Rand Water | Integrated Annual Report 2025

accountable water services supported by climate resilient infrastructure. The organisation also demonstrated strong performance in legislative compliance, transformation, and human capital development. All tenders were awarded to B-BBEE compliant entities, with B-BBEE spend reaching 105.6% of total expenditure against a target of 85%. Rand Water’s investment in skills development remains a cornerstone of its strategy, supporting 102 learnerships, 41 bursaries, and 182 graduates through structured programmes. Notably, 71.9% of new hires in management and technical roles were women, reinforcing our leadership in gender transformation. Rand Water continues to be an employer of choice, with a staff turnover rate of 1.61% against a target of 5%, and increased its staff complement by 378 permanent and contract employees, exceeding the target of 145. Stakeholder engagement remains a strategic priority. The Customer Satisfaction Survey yielded a score of 86.8%, surpassing the target of 82.5%, and affirming stakeholder confidence in Rand Water’s ability to deliver high-quality potable water. As a responsible corporate citizen, Rand Water’s Corporate Social Investment arm, the Rand Water Foundation (RWF), implemented 61 initiatives well above the target of 25. These included 32 water supply projects, 19 sanitation projects, and domestic leak repairs benefiting 4,241 households. A total of 2,898 temporary jobs were created through project implementation, further contributing to community upliftment. Nonetheless, challenges persist. Debtor days increased to 125, reflecting financial distress at the municipal level. The growing municipal debt burden necessitates ongoing engagement, structured recovery strategies, and, where necessary, legal recourse. Municipal physical water losses remain a concern, particularly during high-demand summer months. Rand Water continues to collaborate with municipalities to implement non-revenue water reduction, conservation, and demand management strategies. In line with our ongoing commitment to ensuring Rand Water’s adherence to applicable legislative and regulatory requirements, we continuously monitor and report any identified irregularities. In this context, irregular expenditure was initially disclosed as being under assessment during the 2023/24 financial year. This matter was subsequently assessed in the 2024/25 financial year, resulting in a conclusion that differed from that of the AGSA. In accordance with the PFMA Compliance and Reporting Framework, the matter has been referred to the National Treasury for dispute resolution. The organisation did not meet its target for project completion due to administrative delays by contractors, which impacted timelines and deliverables. Additionally, a repeat audit finding was recorded during the year within the

supply chain management environment. However, Rand Water is actively working to enhance processes in that area. Rand Water continues to implement the Vaal River System intervention and the Section 63 intervention under the Water Services Act No. 108 of 1997, for which it previously received Cabinet commendation. These projects are being executed in alignment with expectations of the Department of Water and Sanitation. In line with Rand Water’s strategic theme of a Risk-Based, Innovation-Driven Strategy, the organisation is evolving beyond its traditional role as a water utility. Through the Rand Water Institute, we are driving innovation and research to develop new products, services, and sustainable solutions for the sector. The approval of the Rand Water– Emfuleni Local Municipality Special Purpose Vehicle (SPV) marks a strategic milestone, enhancing service delivery at the municipal level and expanding our developmental impact. This initiative, alongside the growth of Rand Water Services, positions the organisation to broaden its secondary activities, support municipalities, implement ministerial directives, and explore opportunities across the continent. The operating environment remains challenging, prompting the development of innovative solutions, which includes strategic goals such as energy self-reliance. Rand Water has developed a comprehensive energy package supported by the installation of solar photovoltaic panels. Recognising South Africa’s water scarcity and the repeated postponement of the Lesotho Highlands Water Project Phase II, now scheduled for completion in October 2028, Rand Water has proactively explored alternative water sources, including groundwater, wastewater treatment, and purification of acid mine drainage. As we reflect on another successful year, Rand Water remains acutely aware of the challenges ahead. The demand for water continues to outpace supply, and the prevailing economic climate affects both our customers and the organisation. However, these challenges present opportunities to innovate, strengthen partnerships, and embed resilience across all operations. I extend my sincere appreciation to the Board of Rand Water for their guidance, to our stakeholders for their trust, and to every Rand Water employee for their professionalism, diligence, and passion. Together, we will continue to safeguard South Africa’s water future and uphold Rand Water’s legacy of excellence and sustainability.

Mr. Sipho Mosai Group Chief Executive

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Rand Water | Integrated Annual Report 2025