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LICENCE ANALYIS CHECKLIST AND EVALUATION FORM WATER ACT 2016

Name and Address of Water Service Provider:

Nyandarua Water and Sanitation Company

P.O. BOX 164-20300

NYAHURURU

NOWSP APPLICATION CONDITION Minimum RequirementsANALYSIS/ASSESSMENT  BY WASREB 
 
1.Preliminary details
      i.            Date received by WASREBDate of receiptApplication form satisfactorily filled
    ii.            Application fee receivedProof of payment*Application fee paid
  iii.            Certificate of Company RegistrationCopy of certificate*To provide actual Certificate of Company Registration
  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

Received Letter dated 26th June 2018 by Ag. Chief Officer Nyandarua County
  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 standards

 

As per model memorandum of association*To align MOA with the model before issuance of license.
ii. Details of board members meet the governance standards ; competence in academic and professional criteria and stakeholder representation ; genderInformation sheet on BoDThe utility to:

· Provide CR7 form with details of directorship as at 28th June 2018 attached.

· 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 positions to be filled through competitive recruitment.
iv. Approved Staff Establishment  in line with Wasreb StandardsApproved Staff Establishment

 

To provide staff list 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 approved Human Resource Policy manual
       ii.           Performance management  system· PMS in place

· Evidence of appraisal (implementation)

To provide evidence of appraisal implementation
     iii.            HIV PolicyHIV PolicyTo provide the HIV Policy and implement HIV  and AIDS mainstreaming activities in line with NACC guidelines
     iv.    Collective Bargaining Agreement  in line with WASREB Standards· Valid CBA

· In line with approved tariff

To provide details of the CBA  if any.
       v.            Contracts of employment  for  Management Staff with clear terms and conditions of service· Sample Copy of signed contracts for  Management StaffTo provide sample contracts for the 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 sample contracts for unionizable staff
    vii.         Approved Organization Structure in Line with WASREB StandardsApproved Organization StructureTo establish an NRW management function at level 3 in the structure
  viii.         Code of Conduct and Ethics for employeesSample Copy of signed code of Conduct and Ethics for employeesTo provide sample signed codes for staff
      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 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 valid permits for the following sources:

· WRMA/50/RUM/5AB/62/S Pesi River expiring 26th November 2018.

· WRMA/50/RUM/5AB/63/S Kaheho Tributary of Pesi River expiring 16th January 2019.

· WRMA/50/RUM/5AA/64/S Oraimutia River expiring 15th January 2019

· WRMA/50/RUM/5BD/65/S Karurumo Tributary of Malewa River expiring 03rd February 2019.

To provide the missing valid abstraction permit for Kasuku Water Supply Borehole.

 

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
iv. Compliance with WQEMG –last report· Latest report for the month preceding the application

· Check against previously submitted reports

· Determine compliance

To provide annual reports for Water and effluent quality 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
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 be provided exclusively for each the assets from office equipment, machinery, waterworks and transmission/distribution networks and appurtenances as appropriate.
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 signed deed of handover for all assets.

 

xii. Details of planned institutional and infrastructural improvementsReview planning documents (strategic plan, master plan, business plan) to determine adequacy/link to performance targetsTo provide current Strategic Plan and Business Plan.
xiii. Financing PlanA plan to support activities in (xii) aboveTo provide an approved financing plan in line with the Strategic Plan
Information on Commercial Management
i. Copy of Customer contractCheck against model customer contractTo be aligned  to the model customer contract specifically that:

· The terms and conditions that refers to charges to be aligned to the gazetted tariff

· Utility to provide a sample filled (original copy) 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 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
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  three years Auditor General Reports· Audit certificate for the 3 years

· Signed audit reports

To provide audited accounts for 2015/16 & 2016/17 FYs
viii. Website Information on annual reportCheck website for annual reportTo develop a website that is in line WASREB minimum website guidelines.
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 develop a website that is in line WASREB minimum website guidelines.
Information on financial management
i. Proposed / Valid Regular TariffCheck validity on websiteThe utility shall finalize the tariff application before the license approval.
ii. Maintenance Costs / O+MCheck against tariff, audited accounts and WARIS data2015/16; Maintenance costs not defined in the F/S

2016/17; Maintenance costs not defined in the F/S

Acceptable range is 8% – 15%

iii. Employee Costs / O+M2015/16; 40%

2016/17; 32%

Acceptable Sector Benchmark, <40%.

iv. O+M Coverage2015/16; 55%

2016/17; 69%

Full cost recovery, >150%

v. Quick Ratio (Acid Test ratio)2015/16; 0.42

2016/17; 0.43

Acceptable limit,  >=1

vi. Debtor days2015/16; 86

2016/17; 110

Acceptable limit, <=90 days

vii. Collection Efficiency2015/16; 92%

2016/17; 85%

Acceptable Sector Benchmark, >85%

viii. Debt Service Coverage Ratio2015/16; N/A

2016/17; N/A

No long term debt

Acceptable limit, >=1.25:1

To confirm basis of the ratio

ix. Performance GuaranteeYes/NoTo be determined
x. Approved Strategic PlanBoD Approved Strategic PlanTo provide an approved Strategic Plan
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 a business plan aligned to the Strategic Plan
xiii. Approved Disaster Management PlanBoD Approved Disaster Management PlanUtility to 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

The utility listed 3No. Projects financed by Water Sector Trust Fund.

 

To provide a comprehensive list of assets developed by CDF/County/WSB with exhaustive details, including the value of water assets/projects with attached certificates of handover/completion, 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

N/A
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

There were 4No. SSSPs identified from the exercise which were unregulated. These were:

1. Kariko

2. Leshau Karagoini

3. Muthangira Water Society

WSP to confirm and include other SSSPs not listed above.

To confirm status of a mega proposed dam to serve the bigger Nyandarua county

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), 21% (Y2), 25% (Y3), 30% (Y4), 40% (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 maintain at the acceptable Sector Benchmark of at least 16 hours per day.

WSP to provide a published rationing programme

             iv.            Sewerage coverage %Check against 2022 targets and link to NWSSTo put in place sewerage master plan in the current license period.
              v.             Effluent Quality %100%
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: 32%(Y0), 30% (Y1), 28% (Y2),27% (Y3), 26% (Y4), 25% (Y5)
              ii.            O+M Costs coverage %Progression to full cost recoveryTo progress to 100% with a performance based subsidy from the County.
             iii.            Revenue Collection Efficiency %Compliance to sector benchmarksFigure provided is 88% against WARIS figure of 85%. To harmonise the two figures and separate between collections for the current period and arrears.

To attain the proposed target of 94% by the end of the license period.

c.       Operational Sustainability  
                i.            Non Revenue Water  %Progression to acceptable sector benchmarksUsing the figure of 51%, to reduce as indicated: 51% (Y0), 48% (Y1), 46% (Y2), 44% (Y3), 42% (Y4), 40% (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 harmonise the two figures and reduce as per the trend below:

21(Y0), 19 (Y1), 18 (Y2), 16 (Y3), 15 (Y4), 14 (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/NoTo be paid after issuance of License
             iii.            Arrears of Regulatory LevyReconciled amount Arrears of Kshs. 175,893.00 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 56% which makes it commercially viable. The utility is weak in the area of personnel expenditures and Non-revenue water.

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