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LICENCE ANALYIS CHECKLIST AND EVALUATION FORM WATER ACT 2016

Name and Address of Water Service Provider:

Eldoret Water and Sanitation Company Limited

P.O. BOX 8418-30100

ELDORET

NOWSP APPLICATION CONDITION Minimum RequirementsANALYSIS/ASSESSMENT  BY WASREB 
1.Preliminary details
                i.            Date received by WASREBDate of receiptSupporting documentation provided in hard copy
              ii.            Application fee receivedProof of payment*Application fee paid
             iii.            Certificate of Company RegistrationCopy of certificate*Company registration No. C78551
             iv.        Geo- Referenced Map of Service Area accompanied by “Shape Files”·        PDF illustration

· List of sub-locations*

· Shape files*Mandatory for mapped WSPs (66)

To view service Area map

Click Here

 

              v.        Copy of letter to county on application· Copy of letter*

· Share application with the county

To provide a copy of letter to County on application
             vi.  Period of License (Agreed per category)To be defined

To be illustrated in Financial Years, recommended 5 years

To Be Determined
Institutional profile
i. Compliant memorandum and objects of association to WASREB standardsAs per model memorandum of association*MOA to be aligned to the Water Act 2016, Companies Act 2015, specifically provide that:

·         WSP is owned by county government (issue shares to the county secretary, CECM for Finance and  CECM Water holding in trust for the county government)

ii. Details of board members meet the governance standards ; competence in academic and professional criteria and stakeholder representation ; genderInformation sheet on BoDTo provide CR 7 form duly completed by the registrar of companies.
iii. Key  executive staff meet competence criteria of LN 137 of 2012 (Level 1, 2 & 3)Profile of key staffTo provide competencies of the new Managing Director
iv. Approved Staff Establishment  in line with WASREB StandardsApproved Staff Establishment

 

To provide staff establishment Vs in post
 Human Resource Management
         i.     Approved Human resource policy manual  in line with WASREB StandardsApproved updated Human resource policy  Manual as per modelTo align the Human Resource Policy with the existing guidelines
       ii.            Performance management  system· PMS in place

· Evidence of appraisal (implementation)

To provide evidence of signed appraisal document
     iii.            HIV PolicyHIV PolicyTo implement the HIV Mainstreaming activities under the NACC Guidelines.
     iv.   Collective Bargaining Agreement  in line with WASREB Standards· Valid CBA

· In line with approved tariff

The CBA provided had expired. Any new CBA if any should be negotiated based on existing guidelines.
       v.    Contracts of employment  for  Management Staff with clear terms and conditions of service· Sample Copy of signed contracts for  Management StaffTo provide samples of signed contract of management staff
     vi.       Contracts  of employment for  unionisable  and other staff with clear terms and conditions of service· Sample Copy of signed contracts unionisable  and other staff

· Link to CBA

To provide samples of signed contract of unionisable staff
    vii. Approved Organization Structure in Line with WASREB StandardsApproved Organization StructureThe utility to:

· Establish a Non-Revenue management function in the structure at level 3

· Establish an asset planning and development function in the structure at level 3

· The two functions (NRW Management function and asset planning and development function) to be filled with requisite skills.

  viii.        Code of Conduct and Ethics for employeesSample Copy of signed code of Conduct and Ethics for employeesTo establish a code of conduct and ethics for employees and provide a sample copy of signed code of conduct for employees
      ix.     Pension Scheme Arrangements whether DB or DC  and Compliance to relevant laws and guidelines (RBA act, Treasury circulars, Scheme roles and deeds)Evidence of Pension Scheme Arrangements.

Should be a DC scheme.

To provide details on the scheme type  and rates
Information on Technical Management
i. Water sources and abstraction permits (Own Source or Guaranteed Bulk Supply)· Water sources and valid abstraction permits

· Bulk supply agreements where applicable

Provided 3 out of 4 permits expected.

· WRMA/11/ELD/1CB/42/S Two Rivers source.

· WRMA/11/ELD/1CB/43/S Ellegrini Dam source.

· WRMA/11/ELD/1BA/44/S Moiben Dam Source.

 

To provide missing Kesses Dam source permit and confirm the status of Kipkaren dam as a source for Eldowas

 

ii. Scheme summary water· Total Population in SA and population served

· Production and billed water sources and abstraction volumes

· Water treatment process

· Billing and collection amount

· No. of staff (contract and permanent)

· O+M cost

· Personnel, chemical and energy costs

· Total (registered, active) and metered connections

To provide scheme summaries for all schemes (refer to minimum requirements outlined)
iii. Scheme summary waste water· Total Population in SA and population served

· Volumes of influent to be treated

· Waste water treatment capacity

· Billing and collection amount

· No. of staff (contract and permanent)

· O+M cost

· Personnel, chemical and energy costs

· Total (registered, active) and metered connections

To provide scheme summaries for all schemes (refer to minimum requirements outlined)
iv. Compliance with WQEMG –last report· Latest report for the month preceding the application

· Check against previously submitted reports

· Determine compliance

To provide Water and effluent quality reports for the FY 2017/18 as per Wasreb guidelines on Water Quality and Effluent monitoring.
v. Copy of effluent discharge permitValid effluent discharge permit(s)To provide valid effluent discharge permits or current application documents to NEMA
vi. Asset Register – assets owned by WSPCopy of asset registerTo be provided in form of a comprehensive list with Net Book Values after depreciation for each asset
vii. Asset Register- assets from Local AuthorityCopy of asset registerTo be provided in form of a comprehensive list with Net Book Values after depreciation for each asset
viii. Asset Register –assets from Water Service BoardCopy of asset registerTo be provided in form of a comprehensive list with Net Book Values after depreciation for each asset
ix. Asset maintenance scheduleCopy of asset maintenance scheduleTo provide details of the transmission and distribution infrastructure and appurtenances maintenance.
x. Approved Water Safety PlanYes/NoTo be provided as it was to be implemented as per the existing Strategic Plan
xi. Signed deed of handover  of all assets including new ones during the previous SPA periodCopy signed deed of handover  of all assetsTo provide deed of handover/transfer documents of all assets.
xii. Details of planned institutional and infrastructural improvementsReview planning documents (strategic plan, master plan, business plan) to determine adequacy/link to performance targetsProvided
xiii. Financing PlanA plan to support activities in (xii) aboveTo provide an approved financing plan
Information on Commercial Management
i. Copy of Customer contractCheck against model customer contractTo be aligned  to the model customer contract
ii. Customer complaint handling procedureCheck against CEGTo provide complaint handling procedures aligned to Customer Engagement Guideline
iii. Customer Service CharterCheck against minimum service standardsTo be aligned to the  sector standards
iv. Procurement PolicyApproved procurement policy/or evidence of following PPAD Act 2015To provide the approved procurement policy
v. Evidence of Stakeholder ConferenceEvidence of Stakeholder Conference invitation, list of participants, minutes within the last 2 financial yearsTo provide evidence of stakeholder engagement including minutes, list of participants etc
vi. Tax compliance certificate/statusCheck validity, validate with iTaxTo provide evidence of a tax compliance certificate
vii. Most recent  two years Auditor General Reports· Audit certificate for the 2 years

· Signed audit reports

To provide audited accounts for 2016/17 FY
viii. Website Information on annual reportCheck website for annual reportTo upload the most recent annual report  in the website
ix. Evidence of Bi- annual Customer Satisfaction SurveyReport within the last 2 yearsTo provide evidence of customer satisfaction survey
x. Adoption of Maji VoiceCheck against Maji Voice list and adoption status (reports)Utility to increase uptake of system usage from the current year onwards
xi. Compliance to WASREB’s website requirementsCheck website against WASREB standardsTo align to WASREB standards- Annual Reports, Tariff, Complaint procedure, Link to MajiVoice
Information on financial management
i. Proposed / Valid Regular TariffCheck validity on websiteApplication submitted to WASREB
ii. Maintenance Costs / O+MCheck against tariff, audited accounts and WARIS data2015/16; 7%

2016/17; 7%

Acceptable range is 8% – 15%

iii. Employee Costs / O+M2015/16; 49%

2016/17; 48%

Acceptable Sector Benchmark, <30%.

iv. O+M Coverage2015/16; 145%

2016/17; 156%

Full cost recovery, >150%

v. Quick Ratio (Acid Test ratio)2015/16; 1.5

2016/17; 1.97

Acceptable limit,  >=1

vi. Debtor days2015/16; 304

2016/17; 303

Acceptable limit, <=90 days

vii. Collection Efficiency2015/16; 88%

2016/17; 83%

Acceptable Sector Benchmark, >85%

viii. Debt Service Coverage Ratio2015/16; 0.16

2016/17; 0.23

Acceptable limit, >=1.25:1

To confirm basis of the ratio

ix. Performance GuaranteeYes/NoTo Be Determined
x. Approved Strategic PlanBoD Approved Strategic PlanProvided
xi. Specifications of the current billing systemCheck against WASREB standardsUtility  to carry out self-assessment
xii. Operational business plan· BoD approved Operational business plan

· Check against WASREB standards

To provide an operational Business Plan aligned to the Strategic Plan
xiii. Approved Disaster Management PlanBoD Approved Disaster Management PlanTo provide an approved Disaster Management Plan
Asset Handover
i. New water supply asset handed over during last 10 years by source· List of assets/projects

· Hand over certificate(s) for water supply asset(s) handed over

To provide list of water assets/projects and certificates of handover, or explanation as to why they are missing.
ii. New waste water assets handed over last 10 years by source· List of assets/projects

· Hand over certificate(s) for waste water asset(s) handed over

To provide list of wastewater assets/projects and certificates of handover, or explanation as to why they are missing.
Projected improvement of services in license  period
i. Small scale providers in service area –situation described and projected· List of SSPs in the SA

· Link to Main WSP

· Report of SA mapping exercise

Provided a list of 8No. SSSPs which are under their regulation. However the mapping exercise outlines 14 No. SSSPs some of which are unregulated.
9.Performance improvements in license period   
a.       Quality of Service  
                i.            Water coverage %Check against 2022 targets and link to NWSSProposed trend is acceptable. 76%(Y0), 78% (Y1), 80% (Y2), 82% (Y3), 84% (Y4), 86% (Y5)
              ii.            Drinking Water Quality %100%To attain 100% from Y1 onwards
             iii.            Hours of SupplyProgression to acceptable sector benchmarksService quality improvement to be balanced with growth in coverage. To progress to acceptable Sector Benchmark, at least 16 hours per day.
             iv.            Sewerage coverage %Check against 2022 targets and link to NWSSProposed trend is acceptable. 33%(Y0), 34% (Y1), 36% (Y2), 38% (Y3), 40% (Y4), 42% (Y5)
              v.             Effluent Quality %100%To attain 100% from Y1 onwards
b.       Economic Efficiency  
                i.       Personnel Expenditure as % of O+M costs %Compliance to sector benchmarksTo harmonise the two figures and reduce as per the trend below:

48%(Y0), 46% (Y1), 44% (Y2), 42% (Y3), 40% (Y4), 38% (Y5)

              ii.            O+M Costs coverage %Progression to full cost recoveryTo maintain the figure at 150% throughout the period.
             iii.            Revenue Collection Efficiency %Compliance to sector benchmarksFigure provided is 95% against WARIS figure of 88%. To harmonise the two figures and separate between collections for the current period and arrears.

To attain the proposed target by the end of the license period.

c.       Operational Sustainability  
                i.            Non Revenue Water  %Progression to acceptable sector benchmarksUsing the figure of 43%, to reduce as indicated: 43% (Y0), 39% (Y1), 36% (Y2), 34% (Y3), 32% (Y4), 30% (Y5). Clear measures in this regard to be clearly documented.
              ii.            Metering(operational) ratio %100%To progress to 100% but ensure all meters are functional.
             iii.            Staff ProductivityProgression to acceptable sector benchmarksTo main the current performance throughout the license period.
             iv.            Environmental ( source) protectionCheck CSR reports, SP, Go green, renewable energyWSP to document efforts towards source protection.
v. Governance IndicatorScore for last assessmentThe score for 2015/16 is 66%

Acceptable performance 50%.

vi. Pro-poor AssessmentThe score for 2016/17 is 49%

Acceptable performance 75%.

Other Issues
                i.            Evidence of Public ConsultationEvidence of Public Consultation invitation, list of participants, minutes for the license application To be undertaken
              ii.            License Fee   to be paidYes/NoTo be paid on issuance of the license
             iii.            Arrears of Regulatory LevyReconciled amountArrears of Kshs. 1,030,824.00 as at 30th June 2018 to be cleared before issuance of License
             iv.       Arrears of Licensee Remuneration to WSBsReconciled amount Arrears to be cleared before issuance of License.

 Date of Evaluation          24th July 2018

  

Management Recommendation on License application and conditions in License based on commercial viability criteria below 

Performance rangeRemarks
≥70Commercially Viable
50 69Not Commercially Viable. However, entity has to be nurtured to viability. There must therefore be clear projections to support this.
<50Not Commercially Viable in the short term but with improvements may be nurtured to commercial viability.

 

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