Gov fin rc2 d1 s1

1. 12-Dec-16
2nd UfM Regional Conference of
Governance & Financing for the Mediterranean
Water Sector
Comments on the key findings from the Policy
Dialogues in Palestine
Mohammad Said Al Hmaidi
CEO, WSRC, Palestine

2. Outline
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• Brief reflection on the key findings from the
Policy Dialogues in Palestine,
• Recent developments in water services,
• Developments in the work of the WSRC and next
steps

3. INTRODUCTION
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4. Challenges of the Sector
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One of the lowest per capita water availability in the region
Territorial fragmentation leading to different approaches and many different water service providers
Operational inefficiencies lead to interruption, high NRW and pollution
Insufficient customer satisfaction
Insufficient ring-fencing of revenues in the water sector
Chronic under investment for infrastructure development
Inadequate information system and transparency
Insufficient corporate governance
Limited cooperation among key stakeholders

5. Institutional Capacity & Services Sustainability
Water Sector Reform
Palestinian Water Authority (PWA):
- Water Sector Policy, Strategy, and
Master Planning,
- Sector Development and restructuring’
- Water Resources licensing and
Monitoring
Water Sector regulatory
Council (WSRC):
- Licensing of Service
Providers
- Monitoring the Service
Providers Performance
National Water company
(Bulk Water Supply)
Service Delivery:
Regional Water Utilities, Joint Water Services and Water User Associations

6. • To monitor all matters related to the operations of S.P’s
providers including Production, transportation, distribution,
consumption and wastewater management, to ensure water
and wastewater service quality and efficiency to consumers
in Palestine at reasonable prices.
Main Objective

7. Brief reflection on the key findings
from the Policy Dialogues in
Palestine,
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8. Where are we?
• Iintra-sector relationships:
- Internal communication, establishing rules of procedures, roles
and responsibilities of other stakeholders from outside the
sector : a communication plan was prepared, advisory board will
be established soon
- Private sector relations, establishment of multi-stakeholder
platforms,: a policy paper/note was prepared and sent to PM
- Enhance building of trust; on going
- Identify consumers’ needs and interests, related also to socio-
economic factors; on going
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9. Strengthen Capacity Building in PPP contracts:
- Introducing different PSP /PPP modalities, a number
of cost calculation trainings were introduced
- Identifying project applicability to PSP /PPP ,
- Developing project preparation and basic Value for
Money (VfM) methodologies, : true cost of water is
being calculated through tariff reviews process
- Introducing the social context of investment into
VfM; new tariff bylaw pillars is social context
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10. Develop mechanisms to identify the true cost of water in
bulk supply:
• Set up the process for the utilities to apply a
uniform accounting system, training
modules were prepared
• Conduct an affordability and willingness to
pay study : planned for 2017
• Disaggregate gender, poor/middle income,
etc.; gender related indicators were
introduced within performance monitoring
indicators
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11. Support the financial self-sufficiency of water
entities, “Corporatization”
• Assessing the financial relationships among
entities and identifying single points of
subsidy; different modalities of hidden or clear
subsidies are being discussed at different levels
• Establish accountability mechanisms for the
newly established regulator (WSRC ),
including its role in project and PSP
management,
• the regular conduct of RIA s with
gender/socio-economic considerations,
etc.; planned for 2018
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12. Consolidation of water providers and establish
regional water utilities
• Roadmap for action, road map is under
preparation
• Socio-economic/demographic indicators as
part of their performance indicators, already set
and used
• Build staff capacity that is gender-sensitive
and promote women’s access to elected
decision-making positions;
• Submit to Cabinet requirements foreseen in the
Water Law, including water tariff and regional
water utilities regulations
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13. The Modern Utility
Utility
Mgmt.
Staff
Government
Customers
Private Sector
IFIs
Donors
NGOs
What Makes a Modern
Utility?
External Environment
Internal Accountability
Corporate Governance
Market Orientation
Client Orientation

14. Six elements to help towards effective utilities …
Clear policies &
legal mandate
Shareholder
compact
Policy & legal
mandate
Water utility
Autonomous &
professional
management
team
Government
Tariffs that recover
costs
Credible public
reporting
Shareholder
agreement with
sound governance
Financiers Regulator
Utility is able to raise
commercial debt
finance
(an outcome of and an input
to good performance)
1 2
3
4
5
6

15. Strategic Objectives

16. Policy priorities of the five strategic
objectives

17. Implementation Approach (1)
Upscaling scenarios
(*) A Higher JSC is an institutional form where two or more JSC establish a new organization comprising its member JSCs
Nos
±4
8-11
±30
300+
Local Authorities Law
Water Law
Municipalities & Village Councils
Small JSCs
(Various)
Small RWUs
(WSSA, City Utility)
Medium RWUs
(JWU)
Large Regional Water Utilities
Medium JSCs
(Higher JSC (*), CMWU)
EconomiesofScale
PoliticalInterference
Professionalism

18. Developments in the work of the
WSRC and next steps
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19. Council Functions/Mandate:
1- Approval of water prices, cost of supply and construction costs of
water and sanitation services and monitoring of these costs.
2- Issue licenses to S.P’s (desalination, treat water or collect and
treat wastewater, RWU, LGU’s..)
3- Supervise and Inspect compliance with the conditions,
requirements and indicators stipulated in the licenses and
permits.
4- Develop performance incentives systems for service providers.
5- Make sure that costs of production, transport, distribution and
wastewater treatment protect the interests of all concerned
parties.

20. Council functions….continue
6- Set and disseminate quality assurance standards for technical
and administrative services provided by S.Ps
7- Create a database with technical, financial and statistical
information.
8- Monitoring of water supply agreements.
9- Addressing complaints of consumers against SP.
10- Ensure that production, treatment, distribution and ww
treatment cost takes into consideration the interest of all parties.

21. Added value of the WSRC 1/2
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•Regulation increases the overall
sector performance and self-
financing of utilities
•…makes the sector more
transparent
•…stabilizes the development of
the sector
•…increases the prominence and
visibility of the sector
•…improves IWRM
•…strengthens national
ownership
To the Water
Sector
•Regulation recognizes good
performance through
benchmarking system
•…supports fund mobilization
•…provides orientation to BoD
and management for better
decision making (e.g. cost
recovery, risk management)
•…as facilitation
•…gives arguments to protect
management from external
interference
To the Water
Service Providers
•Regulation increases continuity
of service
•…ensures fair water prices
•…ensures safe water quality
•…increases good management
of consumer complaints
•…increases functioning
wastewater system
•…leads to cleaner environment
•…leads to better information
To the
Consumers

22. Added value of the WSRC 2/2
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•Regulation stops the drain on
government budget due to
unpaid bulk water bills
•…helps to stop subsidies for
utilities once cost recovery has
been achieved
•…increases information on the
situation in the sector
•…supports the implementation
of the governmental policies
•…contributes to environmental
safety
To the
Palestinian
Government
•Regulation leads to a higher
credibility within the sector
•…enables a better overview of
the sector for improved
decision-making on funding
•…supports sustainability of the
sector
To the Donors
•Potential PPP Interventions are
identified,
•Assurances to the PS that
investments are monitored and
results are reported
•Accurate and verified data are
made available,
•WSRC campaigns studies and
campaigns covers ability to pay,
willingness to pay and
customers satisfaction results
To the Private
Sector

23. Current Status of the Establishment 1/2
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Preparation, review
and finalizing Bylaws:
• Licensing Bylaw (PWA)
• Agricultural Water Tariff
Bylaw (PWA and MoA)
• Water Users Associations
Bylaw (PWA and MoA)
Internal Bylaws and
procedures including:
•BoD Bylaw (submitted)
•Admin Bylaw (approved)
•Financial Bylaw (approved)
•Procurement Manual (completed)
•Fixed Assets Manual (final draft)
•HR Manual (final draft)
•Org. Structure (submitted).

24. Current Status of the Establishment 2/2
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Reporting Progress
•2013 Performance Report
(published)
•2014 Performance Report
(final design and printing)
•2015 Reports (data collection
and verification)
•Wastewater monitoring:
progressing
•Gaza SP Training (completed)
WSP tools, procedures
and guidelines: (with
the GIZ water Program
team)
• Tariff setting guidelines
• Water Balance Module
• Cost Calculation Module
• Indicators Module

25. Performance Monitoring: TECHNICAL INDICATORS:
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Average daily per capita water consumption at domestic level
Average daily per capita water consumption -All types
Domestic water consumption as % of total consumption
Industrial water consumption as % of total consumption
Commercial water consumption as % of total consumption
Touristic water consumption as % of total consumption
Bulk water consumption as % of total consumption
Non-Revenue Water by volume
Non-revenue water in (m3) per km in the network per year
Non-revenue water per connection per day
Wastewater Coverage

26. Performance monitoring: Financial Indicators
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Average selling price per m3 of water
Operating costs per m3 of water sold
Personnel costs per m3 of water sold
Water purchase costs (at purchase point) per m3 of water sold
Energy costs per m3 of water sold
Other operating costs per m3 of water sold
Collection Efficiency - water service
Collection Efficiency - wastewater service
Working ratio (Efficiency Ratio) - water service
Operating Costs per m3 of Wastewater

27. Performance monitoring: Quality
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Water samples (taken from network including mains) containing free chlorine
residual (RC)
Water samples (taken at source) free from total coliform contamination
Water samples (taken at source) free from fecal coliform contamination
Water samples (taken from network including mains) free from total coliform
contamination
Water samples (taken from network including mains) free from fecal coliform
contamination
Microbiological tests carried out
Water Samples (taken at the sources) free from Nitrate contamination

28. Other Indicators
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Female workers as % of total staff
Males workers as % of total staff
Female workers as % of total supervisory or managerial
staff
Staff Productivity Index

29. 12-Dec-16 29
Recent developments in water
services,

30. Current coverage of PM:
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31. Wastewater Related Deductions:
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32. Main SP challenges: WBWD indebtedness
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-
200.000.000
400.000.000
600.000.000
800.000.000
1.000.000.000
1.200.000.000
2011 2012 2013 2014
‫المدينة‬ ‫الذمم‬-‫الغربية‬ ‫الضفة‬ ‫مياه‬ ‫دائرة‬
‫الدفترية‬ ‫المدينة‬ ‫الذمم‬ ‫أرصدة‬
‫المؤجلة‬ ‫الشيكات‬ ‫تشمل‬ ‫المدة‬ ‫آخر‬ ‫الذمم‬ ‫أرصدة‬

33. Indebtedness by governorate
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-
50.000.000
100.000.000
150.000.000
200.000.000
250.000.000
300.000.000
350.000.000
‫محافظة‬
‫طولكرم‬
‫جنين‬ ‫محافظة‬ ‫نابلس‬ ‫محافظة‬ ‫قلقي‬ ‫محافظة‬‫لية‬ ‫محافظة‬
‫سلفيت‬
‫رام‬ ‫محافظة‬
‫هللا‬
‫أريحا‬ ‫محافظة‬ ‫بيت‬ ‫محافظة‬
‫لحم‬
‫الخلي‬ ‫محافظة‬‫ل‬ ‫القدس‬ ‫محافظة‬ ‫محافظة‬
‫طوباس‬
‫المشتركيين‬
‫الزراعيين‬
‫المشتركيين‬
‫األفراد‬
‫المحافظات‬ ‫بحسب‬ ‫المدينة‬ ‫الذمم‬
2011
2012
2013
2014

34. Key indicators:
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35. Key indicators:
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36. Key indicators:
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WWW.WSRC.PS

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Thank You