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LICENCE ANALYSIS CHECKLIST AND EVALUATION FORM WATER ACT 2016

Name and Address of Water Service Provider:

Isiolo Water and Sewerage Company Limited

P.O. BOX 491

ISIOLO

NOWSP APPLICATION CONDITION Minimum RequirementsANALYSIS/ASSESSMENT  BY WASREB 
1.Preliminary details
           i.        Date received by WASREBDate of receipt·
          ii.        Certificate of Company RegistrationCopy of certificate*· Copy of Certificate of Incorporation no C117982
         iii.   Geo- Referenced Map of Service Area accompanied by “Shape Files”

·  PDF illustration

· List of sub-locations*

· Shape files*Mandatory for mapped WSPs (66)

        iv.        Copy of letter to county on application

·        Copy of letter*

·        Share application with the county

OK
         v.         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*WSP to submit copy memo and articles of association before license meeting with management.
ii. Details of board members meet the governance standards ; competence in academic and professional criteria and stakeholder representation ; genderInformation sheet on BoD

WSP to submit CR 7 Form for records.

 

Company has nine (9) directors seven of whom were competitively recruited and been inducted by WASREB

 

Board is balanced gender wise

 

Board to ensure compliance with the corporate governance guidelines, license conditions, tariff conditions among others.

iii. Key executive staff meet competence criteria of LN 137 of 2012 (Level 1, 2 & 3)Profile of key staff·         To in addition include the Professional qualifications of the core management team
iv. Approved Staff Establishment in line with WASREB Standards

Approved Staff Establishment

 

·         To provide Approved staff establishment versus in-post.
 Human Resource Management
      i.        Approved Human resource policy manual in line with WASREB StandardsApproved updated Human resource policy Manual as per model· The HR Policy manual was done in 2008 and there is need for revision in line with public service HR policy guidelines 2016.
     ii.        Performance management system

·        PMS in place

·        Evidence of appraisal (implementation)

· To provide evidence of appraisal implementation
    iii.        HIV PolicyHIV Policy·  In addition to implement NACC guidelines on HIV and AIDS mainstreaming
   iv.        Collective Bargaining Agreement in line with WASREB Standards

·        Valid CBA

·       In line with approved tariff

·         To confirm whether the company has CBA or not
    v.        Contracts of employment for Management Staff with clear terms and conditions of service·        Sample Copy of signed contracts for Management Staff·         To provide signed sample contracts for 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 signed sample contracts for unionisable staff if any.
  vii.        Approved Organization Structure in Line with WASREB StandardsApproved Organization Structure

· To separate the commercial and finance function.

·         To also include the asset planning and development function in the structure.

 viii.        Code of Conduct and Ethics for employeesSample Copy of signed code of Conduct and Ethics for employees·         To provide signed sample codes 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.

·  The company operates a provident fund scheme at 7.5% employee and same rate of contribution is matched by the employer

·  The company to ensure compliance with pension contribution rates in line with the treasury circular No. 18/2010 as communicated vide WASREB letter REF: WASREB/LIC/534/VOL.XVIII (83) dated 18th September 2018.

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

Listed sources as:

1.    Isiolo river,

2.    Rugusu, &

3.    3 boreholes

 

To provide valid abstraction permits for all outlined sources.

 

For the boreholes, provide details for each.

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

What was submitted was a listing of sources and capacities.

 

·        To present the information in the acceptable framework as provided in this summary form as per the checklist.

 

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 present the information in the acceptable framework as provided in this summary form as per the checklist.
iv. Compliance with WQEMG –last report

·        Latest report for the month preceding the application

·        Check against previously submitted reports

·        Determine compliance

Utility does not report on Water and effluent quality monthly and annually.

 

·  To provide annual Water quality report for the FY 2017/18 as per schedule 13 of Wasreb guidelines on Water Quality and Effluent monitoring.

v. Copy of effluent discharge permitValid effluent discharge permit(s)

Permit provided expired on 23rd January 2016

· To provide a valid discharge permit or evidence of formal application to NEMA for renewal.

vi. Asset Register – assets owned by WSPCopy of asset register·         To provide an updated and comprehensive register containing the totality of all assets being utilized by the utility, with their respective current Net Book Values after depreciation.
vii. Asset Register- assets from Local AuthorityCopy of asset register· To clearly indicate if they received any assets from the municipality and list them if any as above.
viii. Asset Register –assets from Water Service BoardCopy of asset registerTo provide an updated and comprehensive register containing the totality of all assets being utilized by the utility, with their respective current Net Book Values after depreciation.
ix. Asset maintenance scheduleCopy of asset maintenance schedule·  To be provided exclusively for each of the assets from office equipment, machinery, waterworks and transmission/distribution networks and appurtenances as appropriate.
x. Approved Water Safety PlanYes/No·         To be included as a license condition
xi. Signed deed of handover of all assets including new ones during the previous SPA periodCopy signed deed of handover of all assets·         To provide deed of handover for additional assets from the water board after 2012
xii. Details of planned institutional and infrastructural improvementsReview planning documents (strategic plan, master plan, business plan) to determine adequacy/link to performance targets

Strategic plan submitted expires in 2018 and is therefore inadequate and has no link to performance targets proposed for the license period.

·         Utility to justify the basis of projected performance targets.

xiii. Financing PlanA plan to support activities in (xii) above·         To be provided
Information on Commercial Management
i. Copy of Customer contractCheck against model customer contract·  WSP to provide a customer contract aligned to the model customer contract by WASREB.
ii. Customer complaint handling procedureCheck against CEG

·  WSP to provide a customer complaint handling procedure aligned to WASREB Consumer Engagement Guidelines.

·  Utility to develop a customer service policy

iii. Customer Service CharterCheck against minimum service standards

·   To enhance the Service Charter to include a matrix on all services offered, the associated costs and timelines

·    To include how to submit complaints

·    To align applicable charges to the gazetted tariff

iv. Procurement PolicyApproved procurement policy/or evidence of following PPAD Act 2015· WSP to provide an approved and signed procurement policy aligned to PPAD Act 2015
v. Evidence of Stakeholder ConferenceEvidence of Stakeholder Conference invitation, list of participants, minutes within the last 2 financial years

·  To provide properly written and signed minutes within the last 2 financial years

·  Also provide conference invitation, list of participants

vi. Tax compliance certificate/statusCheck validity, validate with iTax

·         To submit tax compliance certificate

· To provide evidence of payment of statutory taxes

 

vii. Most recent two years Auditor General Reports

·        Audit certificate for the 2 years

·        Signed audit reports

·         WSP to provide the auditor general’s report for 2015/16 and 2016/17
viii. Website Information on annual reportCheck website for annual report·     WSP to upload the latest annual reports on their website
ix. Evidence of Biennial Customer Satisfaction SurveyReport within the last 2 years

·   WSP to provide a plan to carry out a customer satisfaction survey within the first year of the license period and conduct the same biennially

·         To conduct a Customer Identification Survey and the customer database shall be updated regularly.

x. Adoption of MajiVoiceCheck against MajiVoice list and adoption status (reports)

·         Utility to adopt MajiVoice within the first 2 years of the licence period

·         WSP to submit the Customer Complaints Register in use currently

xi. Compliance to WASREB’s website transparency guidelinesCheck website against WASREB standards

·         Annual reports not uploaded

·   To continue improving and enhancing the website to be customer oriented as per WASREB’s website transparency guidelines

Information on financial management
i. Proposed / Valid Regular TariffCheck validity on websiteWSP to finalize the e tariff application process before issuance of the license.
ii. Maintenance Costs / O+MCheck against tariff, audited accounts and WARIS dataSector benchmark is 8-15%
iii. Employee Costs / O+MSector benchmark is below 30%
iv. O+M CoverageSector benchmark is 110-150%
v. Quick Ratio (Acid Test ratio)Acceptable limit is >=1
vi. Debtor daysAcceptable is <=90 days
vii. Collection EfficiencyAcceptable is >85% and the WSP should separate current and arrears.
viii. Debt Service Coverage RatioAcceptable Minimum is 1.2
ix. Performance GuaranteeYes/NoTo have a performance guarantee from a reputable financial institution or deposited with the WASREB. This is to be posted with the WASREB before license is issued. Approved rate for your category of WSP is Kshs. 2,000,000.
x. Approved Strategic PlanBoD Approved Strategic Plan·         To develop new five-year strategic plan.
xi. Specifications of the current billing systemCheck against WASREB standards·         WSP to carry out and submit a self –assessment of the current billing system as per the WASREB minimum billing requirements.
xii. Operational business plan

·        BoD approved Operational business plan

·        Check against WASREB standards

·        Provided but Expired
xiii. Approved Disaster Management PlanBoD Approved Disaster Management Plan·         Not provided
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 updated water supply project details including the developer/financier, time, and technical details like pipe length, sizes, reservoir capacities and the value of the projects.

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 updated waste water/sanitation project details including the developer/financier, time, and technical details like, sizes, capacity and the value of the projects.

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

No information given in the application form. However, service area mapping output highlighted;

1.    Kilimani Community Water Project

2.    Kisimani Community water project (Third party agreement in place)

3.    Ramadhan Community water project (Third party agreement in place)

4.    Kiwanjani Community Water Project (third party in place)

 

·         The WSP to provide a comprehensive list of all SSSPs operating in their service area as well as any arrangements they may be having with some of them.

9.Performance improvements in license period   
a.    Quality of Service  
           i.        Water coverage %Check against 2022 targets and link to NWSS·         To harmonise the figures. However, the proposed growth rate acceptable.
          ii.        Drinking Water Quality %100%·         To attain 100% from Y1 onwards
         iii.        Hours of SupplyProgression to acceptable sector benchmarks·         Growth in coverage to consider maintenance of minimum hours of service. The acceptable Sector Benchmark is at least 16 hours per day.
        iv.        Sewerage coverage %Check against 2022 targets and link to NWSS

·   To harmonise the figures. The utility to target a figure of at least 24% by the end of the 5th year.

·   WSP to document in the strategic plan initiatives to realise this target.

         v.         Effluent Quality %100%

·   To maintain this level throughout the license period.

·   To submit the annual effluent quality reports for 2017/18 as per schedule 14 of the WASREB guidelines on water quality and effluent quality, to support this.

b.    Economic Efficiency  
           i.        Personnel Expenditure as % of O+M costs %Compliance to sector benchmarks

·   WSP to reduce to <30% at the end of the 5th year.

· WSP to demonstrate measures to be taken to achieve this.

          ii.        O+M Costs coverage %Progression to full cost recovery·  To progress to 130% at the end of the period.
         iii.        Revenue Collection Efficiency %Compliance to sector benchmarks·         To maintain at least 95% throughout the license period but ensure there is a separation between old debts and current collection. develop as indicated.
c.    Operational Sustainability  
           i.        Non-Revenue Water, %Progression to acceptable sector benchmarks

·   To indicate interventions implemented to reduce it by 9 percentage points from the previous year’s figure of 39%

·   To implement Non Revenue Water  Management Standards developed by WASREB.

·   To develop as proposed and target <25% at the end of the 5th year.

          ii.        Metering(operational) ratio, %100%·   To maintain the figure of 100% while ensuring all meters are functional.
         iii.        Staff Productivity, NoProgression to acceptable sector benchmarks·   To reduce to 6 by year 5.
        iv.        Environmental (source) protectionCheck CSR reports, SP, Go green, renewable energy·   WSP to document efforts towards source protection.
v. Governance IndicatorScore for last assessment

Acceptable performance 50%.

WSP to improve on the following aspects of the governance assessments

·         Financial Management

·         Human resources

·         Service standards and

·         Information and control systems

vi. Pro-poor AssessmentAcceptable performance 75%.
Other Issues
           i.        Evidence of Public ConsultationEvidence of Public Consultation invitation, list of participants, minutes for the license applicationTo be carried out before issuance of the license
          ii.        License Fee   to be paidYes/No 0.01% of Annual turnover based on the latest audited accounts.  To be paid on issuance of the license
         iii.        Arrears of Licensee Remuneration to WSBsReconciled amount

 Date of Evaluation   13th November, 2018

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