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Staying out of hot

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Utilities

Maintaining a steady supply in a waterscarce country like South Africa is no easy task. Yet somehow, state-owned Rand Water has managed to maintain consistent resources and financial self-sufficiency for over one hundred years.

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t a time when the South African government is cracking down on financial mismanagement and corruption in state-owned enterprises, Rand Water stands out as a notable exception. The utility, which operates mainly in the northern Gauteng province under the Department of Water and Sanitation, is a profitable and well-run entity that has consistently displayed a commitment to reliable water supply and sustainability. Providing water in a country that is frequently crippled by shortages is no mean feat. Yet Rand Water successfully provides over 3,500 million litres of water daily to over 11 million people, using its distribution network of over 3,000 kilometres of pipeline.

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KSB Pumps and Valves (Pty) Ltd KSB achieves Level 1 B-BBEE status

Rand Water isn’t just adequate though - it’s actually a profitable and well-run SOE. In the last six months of 2017, the company turned a R1.8 billion profit, a massive increase of 21.3%. Throughout its one hundred years of history, it has always managed to remain financially self-sustaining. Yet the company succeeds because it knows that it is a rarity, and can make strategic decisions that are in line with the challenges it so clearly faces.

“Providing water in a country that is frequently crippled by shortages is no mean feat Reliability

Rand Water’s success stands in stark opposition to many other SOEs in the country, particularly state-owned electricity company Eskom Holdings, which has long been infamous for its astronomical debt of R600 billion, frequent blackouts and ongoing allegations of corruption. But Eskom’s problems are South Africa’s problems too, and Rand Water knows it is no exception. Currently, the company relies on Eskom’s electricity to supply water through its pipeline systems, and back in 2014, a power outage cut water supply to some municipalities for

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nearly two weeks. In June, Rand announced that it had invested R300 million in emergency power supplies in a bid to ensure its ability to supply water to its customers remains uninterrupted by Eskom’s woes. “We want to go off-grid,” commented Sipho Mosai, chief operating officer, at the launch of the emergency units in Roodeport. The decision to become more independent of Eskom comes just after the protest action by Eskom employees led to loadshedding, disrupting power supply across the country.

One of Rand Water’s largest pumping system suppliers, KSB Pumps and Valves (Pty) Ltd recently announced that it has achieved Level 1 B-BBEE status following the acquisition of 30% of its holding company’s shares by a 100% black women-owned company, Insikazi Synergies (RF) (Pty) Ltd. For the German-owned multi-national, transformation is not only a strategic imperative for operating in this market, but something it embraces as a company that will soon celebrate 60 years of operating in South Africa. ‘We are proud to be the first pump and valve Original Equipment Manufacturer (OEM) to achieve Level 1 B-BBEE status in South Africa,” says KSB managing director for South Africa, Dr Sven Baumgarten. Insikazi has four shareholders, all highly qualified and experienced black businesswomen who will actively contribute to the KSB business, with Nonhlanhla Ngwenya and Matshepiso Finca joining the Board of Directors.

Stress headaches

Irrespective of third parties, South Africa is a water-stressed country, making Rand Water’s job a daily uphill battle. Water loss through leaking pipes, some of which are over a hundred years old, is a nationwide issue, driving up prices while limiting supply for customers. It’s estimated that South Africa loses R7 billion in water every year. Across the country, there is an urgent need for new infrastructure as well as infrastructure refurbishment projects to prevent South Africa from running out of water. Rand Water have been at the forefront of the world’s largest bi-national infrastructure project in cooperation with landlocked Lesotho for two decades.

The Lesotho Highlands Water Project (LHWP) is a large-scale infrastructure project aimed at redirecting water from the mountains of Lesotho to South Africa, providing hydropower for the former and adequate water supply for the latter. Construction on the second phase of the project began in 2014.

Empowering the community

While improvements to infrastructure are undoubtedly necessary, Rand Water also takes a proactive approach to water loss prevention by empowering the community to take matters into their own hands. Infrastructure projects, although desperately necessary,


Sector

Projects half page 2018 rev1a.pdf 1 04/09/2018 14:44:59

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Pump station rehabilitation and upgrading – state-of-the art water engineering technology

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With decades of experience KSB has become a specialist in pumping station rehabilitation and upgrading in all the water sectors. From detailed planning through to implementation – KSB provides support at all stages of pumping station rehabilitation and upgrading. • • • •

Pumps Diesel Generators Plant accessories such as pipes and valves Telecommunication systems

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Low and high voltage switchgear Control systems for fully automatic operation System analysis and design.

For more information on this email our Projects department on projectsalesza@ksb.com www.ksbpumps.co.za

aren’t being commissioned quickly enough and those that have begun construction may not be complete in time to avert a water crisis. As a result, Rand Water has an active Community Based Projects Department (CBPD) which partners with municipalities on projects aiming to reduce water losses. Through the work of the CBPD, community members in affected municipalities receive accredited training on the detection of leakages as well as repair work. This has not only given rise to improved water supply and fewer leakages in regions where projects have taken place,

but opened up new business opportunities for community members and empowered them to play an active role in water loss management initiatives in future to help mitigate the effects of leakages while they are still an inevitability.

Making preparations

Rand Water is not blind to South Africa’s challenges. On the contrary, its crystal-clear vision is instrumental to both its financial success and continued reliability

Follow us: @Rand_Water Rand Water

in terms of supplying water to its domestic, commercial and industrial customers. This ability to recognise upcoming obstacles before they become a problem continue into the company’s most recent report, where they were open about the challenges presented by climate change. However, Rand Water is already preparing to develop technology that will increase efficiency and make sure that its operations stand the test of time. If their history of adaptability and foresight is anything to go by, customers in Gauteng province can trust that Rand Water will continue to cope with both environmental and infrastructure constraints.

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Head Office 522 Impala Road Glenvista, 2058 South Africa Tel: +27 (11) 682 0911 Customer Service Centre: 0860 10 10 60 Email: customerservice@randwater.co.za

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www.essentialbusinessmag.com ŠEssential Business Magazine 2018

Rand Water  

Staying out of hot water

Rand Water  

Staying out of hot water