY Johannesburg Water Regions Midrand Sandton Alex Length of Mains (metres) 2014/15 Actual 2015/ / /18* Total Roodepoort Johannesburg Central Soweto Nil Nil Deep South Total Renewal Rate (%) Note*: The current pipe replacement four year plans end in 2016/17 financial year and new programme will start in 2017/18 financial year. Version: 25 April 2016 Page 42

43 7.2 WWTW Infrastructure Upgrade and Renewal In order to continue to support the city economic developments, further upgrade or expansions and renewal will continue in other WWTW in 2016/17 financial which include Olifantsvlei, and Northern Works. The design of the new Lanseria treatment works will continue with construction expected to commence in 2017/ Sewer Network Pipe Replacement and Upgrading Programme JW intends to reduce number of blockages per 100 kilometres of pipes. Reduction in number of blockages per 100 meters does improve level of service to its customers. The plan was intended to replace a total of 800 kilometres of old sewer pipes by end June However following rebase of capital budget (50%) in 2014/15 FY the target was reduced to 277 kilometres as some of the projects have been deferred. Table 13 below, shows the detailed sewer pipe replacement per regions for three years citywide. These sewer projects will also assist in reducing the sewer blockages as most of these areas are experiencing high sewer blockages. As a result of budget reduction, it is estimated that only 228 km against an original target of 800 km will have been replaced by June Table 93: 2015/ /18 Sewer Pipe Replacement Plan Length of Mains ( metres) Johannesburg Water Regions 2014/15 FY Actual 2015/16 FY 2016/17 FY 2017/18 FY Total Length Midrand Sandton- Alex Roodepoort-Diepsloot Johannesburg Central Soweto Deep South Total Renewal rate % Version: 25 April 2016 Page 43

44 7.4 Water Network Upgrading Besides the pipe renewal programme implementation of water network upgrades will also be done in 2016/17 financial year. Due to development growth within the city, the current infrastructure needs upgrading in order to meet the current and future demand, including the developments within three major corridors of freedom. 7.5 Storage Capacity Augmentation - Reservoirs The entity s service standards commit to ensure a minimum of 24-hour storage facilities. To ensure a minimum 24-hour security of supply across all supply zones JW will ensure construction of Diepsloot reservoir, Lenasia High level, and Orange Farm high level, Halfway House, and Woodmead reservoirs. Table 14 below reflects developmental impact expected on these projects. Table 104: Expected Outcomes on Infrastructure Upgrades and Renewal Projects Name of the Project Budget Programme Name R 000 Return on 2016/ / /19 Investment FY FY FY Bulk Increased 50 Wastewater Ml treatment Upgrade capacity at Infrastructure Lanseria Upgrade and WWTW that Renewal will serve HH equivalent Sewer Pipe Replacement kilometres of pipes replaced by June 2017 & Reservoirs Additional water storage for households equivalent Total Impact Green Drop certification and reduced level of river contamination Less sewer blockages and improved level of service Additional households connection within the City Version: 25 April 2016 Page 44

45 Chapter 8: Risk and Compliance Management As articulated in the Municipal Finance Management Act (MFMA, 2003) this section covers, a summary of any risks to achieving revenue projections, and expected major shifts in revenue patterns and any non-discretionary expenditure. JW has adopted an entity wide risk management approach, which has been rolled out at a strategic level, and across all business units for identification of strategic, operation, fraud and compliance risks. To add value to the organization and the business-planning process, and ensure that JW achieves its objectives, the Risk Management function will fulfill the following responsibilities: Facilitate organization-wide risk and opportunity identification and analysis Promote the management of risk in line with best practices at all levels in the organization Promote training in management of risks within different business units and across the organization Ensure enterprise-wide compliance with key regulatory and legal requirements Ensure resilience of JW operations through Business Continuity and Disaster Management Planning Provide emerging risk intelligence in respect of service-delivery projects and interventions. Provide support and guidance to Departments in managing risks Report regularly on the performance of the organization with regards to management of risks. The Risk and Compliance department seeks to ensure that identified risks are managed by the respective risk owners in pursuit of achievement of JW s business objectives. The plan indicates the role played by the Risk and Compliance Department in the implementation of enterprise risk management from JW in 2015/ /17 FY. Risk and Compliance Management Objectives 1. Develop and implement Enterprise-wide Risk Management system and tools (infrastructure) to ensure that JW is at the forefront of best practice in the discipline 2. Develop, implement and the Business Continuity Management (BCM) System. 3. Develop, implement and maintain a Compliance management system that will enable JW to be compliant to all business related laws and regulations. 4. Monitor and communicate to all governance structures adherence to the enterprise risk, Compliance and business continuity management policies and frameworks in line with CoJ requirements. Version: 25 April 2016 Page 45

46 The activities to be performed in implementing the plan are divided into two parts: a) Activities to be performed in the normal roll out and implementation of ERM within JW b) Activities related to ensuring appropriate and adequate management of major strategic and operational risks. The plan has been allocated funds to achieve it and any significant changes will be managed through internal funding alternatives including shareholder initiatives. Focus areas for as per table 15 below; Risk and Compliance Policy review Strategy Review Risk Plan for 2015/16 approval (interim for the remainder of the FY) Risk Controls and mitigation plans audit by JW internal Audit unit Combined assurance reporting JW in line with CoJ requirements Review of appetite and tolerance levels in line with CoJ framework Risk mitigation implementation progress quarter to quarter comparison Development of the BCM system which will now be separate from the initially envisaged CoJ system Compliance Management Johannesburg Water has adopted the Compliance Management Framework developed by the shareholder (CoJ) in consultation with the Entities and Departments. The entity has developed a Compliance universe, which is being regularly reviewed to keep track on new legislation and amendments to existing legislation. The top five Acts that have been identified as Core to the operations of JW are: National Environment Management Act,1998 (Act No.107 of 1998) National Water Act, 1998 ( Act No.36 of 1998) Water Services Act,1997 ( Act No.108 of 1997) Accreditation for Conformity Assessment Calibration and Good Practice Act, 2006 (Act No. 19 of 2006) Occupational Health and Safety Act,1993 (Act No. 85 of 1993) On a continuous basis, compliance with the above Acts and other relevant legislation is monitored by the Risk and Compliance Management Department and in areas of noncompliance, referred to the relevant Act owners for correction action to be taken. Version: 25 April 2016 Page 46

47 Table 15: Risk Management Implementation Plan 2015/ /17 FY No. TASKS/ACTIVITIES CONTENT OUTPUT/OUTCO ME TARGET DATE Q 1 Q 2 Q 3 Q 4 1. Review the Risk Management Policy 2. Risk Assessments workshops Strategic Operational Flagship Projects 3. Facilitate finalization of Compliance status updates 4. Develop tool for monitoring compliance with ISO Monitoring & reporting on risk mitigations 6. Updates and reports on compliance status 7. Finalisation of the Business Continuity Plan Composition, Approved Policy Jan/Feb 201 Roles and responsibilitie s, Review and re-evaluation of existing risks and identification of emerging risks, develop mitigation plans. Status on compliance with existing and new legislation Checklist Status of implementatio n Status of compliance Business Impact Analysis, Business Recovery Plans Risk Registers/Profile Sept/Nov 2015 Compliance Status Sept 2015 Reports Monitoring tool July 2016 and gap analysis Monitoring reports 2015/2016 Compliance status Jan 2016 report Business Sept Continuity Plan 2016 Version: 25 April 2016 Page 47

48 No TASKS/ACTIVITIES CONTENT OUTPUT/OUTCO TARGET Q Q Q Q. ME DATE ISO Status of Improvement Sept 2016 compliance readiness for plans monitoring compliance Version: 25 April 2016 Page 48

49 Chapter 9: Financial Plan The company has been exempted from the payment of normal company tax in terms of sec 10 (1) (t) of the income tax act since July 2007 and has consequently not been providing for tax since this date. The revenue function, which includes the customer call centre, invoicing of customers and collection of monies from customers is outsourced to the City of Johannesburg s Revenue and Customer Relations Management department. Johannesburg Water has a team of 13 employees who are assisting with credit control of platinum customer. Over the past few years, JW s performance regarding revenue, net profit and cash has been below budgeted levels. This is mainly due to difficult economic conditions. In order to improve financial performance, JW established revenue and metering project. The objectives of the project are to enhance revenue by identifying missing customers, ensuring that all customers are billed at the correct tariff and that all customers are billed monthly for the services rendered. The City s revenue shared services centre (RSSC), City Power and Johannesburg Water, its entities embarked on revenue recovery project in January 2014 were a McKenzie Revenue Diagnostic was conducted which resulting in five key priorities as the main focus areas to: Reduce the number of non-metered power and water customers, starting with businesses and focusing on critical low performing regions; Launch an integrated property-by-property audit across the city to improve baseline data; Address pre-paid meter fraud to enable long-term shift away from deemed/uncollectable service provision; Improve current collection rates by establishing risk-based contact strategies and implementing a system to monitor portfolio and operational performance and Increase visibility into billing process flows and manage break-points and exceptions across entities. The progress and status update is as tabulated in table 16 below; Version: 25 April 2016 Page 49

50 Table 16: Revenue Recovery Project Area Progress Details Issues Status Business The BPEM has been deployed in production with on-going monitoring. The usage Completed process exception of the tool by super users is in the production environment and end user training by super users handed over to operational teams. management (BPEM) Business process analytics (BPA) Management reporting and control SMS Channel Solution Fraud Management Tool Governance Risk and Compliance Device Management Meter Reading (MR) Control Device Management and Dunning Device Management and Billing Device Management and Access to SAP-ISU The BPA has also been deployed into production with the handover to operational team completed however additional technical training in progress. SAP GUI compatibility issues to the version of Business Warehouse (BW) used were resolved. Design, realisation and testing completed on the 21 st of April Fifteen (15) users were trained and now have access to SAP-ISU in realtime to generate management reports. Business solution design, user acceptance testing (UAT), development of change requests and regression testing were completed and an internal pilot with staff members to sms their meter readings conducted. Phase-II, a broader rollout to open up the alternative channel to the customers awaiting a public announcement. This project milestone resumed on 16 th May 2016 after the activities were put on hold until hardware the migration was completed and tested. Completed Completed Completed On Hold Design configuration has been completed Completed The meter reading (MR) control field changes and unit testing are to be completed by the 29 th April 2016 with additional business processes required for the full solution to work. SAP still to give advice on system capability to support the processes such that the current status of the MR Control solution is incomplete and cannot go-live without the rest of the functionality in place. The Move-in/ Move-out unit testing in progress (SAP) with the biggest risk on the Billing Logic that would be impacted. SAP still to investigate the Billing Logic impact and provide initial problem statement. User acceptance testing (UAT) and knowledge transfer are to be rescheduled. User acceptance testing (UAT) done and the Billing Block approved and signed off with Bill Correction approved but awaiting signed-off. It should be noted that the function of the Bill Correction transaction EABICO is to bundle access to different functions within SAP IS-U which will allow for invoice cancelling, meter readings update changes, rebilling and re-invoicing (with segregation of duties). The solution would cater for one adjustment reversal and not multiple adjustment reversals as is currently the case. User acceptance testing (UAT) for Billing Outsorts has been approved, not signed. Mass data update program to be developed and would require business approval User acceptance testing (UAT) for Invoicing Outsorts is in progress Mobilisation of teams is in progress and SAP to share team structure plan with RSSC and the Entities. Open Open Open Open Version: 25 April 2016 Page 50

51 Revenue is budgeted to increase to R9.2 billion in 2016/17 FY which is an increase of 11% on the forecast of R8.3 billion in This is mainly due to the tariff increases. Graph 5 below reflects the revenue and % tariff trends Figure 5: Revenue and tariff trends The average proposed tariff increase for 2016/17 FY is 13.9%. This is based on the Rand Water gazetted tariff increase of 11.9% and a retail margin of 2% to fund capital projects and loans. The increase is above the inflation rate and the inflation target by the South African Reserve Bank and may have a negative impact on consumer payment levels. The increase however, does not adequately cover funding for the capital expenditure required to replace infrastructure that is reaching the end of its useful life over the next few years. Therefore additional loans will be required to fund the shortfall. Bulk purchases consist of the purchase of potable water from Rand Water. The price is determined by a combination of a government pricing strategy which is linked to producer inflation for the raw water as well as the costs incurred by Rand Water for the treatment of the water. For the 2016/17 year, the increase from Rand Water will be 11.9%. This includes the AMD charge which is levied by TCTA to the Vaal River water users through Rand Water, the AMD charge was not separately levied in the raw water cost. The bulk water volume purchases budget has been based on current consumption patterns with a 1.3% allowance for increases which is in line with the population growth per the 2011 census. Version: 25 April 2016 Page 51

52 The impact of water demand management initiatives such as pressure valve management, active leakage control and the prepaid metering project have been factored into the calculation. These initiatives are expected to yield a reduction in the cost of water purchases. Graph 6 below reflects the net profit trends. Figure 6: Net Profit The net profit of the company improved in 2014/15 due to an increase in billed volumes and efficient management of company resources. The forecast for 2015/16 has been revised down to R720 million from the original budget of R1 520 million as a result of increased provision for bad debt due to lower payment level. The budgeted profit for 2017 increased to R773 million. Debt impairment has been increasing steadily over a number of years. This is reflected in figure 7 below. Version: 25 April 2016 Page 52

53 Figure 7: Bad Debts The low payment level from customers remains a concern. During 2015 the payment level was 81.1% and the forecast for 2016 has been revised down from 93.9% to 83.2% this is due to adverse economic conditions. The budgeted payment level in 2016/17 is 83.5% and will require a major effort from the revenue collection department of CoJ as well as from the internal credit control department in the company which is now responsible for credit collections of the platinum customers. Control over operating costs General expenses will increase to R612 million (32.2%) due to increased maintenance on water and sanitation infrastructure, software licenses for IT system, communications and increase on electricity. Version: 25 April 2016 Page 53

54 The operating costs per major category are reflected in figure 8 below. Figure 8: Operational Expenses Employee related cost is budgeted to increase from R872 million in 2016 to R926 in This represents 6.2% increase. The primary increase is due to (1) establishment of the prepaid meters commercial department and (2) insourcing of meter reading activities. These two departments are expected to play a critical role in enhancing JW s revenue. The total employee cost as a percentage of total operating costs remained well below the 30% benchmark of the CoJ and National Treasury as illustrated in figure 9 below. Figure 9: Salary trends Version: 25 April 2016 Page 54

55 The company ended the 2015 year on 23% salaries to operating expenses. The budget for contracted services (excluding the CoJ service fee) increased by 6.2% (R54 million) to R518 million when compared to the 2015/16 FY. The major increase in contracted services is as a result of an additional R36 million payable to Emfuleni Local Municipality monthly cross boundary sewer service charges for which the prices never increased since 1997 and the balance is due to inflationary increase. Cash generated from operations The collection rate of water billed to customers is set at 83.5% for 2016/2017 FY and 84.2% and 84.9% for the 2017/2018 FY to 2018/2019 FY. This is an improvement on the 81.1% achieved in the 2014/2015 FY as illustrated in figure 10 below. Figure 10: Payment levels The continued focus on improving billing and collections by the Revenue and Customer Relations Department at the CoJ will result in improved collection of outstanding monies for the 2016/17 financial year. The cash balance is swept to the CoJ in terms of the treasury management arrangement. At the end of 2015 financial year, JW had cash reserves of R330 million (2014: R42 million). The projected cash reserve for the MTEF is reflected in figure 11 below. Version: 25 April 2016 Page 55

56 Figure 11: Cash at Bank The cash position for 30 June 2017 is budgeted at R595 million (forecast 2016: R441 million). The main contributor to the improvement is the high budgeted payment levels, which is the RSSC s main focus for the financial year and additional reductions on contracted services and general expenditures. The additional customers added on the customer database and the increased tariffs are also expected to positively impact the cash reserves. Solvency The entity budgeted to be in a strong solvency position with its total assets exceeding the total liabilities by R3.6 billion in The solvency ratio as at 30 June 2017 is 1:60 as illustrated in figure12 below. Version: 25 April 2016 Page 56

57 Figure 12: Solvency Ratio Capital projects The capital expenditure is budgeted as follows: June 2017 June 2018 June 2019 R 737 million R billion R billion The capital budget has decreased from what was previously approved by the CoJ to address backlogs, upgrading and renewal of ageing infrastructure and new infrastructure requirements. The source of funding for CAPEX is reflected in figure 13 below. The own funding depends largely on the increased payment levels. The affordability of funding for the infrastructure remains a challenge, especially if the payment levels do not improve or deteriorate due to the current economic conditions. Version: 25 April 2016 Page 57