ANNUAL REPORT FOR 2018 / 2019 FINANCIAL YEAR
1. FINANCIAL ANALYSIS
The 2018 / 2019 Financial Statements have been compiled by external Auditors, PKF (PE), as a running business and is attached hereto.
The income for the year was R46,950,061.00 of which R22,579,118.00 was paid to the Department of Water and Sanitation for water use charges.
The difference was used for daily expenses of the Association.
Budgets have been done in a conservative manner, which included the building of reserve funds for capital and major maintenance expenditure.
The influence of the current economic situation on the Association has been counteracted to a large extent by intense management and stringent financial control.
2. POOL SYSTEM - 2018 / 2019
Into the Pool 213.70 Ha (16 Users)
Water bought 133.20 Ha (8 Users)
Amount in the Pool R262,321.40
Less 10 % Admin Fee R 26,232.14
Amount available for
Amount Credited R236,089.26
Additional Income R 0.00
Income from application fees R 3,971.84
Tariff per Ha (Sliding scale not applied) R 1,772.44
The water use charges for 2019 / 2020 is R2,142.18 / ha for the year, and the maximum credit tariff provided to users who placed water in the pool amounts to R1,772.44 / ha.
Income from application fees R24,664.15
Total number of transfers 35
Total hectares transferred 589.50 Ha
3. FINANCIAL SUSTAINABLE PROVISION
3.1 CAPITAL RESERVE FUND
Any unused funds are invested during the year for relative short periods of time and are used for daily expenses.
Interest is received on investments.
3.2 OTHER RESERVE FUNDS
Reserve funds are used for capital expenses, as required.
3.3 MAINTENANCE FUNDS
The total balance of the maintenance funds is used for maintenance of the dams, syphons, valves, computerised system, office upgrades and housing.
Provision is made with the funds to provide for unforeseen large expenses and the maintenance of capital items.
3.4 RECOMMENDATIONS BY AUDITORS
From the current financial year onwards the auditors' recommendations of 2012, where projects are budgeted in income statement, is followed. Funds are kept in the Contingency Fund for unforeseen expenses.
3.5 SUNDRY DEBTORS AND CREDITORS
Sundry Debtors to the amount of R2,157,539.00 were outstanding of which R468,434.00 were the outstanding water use charges handed to the attorneys for collection. The bulk of the amount consisted of new licenses approved by DWS.
The Association, some time ago, adopted a resolution that the Contingency Reserve Fund should be at least 10,0 % of the total Income. The Association has managed to increase this percentage from 23.0% to 32.2%, in spite of undertaking a vast amount of maintenance work.
The negative influences of the current economic situation on the citrus industry may also have a negative influence on the Association's financial position.
Accordingly because of this volatility, it is necessary that reserves continue to be accumulated, to counteract any sudden increases in charges to the water user. The favorable position currently enables the Association to do urgent maintenance to the ageing canal infrastructure.
4. OPERATION AND MAINTENANCE
4.1. CANAL SYSTEM
The Association is continuously monitoring the progress of the repairs being undertaken by the Department of Water and Sanitation at the Veeplaats Main canal section where the embankment slipped. These works have now reached the next phase which is the stabilization of the current embankment which is almost completed. The next phase entails the ground works and construction of the new by - pass canal.
In the meantime, only 70% of the full capacity of the canal can be supplied through the temporary repaired canal.
Therefore, the Association requests downstream users to utilize water optimally and to keep dams full as far as possible. Through good management of the water supply system, the Association has thus far succeeded to supply all downstream users of their allotted quota of water.
During the recent dry period, external contractors were once again used to clean alongside the canals, mechanically remove mud from the canals and to seal joints and cracks. This meant that a lot more maintenance works could be done during this period and that the Association's staff could focus on essential repairs.
Maintenance works are attended to according to a priority list (critical faults affecting the most users first).The section of the Mistkraal main canal that collapsed, has been replaced and is nearing completion.
For all works (the erecting of fences, construction of bridges, the laying of pipelines or cables, etc.) within the servitude of the canal system, a written request must be submitted and written approval must be obtained from the Association before the works may commence.
All irrigation dams receiving water directly from the canal, must be supplied with an effective overflow structure to ensure that excess water does not flow back into the Association's canals and cause flooding downstream. The Association cannot be held liable for any damages caused by such dams.
The Association wants to thank water users that assist with the cleaning of canals, the reporting of faults and various other activities.
The rainfall figures as shown in table 5.1 below, are still below average and many parts of the country are still experiencing droughts.
Maintenance to the steel outlet pipes and sleeve valves at Darlington dam have commenced again by the contractor of the Department of Water and Sanitation, albeit progress is slowly.
No further repairs were affected by the Department of Water & Sanitation to the butterfly valve at Scheepersvlakte Dam.
Darlington dam started at a capacity of 63.918 million m3 (35.35 %) on the 1st July 2018 and ended with 63.158 million m3 (34.93%) on the 30th June 2019.
Refer to table 5.2 for the Darlington Dam balance figures.
4.3. ORANGE RIVER WATER
The water supply from the Gariep dam to the Lower Sundays River Water User Association is of cardinal importance and has once again ensured that irrigation activities could proceed as per normal in a country where large parts are experiencing droughts.
The current dam levels of the Gariep and Vanderkloof dams are indicated in Table 5.3 below.
4.4. WATER SUPPLY TO NELSON MANDELA BAY MUNICIPALITY
Water supply from Scheepersvlakte Dam through the NMBM pipeline to the Nelson Mandela Bay Municipality, has once again, year on year, increased drastically. See table 5.4.
The increase is a direct result of the drought in other parts of the province and the constant availability of water from the Gariep dam to the Lower Sundays River Water User Association.
Displayed below in table 5.5 are the water quality figures of last three years.
4.5. AUTOMATED SYSTEM
The automated system currently consists of the older telemetry control stations and the newer monitoring stations. The older telemetry stations require more maintenance and there are currently many gearboxes for the electrical motors that control sluices, which is in the process of being replaced. This system largely contributes to the effective control and restriction of water losses on the canal system as well as the accurate determination of the water use of the Association as prescribed by the Department of Water and Sanitation.
Attached in table 5.6, is the water use report for the past water year as submitted to the Department of Water and Sanitation.