Corporatization - Commercialization Reforms in the Water Sector in Jordan

Transcription

1 Corporatization - Commercialization Reforms in the Water Sector in Jordan

2 USAID Assistance Technical assistance to corporatize Aqaba Water Company Technical assistance to corporatize Amman Water Company - Miyahuna (Our Water)

3 Water Sector in Aqaba Service Coverage Population 130,000 Subscribers 25,045 Non residential 3% (85% of billed revenue) Water coverage 99% W. Water cov. 78% AWC covers the whole area of Aqaba Governorate; not only the Aqaba city with the Special Economic Zone UFW: 24.19% Coverage area

4 Aqaba Special Economic Zone Jordan Aqaba Special Economic Zone Authority -Own government - Own planning and developing entities - Separate tax system - Regulation of utilities

5 How Corporatization of Water Services Started in Aqaba? ASEZA is empowered by law to develop infrastructure and provide services. ASEZA wanted to reform the water sector bringing a private operator to develop the sector and invest in a desalination plant. WAJ asked assistance to USAID to look for the best solution. USAID tasked a contractor to do a feasibility study and to help implement the reform.

6 AWC s Feasibility Study Water and wastewater demand forecast Water treatment and distribution needs Wastewater treatment and reuse Financial analysis of recommended plan Capital financing alternatives Institutional and management analysis Legal mandates in establishing the AWC Project implementation

7 Corporate Form Limited Liability Company (LLC) WAJ 85% ASEZA 15% Capabilities Own and Operate Assets Covers Operation, Maintenance and Investment Expenses Responsible for the whole cycle (water production, distribution, wastewater collection and treatment)

8 Corporate Governance ORIGINAL STRUCTURE WAJ: AQABA WATER COMPANY WAJ: OWNERSHIP OWNERSHIP, CONTROL CONTROL: BOARD OF DIRECTORS & MANAGEMENT MANAGEMENT: General Director (Experienced Utility Professional)

9 Key Legal Agreements Memorandum of Understanding Assignment Agreement Bulk Water Supply Agreement

10 Institutional Relationships USAID MWI MOU ASEZA WAJ Assignment Agreement Water Supply Agreement Development Agreement Aqaba Water Co,

11 Regulation by Contract WAJ Assignment Agreement Formation Agreement General Assembly 1 1 ASEZA Development Agreement 5 Management Committee 2 General Manager

12 AWC s Implementation III IV NOV I DEC II JAN III FEB IV MAR I APR II III IV III III Project starts Feasibility Study Preparatory Process MOU WAJ-Aqaba Transfer of assets, personnel, new recruits, Assignment Agreement Technical assistance on strategic planning, public information, customer services AWC Company Creation Company Starts Operation

13 Expected Benefits of Corporatization Benefits Beneficiaries Accountability Commercial Orientation Customer Orientation PPP Attractiveness Better Compensation WAJ, ASEZA, customers Customers, WAJ, ASEZ Customers, ASEZ WAJ, ASEZA Employees, ASEZ

14 Performance Improvements ( )

15 Performance Improvements Ability to provide services to any new investment 30% increase in sales (value) 23% increase new water subscribers 39% increase wastewater subscribers UFW decreased from 32% to 24% Aqaba City UFW% % 24.5% 26% %

16 Performance Improvements 85% of new water connections installed in less than 5 days, 15% in 10 days 90% of networks outside ASEZ were renewed 8 new reservoirs built 20 water resource sites protected The first reuse of treated water for industry in Jordan

17 Performance Improvements 3208 hours of staff training 58% increase on staff salaries Saving fund, life insurance, health programs introduced as new employment benefits. Less received complaints regarding water bills due to improved billing processes.

18 Customer Service Improvements 24/7 complaint centre One stop service Quick response time for complaints Connecting new subscribers in remarkable time 55 Persons at CSD to serve the company customers