RAND WATER ANNUAL REPORT 2023

HOW WE CREATE VALUE

Our focus to invest in the refurbishment of our existing infrastructure is vital to support the reduction of non-revenue water. Despite augmenting infrastructure supply capacity throughout the year, the organisation has had to enforce water conservation and demand management measures, resulting in a reduced supply volume in contrast to an increased demand. This measure was necessary to preserve the invaluable and limited resource in light of the climate variability and extreme heat waves that had been encountered. Cost Optimisation The Financial Year posed considerable challenges, largely stemming from the impact of a very volatile global economy. Rand Water experienced substantial spikes in operational expenses, prompting management to embark on swift strategic endeavours and seek innovative methods to contain costs. An analysis of the cost of sales revealed a 10.3% upsurge in sales-related expenses, driven by the following factors: Water purchases: The volumes of raw water purchased increased by 1.6%, which aligns with the increase in sales volumes. It is imperative to acknowledge that increased sales do not solely arise from actual consumption demand but are marginally attributed to water use inefficiencies within municipal networks. Furthermore, the costs of water purchases include non-revenue water (NRW), which constitutes 6.8% of the total water purchased (FY2022: 6.5%). These factors collectively contributed to the increased demand, resulting in a 6.9% increase in water purchased (FY2022: 8.3%). To confront NRW challenges, the organisation has embarked on implementing a “Satellite Leak Detection” project to optimise the accuracy in locating leaks, the establishing of supplementary zones/sectors within the distribution network, and pipeline enhancements involving additional metering at cross connections. Moreover, as part of the Project 1600 initiative, a systematic effort has been undertaken to continually monitor municipal performance monthly. The primary aim of this initiative is to optimise water usage efficacy. This collaborative endeavour is aimed to improve water efficiency for Rand Water and its customers, in order to cap water demand from the Integrated Vaal River System (IVRS) at 1600 million cubic meters annually.

Our persistent endeavours to ensure prudent water utilisation not only assist in curbing our water expenditures but also ensures the preservation of our invaluable resource. These efforts are aligned with United Nations Sustainable Development Goal target 6.6. “By 2030, our plan aims to substantially increase water-use efficiency across all sectors and ensure sustainable withdrawals and supply of freshwater to address water scarcity and substantially reduce the number of people suffering from water scarcity.” Energy Costs: There was a notable increase in energy costs of 13.8% (FY2022: 14.9%). This rise primarily stemmed from increased energy usage due to higher volumes of treated and sold water that escalated the cost per kilowatt-hour. Furthermore, the recurring occurrences of power outages have had a negative impact on energy costs. In response, Rand Water has embarked on a strategic exploration of viable alternative energy sources, with a specific focus on renewable options like hydropower and photovoltaic (solar PV) generation. Both hydropower and solar PV generation hold promising potential for harnessing sustainable energy. By diversifying our energy supply, we aim to reduce dependency on Eskom, mitigate the impact of escalating energy expenditures, and make substantial contributions to a more environmentally sustainable operation. Chemical Costs: Chemical costs increased by 28.8% (FY2022:42.5%). This increase is attributed to higher water volumes treated, increased chemical dosages due to deteriorating raw water quality, and an upturn in unit prices from our chemical suppliers. Notably, both organic coagulants and chlorine experienced substantial price hikes. Concerning chlorine, the constrained national supply of this chemical has presented difficulties in its procurement, consequently contributing to a surge in its unit price. The organisation has initiated a chemical optimisation investigation to address these chemical-related challenges. These efforts aim to streamline chemical consumption from an informed assessment of decision variables and economic factors, while maintaining drinking water quality production specifications.

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