e r 2 - Umgeni Water

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Chapter| Analysiss off RiskssFiguFure 21.1: UmgeniWater’s strategic risksperr strategicperspectiveInfrastructurestability tomeetdemandtimeouslySustainable tariffCustomer andaGrowthCatastrophic failureePotable water andof strategicfinal effluent qualityinfrastructureFinancialCredit risk concentrationStakeholderrelationsLiquidityriskkDevelopmental andEnvironmentalHealth, safety andenvironmentWater resources availabilityincluding climatechangeServitudeencroachmentFrauFd riskOrganisationalLearningandGrowthLegal andIntegratedSkills availabilityregulatorybusinessand attractioncompliancecontinuityplanInformation andcommunicationstechnologygovernance21.2Assessment ofthe Major RisksTable 21.1:: Umgeni Watter’ss top 5 risks:# Risk and Riskk OwnerrOverall ControlStrength (OCS)Current Residual Risk Rating(CRRR)Risk Gap G (RG)1 FraudRiskOCS:(50%) SatisfactoryyRisk Owner: ChiefCRRR: R 175,000,0000 MajorrExecutiveRG: R70,0R000, 0000 ModerateRejectedby management &actionn to be taken within the2011/20122 business plann periodMitigation ApproachFollowingg a benchmarkexercise a framfmeworkfor fraudmanagement has been endorsed by b the AuditCommittee.The Fraudd Prevention policyy is to be submittedtoo theeBoardforr approval and thecurrentfraud prevention planistoo be reviewed thereafter. Thee fraud hotline is operationaland ismanagedby externall servicee providers & wherewerequestedd Internal Auditt undertakes add hoc investigations.2Waterresourcesavailability includinggclimate changeRisk Owner: GeneralManager Engineeringg& Scienntific ServicesOCS:(26%) WeakCRRR: R 51,.800,,0000 ModerateRG: R16,8R800, ,0000 MinorRejectedby management &actionn to be taken within the2011/20122 business plann periodUmgeni WatWer constantly monitors thee availability offsurface watewr resourcesto assess adeqaquacy tosustainn theorganisation’’s bulk water business. Waterconservationand demandmanagementinitiatives are pursuedtoincrease useefficiency, whilst alternative resourcee optionsincludingseawater desalinationn and wastewaterreclamation,are investigated. Research into climatechange iss undertaken too assesss impacts onn futureresourceavailability and inform adaptationstrategies.3Infrastructureestability tomeetdemand timeouslyRisk Owner: GeneralManager Engineeringg& Scienntific ServicesOCS:(48%) SatisfactoryyCRRRR : R 91,000,,0000 ModerateRG: R38,5R500, 0000 MinorRejectedby management &actionn to be taken within the2011/20122 business plann period.Umgeni WatWer maintains regular liaison with WaterServices Authoritiesregarding their futuree waterrequirements, and undertakes joint watersupplyinfrastructuree planning to ensure correct alignment andimplementationprogrammes.Similarliaison andinteraction iss maintained with DWAA regardingwaterPagee 150Umgeni WateWer Five-Year Business Plann | 201121/2012to 2015/2016
| Analysis of Risks Chapter# Risk and Risk Owner Overall Control Strength (OCS)Current Residual Risk Rating(CRRR)Risk Gap (RG)Mitigation Approachresource infrastructure requirements and implementationprogrammes. Umgeni Water’s infrastructure requirementsare consolidated into its Infrastructure Master Plan, whichis updated on an annual basis.4 Catastrophic failure ofstrategicinfrastructureRisk Owner: Heads ofOperations5 Health, Safety andEnvironmentRisk Owner: ChiefExecutiveOCS: (80%) Very GoodCRRR: R 35,000,000 MinorRG: R17,5000,000 MinorRejected by management &action to be taken within the2011/2012 business plan period.OCS: (48%) SatisfactoryCRRR:R 84,500,000 ModerateRG: R76,375, 000 Rejected bymanagement & action to betaken within the 2011/2012business plan period.Umgeni Water views this risk in the context of forcemajeurein that there is a low probability of occurrence buta high severity & impact which is out of the organisation’sdirect control. Umgeni Water’s insurance programmeincludes assets, business interruption and public liabilityinsurance policies. A Business Continuity Managementframework includes crisis management plans tostrengthen the organisation’s ability to respond todisasters.Umgeni Water maintains the following systems tomitigate this risk: Pre-screening & post screening medicalexaminations, contractor health & safety induction,Occupational Health & Safety management systems inOperations (OHSAS 18000) and being developedcorporate-wide, Occupational injuries & disease safetystandards & programmes are implemented. Wastemanagement & biodiversity strategies are beingdeveloped. The organisation ensures compliance withwater & environmental legislation & regulations, whichincludes monitoring and reporting if there is noncompliance.Refer to section 9 of the financial business plan for the analysis of the financial risks; sustainable tariff, credit riskconcentration and liquidity risk.Umgeni Water Five-Year Business Plan | 2011/2012 to 2015/2016 Page 151
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Chapter| Table of ContentsPage 2 Um
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Chapter| Foreword by the ChiefExecu
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| Introduction and Strategy Chapter
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| Introduction andd StrategyChapter
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| Policy StatementChapterChapter 3.
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| Directivesby thee MiniisterChapte
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For thee strategicobjective ‘excc
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| Self-Appraisal Chaptero The proje
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| Participation inCompaniesChapterC
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| Water ResourcesChapterChapter 7.W
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| Water Resources Chapter7.2 Water
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7.4 Water Demands, Planned Developm
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| Water Resources ChapterFigure 7.1
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| Water Resources Chapterconstructi
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| Water ResourcesChapterandSouthCoa
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| BulkPotable WaterSupply PlanChapt
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| BulkPotable Waterr Supply PlanCha
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| Bulk Potable Water Supply Plan Ch
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8.4.2 Bulk Water Supply Infrastruct
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| Bulk Wastewater Treatment andd Di
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| RetailSupplyChapterChapter 10.Ret
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| OtheOer Activitiess (Sectionn 30)
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| Other Activities (Section 30) Cha
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| HumanResources PlanChapterChapter
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| HumanResources PlanChapterFigure1
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| Human Resources Plan ChapterThe s
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| HumanResources PlanChapter12.7Gov
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| Environmental ManaMagementt Progr
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| Environmental Management Programm
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| Waterr Conservationandd Demand Ma
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| Financial Plan Chapter15.2.2 Staf
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| Financial Plan Chapter15.2.4 Raw
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SalTabCusteTheMsunuMguSizaUguiLemSi
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| Financial Plan Chapter15.4 Tariff
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| Financial Plan Chapter15.5 Subsid
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| Financial Plan Chapter15.7 Challe
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Table 15.12: Umgeni Water Income St
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| Financial Plan ChapterTable 15.14
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| Financial Plan ChapterTable 15.16
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Page 155 and 156: | Organisational Scorecard: Key Per
Page 165 and 166: | DeclarationChapterChapter 23.Decl
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e r 2 - Umgeni Water

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