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LICENCE ANALYIS CHECKLIST AND EVALUATION FORM WATER ACT 2016

Name and Address of Water Service Provider:

Thika Water and Sewerage Company Limited

P.O. Box 6103 – 01000
THIKA.

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*No proof of payment
             iii.            Certificate of Company RegistrationCopy of certificate*To provide actual copy of 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 provide georeferenced map with accompanying shape files. List of sub-locations in SA to be included.

To provide status of implementation of mapping output

              v.             Copy of letter to county on application· Copy of letter*

· Share application with the county

Letter received by Kiambu County on 12th June 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 standardsAs per model memorandum of association*Draft to be amended to conform to the Water Act 2016, Companies Act 2015.

Specifically provide that the Company is owned by County Government (issue shares to the county secretary, CECM for Finance and  CECM Water holding in trust for the county government)

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

To consider gender balance in the Board

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

 

iv. Approved Staff Establishment  in line with Wasreb StandardsApproved Staff Establishment

 

To provide  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 modelTo update the Human Resource Policy with the existing guidelines and include review date

 

       ii.            Performance management  system· PMS in place

· Evidence of appraisal (implementation)

PMS in place

To provide evidence of appraisal implementation and clearly defined job descriptions and performance targets

     iii.            HIV PolicyHIV PolicyProvided
     iv.            Collective Bargaining Agreement  in line with Wasreb Standards· Valid CBA

· In line with approved tariff

The CBA provided expired in June 2018

 

       v.            Contracts of employment  for  Management Staff with clear terms and conditions of service· Sample Copy of signed contracts for  Management StaffTo provide contracts of employment for management staff with clear terms and conditions of service
     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  contracts of employment for unionisable and other staff with clear terms and conditions of service
    vii.            Approved Organization Structure in Line with WASREB StandardsApproved Organization StructureTo update 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 employeesProvided
      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 align the pension scheme arrangement  with Treasury circulars
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 :

· Chania River

· Thika River

· Kilimambogo Borehole

· Maguguni Borehole

· Gatuanyaga Borehole

· Gatundu-Landless Borehole

· Ngoingwa 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

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 permitValid effluent discharge permit(s)To provide valid effluent discharge permits or current application documents to NEMA (not to WRA).
vi. Asset Register – assets owned by WSPCopy of asset registerTo be provided in form of a comprehensive list 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 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 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 assetsProvided Signed deed of handover of fixed assets from AWSB signed in 2009.
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 fully align to WASREB model customer contract
ii. Customer complaint handling procedureCheck against Customer Engagement Guideline (CEG)To provide a customer handling policy with clear complaints handling procedures
iii. Customer Service CharterCheck against minimum service standardsTo include the principles of service delivery in a table format with clear timelines.
iv. Procurement PolicyApproved procurement policy/or evidence of following PPAD Act 2015To provide duly approved procurement policy that is in line with the PPAD Act 2015.
v. Evidence of Stakeholder ConferenceEvidence of Stakeholder Conference invitation, list of participants, minutes within the last 2 financial yearsTo provide notice of meeting,  and report/minutes of the meeting
vi. Tax compliance certificate/statusCheck validity, validate with iTaxCompliant
vii. Most recent  two years Auditor General Reports· Audit certificate for the 2 years

· Signed audit reports

To provide Audited Reports for 2016/17
viii. Website Information on annual reportCheck website for annual reportTo upload most recent annual reports

 

ix. Evidence of Bi- annual Customer Satisfaction SurveyReport within the last 2 yearsTo provide a report of the customer satisfaction survey
x. Adoption of Maji VoiceCheck against Maji Voice list and adoption status (reports)Utility to increase uptake of system usage
xi. Compliance to WASREB’s website requirementsCheck website against WASREB standardsCompliant
Information on financial management
i. Proposed / Valid Regular TariffCheck validity on websiteTo start application by Jan 2019.
ii. Maintenance Costs / O&MCheck against tariff, audited accounts and WARIS data2015/16; 4%

2016/17; 5%

Acceptable range is 8% – 15%

iii. Employee Costs / O&M2015/16; 33%

2016/17; 41%

Acceptable Sector Benchmark, <30%.

iv. O+M Coverage2015/16; 100%

2016/17; 126%

Full cost recovery, >150%

v. Quick Ratio (Acid Test ratio)2015/16; 0.89%

2016/17; 1.14%

Acceptable limit,  >=1

vi. Debtor days2015/16; 166

2016/17; 161

Acceptable limit, <=90 days

vii. Collection Efficiency2015/16; 87%

2016/17; 97%

Acceptable Sector Benchmark, >85%

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

2016/17; N/A

Acceptable limit, >=1.25:1

To confirm basis of the ratio (no long term debt)

ix. Performance GuaranteeYes/NoTo Be Determined
x. Approved Strategic PlanBoD Approved Strategic PlanExpiring in 2019, approval status could not be verified

 

xi. Specifications of the current billing systemCheck against WASREB standardsProvided

Physical inspection to be carried out.

xii. Operational business plan· BoD approved Operational business plan

· Check against WASREB standards

To provide an operational business plan

 

 

 

 

xiii. Approved Disaster Management PlanBoD Approved Disaster Management PlanTo 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 list provided is for assets developed by THIWASCO only and do not indicate the values and when completed.

To provide the following:

· List of assets developed by THIWACO, AWSB, County/CDF and indicate their values and date of completion

· Completion/handover Certificates

· The 5 boreholes outlined should be clear as to who developed them.

 

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 the following:

· List of assets developed by THIWACO, AWSB, County/CDF and indicate their values and date of completion

· Completion/handover 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

The Utility has not disclosed an SSSPs, however the mapping report shows the following:

· Buffalo Hills Estate

· Garden Estate

· Kilimambogo Teachers College

· Ngoliba Community Water Project

· Munyu Community Water Project. (a third party agreement was in progress at the time of the mapping exercise)

9.Performance improvements in license period   
a.       Quality of Service  
                i.            Water coverage %Check against 2022 targets and link to NWSSConsidering the proposed service area from the mapping output, the coverage should be less than 97%. The targets to be reworked once the baseline is established
              ii.            Drinking Water Quality %100%To attain 100% from Y1 onwards
             iii.            Hours of SupplyProgression to acceptable sector benchmarksAcceptable Sector Benchmark, at least 16 hours per day
             iv.            Sewerage coverage %Check against 2022 targets and link to NWSSCurrent figure is 44% for 2018 (WARIS 40% 2017). Using the figure of 44%, growth should develop as indicated: 44%(Y0), 45% (Y1), 46% (Y2), 48% (Y3), 50% (Y4), 52% (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 benchmarksFigure provided is 44% against WARIs 41%. To harmonize the figures and reduce to below 30% by end of License period.
              ii.            O&M Costs coverage %Progression to full cost recoveryUsing the figure of 126%, growth should develop as indicated: 126%(Y0), 128% (Y1),130% (Y2), 132% (Y3), 134% (Y4), 136% (Y5)
             iii.            Revenue Collection Efficiency %Compliance to sector benchmarksFigure provided is 92% against WARIS figure of 97%. To harmonize the figures and reach at least 95% at the end of License period.
c.       Operational Sustainability  
                i.            Non Revenue Water  %Progression to acceptable sector benchmarksFigure provided is 27% against WARIS 31%. To harmonize the figures and reduce to below 25% by end of License period. Clear initiatives to be documented.
              ii.            Metering(operational) ratio %100%Using the figure of 81%, the WSP should move to 95% in Y1 and 100% in Y2.
             iii.            Staff ProductivityProgression to acceptable sector benchmarksFigure provided is 6 against WARIs 5. To harmonize the figures and reduce to below 5 by end of License period.
             iv.            Environmental ( source) protectionCheck CSR reports, SP, Go green, renewable energyWSP to document efforts towards source protection.
v. Governance IndicatorScore for last assessmentScore for 2015/16 is 47%

Acceptable performance 50%

Weaknesses in: Utility Oversight/Supervision, Information and Control Systems, Financial Management, Service Standards, Human Resources worst performed.

vi. Pro-poor AssessmentScore for 2016/17 is 65%

Acceptable performance 60%

Other Issues
                i.            Evidence of Public ConsultationEvidence of Public Consultation invitation, list of participants, minutes for the license application To be undertaken
              ii.            License Fee   to be paidYes/NoTo be paid on issuance of the license
             iii.            Arrears of Regulatory LevyReconciled amountArrears of Kshs. 2,739,764.43 as at 30th June 2018, to be cleared before issuance of License
             iv.            Arrears of Licensee Remuneration to WSBsReconciled 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 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 80% which makes it commercially viable. The utility is weak in the area of personnel expenditures and Non-revenue water.

 

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