LICENCE ANALYSIS CHECKLIST AND EVALUATION FORM WATER ACT 2016

Name and Address of Water Service Provider:

Tatu City Water and Sanitation Company Limited

P.O. BOX 2739-00621

NAIROBI

NOWSP APPLICATION CONDITION Minimum RequirementsANALYSIS/ASSESSMENT BY WASREB 
1.Preliminary details  
           i.        Date received by WASREBDate of receipt

·         Documents both in hard and soft

·         Application form well done.

·         Adequate supporting documents

          ii.        Certificate of Company RegistrationCopy of certificate*·   Copy of Certificate of incorporation (serial No. CPR/2010/37604) dated 16th May 2012 provided
         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 of service area.
        iv.        Copy of letter to county on application

·  Copy of letter*

· Share application with the county

·         Provided
         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*

1.    Memo and articles not compliant with model MOA.

provided by WASREB.

 

 

2.    To discuss with the company customized requirements for this type of WSP.

 

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

· Company to provide form CR 7 detailing particulars of directors.

 

· Directors to sign an enforceable undertaking as prescribed by WASREB.

 

· Board of directors to ensure compliance with the license conditions, corporate governance standards, tariff conditions among others.

iii. Key  executive staff meet competence criteria of LN 137 of 2012 (Level 1, 2 & 3)Profile of key staffThe key staff meets the competence criteria
iv. Approved Staff Establishment in line with WASREB Standards

Approved Staff Establishment

 

To discuss with the utility the staff establishment model.
 Human Resource Management   
      i. Approved Human resource policy manual  in line with WASREB StandardsApproved updated Human resource policy Manual as per modelConventional and Updated Employee Handbook dated June 2018 provided. The company need to consider aligning some clauses to the provisions of Kenyan employment laws such as maternity leave is 90 calendar days instead of 12 weeks
     ii.        Performance management system

·        PMS in place

·     Evidence of appraisal (implementation)

·         To institutionalize performance management.
    iii.        HIV PolicyHIV Policy·   To develop HIV policy for the company in line with NACC guidelines.
   iv.        Collective Bargaining Agreement in line with WASREB Standards

·     Valid CBA

·     In line with approved tariff

·    The CBA is not necessary if the employees are not unionisable
    v.        Contracts of employment for  Management Staff with clear terms and conditions of service·   Sample Copy of signed contracts for Management Staff·         The WSP to adhere to the signed contract of employment.
   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

N/A
  vii.        Approved Organization Structure in Line with WASREB StandardsApproved Organization Structure· The company is managed by the operations manager together with a small agile team consisting of engineers, technicians and other professionals
 viii.        Code of Conduct and Ethics for employeesSample Copy of signed code of Conduct and Ethics for employees·         The company to ensure signed code of conduct is adhered to by the 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 status of the pension scheme /gratuity
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 submit a clear list of water sources and their capacities and attach valid permits or copies thereof.

For the supply from RUJWASCO, there is need for a bulk water supply agreement between the parties and approved by WASREB

 

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 distribution network and business plan.

 

·  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

Submitted distribution network and business plan.

 

·         To present the information in the acceptable framework as provided in this summary form as per the checklist plus an indication of how wastewater is disposed.

iv. Compliance with WQEMG –last report

· Latest report for the month preceding the application

·  Check against previously submitted reports

·        Determine compliance

Indicated that reports were to be developed once the utility becomes operational. However, the utility is currently operational considering it is receiving bills from RUJWASCO. Therefore, the utility should have been preparing and submitting water and effluent quality reports from the onset as per WASREB guidelines on Water Quality and Effluent monitoring.

 

· To provide annual Water quality report for the FY 2017/18 in the proper format as per as per schedule 13 of the WASREB guidelines on Water Quality and Effluent monitoring.

 

v. Copy of effluent discharge permitValid effluent discharge permit(s)

·         To confirm if they have/ have plans for a own wastewater treatment plant

·         The utility should have a copy of RUJWASCO’s valid effluent discharge permit as part of the formal agreements between the two parties.

vi. Asset Register – assets owned by WSPCopy of asset register

Indicated this section as not being applicable.

·         To provide an up to date 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 registerTo clearly indicate whether they received any assets from the local authorities including any public way-leaves
viii. Asset Register –assets from Water Service BoardCopy of asset registerTo clarify To clearly indicate whether they received any assets from the WSB including any public way-leaves
ix. Asset maintenance scheduleCopy of asset maintenance schedule

Indicated that the maintenance schedule would be developed once the utility becomes operational. However, the utility is currently operational and maintenance requirements are imperative.

·  To provide an asset maintenance schedule exclusively for each of the assets from office equipment, machinery, waterworks and transmission/distribution networks and appurtenances as appropriate for 2017/18 with differentiated specific timelines. Ensure to include specific components requiring maintenance.

x. Approved Water Safety PlanYes/No

 

To develop a water safety plan and implement it as a license 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 provide if applicable
xii. Details of planned institutional and infrastructural improvementsReview planning documents (strategic plan, master plan, business plan) to determine adequacy/link to performance targetsOutlined in business plan and financial model with the projections.
xiii. Financing PlanA plan to support activities in (xii) above·         Inherent in the financial model
Information on Commercial Management   
i. Copy of Customer contractCheck against model customer contract· WSP to provide a customer contract aligned to the model customer contract by WASREB
ii. Customer complaint handling procedureCheck against CEG· WSP to develop a customer service policy
iii. Customer Service CharterCheck against minimum service standardsWell provided
iv. Procurement PolicyApproved procurement policy/or evidence of following PPAD Act 2015· WSP to provide an approved and signed procurement policy.
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 since inception.

· Also provide conference invitation, list of participants

vi. Tax compliance certificate/statusCheck validity, validate with iTax 
vii. Most recent two years Auditor General Reports

· Audit certificate for the 2 years

· Signed audit reports

· WSP to provide Audited FS for the last two years.
viii. Website Information on annual reportCheck website for annual report· WSP to upload annual reports on their 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 biennially

· To conduct a CIS and regularly update it

x. Adoption of Maji VoiceCheck 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· To develop a website dedicated to water services in line with WASREB Website Transparency Guidelines.
Information on financial management   
i. Proposed / Valid Regular TariffCheck validity on website· To have an approved tariff within the first year 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·         Benchmark is 100-150%
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

 

ix. Performance GuaranteeYes/No

To have a performance guarantee from a reputable financial institution or deposited with the WASREB. This is to be posted with the WASREB before license is issued. Approved rate for your category of WSP is Kshs. 250,000.

 

x. Approved Strategic PlanBoD Approved Strategic Plan·         To submit 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 as per the WASREB minimum billing requirements.
xii. Operational business plan

·  BoD approved Operational business plan

· Check against WASREB standards

To provide adequate.
xiii. Approved Disaster Management PlanBoD Approved Disaster Management PlanTo develop within the first year of the license.
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

· To provide completion certificates for the water infrastructure.
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 completion certificates for the wastewater infrastructure.
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 WSP to confirm if any SSSPs are present.
9.Performance improvements in license period   
a.    Quality of Service  
           i.        Water coverage %Check against 2022 targets and link to NWSS100% based on the progress of development as indicated in the financial model.
          ii.        Drinking Water Quality %100% 
         iii.        Hours of SupplyProgression to acceptable sector benchmarksAcceptable sector benchmark is 12hrs/day
        iv.        Sewerage coverage %Check against 2022 targets and link to NWSS100% based on the progress of development as indicated in the financial model.
         v.         Effluent Quality %100%Acceptable sector benchmark is 100%
b.    Economic Efficiency  
           i.        Personnel Expenditure as % of O+M costs %Compliance to sector benchmarksAcceptable sector benchmark is >12hrs/day
          ii.        O+M Costs coverage %Progression to full cost recoveryAcceptable sector benchmark is 110% to guarantee the current level of service.
         iii.        Revenue Collection Efficiency %Compliance to sector benchmarksAcceptable sector benchmark is >85%
c.    Operational Sustainability  
           i.        Non-Revenue Water, %Progression to acceptable sector benchmarksAcceptable sector benchmark is <25%
          ii.        Metering(operational) ratio, %100%Acceptable sector benchmark is 100%
         iii.        Staff Productivity, NoProgression to acceptable sector benchmarksAcceptable sector benchmark is <8. However, this will be informed by the contractual arrangement.
        iv.        Environmental (source) protectionCheck CSR reports, SP, Go green, renewable energy 
v. Governance IndicatorScore for last assessment 
vi. Pro-poor Assessment 
Other Issues   
           i.        Evidence of Public ConsultationEvidence of Public Consultation invitation, list of participants, minutes for the license applicationTo be carried out before issuance of the license
          ii.        License Fee   to be paidYes/No 0.01% 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 

 Date of Evaluation   15th November, 2018

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