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LICENCE ANALYSIS CHECKLIST AND EVALUATION FORM WATER ACT 2016

Name and Address of Water Service Provider:

Kirinyaga Water and Sanitation Company Limited

P.O. BOX 360-10300

KERUGOYA

NOWSP APPLICATION CONDITION Minimum RequirementsANALYSIS/ASSESSMENT  BY WASREB 
1.Preliminary details
           i.        Date received by WASREBDate of receiptSupporting documents were illegible and the details were scanty.
          ii.        Certificate of Company RegistrationCopy of certificate*·         To provide a copy of certificate of incorporation
         iii. Geo- Referenced Map of Service Area accompanied by “Shape Files”

·        PDF illustration

·        List of sub-locations*

·    Shape files*Mandatory for mapped WSPs (66)

·         To provide Shape files

·         To include a list of the sub-locations in the service area.

        iv.        Copy of letter to county on application

·        Copy of letter*

· Share application with the county

·         To provide
         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*

To amend MOA to comply with the water Act 2016 and company Act 2015.

Clauses referencing repeal law to be reviewed and aligned to the above laws

ii. Details of board members meet the governance standards; competence in academic and professional criteria and stakeholder representation; genderInformation sheet on BoD

·  To provide CR 7form with information on BoD

·         To ensure the board meets competence and professional requirements.

iii. Key executive staff meet competence criteria of LN 137 of 2012 (Level 1, 2 & 3)Profile of key staff

·         Key staff meets the competence criteria.

·         Following Special Regulatory Regime, the utility was required to overhaul CMT and implement performance appraisal system, among others.

·         To provide progress made on the above recommendations.

 

iv. Approved Staff Establishment in line with WASREB Standards

Approved Staff Establishment

 

· To provide the current staff establishment versus in-post staff component.

 

 Human Resource Management
      i.        Approved Human resource policy manual in line with WASREB StandardsApproved updated Human resource policy Manual as per model·         To provide the HR Policy manual
     ii.        Performance management system

·        PMS in place

·        Evidence of appraisal (implementation)

· To provide PMS and samples of appraisal report
    iii.        HIV PolicyHIV Policy·         To provide HIV Policy
   iv.        Collective Bargaining Agreement in line with WASREB Standards

·        Valid CBA

·        In line with approved tariff

·         To provide CBA in a readable format
    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 samples 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 samples of contracts for unionisable staff
  vii.        Approved Organization Structure in Line with WASREB StandardsApproved Organization Structure· To provide in a readable format and ensure NRW function and asset planning & development function is provided in the structure
 viii.        Code of Conduct and Ethics for employeesSample Copy of signed code of Conduct and Ethics for employees·         To provide signed samples
    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 pension scheme arrangements

·         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.    Kahuhi muhuhi and kururu intake works

2.    Sagana intake on Ragati

WRMA/40/MRG/488/10234/S expiring 7th Jan 2020

3.    Wanguru intake works

4.    Kerugoya Intake works

5.    Mukengeria Intake works

6.    Rwamuthambi intake works

WRMA/40/KRG/4BC/10034/S expiring 20th July 2020

7.    Rundu intake works

Only two permits provided for Ragati River and Rwamthambi.

WSP also provided scanned images of copies of application for renewal to WRA, however, they are not stamped and there is no verification of receipt by WRA.

 

To provide permits or verifiable formal permit applications to WRA or their acknowledgement.

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

Submitted 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 provide indicative information on the ongoing sewer project.
iv. Compliance with WQEMG –last report

· Latest report for the month preceding the application

·        Check against previously submitted reports

·        Determine compliance

submitted a summary of tests conducted for the months of July – Feb of 2017/18 but not the report as required in the guidelines.

 

·  To provide annual Water quality report 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)·         Not applicable
vi. Asset Register – assets owned by WSPCopy of asset register·         To be provided in form of a 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 be provided
ix. Asset maintenance scheduleCopy of asset maintenance schedule

KIRIWASCO marked this section as not applicable in the application form which is unacceptable.

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 develop a Water Safety Plan and implement it as a licence condition in accordance with guidelines to be issued by WASREB.
xi. Signed deed of handover  of all assets including new ones during the previous SPA periodCopy signed deed of handover of all assets·         To be provided
xii. Details of planned institutional and infrastructural improvementsReview planning documents (strategic plan, master plan, business plan) to determine adequacy/link to performance targets

Neither Strategic Plan nor business plan provided and no indication of any planned institutional and infrastructural improvements mentioned in the submitted application form.

There is no basis for the proposed performance targets in the application.

 

·         To be provided.

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 that is aligned to the model customer contract by WASREB to include:

  • Customer and WSP obligations
  • Code of practice and procedure of leakage control.
  • Redress mechanism
ii. Customer complaint handling procedureCheck against CEG·         WSP 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

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 of 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 provide the latest compliance certificate/ to submit 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 audited accounts for 2015/16

· To provide full Auditor General’s report for 2016/17

viii. Website Information on annual reportCheck website for annual report· WSP to upload the annual reports on the 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 biennial.

· To conduct a CIS which shall be regularly updated.

x. Adoption of MajiVoiceCheck against Maji Voice 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 requirementsCheck website against WASREB standards

·         Annual reports not uploaded

·         To improve and enhance the website to be customer oriented as per WASREB’s website transparency guidelines

Information on financial management
i. Proposed / Valid Regular TariffCheck validity on website·         Commence application process before issuance of the license.
ii. Maintenance Costs / O+MCheck against tariff, audited accounts and WARIS data·         Sector benchmark is 8-15%
iii. Employee Costs / O+M·         Sector benchmark is below 30%
iv. O+M Coverage·         The tariff had projected 140% in 2017/18
v. Quick Ratio (Acid Test ratio)·         Acceptable limit is >=1
vi. Debtor days·         Acceptable is <=90 days
vii. Collection Efficiency·         Acceptable is >85% and the WSP should separate current and arrears.
viii. Debt Service Coverage Ratio

Acceptable Minimum is 1.2

·         Outstanding loan of AfD yet to be repaid.

ix. Performance GuaranteeYes/No

Provided a copy of performance bond of 2M from Co-op Bank.

To avail the original performance bond to the regulator.

x. Approved Strategic PlanBoD Approved Strategic Plan·         To provide an approved 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

·         To align to WASREB’s minimum billing requirements.

xii. Operational business plan

·        BoD approved Operational business plan

·  Check against WASREB standards

·         To provide an approved business plan
xiii. Approved Disaster Management PlanBoD Approved Disaster Management Plan·         To provide a 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

Provided a simple list of water projects without details.

 

· To provide water supply project details including the developer/financier, time, and technical details like pipe length, sizes, reservoir capacities and the value of the project with attached certificates of handover/completion s.

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

Provided a simple list of sanitation projects without details.

 

· To provide waste water/sanitation project details including the developer/financier, time, and technical details like, sizes, capacity and the value of the projects with attached certificates of handover/completion.

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, it is known that the WSP has been working with several SSSPs including Kamweri and Kiamugwongo projects as outlined during Waris 2017/18 validation.

During the mapping exercise, 13 SSSPs were identified by KIRIWASCO.

 

The WSP to provide a comprehensive list of all SSSPs operating in their service area as well as:

·         Type of source

·         Production

·         Billing volumes

·         Revenue

·         No of connections

·         Population served

·         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 increase by 3% points annually to get to 50% by Y5.
          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 NWSSTarget of 2% by 2023.
         v.         Effluent Quality %100%To attain 100% in Y1
b.    Economic Efficiency  
           i.        Personnel Expenditure as % of O+M costs %Compliance to sector benchmarks

· The figure of <30% may be too ambitious.

· The WSP to demonstrate interventions to realise the above targets.

          ii.        O+M Costs coverage %Progression to full cost recovery·  To progress to 130% by the end of the license period.
         iii.        Revenue Collection Efficiency %Compliance to sector benchmarks

·         To develop as indicated

·  Acceptable is >85% and the WSP should ensure there is a separation of collections between old debts and current billing.

c.    Operational Sustainability  
           i.        Non-Revenue Water, %Progression to acceptable sector benchmarks· To review the trend and target to be at <45% by the end of Y5.
          ii.        Metering(operational) ratio, %100%·  To progress to 100% but ensure all meters are functional.
         iii.        Staff Productivity, NoProgression to acceptable sector benchmarks·   To develop as proposed and target 6 at the end of the 5th year.
        iv.        Environmental (source) protectionCheck CSR reports, SP, Go green, renewable energy·  WSP to document efforts towards source protection.
v. Governance IndicatorScore for last assessmentAcceptable performance 50%.
vi. Pro-poor AssessmentAcceptable performance 75%.
Other Issues
           i.        Evidence of Public ConsultationEvidence of Public Consultation invitation, list of participants, minutes for the license application To be carried out before issuance of the license
          ii.        License Fee   to be paidYes/No 0.1% 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

 Arrears of Licensee Remuneration to WSBs and Other Statutory Obligations

WSP to provide figures as of 30th September 2018 and propose a payment plan for the outstanding amounts.

Date of Evaluation   12th November, 2018

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