AREA SWITCH PROGRAM

FOR

KANUNGU/KIHIHI AREA

FOR FY2014/15

July 2014

SERVICE DELIVERY

WATER SALES

INNOVATION

TEAMWORK

CUSTOMER SERVICE

HARNESS RESOURCES

NATIONAL WATER AND SEWERAGE CORPORATION

PERFORMANCE, AUTONOMY AND CREATIVITY ENHANCEMENT CONTRACT

(PACE II CONTRACT)

NATIONAL WATER AND SEWRAGE CORPORATION

DRAFT 01



1           INTRODUCTION

  1. Preamble

The Area SWITCH Program is in line with the 5-Year Strategic Direction (SD) – (2013-2018) for National Water and Sewerage Corporation (NWSC). SWITCH encompasses the Area Annual Action Plan and mainly includes the Infrastructure Service Delivery Plans (ISDPs) and short-term-high-impact performance improvement programs (PIPs) that Kanungu/Kihihi  Area will implement during the FY2014/15 to ensure that the performance standards set for in the Area PACE II (performance, autonomy & creativity enhancement) Contract are achieved and that customers’ expectations are realized.

The NWSC 5-Year SD has six focus areas, which include: (i) financial sustainability, (ii) infrastructure growth, (iii) increased coverage for water and sewerage services, (iv) learning and innovation, (v) customer delight, and (vi) management of stakeholder expectations.

The NWSC 5-Year SD was launched in November 2013. As part of operationalizing the 5-Yr SD, NWSC formulated the STEP-UP-90 programme in all the NWSC operational areas. The STEP-UP-90 programme ended in June 2014 and has enabled NWSC register a number of achievements especially in service expansion and tackling low functionalities of newly taken over towns.

The SWITCH program has therefore been developed as a successor to the STEP-UP-90 program and ensures continued improvements in the focus areas of the Strategic Direction.

The NWSC Annual Area Action Plans have been code-named SWITCH, which encompasses the following ideals and philosophy:

  1. SWITCH stands for the following objectives and attributes
    1. Service delivery,
    2. Water sales improvement,
    3. Innovation,
    4. Teamwork,
    5. Customer Service,
    6. Harness resources.
    7. The programme aims at achieving and/or improving the above mentioned objectives and attributes
    8. The programme will entail increasing service coverage and improving supply reliability.
    9. The programme will put emphasis on improving water sales. Water sales is taken to be central to the commercial viability and financial sustainability of NWSC. All factors that feed into improved water sales; such as reduction of non-revenue water (NRW) and growth of the customer base will be given due attention.
    10. The programme will encourage innovation from the staff in pursuit of solutions to address NWSC’s major challenges.
    11. The programme will aim at improving teamwork and team spirit, which form the foundation for sustained performance improvements.
    12. The programme will focus on improved customer service in line with the NWSC Slogan: “The Customer is the Reason We Exist”.
    13. The programme will include harnessing of resources, both human and financial, to promote optimization of cost and maximization of productivity.
    14. The bottom line of SWITCH is to improve the performance and service delivery of NWSC.
    15. The SWITCH programme is to run for one year (July 2014 to June 2015) and will include monthly and quarterly monitoring and evaluation in order to ensure effective implementation.

In line with above background and ideals, the management team of Kanungu/Kihihi Area has prepared the Area SWITCH programme which is outlined in the subsequent chapters and sections.


  1. Overview of Key Area Operational Data
    1. a)Geographical extent of the Service Area e.g. which parishes are served etc

Kanungu/Kihihi area currently operates in seven sub counties of Kanungu town council, Kihihi town council, Kambuga town council, Katete Sub County, Nyamirama Sub County, Butogota town council and Kanyantorogo Sub County with Kanyampanga project which is still under implementation, gazetted to NWSC for its operation and maintenance after completion

  1. b)Current customer base and Customer segmentation – consumer categories

We currently have 1499 customers connected to our water supply of which 1345 are metered i.e. 1131 are domestic, 57 are PSPs, 44 are institutional and 113 are commercial. 0f the 1499 customers, 154 customers are unmetered. 

  1. c)Potential customer base, key un-served demand

We have an estimate of 7,000 potential customers that are not currently connected to our water supply yet the need our services

  1. d)Main water supply and sewerage infrastructure in the Service Area –  water works, sewage works, trunk mains, reservoirs, boosters etc

Our water supply is mainly gravity flow schemes in Kanungu town council, Kambuga town council, Kanyantorogo, Butogota and Nyamirama sub counties with the exception of Kihihi and Katete which rely on boosters due to their altitudes in relation to the water sources. Kanungu scheme has a combination of gravity and borehole pumping at Kiru water source. Katete and Kambuga schemes share the same source at Mpangango source with Nyamirama gravity and Katete solar and hydro power pumping.

  1. e)market analysis showing the growth opportunities and related threats to growth e.g. new industries, hotels, business complexes, educational institutions etc and their impact on demand and revenue

Most of the town/ sub counties of our operation have a rapid growing population and rapid emerging institutions and this has greatly affected our performance as the demand for water in towns of Kihihi, Kambuga and Butogota is growing so fast every day. There is need for emergency interventions for us to improve on our water supply reliability in these towns so as to have our customers satisfied with our services.

 


  1. Key Performance Standards for SWITCH Programme

In line with the NWSC 5-Yr Strategic Direction and objectives of the PACE II Contract, the Key Performance Standards for Kanungu/Kihihi Area for the period FY2-14/2015 are presented in Table 1 below

Table 1 Key Performance Standards for Kanungu/Kihihi Area SWITCH Programme

#

KPI Description

Unit

Minimum Standard

(avge perf. In FY2013/14)

Target Standard

PACE II Yr1 (FY2014/15)

  1.  

Total Water Sales – monthly

m3

20,159

25,000

  1.  

NRW – average monthly

%

20

15

  1.  

New Water Connections – average monthly

 

10

            20

  1.  

Suppressed Water Accounts – by end of Yr

 

19

10

  1.  

Total Water Connections - by end of Yr

 

1499

1739

  1.  

Water Connection Efficiency - by end of Yr

%

98

98

  1.  

New Sewer Connections – average monthly

 

0

0

  1.  

Total Sewer Connections – by end of Yr

 

0

0

  1.  

Billed Revenue (Net of VAT) – Monthly

Ushs ‘millions’

34,000,000

42,000,000

  1.  

Collections (Net of VAT) – Monthly

Ushs ‘millions’

30,000,000

43,000,000

  1.  

Cash Operating Margin – average monthly

Ushs ‘millions’

(24,203,839)

(11,937,743)

  1.  

Working Ratio - average monthly

%

147

128

 

 


2           IMPLEMENTATION SCHEDULLE FOR THE AREA INFRASTRUCTURE SERVICE DELIVERY PLAN

This chapter outlines the Implementation Schedule for the Area Specific Infrastructure Service Delivery Plan (ISDP) in an effort to expand the services, increase coverage and improve service and supply reliability. Area ISDP has been broken down into 15 (Nos.) projects. The implementation schedule is presented in Table 2 below.

Table 2: Implementation Schedule for the Kanungu/Kihihi Area ISDP

#

Project Name & Description

(under the Area ISDP)

Project Milestone / Deliverable

Projected Due Date

1

Kanyantorogo scheme (mains extension to Kishenyi area) …. 

3km of HDPE pipe PN10 OD63

  1. Acquisition of Pipes & Fittings

By Sept 2014

  1. Procurement of Contractor(s)

By Aug 2014

  1. Effective Commencement of Works

Sept 2014

  1. 50% Implementation Progress

October 2014

  1. Completion & Commissioning of works

October 2014

2

Kanyantorogo scheme (mains extension to Runyaburambira area) …. 

3km of HDPE pipe PN10 OD63

  1. Acquisition of Pipes & Fittings

By October 2014

  1. Procurement of Contractor(s)

By Sept 2014

  1. Effective Commencement of Works

October 2014

  1. 50% Implementation Progress

October 2014

  1. Completion & Commissioning of works

October 2014

3

Nyamirama scheme (mains extension to Kanwabizo area)

    1. Acquisition of Pipes & Fittings
 

By October 2014

  1. Procurement of Contractor(s)

By Sept 2014

  1. Effective Commencement of Works

Oct 2014

  1. 50% Implementation Progress

Oct 2014

  1. Completion & Commissioning of works

Oct 2014

4

Nyamirama scheme (mains extension to Kagarama area)

    1. Acquisition of Pipes & Fittings
 

Oct 2014

  1. Procurement of Contractor(s)

Sept 2014

  1. Effective Commencement of Works

Oct 2014

  1. 50% Implementation Progress

Oct 2014

  1. Completion & Commissioning of works

Oct 2014

5

Nyamirama scheme (mains extension to Kamisi area)

    1. Acquisition of Pipes & Fittings
 

Oct 2014

  1. Procurement of Contractor(s)

Sept 2014

  1. Effective Commencement of Works

Oct 2014

  1. 50% Implementation Progress

Nov 2014

  1. Completion & Commissioning of works

Nov 2014

6

Katete scheme (mains extension to Omukimanyu)

  1. Acquisition of Pipes & Fittings

Nov 2014

  1. Procurement of Contractor(s)

Oct  2014

  1. Effective Commencement of Works

Nov 2014

  1. 50% Implementation Progress

Nov 2014

  1. Completion & Commissioning of works

Nov 2014

7

Katete scheme (mains extension to Nyarurambi)

    1. Acquisition of Pipes & Fittings
 

Dec 2014

  1. Procurement of Contractor(s)

Nov  2014

  1. Effective Commencement of Works

Dec 2014

  1. 50% Implementation Progress

Dec 2014

  1. Completion & Commissioning of works

Dec 2014

8

Katete scheme (mains expansion from Mpangango source to Katete HC reservoirs)

    1. Acquisition of Pipes & Fittings
 

Dec 2015

  1. Procurement of Contractor(s)

Dec 2014

  1. Effective Commencement of Works

Nov 2014

  1. 50% Implementation Progress

Feb 2015

  1. Completion & Commissioning of works

March 2015

9

Kanungu town council (mains extension to Rugyeyo)

    1. Acquisition of Pipes & Fittings
 

Jan 2015

  1. Procurement of Contractor(s)

Dec 2014

  1. Effective Commencement of Works

Jan 2015

  1. 50% Implementation Progress

Jan 2015

  1. Completion & Commissioning of works

Feb 2015

10

Butogota scheme (mains extension to Rutwe cell)

    1. Acquisition of Pipes & Fittings
 

Dec 2014

  1. Procurement of Contractor(s)

Nov 2014

  1. Effective Commencement of Works

Dec 2014

  1. 50% Implementation Progress

Dec 2014

  1. Completion & Commissioning of works

Dec 2014

11

Butogota scheme (mains extension to Butogota central)

    1. Acquisition of Pipes & Fittings
 

Dec 2014

  1. Procurement of Contractor(s)

Nov 2014

  1. Effective Commencement of Works

Dec 2014

  1. 50% Implementation Progress

Dec 2014

  1. Completion & Commissioning of works

Dec 2014

12

Butogota scheme (mains extension along Market street)

    1. Acquisition of Pipes & Fittings
 

Jan 2015

  1. Procurement of Contractor(s)

Dec 2014

  1. Effective Commencement of Works

Jan 2015

  1. 50% Implementation Progress

Jan 2015

  1. Completion & Commissioning of works

Jan 2015

13

Kihihi town council (mains extension from Katete to Kihihi to boost Kihihi supply)

    1. Acquisition of Pipes & Fittings
 

Nov  2014

  1. Procurement of Contractor(s)

Nov 2014

  1. Effective Commencement of Works

Dec 2014

  1. 50% Implementation Progress

Jan 2015

  1. Completion & Commissioning of works

Jan 2015

14

Kihihi town council (mains extension along Kihihi-Rukunguri RD)

    1. Acquisition of Pipes & Fittings
 

Jan 2014

  1. Procurement of Contractor(s)

Jan 2015

  1. Effective Commencement of Works

Feb 2015

  1. 50% Implementation Progress

Feb 2015

  1. Completion & Commissioning of works

Feb 2015

15

Kihihi town council (mains extension to Kihihi- Kanungu RD)

    1. Acquisition of Pipes & Fittings
 

Jan 2015

  1. Procurement of Contractor(s)

Jan 2015

  1. Effective Commencement of Works

Feb 2015

  1. 50% Implementation Progress

March 2015

  1. Completion & Commissioning of works

March 2015

16

Kihihi town council (mains extension to Kihihi-Kasese RD)

    1. Acquisition of Pipes & Fittings
 

May 2015

  1. Procurement of Contractor(s)

April 2015

  1. Effective Commencement of Works

May 2015

  1. 50% Implementation Progress

June 2015

  1. Completion & Commissioning of works

June 2015

17

Kambuga town council (mains extension from Katete to Kambuga reservoir)

    1. Acquisition of Pipes & Fittings
 

Nov 2014

  1. Procurement of Contractor(s)

Nov 2014

  1. Effective Commencement of Works

 Dec  2014

  1. 50% Implementation Progress

Jan 2015

  1. Completion & Commissioning of works

Jan 2015

18

Kambuga town council (mains extension from Kambuga-Bugongi)

    1. Acquisition of Pipes & Fittings
 

Jan 2015

  1. Procurement of Contractor(s)

Jan 2015

  1. Effective Commencement of Works

Feb 2015

  1. 50% Implementation Progress

Feb 2015

  1. Completion & Commissioning of works

Feb 2015

19

Kambuga town council (mains extension from Kiriga-Kigando)

    1. Acquisition of Pipes & Fittings
 

Jan 2015

  1. Procurement of Contractor(s)

Jan 2015

  1. Effective Commencement of Works

Feb 2015

  1. 50% Implementation Progress

March 2015

  1. Completion & Commissioning of works

March 2015

20

Kambuga town council (mains extension from Kambuga-Kibare)

    1. Acquisition of Pipes & Fittings
   
  1. Procurement of Contractor(s)

Feb 2015

  1. Effective Commencement of Works

March 2015

  1. 50% Implementation Progress

March 2015

  1. Completion & Commissioning of works

March 2015

Need for bigger reservoir at Katete, bigger capacity pumps and a bigger collection tank at Mpangango water source for all water to be pumped to Katete for distribution to Kihihi, Katete and Kambuga

** Add as many ISDP projects as necessary or as provide for in the budget.

3           AREA SPECIFIC PIPs

This chapter outlines the Area Specific Performance Improvement Programmes (PIPs). The PIPS are meant to be short term and high impact in design and of operational interventions in nature. It should be noted that the PIPs are deemed to be over and above the Area routine activities. Each PIP will be designed to run for a period of up to three months with monthly evaluations. The PIPs may run concurrently or in succession of one another depending on the available resources and on the precedence link between the PIPs.  A PIP may be extended beyond the 3-months initial period if the evaluation recommends so or if the impact on Area performance is indeed positively compelling.

Notes:

  1. The Area should formulate a maximum of five (05) PIPs
  2. The PIPs should focus on and aim achieving the following main objectives: (i) increasing water sales and reducing NRW, (ii) improving water supply reliability, (iii) improving customer service / care, (iv) harnessing resources effectively and optimizing costs, and (v) effective stakeholder engagement 

Table 3: Area Specific PIPs

#

PIP Name:

PIP Cost Implication (UGX):

Main Objectives

Main Outcomes

Key Activities

Projected Commencement Date

1

Revenue growth

Cost

2,000,000.

Main Objectives

  1. Increased billing from 34,000,000 to 40,000,000
  2. Increased customer base from 1345 to 1390 
  3. Increasing our pipe work by 67 km  
  4. Reducing suppressed accounts from 69 to 15
  5. Reduced arrears from 35,000,000 to 25,000,000

Main Outcomes

  1. Billing increased by 5,000,000
  2. Customers increased by 45
  3. Pipe length increased by 67 km
  4. Customer sensitization
  5. Intensifying revenue follow up
  6. Enhancing territorial management
  7. Increasing customer outreach
  8. Timely procurement of materials for new connections
  9. Engaging debt collectors
  10. Replacing of old meters
 

Monthly

2

Increasing water production

Cost

6,000,000

Main Objectives

  1. Increased water production from 20,159 m3 to 23,000 m3
  2. Reducing NRW from 20% to 15%
  3. To have un interrupted water supply

Main Outcomes

  1. Water production increased by 3,000m3
  2. NRW reduced by 5%
  3. Increased water sales
  4. Improved customer satisfaction
  1. Protection of identified new sources
  2. Rehabilitation and re-protection of schemes with inadequate supply
  3. Timely repair of bursts and leakages
  4. Acquisition of standby generators for schemes with pumping systems
  5. Procurement of high capacity pumps

30/09/2014

3

Customer satisfaction

 Cost

600,000.

Main Objectives

  1. Building customer loyalty
  2. Provide reliable services
  3. Improve supply reliability

Main Outcomes

  1. Satisfied customers
  2. Informed customers
  3. Reduced debt edge
  4. Improved collections
  1. Building rapport
  2. Quick response to customers complaints
  3. Sensitization meetings
  4. Radio talk shows
  5. Equipping staff with customer care and marketing skills
 

4

Cost optimization

Nil

Main Objectives

  1. To reduce energy costs
  2. Reduction on cost of materials and fittings
  3. To increased revenue collection
  4. To reduce on fuel costs

Main Outcomes

  1. Reduced energy costs
  2. Reduced material costs
  3. Reduced fuel costs
  1. Optimizing use of gravity water
  2. Timely acquisition of materials from central stores.
  3. Encourage multi skilling
  4. Servicing of meters instead of new installations
  5. Encouraging staff not to misuse fuel
 

5

Stakeholder management

Cost

1,000,000.

Main Objectives

  1. To identify different stakeholders
  2. To assess the influence and power of stakeholders
  3. To have satisfied stake holders

Main Outcomes

  1. Stake holders identified
  2. Satisfied stakeholders
  3. Streamlined communication with stakeholders
  1. Formation of water committees
  2. Sensitization meetings
  3. Maintaining active water committees
  4. Ensuring adherence to national standards
  5. Radio talk shows
  6. Cash mobile program

31/08/2014

Explanatory notes to cost implications on pips:

  • On revenue growth, the area estimates 2M to be incurred on customer sensitization programmes for six months.
  •  On increased water production, we intend to protect new identified water sources and we estimate 6M to be spent on these activities.
  • On customer satisfaction, we plan to carry out quarterly training for all the staffs on customer care services.
  • On stake holder Management, the area plans to engage the selected stake holders in each scheme so that water committee meetings are always held to discuss the way forward as far as implementation of policies are concerned. We plan to spend 1M for two quarters.

4           MEMORANDUM OF UNDERSTANDING

MEMORANDUM OF UNDERSTANDING BETWEEN HEAD OFFICE AND KANUNGU/KIHIHI AREA

  1.       This Memorandum of Understanding is made this 31st day of July 2014

BETWEEN

NWSC Head Office of P. O. Box 7053, of Plot 39, Jinja road, Kampala (hereinafter called Head Office)

AND

Kanungu/Kihihi Partnership/Area (hereafter referred to as the “Operator”) of Kanungu/Kihihi Water and Sewerage Service Area, P.O. Box 26,  Rukungiri Road/Street, Western Ward on the other hand

  1.       WHEREAS
    1. The NWSC-Head Office has signed a three year Performance, Autonomy & Creativity Enhancement (PACE II) Contract with the Operator, represented by the Lead Partner.
    2. Clause 4.3 of the PACE II Contract for Kanungu/Kihihi Area allows the Operator to discretionally but in a professional manner develop the services in Kanungu/Kihihi Area efficiently  in the best interests of the Corporation, which include but are not limited to improved customer services and achievement of the agreed performance standards
    3. The NWSC 5-Year Strategic Direction provides guidance on the service enhancement and performance improvement focus areas.
    4. The Operator is desirous of ensuring that the 5-Year Strategic Direction Provisions and Milestones that pertain to Kanungu/Kihihi Area are adequately incorporated in Kanungu/Kihihi Area’s Plans and effectively implemented.
    5. The Operator understands and agrees to be bound, as an agent of the Head Office in Kanungu/Kihihi  Water and Sewerage Service Area, by the relevant provisions stated in the PACE II Contract and any amendments and variations thereto, which relevant clauses of the PACE II Contract form part of this Memorandum of Understanding (MoU).
    6. The Head Office recognizes the roles to be assumed and played by the Operator as a contribution towards the implementation of the 5-Year Strategic Direction.
    7. The purpose and objective of this MoU and the arrangements it puts in place is to ensure effective implementation of the Area Annual Action Plan - Code named “SWITCH”, and to promote further improvements in performance and service delivery and enable Kanungu/Kihihi Area achieve its service and performance obligations set forth in the PACE II Contract and also implied in the 5-Year Strategic Direction.

NOW THE PARTIES HEREBY AGREE AS FOLLOWS:

All parties hereby undertake to fulfill their obligations, outlined below, towards achievement of agreed targets and objectives entailed in the SWITCH Program. The SWITCH Program will be implemented for a one year period July 2014 to June 2015.  

  1.       OBLIGATIONS OF THE HEAD OFFICE:
    1. To provide financial and technical support as agreed in the details set out in PACE II.
    2. To operate in a bureaucracy-free environment, to enable the Area acquire the agreed financial, logistical and technical support in the stipulated time.
    3. To carry out periodic monitoring and evaluation of the SWITCH activities and Area Performance and promptly provide constructive feedback. 
  1.       OBLIGATIONS OF THE OPERATOR:
    1. To do everything necessary to improve performance, and achieve the targets stipulated in this SWITCH Program. 
    2. To take continuous pro-active steps and liaise with the Head Office in respect to the required operational inputs.
    3. To provide timely reports as per the formats agreed upon and provided by the Head Office
    4. To optimize costs in all activities carried out and in the SWITCH implementation.
    5. To ensure professional operations management that promotes the NWSC Corporate Image.


  1. NOW THEREFORE the HEAD OFFICE and OPERATOR here to sign this Memorandum of Understanding (MoU) the day and date first above mentioned.

THE OPERATOR

  1. Signed by                                                             

…………………                                                    ……………………………….

AREA/GENERAL MANAGER                            On behalf of Kanungu/Kihihi

  Area/Water Partnership

  1. Witnessed by:                                                         …...…………………………

…..                                                                      On behalf of Kanungu/Kihihi

……                                                                      Area/Water Partnership

  1. Witnessed by:                                                         …...…………………………

…..                                                                      On behalf of Kanungu/Kihihi

……                                                                      Area/Water Partnership

                     

  1. Witnessed by:                                                         …...…………………………

…..                                                                      On behalf of Kanungu/Kihihi

……                                                                      Area/Water Partnership

  1. Witnessed by:                                                       ….……………………………

……….                                                                 On behalf of the Staff

       Union Representative

THE HEAD OFFICE

 

  1. Signed by:                                                                        ………………………………..

……..                                                                       On behalf of the HEAD OFFICE

………           

  1. Witnessed by:                                                      .…….…………………………

……..                                                                        On behalf of the HEAD OFFICE

………                                                         

Endorsement

  1. Endorsed by:                                                       ………………………………….

………………..                                                                                                                                    CHAIRPERSON UPEU                                 For and on Behalf of the Staff

  1. Endorsed by:                                                       ………………………………….

MANAGING DIRECTOR-NWSC                For and on Behalf of NWSC, UGANDA

 

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