Maluti-a-Phofung water service provision

concluded

Closed

The commencement date of the contract, awarded via competitive bidding process, was November 1, 2005. This was a 6 year management contract. In terms of the contract the private “Strategic Partner” was to provide 3 senior managers (CEO, Operations Manager and Commercial Manager) and head office support. By the end of year 3 the three senior managers were required to put their successors in place. During the remaining three years support was given to the entity. The contract holder was Uzinzo (Pty) Ltd which was a Joint Venture between Amanz’ aBantu Services and Water and Sanitation Services South Africa (WSSA), both private companies. There was no investment, except for expertise, required from the private partner. According to the Key Performance Areas (KPAs), the main responsibility of private party was the transfer process which entailed the consolidation of the financial sustainability, operations, customer services, revenue management, HR, skills transfer, Black Economic Empowerment and Local Economic Development. In a nutshell, the main tasks of the Strategic Partner were: - to amalgamate the previous service providers into one entity which is owned by the municipality and renders the water services which the municipality is mandated to render; - to restructure the various units into one integrated entity with its own corporate identity; - to implement various strategic and operational initiatives to improve the quality of the services rendered; - to identify and develop candidates to take up the positions of CEO, Operations Manager and Commercial Manager at the end of three years; and - to coach and mentor the three senior managers and to provide support to the entity for a further 3 years. Ideally the strategic partner was expected to leave behind a sustainable organisation which can function without external support. Maluti-a-Phofung Municipality held 100% of the project ownership. The Municipality was a water service authority in terms of the Water Services Act and the Municipal Structures Act. It was responsible for rendering water services within its area of jurisdiction. The municipality previously had contracts in place with Sedibeng Water for the QwaQwa and Kestell areas and with Rand Water for the Harrismith area (Both Sedibeng and Rand Water were water boards i.e. organs of state). These contracts were service provider type contracts whereby water services were rendered on behalf of the municipality for a fee. The municipality provided the budget for the work to be done. There were approximately 40 people of previously municipal staff seconded to one of the previous service providers. The staff than had been transferred to Maluti-a-Phofung Water (Pty) Ltd. The services provided included treatment of raw water to potable water standard, storage and distribution of the purified water, collection of the waterborne sewage as well as from conservancy tanks (small scale), treatment of the sewage and return of the final effluent to the water sources. Revenue collection was included. This was an operation and maintenance contract so the implementation of the capital projects was done by a special unit of the municipality known as the Project Management Unit (PMU). The contractor assisted the PMU in the planning and supervision of the capital works. The service area was the whole area of jurisdiction of the Maluti-a-Phofung local municipality. It fell within the Thabo Mofutsanyane District Municipality which was situated in the Eastern part of the Free State province. The main towns in the area of jurisdiction were Phuthaditjhaba, Harrismith and Kestell. The peri-urban and rural areas surrounding these towns were also served under the contract. The service area was mountainous with altitudes ranging from 1200 to 2200m above sea level. The climate was mild in summer and very cold in winter. Due to the extent of the area and the remoteness of some of the areas the exact population was not accurately known. The population was estimated to be about 600,000. Of these only about 23% were employed resulting in high levels of poverty. There were 59,000 individual water connections and 36,000 households served by communal standpipes. 51,000 households had access to waterborne sewerage and 57,000 had a basic level of service or lower. There was a constant influx of people into the informal areas which kept increasing the service backlogs. The project's contract period ended in 2011 as scheduled. No further information was available on any extension beyond the contract period. More reseach on sponsors should be done. Project ended in 2011 (?). No info available on contract renewal / cancellation.

World Bank Group

Project

Commercial, Water Supply and Storage, Government, Power Transmission, Residential, Waste Processing and Treatment, Power Generation (CCGT)