Legislative Mandate 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 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 of 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) for implementation in 2019.
Umgeni Water’s traditional six (6) customers cover 32% of KZN geographical area and are home to 67% of households. With newly acquired customer number seven (7), uThukela DM, the focus area in 2019 will cover 44% of KZN geographical area and 73% of households.
- Umgeni Water’s infrastructure assets in support of its bulk water services business comprise:
- Approximately 897 kilometres of pipelines and fifty-three (53) kilometres of tunnels;
- Fourteen (14) impoundments;
- Seventeen (17) water treatment works; and
- Nine (9) wastewater treatment works.
Structure of Umgeni Water The Umgeni Water Group comprises a parent entity with two small subsidiaries.
The Executive Committee is the top management structure of Umgeni Water Parent and for the reporting year comprised of a Chief Executive and four (4) Executives, namely for Operations, Engineering and Scientific Services, Finance and Corporate Services. The Chief Executive guides the daily operations 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. The Board is appointed by the Minister of Water and Sanitation.
With respect to the subsidiaries, Umgeni Water has 100% shareholding in both 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 2018 comprised of:
- A head count of 1 231 employees;
- Revenue for the year of R2.90 billion with R1.19 billion net surplus generated; and
- Balance-sheet asset value of R11.54 billion of which reserves totalled R8.09 billion.