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LICENCE ANALYIS CHECKLIST AND EVALUATION FORM WATER ACT 2016

Name and Address of Water Service Provider:

Kiambere-Mwingi Water and Sanitation Company

P.O. BOX 656-90400

MWINGI

NOWSP APPLICATION CONDITION Minimum RequirementsANALYSIS/ASSESSMENT  BY WASREB 
1.Preliminary details
                i.            Date received by WASREBDate of receiptThe application form satisfactorily filled
              ii.            Application fee receivedProof of payment*Application fee paid
             iii.          Certificate of Company RegistrationCopy of certificate*Certificate Registration No. CPR/2009/3820
             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*Draft MOA to be reviewed to provide for Mwingi County mandate in water service provision as instructed by Wasreb circular no. 1 of 2018
ii. Details of board members meet the governance standards ; competence in academic and professional criteria and stakeholder representation ; genderInformation sheet on BoDThe utility to address the following:

· Submit CR7 form with details of directorship as at 12th July 2018.

· Provide qualification credentials for Board of Directors which should also be preserved in WSP records.

· Comply with gender requirements on board membership.

iii. Key  executive staff meet competence criteria of LN 137 of 2012 (Level 1, 2 & 3)Profile of key staffThe company to ensure competence criteria for finance/accountant is in relevant background not sales & marketing
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 provide the HR policy manual
       ii.       Performance management  system· PMS in place

· Evidence of appraisal (implementation)

To provide PMS samples of appraisal reports
     iii.            HIV PolicyHIV PolicyTo provide HIV Policy
     iv.          Collective Bargaining Agreement  in line with Wasreb Standards· Valid CBA

· In line with approved tariff

To provide details on CBA
       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 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 samples of contracts for unionisable staff
    vii.        Approved Organization Structure in Line with WASREB StandardsApproved Organization StructureUtility to address the following:

·         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 provide sample of signed code 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 of CBA if any
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

To provide valid abstraction permits for the five water sources (Kiambere Dam and four boreholes).
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

N/A

DTF coming on board in December 2018 and the sewerage system projected to be realized in 2022.

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)N/A

DTF coming on board in December 2018 and the sewerage system projected to be realized in 2022.

vi. Asset Register – assets owned by WSPCopy of asset registerTo be provided in form of a comprehensive list of current assets 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 of current assets 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 of current assets with Net Book Values after depreciation for each asset.
ix. Asset maintenance scheduleCopy of asset maintenance scheduleTo provide a comprehensive list of assets by names, quantities and specific components for maintenance purposes with differentiated specific timeline schedules.
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 assetsProvide copies of any deeds of handover for projects
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) aboveProvided
Information on Commercial Management
i. Copy of Customer contractCheck against model customer contractTo provide a customer contract that is aligned  to the model customer contract
ii. Customer complaint handling procedureCheck against CEGTo provide complaint handling procedures aligned to CEG
iii. Customer Service CharterCheck against minimum service standardso be aligned to the  sector standards e.g. water quality, supply fail, infrastructure quality assurance, billing etc.

 

iv. Procurement PolicyApproved procurement policy/or evidence of following PPAD Act 2015To provide the approved procurement policy aligned to PPAD 2015 Act
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 latest annual reports
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 apply to be on-boarded to the system within the first 2 years of the license period.
xi. Compliance to WASREB’s website requirementsCheck website against WASREB standardsTo ensure website is in line WASREB minimum website guidelines e.g. upload audited reports, customer complaints, customer, tenders, list of services offered
Information on financial management
i. Proposed / Valid Regular TariffCheck validity on websiteUtility to apply for a new tariff before license approval.
ii. Maintenance Costs / O&MCheck against tariff, audited accounts and WARIS data2015/16; 10%

2016/17; Financial Statements not provided

Acceptable range is 8% – 15%

iii. Employee Costs / O&M2015/16; 23%

2016/17; 26%

Acceptable Sector Benchmark, <40%.

iv. O+M Coverage2015/16; 54%

2016/17; 55%

Full cost recovery, >150%

v. Quick Ratio (Acid Test ratio)2015/16; 0.75

2016/17; Financial Statements not provided

Acceptable limit,  >=1

vi. Debtor days2015/16; 129

2016/17; Financial Statements not provided

Acceptable limit, <=90 days

vii. Collection Efficiency2015/16; 111%

2016/17; 106%

Acceptable Sector Benchmark, >85%

viii. Debt Service Coverage Ratio2015/16; N/A No long term liability

2016/17; N/A No long term liability

Acceptable limit, >=1.25:1

To confirm basis of the ratio

ix. Performance GuaranteeYes/No
x. Approved Strategic PlanBoD Approved Strategic PlanProvided
xi. Specifications of the current billing systemCheck against WASREB standardsWSP to carry out self-assessment and provide screenshots of the billing system
xii. Operational business plan· BoD approved Operational business plan

· Check against WASREB standards

To provide Business Plan aligned to the Strategic Plan
xiii. Approved Disaster Management PlanBoD Approved Disaster Management PlanTo provide 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

License application form indicates that there are none.
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

License application form indicates that there are none. There project is still ongoing.
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

Not provided

 

9.Performance improvements in license period   
a.       Quality of Service  
                i.            Water coverage %Check against 2022 targets and link to NWSSProposed trend is acceptable. 15%(Y0), 18% (Y1), 20% (Y2), 23% (Y3), 27% (Y4), 31% (Y5)
              ii.            Drinking Water Quality %100%To attain 100% from Y1 onwards
             iii.            Hours of SupplyProgression to acceptable sector benchmarksTo be reworked with the WSP.

Acceptable Sector Benchmark 12 hours per day.

             iv.            Sewerage coverage %Check against 2022 targets and link to NWSSTo develop as per the proposed trend.  0%(Y0), 0% (Y1), 2% (Y2), 4% (Y3), 7% (Y4), 10% (Y5)
              v.             Effluent Quality %100%To comply 100% once the sewerage system is developed.

To ensure discharge from the Decentralized Treatment Facility (DTF) meets required standard.

b.       Economic Efficiency  
                i.            Personnel Expenditure as % of O&M costs %Compliance to sector benchmarksTo rework the figures in line with the approved establishment.
              ii.            O&M Costs coverage %Progression to full cost recoveryTo progress to 75% within the tariff period as per the proposal in the SP.
             iii.            Revenue Collection Efficiency %Compliance to sector benchmarksFigure provided is 95% against WARIS figure of 106%. To harmonise the two figures and separate between collections for the current period and arrears.

To attain the target of 95% by the end of the license period.

c.       Operational Sustainability  
                i.            Non Revenue Water  %Progression to acceptable sector benchmarksUsing the figure of 39%, to reduce as indicated below: 39% (Y0), 37% (Y1), 35% (Y2), 33% (Y3), 31% (Y4), 30% (Y5). Clear measures in this regard to be clearly documented.
              ii.            Metering(operational) ratio %100%To harmonise the figures and progress to 100% by year 1 while ensuring all meters are functional.
             iii.            Staff ProductivityProgression to acceptable sector benchmarksTo progress as per the proposal providedas indicated below:

16(Y0), 15 (Y1), 13 (Y2), 12 (Y3), 10 (Y4), 8 (Y5)

             iv.            Environmental ( source) protectionCheck CSR reports, SP, Go green, renewable energyWSP to document efforts towards source protection.
v. Governance IndicatorScore for last assessmentNot assessed
vi. Pro-poor AssessmentNot assessed
Other Issues
                i.            Evidence of Public ConsultationEvidence of Public Consultation invitation, list of participants, minutes for the license applicationTo be undertaken
              ii.            License Fee   to be paidYes/No To be paid after issuance of License
             iii.            Arrears of Regulatory LevyReconciled amount Arrears of Kshs. 299,866.24 as at 30th June 2018 to be cleared before issuance of License.
             iv.            Arrears of Licensee Remuneration to WSBsReconciled amount Arrears of Kshs. Xxx to be cleared before issuance of License.

 Date of Evaluation          25th 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.

 Attaining the targets above and assuming that the details of planned institutional and infrastructural improvements are fully realized would take the company to a figure of 70% which makes it commercially viable. The utility is weak in weak in the area of personnel expenditures and Non-revenue water.

 

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