Umgeni Water is a State-Owned Entity (SOE), established in 1974, to provide water services – water supply and sanitation services – to other water services institutions in its service area. The entity operates in accordance with the Water Services Act (Act 108 of 1997) and the Public Finance Management Act (Act 1 of 1999), amongst others, and is categorised as a National Government Business Enterprise. Umgeni Water reports directly to the Department of Water and Sanitation (DWS), through the Board (Accounting Authority) and through its functionaries, the Chairperson of the Board and the Chief Executive. The Minister of Human Settlements, Water and Sanitation is the Executive Authority for Water Boards.
Activities of Umgeni Water
The primary activities of Umgeni Water, as pronounced in section 29 of the Water Services Act, is to provide water services (water supply and sanitation services) to other water services institutions in its service area.
In addition, section 30 of the Water Services Act, enables Umgeni Water to undertake other activities, provided these do not impact negatively on the entity’s ability to perform its primary activity.
Supply Area and Customers
KwaZulu-Natal is the gazetted supply area of Umgeni Water and Mhlathuze Water and straddles a total geographical area of 94 359 km2, which is home to 11.1 million people and 2.9 million households.
The KwaZulu-Natal Province comprises one (1) Metropolitan Municipality, ten (10) District Municipalities and forty-three (43) Local Municipalities. Fourteen (14) of these municipalities are Water Services Authorities as defined in the Water Services Act.
In the reporting period Umgeni Water focused service delivery and largely derived revenue from six (6) customers:
- eThekwini Metropolitan Municipality;
- iLembe District Municipality;
- Ugu District Municipality;
- Harry Gwala District Municipality;
- uMgungundlovu District Municipality; and
- Msunduzi Local Municipality.
In November 2017, Umgeni Water successfully concluded a supply agreement with an additional municipality (uThukela District Municipality) with operations scheduled to start from July 2019.
Umgeni Water’s seven (7) customers account for 44% of KZN geographical area and are home to 72% households.
Umgeni Water’s infrastructure assets in support of its bulk water services business comprises of:
- Approximately 1 260 kilometres of pipelines
- and sixty-seven (67) kilometres of tunnels;
- Fifteen (15) impoundments;
- Twenty (20) water treatment works; and
- Eleven (11) wastewater treatment works.
Structure of Umgeni Water
The Executive Committee is the top management structure of Umgeni Water Parent, and for the reporting year comprised of a Chief Executive and five (5) Executives, namely for Operations, Infrastructure Development, Scientific Services, Finance and Corporate Services. The Chief Executive guides the day-to-day activities of the entity with powers delegated to him by the Board.
The non-executive Board is the Accounting Authority and provides strategic leadership to the Executive Committee; the Board is appointed by the Minister of Human Settlements, Water and Sanitation.
With respect to the subsidiaries, Umgeni Water has 100% shareholding in Msinsi Holdings SOC Ltd. and Umgeni Water Services SOC Ltd. The latter holds an 18.5% investment in Durban Water Recycling (Pty) Ltd.
The Umgeni Water Group as at 30 June 2019 comprised of:
- A head count of 1 250 employees;
- Revenue for the year of R3.54 billion with
- R1.41 billion net surplus generated; and
- Balance-sheet asset value of R13.12 billion
- with reserves totalling R9.45 billion.