Infrastructure Development

Presentation to SCOA28 August 2012

Cape TownaDDG: NWRI

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Projects within Capital ProjectsProject

1 Olifants River Water Resources Development Project – Phase 2A (De Hoop Dam)

2 Olifants River Water Resources Development Project – Phase 2 Bulk Distribution System

3 Mdloti River Development. Hazelmere Dam Raising

4 Olifants – Doorn River Water Resources Project – Raising of Clanwilliam Dam

5 Mokolo and Crocodile River (West) Water Augmentation Project Phase 1 (MCWAP-1)

6 Komati Water System Augmentation Project (Off-budget)

7 Mooi Mgeni Transfer Scheme – Phase 2 (Off-budget)

8 Vaal River Eastern Sub-System Augmentation Project (VRESAP)(Off budget)

9 Nandoni Pipeline 230 April 2012

Project description:Construction of the 80 m high De Hoop Dam and related infrastructure - to supply water to domestic and industrial users in the middle Olifants river catchment area.

Status: Approved as Government Water Work.Province: LimpopoJobs impact: • Direct project construction jobs (peak):

• 1150 : De Hoop Dam• 528 : Road re-alignment• 250 : Housing infrastructure

• Jobs due to new industrialisation and growth: ±5000

Projected cost to completion: • Phase 2A (Dam): R3.1bnProject Scope: • Construction of the De Hoop Dam.• Re-alignment of 20 km portion of P169-1.• Housing infrastructureProject schedule: • Construction started: June 2007• Construction Completion: March 2013

Progress/Challenges• Impoundment delayed to August 2012• Green Scorpion’s allegations of non-

compliance• Sediment from upstream open cast mining

polluting and decreasing dam storage capacity

• Community distress if primary water is not supplied

• Some workers’ contract completion processes to commence in February 2012

• The section 19 pollution remediation directive has been issued.

Olifants River Water Resources Development Project – Phase 2A (De Hoop Dam)

330 April 2012

Project description:The construction of the bulk distribution system which will transfer water from the De Hoop and Flag Boshielo Dams to domestic and industrial users in the middle Olifants River catchment area.Status: Approved as Government Waterwork.Province: LimpopoJobs impact: •Direct project construction jobs: 2 000 jobs for the BDS•Jobs due to new irrigation and industrialisation and growth: 5 000Projected cost to completion: •Phase 2B-H (Distribution): R12,975bnProject Scope: •Construction of the Bulk Distribution system that will convey raw water from the De Hoop and Flag Boshielo Dams to domestic and industrial users.Project schedule: •Construction of 2C commenced, completion by March 2014.•Phased completion following implementation of water reconciliation study and funding availability

Progress / Challenges• The mining houses did not want to sign the off take

agreements (citing that the water was too expensive); TCTA could not obtain funding from the capital market because of this,

• TCTA already had committed funds on the projects because of the detail design already 90% complete

• National Treasury had to fund the revised directive to implement Phase 2C (pipeline from the De Hoop dam to Steelpoort)

• Phase 2C important as the De Hoop dam is almost completed.

• Facilitation process amongst stakeholders to agree on the BDS configuration.

• Still a possibility of off budget funding when facilitation process is completed.

Olifants River Water Resources Development Project – Phase 2 Bulk Distribution System

30 April 2012

Project description:• This project is to augment the water supply to

the KZN North Coast by increasing the yield of the dam for medium term supply.

Status: Approved as Government Water Work.Province: KwaZulu Natal, ILembe District.Jobs impact: • Direct project jobs estimated at 300.Projected cost to completion: • The revised estimate (April 2012) is R 360

million (incl. VAT, contingencies, escalation) Project Scope: • The installation of crest gates.• Civil work for dam safety and stability.• Acquisition of additional land in dam basin.Project schedule: • Design of civil works started - October 2011• Civil contract award - July 2013• Gate contract award - November 2012• Project completion - September 2014

Progress & Challenges:• Valuation of properties and tender for crest

gates is on hold pending outcome of viability of project at increased cost.

• Due diligence analysis of preferred design option for raising, incl. geological investigation, has been completed.

• Report on preferred design option needs to be submitted to CD: IWR Planning.

Connected issues: • Construction of infrastructure by Umgeni

Water.Decisions required:• Economic viability of project needs to be

confirmed by Chief Director: IWR Planning.

Mdloti River DevelopmentHazelmere Dam Raising

530 April 2012

Olifants-Doorn River Water Resources Project – Raising of Clanwilliam Dam

Project description:• Raising of existing full supply level by 13 metres to

provide additional water to supply full existing allocation, establish resource poor farmers and address dam safety aspects.

Status: Approved as Government Water Work.Province: Western Cape, Cederberg Municipality.Jobs impact: • Direct project construction jobs: 650• Jobs due to new irrigation and growth: 2 500Projected cost to completion: R1 830 millionProject Scope: • Raising of the dam wall and spillway.• Construction of a multi-level outlet works. • Re-alignment of Route N7 and Provincial roads.• Compensation for affected properties.Project schedule: • Design of N7 re-alignment started - July 2011• Design of dam wall started - March 2011• Construction of N7 re-alignment - Nov 2012• Construction of dam wall raising - April 2013• Completion of project - May 2017

Progress & Challenges:• Design of the N7 re-alignment is in

progress.• Investigation of Provincial roads has

started.• Detailed design of dam wall raising and

outlet works is in progress.• Determination of dam boundary line is in

progress.Connected issues:• Upgrading of existing conveyance system

and allocation of water to users.Decisions required:• Record of Implementation Decisions.• Confirmation of funding from National

Treasury for construction of project.30 April 2012

Project description:Construction of a pumping station and 46 km of pipeline, with a diameter of 1m to deliver bulk raw water from the Mokolo Dam to Medupi and Matimba Power stations, Exxaro and for the expected growth in the Lephalale Municipality. The existing pipeline will be refurbished following commissioning of the new works. Status:Approved as Government Waterwork.Province:LimpopoJobs impact: •Direct project construction jobs: 1 600Projected cost to completion: R2,138 billionProject Scope: •Construction of a pumping station.•Construction of a 46 km, 1m diameter pipeline.•Refurbishment of existing pipeline•TCTA to obtain off budget funding (75% commercial)Project schedule: •First delivery of water at the end of 2013•Forecast project close out: August 2015

Progress& Challenges:• Project advanced to detail design and construction

phase.• Water supply agreements concluded between Eskom,

Exxaro and DWA.• DWA-TCTA Implementation Agreement concluded

December 2011.• Fitch rating AA+ achieved, funding secured• Contract awarded in June 2011.• Site handed over to contractor on 14 Sept 2011 and

physical activities started during November 2011• Environmental baseline studies ongoing• No significant challenges at this stage• Agreement on subsequent phases to be obtained

Mokolo and Crocodile River (West) Water Augmentation Project Phase 1 (MCWAP-1)

30 April 2012

Project description:Construction of a pumping station and two pipelines to provide water to Duvha and Matla Power Stations.Status: Approved as Government Waterwork.Province: MpumalangaJobs impact: •Direct project construction jobs: 800Projected cost to completion: R1,736 billionProject Scope: •Construction of a pumping station at Rietfontein Weir.•Construction of a 58,4 km , 1,1m diameter pipeline to Duvha Power station•Construction of a 12,9 km , 600mm diameter pipeline to Matla Power station.•TCTA to obtain off budget funding (100%)

Project schedule: • Construction commenced in January 2011• Forecast project close out in October 2013Progress & Challenges:• Water supply long term funding for the

project had been secured.• Delays in pipe manufacturing solved• 17,5 km pipes laid, expect water delivery end

January 2013• No significant challenges reported

Komati Water System Augmentation Project - KWSAP (Off-budget)

30 April 2012

Project description:Construction of the 42 m high Spring Grove Dam, the associated transfer system and the refurbishment of existing MMTS-1 pumping station and transfer system.Status: Approved as Government Waterwork.Province: KwaZulu NatalJobs impact: •Direct project construction jobs: 850•Jobs due to growth: 800Projected cost to completion: R1,67billionProject Scope: •Refurbishment of existing MMTS-1 pipeline system.•MMTS-2A:Construction of the 42 m high Spring Grove Dam.•MMTS-2B: Construction of a transfer system. •Acquisition of off budget funding by the TCTA (100%).Project schedule: •Construction Commenced during Feb 2011•Forecast Project Closure Jan 2015Progress/Issues:•The sod turning event was held on the 16th May 2011.

• Municipal off-take Agreements between Umgeni Water (UW) and eThekwini, uMgungundlovu and Msunduzi Municipalities were signed

Progress & Challenges:• Stage 2 River Diversion works are completed.• Excavation completed• EMPR restriction of 30 heavy duty trucks per day

hindering supply of construction materials was lifted

• Impoundment delayed to January 2013• Environmental authorisation of pipeline route

contested and upheld resulting in reassessment of environmental impact assessment, started during February 2012

• Pre-qualification of contractors commenced

Mooi Mgeni Transfer Scheme – Phase 2 (Off-budget)

30 April 2012

Project description:Construction of a raw water conveyance system of an abstraction system, storage reservoir, a high lift pump station, a 121 km pipeline, surge tank and diversion structure.Status:Approved as a Government Waterwork.Province: MpumalangaJobs impact: •Direct project construction jobs: 1 600Projected cost to completion: R2,698 billionProject Scope: •Construction of an abstraction works.•Construction of a storage reservoir.•Construction of a high lift pump station.•Construction of a surge tank and a diversion structure.•TCTA to obtain off budget funding (100% commercial)Project schedule: •Forecast project close out: July 2012

Expenditure:• Project 99% complete (permanent

abstraction works not complete)• Earning revenue from June 2009• Progress & Challenges:• Works commissioned, snags being

addressed• Abstraction works to be completed by May

2012.• Challenges experience with the coffer dam

demolition.• Potential legal action by contractor (C-MC)

due to premature contract termination for poor performance.

• DWA O&M staff challenges

Vaal River Eastern Sub-System Augmentation Project (VRESAP)

(Off-budget)

30 April 2012

Luvuvhu River Government Water Luvuvhu River Government Water Scheme: Nandoni Steel PipelinesScheme: Nandoni Steel PipelinesProject description:Construction of the five new pipelines to complete Nandoni

bulk distribution system and to replace problematic GRP pipelines, including the Valdezia Pipeline

Reasons for under-spending in the 2011/2012 year :• The budget of R203 million was allocated before the

design had commenced.• The appointment of the professional service provider who

is responsible for the design and construction supervision was finalized during February 2012, which impacted on the completion of the designs and caused a significant delay.

• The pipe diameters had to be changed because of the higher water demands due to the later design options (previously 2010 and now 2025).

• The project was accelerated by awarding the construction of the pipeline to three different contractors.

Province: LimpopoJobs impact: About 300 jobsProjected cost to completion: R750,1 millionProject Scope: This project includes new steel pipelines forXikundu Distribution Scheme and NandoniDistribution Scheme

Project schedule: • The Lukalo-Lambani, NN20B and NR6 bulk lines to the

north of Nandoni Dam and Xikundu Weir respectively will be completed by end of October 2012.

• The construction of the Vuwani bulk pipeline has been split into three contracts. The contractors established the site in June 2012 and the work will be completed by May 2013. The Valdezia bulk pipeline, is being constructed by DWA Construction: North and will be completed by April 2013.

Progress/Challenges• Updated water demand figures are significantly higher

than the previously estimated, requiring larger pipe diameters .

• Approval for roll-over of R200 incl vat has not yet been received from National Treasury.

• Risks or challenges– Possible delay with supply of pipe

materials – Cash flow of emerging contractors– Labour/Industrial action/strikes or go

slows– Compliance with stringent environmental

conditions

• Local Water distribution Infrastructure to be implemented by Local Authorities

Decisions required:None

Dam Safety Rehabilitation Programme (DSRP)

• The Klein Maricopoort Dam near Zeerust and Rust de Winter Dam near Hammanskraal was successfully completed in the fourth quarter to bring the total number of dams completed to four for the financial year.

• Various rehabilitation design projects are carried out using internal staff and progressing well.

• Numerous projects are promoting labour intensive methods and maximising job creation.

• Slow procurement processes are hampering progress where DWA Construction is involved.

• Shortage of staff doing rehabilitation design internally is delaying progress.• Non appointment of consulting engineering PSPs are delaying implementation of

various projects.• Non appointment of mechanical term contracts are delaying implementation of

various work.• Unavailability of as-built drawings increases the possibility of variations on contracts

TCTA Tender and implementation process

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• Directive by Minister• Project Charter including SED prescripts in terms of legistation• Preparation and approval of tender documentation by TCTA Board• Public invitation to select preferred bidders (pre-qualification of

contractors)• Submission of tender documentation to preferred bidders• Adjudication of bids• Awarding of contract• Credit rating obtained from financial markets• Secure loan funding• Supervision of construction contracts• Submission of contractor invoices• Monthly certification of work performed to specification

TCTA Tender and Implementation Process cont.

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• Project ready for operation• Project ready for commission• Handover to DWA for operation and maintenance• Commencement of defects liability period • Commencement of debt repayment period• Customer invoiced for water consumption as per

capitol unit charge• Users, TCTA and DWA meet annually to set tariffs in

accordance with agreement

END

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