LICENCE ANALYIS CHECKLIST AND EVALUATION FORM WATER ACT 2016
Name and Address of Water Service Provider:
Nyahururu Water and Sanitation Company Limited
P.O. BOX 952-20300
NYAHURURU
NO | WSP APPLICATION CONDITION | Minimum Requirements | ANALYSIS/ASSESSMENT BY WASREB |
1. | Preliminary details | ||
i. Date received by WASREB | Date of receipt | Some sections of the application form have not be filled | |
ii. Application fee received | Proof of payment* | Application fee paid | |
iii. Certificate of Company Registration | Copy of certificate* | Company registration No. C97364 | |
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 provide georeferenced map with accompanying shape files. List of sub-locations in SA to be included. To provide status of implementation of mapping output (area around Mairo inya) | |
v. Copy of letter to county on application | · Copy of letter* · Share application with the county | Copy of Letter from Laikipia County dated 9th May 2018 | |
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 be aligned with the Water Act 2016, Companies Act 2015. | |
ii. Details of board members meet the governance standards ; competence in academic and professional criteria and stakeholder representation ; gender | Information sheet on BoD | Provided | |
iii. Key executive staff meet competence criteria of LN 137 of 2012 (Level 1, 2 & 3) | Profile of key staff | To align with LN 137 0f 2012. The utility to progressively engage personnel with requisite competencies (most personnel at diploma level for skill) | |
iv. Approved Staff Establishment in line with Wasreb Standards | Approved Staff Establishment
| To provide staff establishment versus in-post | |
Human Resource Management | |||
i. Approved Human resource policy manual in line with WASREB Standards | Approved updated Human resource policy Manual as per model | To align Human Resource Policy with the existing guidelines | |
ii. Performance management system | · PMS in place · Evidence of appraisal (implementation) | PMS in place To provide evidence of appraisal implementation | |
iii. HIV Policy | HIV Policy | The company to in addition 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 | The company to confirm if there is a CBA in place | |
v. Contracts of employment for Management Staff with clear terms and conditions of service | · Sample Copy of signed contracts for Management Staff | To provide sample signed 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 sample signed contracts for unionisable staff | |
vii. Approved Organization Structure in Line with WASREB Standards | Approved Organization Structure | 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. · Commercial function to be established and filled with the requisite competencies
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viii. Code of Conduct and Ethics for employees | Sample Copy of signed code of Conduct and Ethics for employees | To provide signed copies of code ethics | |
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. | Provided To confirm the actuarial liabilities under the National water pension scheme and sensitize members to transfer to another scheme | |
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 two water sources.
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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 permit | Valid effluent discharge permit(s) | To provide valid effluent discharge permits from NEMA. The provided permit expired on January 25th 2015. | |
vi. Asset Register – assets owned by WSP | Copy of asset register | To be provided in form of a comprehensive list with Net Book Values after depreciation for each asset | |
vii. Asset Register- assets from Local Authority | Copy of asset register | To be provided in form of a comprehensive list with Net Book Values after depreciation for each asset | |
viii. Asset Register –assets from Water Service Board | Copy of asset register | To be provided in form of a comprehensive list with Net Book Values after depreciation for each asset | |
ix. Asset maintenance schedule | Copy of asset maintenance schedule | To provide a comprehensive list of assets by names, quantities and specific components for maintenance purposes with differentiated specific timeline schedules. | |
x. Approved Water Safety Plan | Yes/No | To 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 period | Copy signed deed of handover of all assets | To provide deed of handover/transfer documents of all assets. | |
xii. Details of planned institutional and infrastructural improvements | Review planning documents (strategic plan, master plan, business plan) to determine adequacy/link to performance targets | Inadequately provided | |
xiii. Financing Plan | A plan to support activities in (xii) above | Provided in the business plan. However, it is due to end in 2019. | |
Information on Commercial Management | |||
i. Copy of Customer contract | Check against model customer contract | To be aligned to the model customer contract | |
ii. Customer complaint handling procedure | Check against CEG | To be developed and/or aligned to the Customer Engagement Guideline
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iii. Customer Service Charter | Check against minimum service standards | Utility to include the principles of service delivery in a table with clear timelines in accordance with sector standards | |
iv. Procurement Policy | Approved procurement policy/or evidence of following PPAD Act 2015 | To provide duly approved procurement policy | |
v. Evidence of Stakeholder Conference | Evidence of Stakeholder Conference invitation, list of participants, minutes within the last 2 financial years | To provide signed Minutes | |
vi. Tax compliance certificate/status | Check validity, validate with iTax | To provide status. | |
vii. Most recent two years Auditor General Reports | · Audit certificate for the 2 years · Signed audit reports | To provide audited accounts for 2015/16 and 2016/17 | |
viii. Website Information on annual report | Check website for annual report | To upload annual reports | |
ix. Evidence of Bi- annual Customer Satisfaction Survey | Report within the last 2 years | To provide evidence | |
x. Adoption of Maji Voice | Check against Maji Voice list and adoption status (reports) | To adopt and implement MajiVoice in the 2018/19 FY as a license condition | |
xi. Compliance to WASREB’s website requirements | Check website against WASREB standards | To align website to Wasreb Standards. | |
Information on financial management | |||
i. Proposed / Valid Regular Tariff | Check validity on website | To provide a proposed Regular Tariff Application before issuance of the license | |
ii. Maintenance Costs / O+M | Check against tariff, audited accounts and WARIS data | Audited accounts not provided Acceptable range is 8% – 15% | |
iii. Employee Costs / O+M | 2015/16; 43% 2016/17; 42% Acceptable Sector Benchmark, <30%. | ||
iv. O+M Coverage | 2015/16; 103% 2016/17; 105% Full cost recovery, >150% | ||
v. Quick Ratio (Acid Test ratio) | Audited Accounts not provided Acceptable limit, >=1 | ||
vi. Debtor days | Audited Accounts not provided Acceptable limit, <=90 days | ||
vii. Collection Efficiency | 2015/16; 88% 2016/17;88% Acceptable Sector Benchmark, >85% | ||
viii. Debt Service Coverage Ratio | Audited Accounts not provided Acceptable limit, >=1.25:1 To confirm basis of the ratio | ||
ix. Performance Guarantee | Yes/No | To Be Determined | |
x. Approved Strategic Plan | BoD Approved Strategic Plan | Provided | |
xi. Specifications of the current billing system | Check against WASREB standards | To conduct a self-assessment | |
xii. Operational business plan | · BoD approved Operational business plan · Check against WASREB standards | The Business Plan period is 5 years versus the required 1 year with annual adjustments. | |
xiii. Approved Disaster Management Plan | BoD 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 list outlining a water treatment plant, pipelines, pump sets and storage tanks but it is unclear who developed these assets and when. To provide Completion/Hand over Certificates | |
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 list outlining a maturation pond, sewer line network, sewerage office block and sludge drying bed but it is unclear who developed these assets and when. To provide Completion/Hand over Certificates | |
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 are no SSSPs operating in the utility’s service area. This was corroborated by the mapping report which confirms that at the time of mapping, SSSPs previously existing had been taken up by the WSP. | |
9. | Performance improvements in license period | ||
a. Quality of Service | |||
i. Water coverage % | Check against 2022 targets and link to NWSS | Figure provided is 90% against WARIS 72%. To harmonise the figures and increase by at least three percentage points annually. | |
ii. Drinking Water Quality % | 100% | Currently at 93% To attain 100% from Y1 onwards | |
iii. Hours of Supply | Progression to acceptable sector benchmarks | Currently at 20 hours/day Acceptable Sector Benchmark, at least 16 hours per day. | |
iv. Sewerage coverage % | Check against 2022 targets and link to NWSS | Using the figure of 46%, growth should develop as indicated: 46%(Y0), 48% (Y1), 50% (Y2), 52% (Y3), 54% (Y4), 56% (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 benchmarks | Figure provided increases from 41% (Y0) to 45% (Y1). To reduce as per the proposal below 41%(Y0), 40% (Y1), 38% (Y2), 37% (Y3), 36% (Y4), 35% (Y5) | |
ii. O+M Costs coverage, % | Progression to full cost recovery | Using the figure of 105%, growth should develop as indicated: 105%(Y0), 110% (Y1),115% (Y2), 120% (Y3), 125% (Y4), 130% (Y5) | |
iii. Revenue Collection Efficiency % | Compliance to sector benchmarks | Figure provided is 90% against WARIS figure of 88%. To harmonise the figures and reach at least 95% at the end of License period. Utility to separate between current collections and arrears. | |
c. Operational Sustainability | |||
i. Non Revenue Water % | Progression to acceptable sector benchmarks | WARIS 40%. Using the figure of 39% to reduce to 27% as indicated: 39 % (Y0), 36% (Y1), 33% (Y2), 31% (Y3), 29% (Y4), 27% (Y5). Clear measures in this regard to be clearly documented. | |
ii. Metering(operational) ratio % | 100% | Using the figure of 94%, the WSP should move to 100% in Y1. | |
iii. Staff Productivity | Progression to acceptable sector benchmarks | Figure provided is 9 against WARIS 6. To harmonise the figures and reduce to below 5 by end of License period. | |
iv. Environmental ( source) protection | Check CSR reports, SP, Go green, renewable energy | WSP to document efforts towards source protection. | |
v. Governance Indicator | Score for last assessment | The score for 2015/16 is 22% Acceptable performance 50% | |
vi. Pro-poor Assessment | The score for 2016/17 is 80% Acceptable performance 75% | ||
Other Issues | |||
i. Evidence of Public Consultation | Evidence of Public Consultation invitation, list of participants, minutes for the license application | To be undertaken | |
ii. License Fee to be paid | Yes/No | To be paid on issuance of the license | |
iii. Arrears of Regulatory Levy | Reconciled amount | Arrears of Kshs. 673,227.72 as at 30th June 2018 to be cleared before issuance of License | |
iv. Arrears of Licensee Remuneration to WSBs | Reconciled amount | Arrears to be cleared before issuance of License. |
Date of Evaluation 23rd July 2018
Management Recommendation on License application and conditions in License based on commercial viability criteria below
Performance range | Remarks |
≥70 | Commercially Viable |
50 ‐ 69 | Not Commercially Viable. However, entity has to be nurtured to viability. There must therefore be clear projections to support this. |
<50 | Not 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.