annual report 2014 - rsb.gov.aersb.gov.ae/.../annual_report_2014_english__2.pdf · the regulation...
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AnnualReport 2014
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Late Sheikh Zayed Bin Sultan Al Nahyan
Founder of the United Arab Emirates
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His Highness Sheikh Khalifa bin Zayed Al Nahyan
The President of the UAE
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His Highness Sheikh Mohamed bin Zayed Al Nahyan
The Crown Prince of Abu Dhabi and Deputy Supreme
Commander of the UAE Armed Forces
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Table of contents
10 Chairman’s Message
11 Director General’s Message
13 Timeline
14 Key Statistics
19 Economic Performance Review
29 Technical
29 Electricity & Water Production
31 Electricity
33 Water
35 Waste Water
37 Waterwise & Powerwise
39 HSEQ & BCM
41 Legal Perspective
42 License Holders
46 Public Records of Activities and Documents
51 Financial Statements
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The Regulation & Supervision BureauAnnual Report 2014
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Chairman’s Introduction
infrastructure, by ensuring a world class utility sector that meets the demand of its customers.
This report sheds light on various achievements the Bureau has accomplished in the year 2014, which you will discover in reading our 2014 annual report.
This year marks a significant milestone to the Regulation and Supervision Bureau (the Bureau) the sector rolled out the restructuring of water and electricity tariffs for the first time in 20 years.
The new water and electricity tariffs reiterate and drive through the message of conservation and the need to manage our resources effectively for the future of the Emirate and the UAE. With the collaborative team work of the sector partners, customers received the new changes to the tariffs in a positive light and are now smarter customers with the knowledge at hand.
As the Emirate continues to plan for the next generation of developments, the Bureau is constantly working closely with its sector partners to support the
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2014 was another year of rapid growth for the Bureau and the sectors that it regulates and supervises. Electricity production increased by 8%, water production increased by 5% and the demand for wastewater services increased by 7% from 2013. This was in line with forecasts and the sector is looking ahead to ensure future demand growth can be met as the Emirate moves towards fulfilment of its 2030 vision.
As part of the Bureau’s duties, we introduced a new compliance tool in 2014 called an Improvement Notice. The Bureau issued fifteen Improvement Notices to the Sector requiring specific improvements to ensure better Licence compliance. The sector has embraced this new tool and is responding as required to improve compliance.
The Bureau also led studies in emerging areas assessing the potential for regulation to drive improvements in customer service and protection and increase the Emirate’s resource efficiency.
In further efforts to support conservation, our Waterwise and Powerwise offices continued their leading edge work to help both distribution companies
Director General’s Message
(ADDC and AADC) to implement various measures of demand side management and for the benefit of both customers and the Emirate to save water and electricity to help conserve our precious resources.
2014 similar to previous years has been a busy year for the Bureau with the various work streams and initiatives the work force has delivered. The following pages sheds lights on the achievements accomplished within the Emirate’s water, wastewater and electricity sector.
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The Regulation & Supervision BureauAnnual Report 2014
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Timeline
JanuaryBureau releases Trial results at the 3rd International Water Summit
PC5 Price Control Implementation
Fourth edition of Water Quality Regulations came into force
MayBureau consultation on the BCM regulations and guidance documents
JulyConsultation on quality standards in the Recycled Water and Biosolids Regulations and Trade Effluent Control Regulations
Shuweihat Asia Power Company (SAPCO) S3 completed all commissioning performance tests and handover documents achieving the milestone commercial operation date (COD) status for all units.
OctoberConsultation on water and wastewater tankering
Issued Mirfa International Power and Water Company Water Desalination and Electricity Generation Licence
MarchThird edition of Electricity Wiring
Regulations published
Bureau goes to the Green festival
JuneThe start of our summer campaign
promoting efficient use of our resources
SeptemberBureau published the Business
Continuity Management Regulations (BCM) for the drinking water,
wastewater and electricity sectors of Abu Dhabi.
NovemberAnnouncement of a new water and
electricity tariff structure, in the Emirate of Abu Dhabi effective
1st January 2015
Launch of Low-Risk Trade Effluent Code of practice for Vehicle Washes
The Guide for Chemicals and Products that come in contact with
Drinking Water published
Code of Practice for the Inspection and Cleaning of Customer Water
Storage Tanks was published
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The Regulation & Supervision BureauAnnual Report 2014
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Electricity
70,847 GWh
+ 8.2 % (includes exports)
Water (potable)
1,245,312 ML
[273,960 MIG]
+ 5.2 %Water supply (Transmission peak)
793 MGD [3.6 MLD]
+ 3.93 %including Northern Emirates demand which occurred on 19 August 2014
Electricity ( Hourly peak)
12,093 MW
+ 7.6% (21 July 2014)
This includes export of 2,865 MW at the time of the peak. Hourly peak for the Emirate of Abu Dhabi: 9,256 MW, up 4.1%
Wastewater
194 MGD
average, received at wastewater treatment plants [884,000 m3/d]; treatment equivalent annual total of 70,979 MG
+ 7 %
Key Statistics
Annual production for 2014
System demand
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Water quality
Total tests
200,545for 77 parameters,
- 0.1 %
Average unit costs
Electricityfils 32.9 per kWh
WaterAED 10.29 per 1,000 litres or one cubic meter
Customers
Electricity
472,992
+ 3.5 %Water
367,752
+ 8.4 %Wastewater
355,565 (estimated)
Sector turnover
Electricity
AED 17.7 billion
Water
AED 10.3 billion
Wastewater
AED 1.2 billion
Installed capacity
Electricity
15,546 MW
Water (potable)
4,164 MLD [916 MGD]
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Growth and production charts
Electricity Demand Growth (MW)
Electricity Generation (GWh)
18,000
16,000
14,000
12,000
901
86
4 1,2
75 1,5
22
1,90
0
2,0
94
2,4
15 2,8
65
10,000
8,000
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
2010
2011
2012
2013
2014
6,000
4,000
2,000
12,000
10,000
8,000
AM
PC
AP
C
ECP
C
RP
C
TAP
CO
SEM
BC
OR
P
FAP
CO
Sham
s 1
SAP
CO
SCIP
CO
GT
TP
C
6,000
4,000
2,000
2013
2014
Peak Demand MW
Exports to Northern Emirates MW; also shown in figures
Available Capacity MW
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2013
2014
Water Producation (MIG)
60,000
50,000
40,000
30,000
AM
PC
AP
C
ECP
C
TAP
CO
SEM
BC
OR
P
FAP
CO
RP
C
SCIP
CO
GT
TP
C
20,000
10,000
1999
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
2010
2011
2012
2013
2014
Peak Daily Water Supply (MIGD)
Wat
er S
up
ply
/ W
ater
Cap
acity
(M
IGD
)
Peak Demand (Northen Emirates)
Peak Demand (Emirate of Abu Dhabi)
Available Capacity
900
1000
800
700
600 7
220 239 27
9 332 38
0 42
3
527
12
19
23 35
45
60 58
22
500
400
300
200
100
553
560 59
5 643
649
655 71
5 744 763
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Sector overviewThe Abu Dhabi water, wastewater and electricity sectors are responsible for providing water, sewerage services and electricity in the Emirate of Abu Dhabi. The sector also exports water and electricity to the neighbouring emirates and countries, if required. The key indicators for 2014 are shown in Figure 1 below.
Figure 1– key sector indicators in 2014
Capacity Transmission Distribution & Supply Wastewater
Electricity Electricity Electricity Wastewater
15,546 MW (UP) 7% Units 61,718 GWh* (UP) 5% Units 44,999 GWh (UP) 9% Units 323 million m3
(UP) 42% Unit cost (UP) 57% Unit cost (UP) 11% Unit cost
(UP) 3% Customers 472,992 (UP) 4% Customers 355,565
Water Water Water
916 MGD (UP) 5% Units 267,407 MIG* (UP) 4% Units 248,057 MIG
(UP) 35% Unit cost (UP) 3% Unit cost
(UP) 9% Customers 366,610
Economic & FinancialReview
* includes exports
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Figure 2– Structure of the electricity, water and wastewater sectors
PWPAadmin
Production
Transmission Distribution
Sup
ply
- s
ales
Dis
po
sal
Irri
gat
ion
Bio
slo
ids
Transmission Distribution
ADWECSells output to
supply business
Competition Economic Regulation
Co
llect
ion
Tre
atm
ent
Co
nn
ecti
on
With the exception of the generation/production companies and ISTPs, all the water, wastewater and electricity companies operating in Abu Dhabi are monopolies. The Regulation and Supervision Bureau is the independent regulatory authority established by Law No (2) of 1998 to oversee and regulate the water, wastewater and electricity sectors in the Emirate of Abu Dhabi.
The revenues for the production companies and ISTPs are determined by the prices that were obtained through competitive tendering and are set out in the respective PWPAs and STAs between these companies and the off-taker (ADWEC or ADSSC). For each network company, annual turnover is capped by its MAR, as defined in its relevant price control.
The turnover for the water, wastewater and electricity sectors, or for each company within these sectors, has features specific to the particular segment in the supply chain:
• Distribution companies (AADC and ADDC) and ADSSC are at the end of the supply-chain in the electricity, water and wastewater sectors in Abu Dhabi, and thereby aggregate sector costs. Consequently, the aggregate revenue for these companies’ together with the revenues from exports represent the total turnover for each of the three sectors;
• TRANSCO’s main revenue source is the TUoS charges paid by the distribution companies and ADWEC (for supply to other Emirates) for units transmitted over its network;
• Distribution companies have two main revenue sources – bills charged to customers and subsidy from government as the customer tariffs are below the economic costs of provision of water and electricity; and
• Currently, ADSSC does not charge customers for sewerage services. Its turnover entirely consists of government subsidy that is being determined only on the basis of budgeted operating expenditure. As the subsidy is currently less than the MAR, it does not fully cover its total costs.
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Turnover by sector including exportsThe turnover for the water and electricity sectors consists of revenue to cover production, transmission and distribution costs. In both sectors, production costs account historically for over half of turnover.
In electricity, the remaining costs are split almost equally between transmission and distribution/supply. For water, transmission costs form a higher proportion of the remaining costs than distribution/supply.
Figure 3– sector total turnoverA
ED b
illo
n
Electricity Water Wastewater
25
30
20
15
10
5
2010
2011
2012
2013
2014
1
1 1
1
1
9
10 10
10
9
Figure 4 - Turnover
AED billon AED billon AED billonFils/KWh AED/TIG AED/m3Electricity Water Wastewater
20 20 2050.0
5
35
30
25
20
15
10
5
16 16 1640.0
412 12 1230.0
38 8 820.0
24 4 410.0
1
2010
2010
2010
2011
2011
2011
2012
2012
2012
2013
2013
2013
2014
2014
2014
Generation Generation
Distribution Distribution
Transmission Transmission ADSSC reg. revenue
Unit Revenue Unit Revenue Unit Revenue
Sector turnoverTotal turnover including exportsSector turnover has increased over time, due to growing customer demand and exports to neighbouring Emirates and the need to invest in production and treatment capacity and network assets. Total turnover increased in 2014 to AED 29.3 billion – a rise of 19% on the previous year. Underlying this change were increases in electricity turnover of 30%, and water turnover of 6%, driven by the implementation of PC5 and in particular the update of the investment related components of network companies’ revenue (namely depreciation and return on capital) incurred to respond to increasing demands in the electricity, water and wastewater sectors.
Looking further back, the total turnover has been relatively stable, especially between 2011 and 2013.
12 14 14
18
13
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Electricity
In 2014, electricity turnover was AED 17.7 billon – 30% above the previous year. Mainly, this was caused by a step-increase in the Maximum Allowed Revenue (MAR) of the network companies due to implementation of PC5 from January 2014 (as explained in Appendix 2) and 7% increase in overall demand (namely from the Northern Emirates, where demand increased by 13%).
Water
For water, at AED 10.3 billon, turnover was also 6% higher in 2014 due to the same factors as mentioned for electricity.
Wastewater
Finally, in wastewater, turnover (composed in almost its entirety by the government subsidy) was down 3% on the preceding year, at AED 1.2 billon. This trend was partially due to the lower revenue requirement to cover ISTP costs (which decreased approximately 12% during 2014), despite the larger wastewater volumes treated and the increase in ADSSC’s own operating costs.
Restructuring of Water and Electricity TariffsDuring 2014, we worked with AADC and ADDC to develop the proposals for a new water and electricity tariff structure, in the Emirate of Abu Dhabi.
The new water and electricity tariffs were published in November 2014, and became effective from 1 January 2015 (the below tables reflect the new tariff structure details).
Customer PropertyCurrent tarif AED/1,000
litres
New tariff AED/1,000
litres
Average Daily consumption
litres/day
National
Flat
0
1.70 up to 700
1.89 over 700
Villa1.70 up to 7,000
1.89 over 7,000
Expat
Flat
2.2
5.95 up to 700
9.90 over 700
Villa5.95 up to 5,000
9.90 over 5,000
Customer PropertyCurrent tarif
fils/kWhNew tarif fils/kWh
Average Daily consumption
kWh/day
National
Flat
5***
5 up to 30
5.5 over 30
Villa5 up to 400
5.5 over 400
Expat
Flat
15
21 up to 20
31.8* over 20
Villa21 up to 200
31.8* over 200
Customer PropertyCurrent
(litres/day)New
(litres/day)
National
Flatup to 700 up to 700
over 700 over 700
Villaup to 5,000 up to 7,000
over 5,000 over 7,000
Expat
Flatup to 700 up to 700
over 700 over 700
Villaup to 5,000 up to 5,000
over 5,000 over 5,000
Customer PropertyCurrent
(kWh/day)New
(kWh/day)
National
Flatup to 20 up to 30
over 20 over 30
Villaup to 200 up to 400
over 200 over 400
Expat
Flatup to20 up to 20
over20 over 20
Villaup to 200 up to 200
over 200 over 200
Figure 5a – Residential water tariff
*Cost-reflective tariff
*Cost-reflective tariff
Figure 6a – Residential electricity tariff
Figure 5b – Residential water block allowances
Figure 6b – Residential electricity block allowances
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Financial OverviewProduction costsIn 2014, production costs were AED 7,458 million for electricity and AED 6,099 million for water. PWPA availability payments and fuel costs represent the majority of these costs. These costs are recovered by ADWEC from AADC and ADDC through the BST and from Northern Emirates in accordance with the agreed tariffs.
Transmission
TRANSCO
In 2014, total turnover for TRANSCO’s was up 59% on 2013 at AED 7.1 billion. Of this, 64% came from the electricity business and 36% from the water business. While majority of its electricity and water revenue came from AADC and ADDC, 23% and 6% respectively came from the Northern Emirates. Meanwhile, the average electricity transmission unit-cost increased by 42% to 8 fils/kWh in 2014. For water, the unit transmission cost increased by 35% to 9.5 AED/TIG.
AED billon AED billon
Figure 7 - Production costs
Electricity Water
6 6
8 8
4 4
2 2
2010 20102011 20112012 20122013 20132014 2014
2.6
3.2
0.1
0.1
0.2
Supplementary/other costs Supplementary/other costs
Variable O&M Variable O&M
Fuel Costs Fuel Costs
Availability Availability
2.7
3.5
2.8
2.8
3.1
3.1
3.1
2.9
0.1
0.1
0.2
0.2
0.2 0.20
.2
0.2
0.1
0.1
0.0 0.1
Figure 8 - TRANSCO tumover and costs
Electricity Water
3 36 6
4 48 8
5 510 10
2 24 4
1 12 2
2010 20102011 20112012 20122013 20132014 2014
Fils/KWh AED/TIG
Turnover Unit cost Turnover Unit cost
0.1
0.1
0.1 0
.1 0.1
AED billon AED billon
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In 2014, the operating costs for the electricity business rose 6% overall and by 1% on a per unit basis. The total exceeded the price control allowance by 1% due to higher staff costs and administrative and other expenses. The water business increased its overall operating costs by 21%, contributing to a 15% increase in the opex per unit. Opex costs were however 28% below the price control allowance (price control allowances include pass-through costs, e.g. licence fees).
Distribution
AADC
AADC’s electricity and water businesses turnover (comprising production, transmission, distribution and supply elements) was 6.4 billon in 2014, up 17% relative to 2013 mainly due to higher transmission and distribution MARs under PC5 implemented in 2014. Electricity contributed 58% to AADC’s total turnover in 2014. While water turnover decreased marginally from the previous year due to lower requirement to cover water production costs, this was offset by the 35% increase in electricity turnover. The electricity unit cost increased 27% to 36.8 fils/kWh while the water unit cost fell 5% to 40.1 AED/TIG.
2010 20102011 20112012 20122013 20132014 2014
2010 20102011 20112012 20122013 20132014 2014
Figure 9 - TRANSCO operating costs
Electricity Water
300 300
400 400
500 500
200 200
100 100
Staff Staff
Other OtherOPEX allowance OPEX allowance
Maintenance Maintenance
AED million
Figure 10 - AADC costs
Electricity Water
3 315 15
4 460 60
2 230 30
1 115 15
AED billon Fils/KWh AED/TIG
AADC AADC
Transmission TransmissionUnit cost Unit cost
Generation Generation
AED million
AED billon
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AADC’s electricity operating costs were 3% higher in 2014, mainly due to higher costs with staff, while water operating costs decreased by 18% driven by reduced staff costs and administrative expenses. The increase in electricity demand by 6% in 2014 meant that the per-unit operating costs for electricity fell 3%. AADC faced also a 4% increase in water demand, which contributed to reduction in the unit operating costs by 21% in 2014. Operating costs exceeded the price control allowances by 3% for electricity, and were 15% below the opex allowances for water. Overall, operating costs fell below the price control allowance by 3%.
ADDC
For ADDC, 59% of its total turnover in 2014 came from electricity, with water contributing the other 41%. At AED 17 billon, total turnover was 23% above the 2013 level. Principally, this was caused by the implementation of PC5 from 2014. Underlying this was a 35% increase in electricity turnover and a 8% increase in the water turnover. Overall, despite reduced generation and production costs, higher demand, transmission and distribution costs in 2014 led to increase in ADDC’s electricity and water unit costs by 28% to 29.3 fils/kWh and 4% to AED 38.8/TIG, respectively.
Figure 11 - AADC operating costs
Electricity Water
300 300
400 400
500 500
200 200
100 100
Staff Staff
Other OtherOPEX allowance OPEX allowance
Maintenance Maintenance
AED million
Figure 12 - ADDC costs
Electricity Water
6 622.5 22.5
10 1037.5 37.5
8 830.0 30.0
12 1245.0 45.0
4 415.0 15.0
2 27.5 7.5
AED billon Fils/KWh AED/TIG
AADC AADC
Transmission TransmissionUnit cost Unit cost
Production Production
2010
2010
2010
2010
2011
2011
2011
2011
2012
2012
2012
2012
2013
2013
2013
2013
2014
2014
2014
2014
AED million
AED billon
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From 2013 to 2014, ADDC’s electricity operating costs fell by 5% in total and 10% on a per unit basis. In comparison, its total water operating costs increased 7% – contributing to 3% per unit rise – driven by higher staff costs. In 2014, electricity and water operating costs were, respectively, 25% and 5% below the price control allowances. Overall, operating costs fell below the price control allowance by 18%.
Wastewater
ADSSC
ADSSC’s turnover, almost entirely based on the actual amount of subsidy received, dropped in 2014 by 3%. This turnover does not fully cover its total cost as set out in the price control for ADSSC, and therefore, the company reports losses every year.
ADSSC total costs, driven by the PC5 revenue requirements, increased by 21% from 2013 to AED 2.7 billion in 2014. The main driver was a 30% increase in ADSSC own costs, which offset the 12% fall in ISTP pass-through costs. ADSSC’s own costs accounted for 85% of the total wastewater sector costs in 2014. The overall cost of wastewater sector per unit treated has increased by 11% to 8.5 AED/m3 in 2014.
Figure 13 - ADDC operating costs
Electricity Water
300 300
400 400
500 500
600 600
700 700
800 800
900 900
200 200
100 100
Staff Staff
Other OtherOPEX allowance OPEX allowance
Maintenance Maintenance
AED million
2010
2010
2010
2010
2011
2011
2011
2011
2012
2012
2012
2012
2013
2013
2013
2013
2014
2014
2014
2014
Figure 14 - ADSSC costs
Wastewater costs Wastewater revenue
2.0 26.0
3.0 39.0
1.0 13.0
AED billion AED billionAED/m3 AED/TIG
ADSSC ADSSC reg. revenueUnit costISTP PC allowed revenue
AED million
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In 2014, ADSSC’s operating costs decreased to AED 672m by 5% due to lower maintenance and other costs. These costs are 1% above the price control target. Moreover, the operating cost per unit-of-wastewater-treated decreased by 13%. In terms of the make-up of these operating costs, collection contributes 68%, treatment represents 25% and disposal accounts for 7%.
Under the existing commercial arrangements in the sector, capacity payments represent the bulk of the ISTP costs to the sector, around AED 391 million in 2014, with variable operation and maintenance and other supplementary costs representing less than 10%
Wastewater treatment capacity
In 2012 two ISTPs operated by Ethiad Biwater and two ISTPs operated by Veolia Besix, entered full operation. The ISTP treatment capacity in the Abu Dhabi Region is 600 Million litres per day (Ml/d) and in Al Ain city is 210Ml/d. Currently the total wastewater treatment capacity in the sector is approximately 1,270 Ml/Day.
Figure 15 - ADSSC operating costs
Department costs Business costs
450 450
600 600
750 750
150 150
300 300
AED million AED million
Staff Collection
Other TreatmentPC allowance PC allowance
Maintenance Disposal
2010 20102011 20112012
2012
20122013
2013
20132014
2014
2014
Figure 16 - Wastewater treatment capacities and ISTP costs
Electricity
300
500
400
600
200
100
AED million
Supplementary costs
Availability
Variable O&M
27 17 23
72
10
Wastewater treatment capacities
34 %Veolia Besix plants
36%ADSSC plants
30 %Etihad biwater plants
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Electricity and Water Production
Production
Production capacity
As of 2014, installed capacity is approximately 15,500 MW and 900 MGD, where additional capacity of about 1,600MW capacity was added to the electricity system by SAPCO Shuweihat 3 power plant, which started commercial operation in July 2014.
Technical
Production market shares
In the production capacity markets, there are seven significant participants, see Figure 18. Each of these has at least a 10% share in either the electricity or water sector. As individual shareholders, GDF Suez, Marubeni and Sumitomo are the major private players in the production market in the sector.
Figure 18– Production capacity market shares in 2014
Electricity Water
10% RPC
10% SCIPCO
16% APC
6% ECPC
9% GTTPC
11% SCIPCO
RPC 11%
TAPCO 18%
11% ESWPC
FAPCO 14%
AMPC 4%
11% GTTPC
5% ECPC
AMPC 4% 16% APC
SAPCO 11%
FAPCO 14%
ESWPC 5%
TAPCO 14%
2010 20102011 20112012 20122013 20132014 2014
Figure 17 - Production capacities
Electricity Water
12 1,200
16 1,600
4 400
8 800
Elec
tric
ity g
ener
atio
n c
apac
ity (
GW
)
Wat
er p
rod
uct
ion
cap
acity
(M
GD
)
12.2
815
916
916
916
916
13.9
13.9
15.5
13.8
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Al Ain
Taweelah
Abu DhabiMasdar City
Liwa
Shuweihat
Sur Baniyas
Baraka
Nuclear Plants
Jabal Dhana
Mirfa
Madinat Zayed
Dhaid
Qidfa
Dubai
Water and Electricity production
Electricity production only
Nuclear Plants
Renewable Energy generation
F1
F2
2975 MW233 MIGD
256 MW
109 MW
5560 MW
1 MW
10 MW
Shams 1
100 MW
T1
T2
T3
4651 MW297 MIGD
S1
S2
S3
4889 MW202 MIGD
A
2430 MW145 MIGD
M
186 MW39 MIGD
The forecast electricity and water demand for the Emirate of Abu Dhabi, and its support to the Northern Emirates, continues to increase year on year to support the industrial, commercial and population growth plans forming the 2030 vision. As a result, the power and water sector faces challenges over the next decade to balance electricity and water demands with new capacity bearing in mind available generation sites, availability of natural gas to the sector, and integration of the programme of 5.6GW of new nuclear plant and renewable targets by 2020.
As part of the Bureau regulatory oversight, all electricity generation and water production activities are carefully evaluated, assessed and ultimately must obtain a Licence from the Bureau to operate within the Emirate. Through 2014, there were a number of power and water projects of note which form a significant contribution to underpin Abu Dhabi’s trajectory towards the 2030 vision.
Significant Milestones in 2014
S3 Commercial Operation
As of 27th July 2014, the Shuweihat Asia Power Company (SAPCO) S3 completed all commissioning performance tests and handover documents achieving the milestone commercial operation date (COD) status for all units. The S3 power plant is the first power only CCGT facility for Abu Dhabi and provides for a Licenced installed capacity of 1600MW. The
Electricity Generation and Water production capacities in 2014
project was unfortunately delayed from its original contract schedule, but its completion now marks the full complement of power plant within the Shuweihat complex in the Western Region, which overall provides a power and water output of some 4890MW / 200MIGD.
Mirfa International Power and Water Company Licence
Mirfa International Power and Water Company PJSC was issued a Licence effective 21 October 2014. The Company will engineer, procure, construct, operate and maintain the new Al Mirfa Plant located in Al Mirfa. The Mirfa International Power and Water Company is a joint venture between Mirfa Power Holding Company (80%) and M Power Holding Limited (20%).
The Mirfa International Power and Water Company is licensed to generate up to 1,728 MW and produce up to 54 MGD installed capacity. The new facility will consist of nine individual electrical generating units, 3 gas turbines along with two steam turbines in combined cycle arrangement; plus an additional 4 gas turbines in open cycle mode. The gas turbines will be fuelled by either natural gas or liquid fuel oil. In terms of water production, the plant will consist of 30MGD RO facility plus an additional 23 MGD MSF units (MSF units to be transferred across from the existing Mirfa facility). The plant is scheduled for commercial operation in two phases with early power and water scheduled for operation by summer 2016 and full commercial operation summer 2017.
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ElectricityThe technical performance of Abu Dhabi Emirate’s electricity transmission system compares favorably with others worldwide. The two primary performance measurements used are “system unavailability” and “energy lost”. System unavailability improved significantly in 2014, as shown in the graph below. Analysis of the data indicates that there was an improvement in all categories (maintenance, construction, faults and users) in 2014 compared to 2013.
The impact of loss of supply for transmission incidents is quantified in terms of “energy lost” which is calculated by taking into account the size and duration of the demand lost, expressed as MWh. In 2014 there was one transmission incident, resulting in the loss of 26 MWh (a reduction of approximately 91.95 MWh from the previous year), which is shown below.
Construction
Maintenance Users
Faults
2012 2013 2014
1.5%
1.0%
0.5%
2012 2013 2014
800
8
9
10
Ener
gy
lost
MW
h
400
4
600
6
2002
700
7
3003
500
5
100 1
Number of incidentsEnergy lost
Ensuring a good quality of supply for end-users requires high performance in all three stages of electricity supply: generation, transmission and distribution. However, distribution is by far the most significant of these in determining quality of supply. The Bureau closely monitors the distribution network performance of AADC and ADDC. The Bureau also requires that an independent audit of annual performance data be carried out by a technical assessor each year. After reviewing the findings of the 2014 audit, the Bureau noted improvements in the performance of both distribution companies. The Bureau uses the following two key performance indicators (KPIs) to measure the performance and reliability of ADDC and AADC distribution systems:
• the system average interruption duration index (SAIDI), calculated from the total number of customer minutes lost (CML) in any one year, divided by the total number of connected customers (at year-end);
• the system average interruption frequency index (SAIFI), calculated from the total number of customer interruptions (CI) in any one year, divided by the total number of connected customers (at year-end).
Distribution Company performanceADDC’s SAIDI/SAIFI figures decreased from 2013 to 2014, mainly due to the reduction in the number of unplanned outages in the Eastern Region during 2014 in comparison with the previous year and also the reduction in transient faults in the Western Region due to proactive preventive maintenance on overhead lines such as tree trimming.
AADC’s performance improved in 2014 as shown below. The following are some of the reasons for this improvement:
• Improvements to network operating practice which reduces the number of planned interruptions.
• Improvements to fault response times due to better resource flexibility through multi skilling.
• Network enhancements including reinforcement to provide greater resilience and additional telemetry, providing better information allowing quicker fault diagnosis.
Transmission system incidents
Transmission system unavailability
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Major eventsThe UAE via Abu Dhabi’s transmission network was first connected to the GCC interconnector in 2011. In 2014 the GCC interconnector continued to demonstrate its value by providing support to all GCCIA members during their generation tripping events, hence improving system security and support whilst reducing generation reserve requirements. The interconnections could facilitate opportunities for the establishment of a GCC electricity market and energy trading in the longer term.
ADDC Power Interuptions
150
200
250
50
100
SAIDI (Minutes lost per customer) SAIFI (Interuption per customer) X 100
2006 20102007 20112008 20122009 2013 2014
AADC Power Interuptions
150
200
250
300
350
400
50
100
SAIDI (Minutes lost per customer) SAIFI (Interruption per customer) x 100
2006 20102007 20112008 20122009 2013 2014
In March 2014, the Bureau issued the revised Electricity Wiring Regulations (Third Edition) following a comprehensive review and consultation period in 2013. The new Edition includes a number of key changes to the scope of the Regulations which now applies to all electrical installations in the Emirate of Abu Dhabi (both off-grid and grid connected installations). The new Edition has been enhanced to improve clarity and provide further guidance to anyone who is involved in the design, construction, maintenance, operation of LV wiring in buildings and other premises.
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Drinking Water
Abu Dhabi’s nine desalination companies’ gross production in 2014 was 273,960 MIG (1,245.42 million m3). This represents an average of 750.58 MIGD (3.41 million m3/day) with the peak production reaching 821 MIGD (3.73 million m3/day). Around 1.30% of the annual gross production is consumed internally by the production plants (i.e. auxiliary consumption). Around 267,406 MIG (1,215.63 million m3) was dispatched into the distribution system. Thermal desalination accounted for 92.4% of the drinking water production in Abu Dhabi (74.4% by MSF and 18% by MED), with the remaining 7.6% generated by SWRO.
Water QualityA total of 200,545 water tests were undertaken by sector’s companies in 2014 out of 204,462 required tests. 77 separate quality determinants were examined. Langelier Saturation Index (LSI) and Total Dissolved Solids (TDS) accounted for the majority of test failures in Table A of the Water Quality Regulations (WQR), while residual chlorine and Bromate levels recorded some failures.. Mitigation measures on Bromate non-compliance levels were initiated by TRASNCO and significant improvements were made which have reduced the average bromate limits in most of the areas in Abu Dhabi region meeting the regulation limits. Results of Pilot studies conducted by TRANSCO in 2014 have also demonstrated that Bromate limits will be considerably improved in Al Ain area. Overall compliance with the sampling frequency measure (SFM) was 99%, while prescribed concentration or value (PCV) compliance increased slightly to 94%.
The chart below demonstrates sector performance against the required number of samples and compliance against the Water Quality Regulations prescribed concentration or values.
Major events - Regulatory documents releasedIn line with our commitment to public health and customer protection, three key documents for the drinking water sector featured prominently during 2014. We were grateful to the support of all stakeholders involved in the extensive consultation processes to deliver these following regulatory framework documents.
• The issue of the fourth edition of the Water Quality Regulations. Following a consultation with sector licensees and stakeholders including the Health Authority Abu Dhabi, Abu Dhabi Food Control Authority and Abu Dhabi National Oil Company, the fourth edition of the Water Quality Regulations
Sector compliance with WQR performance measures
Notes: SF - sampling frequency in accordance with Schedule II of the WQR
PCV - prescribed concentration or value in accordance with Schedule I of the WQR
SP - number of parameters tested
SFM - sampling frequency measure which is the average of SP and SF
2012 2013 2014
60
100
80
20
40
SF% PVC% SP% SFM%
99.9 97 99.999.999.9 91 99.910099.9 94 99.999.9
came into force on 1 January 2014. The Regulations were amended both in structure and content with the addition of three new Parts following the sector consultation.
• Issuance of the final consultation and publication of the Code of Practice for the Inspection and Cleaning of Customer Water Storage Tanks. The work was initiated by the Bureau in 2013 with a proposed framework and then a consultation with the stakeholders in 2014. The Code puts in place cleaning and inspection requirements and guidance to ensure wholesome water supplied to customers is protected and maintained beyond the distribution network. Consultation took place with the Department of Municipal Affairs and the three Municipalities, Al Ain and Abu Dhabi Distribution Companies and other relevant stakeholders including the Abu Dhabi Health Authority.
• Publishing the Guide for Chemicals and Products that Come in Contact with Drinking Water was in
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System Availability - Key Performance Indicator (KPI)One of the KPIs the Bureau has in place for TRANSCO is System Availability determines the proportion of components (pumps, transmission lines, storage tanks, surge vessels, or combinations thereof) that are either operational or available for use during a given period. Components that do not meet this definition are classed as “unavailable”. This KPI measures both the “readiness” and “condition” of the transmission system. Since 2010, TRANSCO’s overall system availability has been between 96.5% to 98%. In 2014, it was 96.6%. The component most often found to be responsible for unavailability during 2014 was pumps (78%).
November 2014. The Guide was issued following a consultation process with the Licensees and stakeholders. The Guide is intended to ensure all chemical and products that come in contact with drinking water should be assessed by following an established procedure and ensuring all the appropriate certifications are provided from recognized agencies in order to govern, steer and regulate usage of chemicals. The Guide has been developed to ensure and establish that Licensees follow best practice technique and operating procedure.
Water Quality Management Audit 2014The Bureau commenced the water quality management audit for all production licensees. The audit was based on the review of companies overall water quality management system to ensure a safe supply of potable water. Three main areas were audited this year, namely sampling arrangements, analytical system in place and data reporting including the Drinking Water Safety Plans.
2010 2011 2012 2013 2014
60
80
100
20
40
% A
vaila
bili
ty
96.6397.7097.8698.1697.72
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Major eventsIn line with our commitment to improving customer service and protecting the environment, three key documents were launched during 2014.
The Bureau carried out consultation with relevant licensees and stakeholders on the provision of water and wastewater services provided by tankers. The consultation confirmed that there is need to review and reinforce the existing regulatory frameworks and that this work must be carried out in close collaboration with key stakeholders. Further work will follow in 2015 on the regulatory framework proposals.
Every two years, the Bureau consults on the quality standards contained within the Recycled Water and Biosolids Regulations and Trade Effluent Control Regulations. These consultations help ensure that the regulations are current and reflect Emirate practice and latest international trends. The consultation process ran during the summer and indicated that the regulations were appropriate and required no changes at this time.
In November 2014, the Bureau published its Low-risk Trade Effluent Code of Practice for Vehicle Washes. This document aims to set a pragmatic framework for control of the quality of discharges from qualifying vehicle washes into the sewerage network. The Code of Practice will help trade effluent customers and Licensees comply with the requirements of the Trade Effluent Control Regulations.
2013 2014
Number of sewer collapses per 100km 0.95 0.79
Number of sewer blockages per 100km 19.43 19.37
Percentage of reported flooding incidents resolved within 8hrs
N/A 98
Percentage of Recycled Water dispatched to reuse
54 61
Percentage of Biosolids dispatched to reuse
0 0
Catchment and treatment energy use per unit volume (MWhr/Ml)
0.83 0.96
Percentage compliance of Microbiological samples
97 96
Percentage compliance of Sanitary samples
98 99
Percentage compliance of Trace elements samples
93 89
WastewaterIn 2014 the Bureau had four major licensees:
• Abu Dhabi Sewerage Services Company (ADSSC);
• Higher Corporation for Specialized Economic Zones (ZC);
• Al Etihad Biwater Waste Water Company (EB); and
• Al Wathba Veolia Besix Waste Water Company (VB).
EB and VB hold treatment only licences and provide treatment capacity to support ADSSC’s operations in Abu Dhabi and Al Ain. ZC treatment assets were handed over to ADSSC in February 2014 and ZC continued to operate the collection, and disposal system in the ICAD development close to Abu Dhabi city.
There were 37 wastewater collection, treatment and disposal systems operated by the four major licensees across the Emirate in 2014. The most significant changes in sewerage service provision in the Emirate in 2014 were the transfer of operational control of the following assets to ADSSC:
• the ZonesCorp ICAD wastewater treatment plant (40 Ml/d); and
• the TDIC Saadiyat Island collection system and treatment plant serving the beach development zone (11 Ml/d).
Any operator managing a wastewater collection, treatment or disposal system with a capacity of less than 10,000m³/d is described as small-scale. The total number of small scale licensees at the end of 2014 was 19 with many licensees operating more than one plant.
The Bureau issued four new small-scale sewerage services licences in 2014 to companies that operate 13 wastewater treatment plants across the Emirate. The total licensed capacity for small scale operators increased to 25,121 m3/d from 19,181 m3/d, an increase of 31%.
The table below sets out the sector performance measures related to major wastewater activities and illustrates any changes in performance between 2013 and 2014.
Wastewater Sector Performance Measures 2013-2014
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Waterwise In-home Water AuditIn Abu Dhabi the residential sector consumes a significant amount of the desalinated water produced for the Emirate. Therefore, developing an in-depth understanding of water consumption in the residential sector has been a key focal point.
Waterwise commenced the In-Home Water Use Audit in 2014. This project aims to collect information on water consumption in larger and older homes in Abu Dhabi and Al Ain. The project will investigate the causes of high water consumption in the residential sector and help residents use water wisely. The project will be concluded in 2015 and data gathered from this project will enhance our baseline data and will drive future demand management activities in the residential sector. Conducting the audit will include:
Waterwise & Powerwise
Our Waterwise and Powerwise offices were launched in 2013, with the aim of creating understanding and awareness of the critical issues surrounding the consumption and use of water and electricity in the Emirate of Abu Dhabi. Two of our initiatives from 2014 are described below:
checking water bills
carrying out surveys on consumer behaviour for indoor and outdoor water uses
assessing plumbing fixtures
detecting leaks
checking whether taps and appliances are water-efficient
assessing irrigation practices and landscaped areas
Powerwise Smart Metering Trial The Smart Metering Project aimed at understanding electricity consumers’ behavioural response to varying price signals and educational materials. The project involved 600 customers served by the Abu Dhabi Distribution Company (ADDC), divided into two groups. A “Test Group” comprising 400 customers living in villas was recruited to actively take part in the project. A “Control Group” of 200 customers was selected from customers living in premises similar to that of the Test Group and had no direct awareness of the project.
It was concluded that savings were sustained over time with key findings including a peak demand reduction of 11.8% for the treatment group than for the control group post Time of Day (TOD) pricing scheme and an 11.1% saving on their bills post TOD pricing scheme.
Utility selection
Costs
Consumption
Consumption monitoring lights
Menu navigation button
Messages
Display screen
MenuCO
2
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HSEQ and BCM
BCM Regulations, Guides and Training Programme On 1st September 2014, the Bureau published the Business Continuity Management Regulations (BCM) for the drinking water, wastewater and electricity sectors of Abu Dhabi. These Regulations and accompanying 3 Guides, are in compliance with ISO 22301 (2012) and AE/HSC/7000 (2012) issued by the National Emergency and Disasters Authority (NCEMA) of the UAE.
The Regulations and Guides have been subject to a rigorous consultation programme with all licensees, government entities and key stakeholders over a period of 12 months. Numerous workshops and site visits were undertaken.
In October, the Bureau and its consultant partner commenced a nine month training and implementation programme for all sector licensees, such that by Q3 2016 full compliance by all will be achieved.
Copies of all documents are available on this website, with the Regulations also available in Arabic.
HSE baseline survey findings and trainingHealth and safety of the public and those working in the sector is a key focus area for the Bureau.
During 2014, we organised 3 workshops to address focus areas identified in our 2013 Health, Safety and Environmental (HSE) study which established baseline HSE performance across the water and electricity sector licensees.
The focus areas where we identified key weaknesses requiring further improvement were risk management, contractor management and permit to work procedures.
Three individual technical workshops were organised to address the issues and support licensees in improving HSE performance. The workshop format varied based on the topic discussed and included presentations from the Bureau, case studies presented by the sector, and hands on group exercises to identify the way forward. The workshops were very well attended with over 30 representatives from HSE, operation, maintenance and project departments of the fourteen Licensees participating.
Our work on health, safety, the environment and quality is a key pillar of the regulatory framework. In 2014, two regulatory elements were progressed as follows:
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The Bureau is an independent regulator of the water, wastewater and electricity Sector in the Emirate of Abu Dhabi. Its powers, duties and functions are set out by law No (2) of 1998 (as amended).
Legal Perspective
In line with Abu Dhabi’s Economic Vision 2030 and Law No (2), the Bureau during 2014 issued regulations, code of practice and other guidance to the Sector, as well as working with the Sector, government entities, the private sector, NGOs and other parties on initiatives to safeguard our energy and water resources and protect public health, the environment and consumers.
As part of its duties, the Bureau issues licences authorising individuals to engage in regulated activities and to supervise the manner in which such regulated activities are undertaken. The Bureau’s licensing activities include:
• the issuance of new licences;
• the modification of existing licences;
• consents or derogations issued in connection with existing licences;
• exemptions issued (with prior Executive Council consultation); and
• the revocation of licences
As a regulator, the Bureau is responsible for monitoring and reviewing compliance with the Licences and Regulations it issues. Where appropriate the Bureau will carry out targeted reviews or investigations and take appropriate remedial, supervisory or enforcement action against companies or individuals operating in the Sector. By the end of 2014, the Bureau had issued 47 licences.
In terms of compliance, during 2014 the Bureau:
• issued fifteen Improvement Notices this year to the Sector requiring specific improvements to ensure better Licence compliance
• continued our collaborative compliance programmes for better wastewater sector compliance; and
• supported a high level review of compliance with the Metering and Data Exchange Code conducted through the MDEC Panel.
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Generation and desalination
Al Mirfa Power Company (AMPC) operates three power stations at Al Mirfa, Madinat Zayed and Al Ain with a total licensed capacity of 636 MW. Water production of up to 38.7 MGD is at the Al Mirfa station only.
Arabian Power Company (APC) is licensed to generate 2,200 MW and produce 160 MGD of water at its Umm Al Nar plant.
Emirates CMS Power Company (ECPC) (T2)
with licensed capacities of 763 MW and 50 MGD of water at Taweelah.
Emirates Sembcorp Water and Power Company (Sembcorp) (F1)
licensed to produce 861 MW and 130 MGD of water at its plant located at Qidfa in Fujairah, one of the Northern Emirates of the UAE.
Fujairah Asia Power Company (FAPCO) (F2)
is situated at the Qidfa complex in Fujairah and licensed to produce 2,000 MW and 130 MGD of water of which 30 MGD is produced via reverse osmosis.
Gulf Total Tractebel Power Company (GTTPC) (T1)
with licensed capacities of 1,600 MW and 84.8 MGD of water at Taweelah.
Ruwais Power Company (RPC) (S2) with licensed capacities of 1,511 MW and 100 MGD of water at Shuweihat in the Western Region.
Shuweihat Asia Power Company (SAPCO) (S3)
with a licensed capacity of 1,600 MW at Shuweihat - in operation since 27 July 2014
Shuweihat CMS International Power Company (SCIPCO) (S1)
with licensed capacities of 1,511 MW and 100 MGD of water at Shuweihat.
Taweelah Asia Power Company (TAPCO) (T3)
with licensed capacities of 2,000MW and 160 MGD of water at Taweelah.
Tourism Development and Investment Company PJSC (TDIC)
has a licence to extract and desalinate seawater for non-potable (2.2 MGD) and potable water (0.88 MGD) purposes on Saadiyat Island.
Mirfa International Power & Water Company
has a licence to generate electricity of 1,728 MW and desalination of 54 MGD seawater at Al Mirfa
Umm Al Nar Power Company (UANPC)
owns Baniyas power station with a licensed capacity of 120 MW, currently not in production.
Licence Holders
We grant licences to “Persons” (undertakings, companies, organisations) to carry out certain activities. Collectively these Persons are known as licence holders. Licences confer rights and obligations on a licence holder, so they can undertake regulated activities. Our primary annual funding is derived from licence holders via the application of fees.
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Generation - renewable energy
Abu Dhabi Future Energy Company (ADFEC or Masdar)
is licensed to produce up to 40 MW of electricity by Embedded Generation Unit(s) using wind turbines located in the Western Region. ADFEC is also licensed to produce up to 50 MW of electricity from solar power generation in the Emirate of Abu Dhabi and is authorised to sell output to ADWEC.
Shams Power Company PJSC is licensed to generate electricity by the use of a solar thermal plant up to 110 MW at a site south of Madinat Zayed in the Western Region.
Self-regulating
Abu Dhabi Judicial Department is licensed to generate power using solar photovoltaic panels mounted on the roof-top of its courthouses on Al Khaleej Al Arabi Street, Abu Dhabi.
Emirates Identity Authority has a self-supply licence for generation of electricity through the use of photovoltaic (PV) solar panels.
German International School is has a self-supply licence for generation of electricity through the use of photovoltaic (PV) solar panels.
The Zoo and Aquarium Public Institution
is licensed to generate power using solar PV panels mounted on the roof-top of the Sheikh Zayed Desert Learning Centre at the Al Ain Wildlife Park & Resort.
Self-supply
Emirates Aluminium Company Limited PJSC (EMAL)
has a self-supply licence for desalination of water and generation of electricity at the EMAL Aluminium Smelter Development in Taweelah. Electricity generation in excess of self-supply requirements may be offered for sale to ADWEC, the sector’s single buyer.
Transmission
Abu Dhabi Transmission and Despatch Company (TRANSCO)
is responsible for all transmission voltages at 400, 220 and 132 kV including despatch of generation units, water balancing and the bulk movement of water throughout the Emirate.
Distribution and supply
Abu Dhabi Distribution Company (ADDC)
distributes and supplies water to approximately 259,000 customers and electricity to around 325,000 customers in the central and western regions of the Emirate of Abu Dhabi.
Al Ain Distribution Company (AADC) distributes and supplies water to approximately 78,000 customers and electricity to around 132,000 customers in the eastern region of the Emirate of Abu Dhabi.
Multi-licensed
Abu Dhabi Company for Servicing Remote Areas (RASCO)
is licensed to generate, desalinate, transmit, distribute and sell electricity and water in remote areas, not connected to either of the distribution networks.
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Procurement
Abu Dhabi Water and Electricity Company (ADWEC)
is the single buyer of water and electricity output and capacity from producers under various Power and Water Purchase Agreements and charges the distribution companies for water and electricity, under a Bulk Supply Tariff.
Wastewater - major
Abu Dhabi Sewerage Services Company (ADSSC)
is responsible for the collection, treatment and disposal of wastewater throughout the Emirate of Abu Dhabi.
Al Etihad Biwater Waste Water Company (W1)
is licensed to treat wastewater at Al Wathba-Abu Dhabi (up to 345,000 m3/d) and at Al Saad-Al Ain (up to 92,000 m3/d).
Al Wathba Veolia Besix Waste Water Company (W2)
is licensed to treat wastewater at Al Wathba-Abu Dhabi (up to 300,000 m3/d) and at Alhamah-Al Ain (up to 130,000 m3/d).
Higher Corporation for Specialized Economic Zones (ZonesCorp)
is licensed to collect, treat and dispose of up to 40,000 m3/d of wastewater at the Industrial City - Abu Dhabi (ICAD).
Wastewater - small scale
ALSA Engineering & Construction Co. L.L.C.
is licenced to collect, treat and dispose of wastewater up to 460 m3/d at the labour camps in Asab, Ghayath and Habshan
Al Jaber Catering Services LLC is licenced to collect treat and dispose of wastewater up to 4,100 m3/d at the labour camps in lDhahera, Al Falah, Ghayathi, Habshan, Shah and Sweihan.
Al Tamouh Investments Company LLC
is licensed to collect, treat and dispose of 50 m3/d of wastewater at its White Water rafting Centre at Jebel Hafeet, Al Ain.
Arabian Nights for Travel and Tourism LLC
is licensed to collect, treat and dispose of 100 m3/d of wastewater at the Arabian Nights Desert Village in Al Khatem.
Dhafra Beach Hotel is licensed to collect, treat and dispose of 400 m3/d of wastewater generated at the Dhafra Beach Hotel and Danat Jebel Al Dhanna Hotel in Jebel Al Dhanna in the Western Region.
Dodsal Engineering & Construction PTE Limited
is licensed to collect, treat and dispose of 3,800 m3/d of wastewater generated at its two labour camps at habshan and Shah-Hameem in the Western Region.
Emirates Aluminium Company Limited PJSC (EMAL)
is licensed to collect, treat and dispose of 700 m3/d of wastewater at the EMAL aluminium smelter site in Taweelah.
Ghantoot Transport and General Contracting Establishment
is licenced to collect treat and dispos of wastewater up to 230 m3/d at the labour camp serving the south of Shamkha
Granite Construction Company L.L.C.
is licenced to collect treat and dispose of wastewater up to 650 m3/d at the labour camps in Asab, Habshan and Ruwais
Hyundai Engineering and Construction Ltd
is licensed to collect, treat and dispose of 1,000 m3/d of wastewater at its labour camp in the Khalifa Port Industrial Zone (KPIZ).
Hyundai Engineering and Construction Ltd
is licensed to collect, treat and dispose of 1,960 m3/d of wastewater at the Braka Nuclear Power Plant.
Manazel Real Estate PJSC is licensed to collect, treat and dispose of 1,000 m3/d of wastewater on the Al Reef Villas Development in Shahama.
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Premier Inn Hotels LLC is licensed to collect, treat and dispose of 20 m3/d of wastewater generated at its hotel at the Abu Dhabi International Airport.
Private Property Management Establishment
is licensed to collect, treat and dispose of 2,500 m3/d of wastewater at the Al Forsan International Sports Resort in Khalifa City A.
Samsung Corporation is licensed to collect, treat and dispose of 500 m3/d of wastewater at two labour camps serving the construction of the S2 power plant in Ruwais.
Shams Power Company PJSC is licensed to collect, treat and dispose of 21 m3/d of wastewater from the Solar Power Plant in Madinat Zayed.
Sorouh Real Estate Company PJSC is licensed to collect, treat and dispose of 2,120 m3/d of wastewater on Reem Island.
Tourism Development and Investment Company PJSC (TDIC)
is licensed to collect, treat and dispose of 620 m3/d of wastewater at its Qasr Al Sarab desert resort near Hameem in the Western Region.
Tourism Development and Investment Company PJSC (TDIC)
is licensed to collect, treat and dispose of 4,500 m3/d of wastewater at its Workers’ Construction Village on Saadiyat Island.
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LicensingIn law we have a duty to maintain a Public Register. This section of this Annual Report is constructed so as to list documents which are part of our Public Register. For the purpose of satisfying the law we maintain our Public Register using our website, where all Public Register documents are available for free view and download.
Under Law No (2), the Bureau is the only organization that can authorize persons to carry out certain regulated activities specified in Article (71). Licensing provides a regulatory mechanism for the Bureau to monitor, regulate and
Public records of activities and documents
supervise licencees. All Licences issued by the Bureau are published on the Bureau’s website - at the end of 2014, there were 48 licensed entities in Abu Dhabi. The Bureau’s licensing activities include:
• the issuance of new licences;
• the modification of existing licences;
• consents or derogations issued in connection with existing licences;
• exemptions issued (with prior Executive Council consultation); and
• the revocation of licences.
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New LicensesWhen issuing a Licence, the Bureau must be satisfied that the applicant has the requisite financial resources and technical and managerial competences, as required under Article 86 of Law No (2). A total of seven new licenses have been issued by the Bureau for the year 2014:
German International School
Self-Regulating Electricity Generation Licence for the generation of electricity from Solar PV cells on its roof
01 Feb 2014 ED/L09/100
Ghantoot Transportation and General Contracting Est
Sewerage, Wastewater Treatment and Disposal Licence for the collection, treatment and disposal of up to 230 m3/day of wastewater generated at its labour camp serving the South Shamka development.
07 Jul 2014 ED/L07/107
Al Jaber Catering Services
Sewerage, Wastewater Treatment and Disposal Licence in relation to sewerage services at its labour camps in Al Dhahera, Al Falah, Ghayathi, Habshan, Shah and Sweihan. The treatment plants have a combined capacity of 4100 m3/day.
20 Jul 2014 ED/L07/108
Granite Construction Company
Sewerage, Wastewater Treatment and Disposal Licence for the collection, treatment and disposal of up to 650 m3/day of wastewater generated at its three Labour camps in Ruwais, Habshan and Asab in the Western Region.
26 Aug 2014 ED/L07/109
ALSA Engineering & Construction Co.
Sewerage, Wastewater Treatment and Disposal Licence for the collection, treatment and disposal of up to 460 m3/day of wastewater generated at its three Labour camps in Ghayathi, Habshan and Asab in the Western Region.
28 Aug 2014 ED/L07/110
Mirfa International Power and Water Company
Desalination and Generation Licence for 1,728MW power generation and desalination of water up to a maximum of 54 MIGD at a new facility known as the Al Mirfa Plant.
21 Oct 2014 ED/L01/103
Emirates Identity Authority
Self-regulating Generation Licence, in relation to the generation of electricity using solar PV systems mounted on the roof-top of its locations at Abu Dhabi Industrial City and Khalifah City
07 Dec 2014 ED/L09/101
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Licence Modifications From time to time, it may be necessary to modify a Licence. Article 101 of Law No. (2) requires that any Licence modifications are either agreed between the Bureau and the Licence holder or ordered by a panel of arbitrators. A total of seven agreed license modifications were issued in 2014.
Derogations Under Article 97 of Law No. (2) the Bureau can issue specific and general derogations which operate to excuse the relevant Licensee(s) from performance of a particular obligation in its licence. In 2014, the Bureau issued a total of five Derogations.
Al Ain Distribution Company (AADC)
Revision 5 (Price Control)
1 Jan 2014 ED/L01/100
Abu Dhabi Distribution Company
Revision 5 (Price Control)
1 Jan 2014 ED/L01/008
Abu Dhabi Transmission and Despatch Company (TRANSCO)
Revision 5 (Price Control)
1 Jan 2014 ED/L01/005
Abu Dhabi Sewerage Services Company
Revision 2 (Price Control)
1 Jan 2014 ED/L01/016
Wadi Adventure LLC
Revision 1 (Extension and name change)
1 Jul 2014 ED/L07/011
Dodsal Engineering and Construction
Revision 1 (Extension)
26 Aug 2014 ED/L07/105
Tourism Development and Investment Company (TDIC)
Revision 1 (Extension)
22 Sep 2014 ED/L07/103
Al Ain Distribution Company (AADC)
Maximum Allowed Revenues for 2012 for the Supply Business
21 May 2014 ED/L06/107
Abu Dhabi Distribution Company (ADDC)
Maximum Allowed Revenues for 2012 for the Supply Business
21 May 2014 ED/L06/111
Abu Dhabi Transmission and Despatch Company (TRANSCO)
Maximum Allowed Revenues for 2012 for the Electricity Transmission Business
21 May 2014 ED/L06/109
Abu Dhabi Sewerage Services Company (ADSSC)
Maximum Allowed Revenues for 2012 for the Sewerage Services Business
21 May 2014 ED/L06/108
Abu Dhabi Water & Electricity Company (ADWEC)
Maximum Allowed Revenues for 2012 for the Electricity Procurement Business
21 May 2014 ED/L06/110
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RevocationsWhere a Licensee advises the Bureau that it intends to discontinue carrying out Regulated Activities or where the limited term of a Licence reaches its natural expiry without a request for a modification of the term, an expiration or revocation of the licence occurs. In 2014, the Bureau revoked only one license.
ExemptionsExemptions authorize the relevant person to undertake particular regulated activities without receiving a Licence. The Bureau issued only one exemption for the year 2014.
ConsentsEach Licence provides that a certain activity or action may only be carried out with the Bureau’s prior written consent. In 2014, the Bureau issued a total of seven consents.
Hyundai Engineering and Construction Ltd.
Sewerage, Wastewater Treatment and Disposal Licence in relation to the collection, treatment and disposal of 1,000 m3/d of wastewater at its labour camp in the Khalifa Port Industrial Zone (KPIZ).
01 Feb 2014 ED/L09/100
Order No. 1 of 2014 to ADNOC (Extension) 16 Dec 2014 ED/L04/005
Gulf Total Tractebel Power Company (GTTPC)
Relaxation of TDS (Extension)
01 Jan 2014 ED/L03/106
Emirates CMS Power Company
Relaxation of TDS (Extension)
08 May 2014 ED/L03/107
Abu Dhabi Distribution Company (ADDC)
Relaxation of TDS
01 Jan 2014 ED/L03/108
Taweelah Asia Power Company
Relaxation of TDS
01 Jan 2014 ED/L03/109
Emirates CMS Power Company (ECPC)
Sale of Certified Emission Reductions
01 Aug 2014 ED/L03/110
Emirates Sembcorp Water and Power Company
Supply of Demineralised Water to VTTI
28 Oct 2014 ED/L03/111
Al Ain Distribution Company
Relaxation of TDS and Minimum Residual Chlorine limit
18 Nov 2014 ED/L03/112
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Consultation Papers
Publications
The Business Continuity Management Regulations – Guide for Drinking Water Services
The Business Continuity Management Regulations – Guide for Waste Water Services
The Business Continuity Management Regulations – Guide for Electricity Services
The Business Continuity Management Regulations for Drinking Water, Wastewater and Electricity Services
May 2014 (ID/T03/101)
(ID/T03/101)
(CP/T03/102)
(CP/T03/101)
Provision of Water and Wastewater Services by Tanker October 2014 EC/T01/100
Code of Practice for Cleaning and Inspection of Customer’s Storage Tanks July 2014
Wastewater Regulations Quality Standards Review 2014 Consultation July 2014
Annual report 2013 ED/P02/100
Annual Economic Report 2013
Guide for Chemicals and Products that comes in contact Drinking Water July 2014 ED/CO1/ 101
Code of Practice for low-risk Trade Effluent discharges from vehicle-washes First edition
December 2014
The Business Continuity Management Regulations – Guide for Drinking Water Services
The Business Continuity Management Regulations – Guide for Waste Water Services The Business Continuity Management Regulations – Guide for Electricity Services The Business Continuity Management Regulations for Drinking Water, Wastewater and Electricity Services
September 2014
(ED/R01/102)
(ED/R03/103)
(ED/R01/105)
(ED/R01/104)
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Independent auditors’ report Report on the financial statements
We have audited the accompanying financial statements of the Regulation and Supervision Bureau (“the Bureau”), which comprise the statement of financial position as at 31 December 2014, the statements of financial performance and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information.
Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Public Sector Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
KPMG Lower Gulf Limited
Munther Dajani
Registration No.268
23 April 2015
statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Bureau as at 31 December 2014, and its financial performance and its cash flows for the year then ended in accordance with International Public Sector Accounting Standards.
Other matter
The financial statements of the Bureau for the year ended 31 December 2013 were audited by another auditor who issued an unmodified opinion on those financial statements on 15 May 2014.
Independent auditors’ report to the Chairman - Regulation & Supervision Bureau and the Financial Statements
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Statement of financial position
as at 31 December
2014 2013
Assets Note AED AED
Non-current assets
Property, plant and equipment 5 10,569,570 14,728,086
Intangible assets 6 911,384 1,538,750
Advances to employees 7 1,870,348 786,042
Security deposit 1,318,800 1,318,800
14,670,102 18,371,678
Current assets
Prepayments and receivables 7 15,297,426 11,204,973
Cash and cash equivalents 8 39,127,505 39,037,763
54,424,931 50,242,736
Total assets 69,095,033 68,614,414
LiabilitiesNon-current liabilities
Balances with licensees 9 11,829,207 858,219
Employees’ end of service benefits 10 17,801,760 17,037,500
29,630,967 17,895,719
Current liabilities
Balances with licensees 9 17,432,479 34,352,608
Payables and accruals 11 22,031,587 16,366,087
39,464,066 50,718,695
Total liabilities 69,095,033 68,614,414
Hala Allaf Saif Al Qubaisi Nasser A. Alsowaidi Acting Head of Finance Acting Director General Entrusted with the duties of and Accounts the Board of Directors
The notes form an integral part of these financial statements.
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2014 2013
Note AED AED
RevenueLicense fees 9 111,831,908 97,196,047
Other income 603,895 348,040
Finance income 24,902 40,958
112,460,705 97,585,045
ExpensesPersonnel expenses 12 78,989,033 70,127,106
Professional fees 8,282,939 3,393,901
Rent expense 7,632,923 7,632,923
Depreciation 5 5,376,777 5,077,016
Publicity 1,562,540 1,855,454
Recruitment 882,517 807,277
Amortisation 6 880,443 844,748
Board of Directors’ remuneration 13 300,000 1,200,000
Other expenses 8,553,533 6,646,620
112,460,705 97,585,045
Net result for the year - -
The notes form an integral part of these financial statements.
Statement of financial performance
for the year ended 31 December
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2014 2013
Note AED AED
Cash flows from operating activitiesNet result for the year - -
Adjustment for:
Interest income (24,902) (40,958)
Depreciation 5 5,376,777 5,077,016
Amortisation 6 880,443 844,748
Gain on disposal of property, plant and equipment (115,485) -
Provision for employees’ end of service benefits 10 4,347,845 3,193,089
10,464,678 9,073,895
Change in prepayments and receivables (4,092,453) (707,083)
Change in balances with licensees (5,949,141) 16,416,946
Change in payables and accruals 5,665,500 1,170,423
Change in advances to employees (1,084,306) (258,246)
Employees’ end of service benefits paid 10 (3,583,585) (181,709)
Net cash from operating activities 1,420,693 25,514,226
Cash flows from investing activities
Acquisition of property, plant and equipment 5 (1,385,550) (2,310,840)
Acquisition of intangible assets 6 (253,077) (377,124)
Proceeds from disposal of property, plant and equipment 282,774 -
Interest received 24,902 40,958
Net cash used in investing activities (1,330,951) (2,647,006)
Net increase in cash and cash equivalents 89,742 22,867,220
Cash and cash equivalents at 1 January 8 39,037,763 16,170,543
Cash and cash equivalents at 31 December 8 39,127,505 39,037,763
The notes form an integral part of these financial statements.
Statement of cash flows
for the year ended 31 December
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1 - Legal status and principal activitiesRegulation and Supervision Bureau (“the Bureau”) was established under Law no. (2) of 1998, to regulate the water and electricity sector in the Emirate of Abu Dhabi. The Bureau is regulated by the Executive Council of Abu Dhabi (the “Executive Council”).
The Bureau is funded by the payment of license fees by those entities awarded licenses and is a not for profit organization.
The Bureau’s registered office is at PO Box 32800, Abu Dhabi, United Arab Emirates.
2 - Basis of preparationThe Board of Directors of the Bureau was dissolved in March 2014 and the Chairman of the Board (“the Chairman”) is currently entrusted with the duties of the Board, as per the directive of the Executive Council.
(a) Statement of compliance
These financial statements have been prepared in accordance with International Public Sector Accounting Standards (“IPSAS”) as issued by International Public Sector Accounting Standards Board (IPSASB). Where IPSAS do not address a particular issue, the requirements of International Financial Reporting Standards (“IFRS”) have been applied.
These financial statements were authorized for issue by the Chairman (Entrusted with the duties of the Board of Directors) on 23 April 2015.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis.
(c) Functional and presentation currency
These financial statements are presented in UAE Dirhams (“AED”), which is the Bureau’s functional currency.
(d) Use of estimates and judgements
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Bureau’s accounting policies and the reported amounts of assets, liabilities, income, expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in these financial statements are described in note 15.
3 - Significant accounting policiesThe accounting policies set out below, which comply with IPSAS / IFRS, have been applied consistently to all periods presented in these financial statements in dealing with items which are considered material in relation to these financial statements.
(a) Foreign currencies
Transactions in foreign currencies are translated into AED at the exchange rate at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into the functional currency at the exchange rate at that date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Foreign currency differences are generally recognised in the statement of financial performance. Non-monetary items that are measured based on historical cost in a foreign currency are not translated.
(b) Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Bureau and revenue can be reliably measured. Revenue is measured at the fair value of the consideration received, excluding discounts and rebates.
License fees funding from the licensees in respect of the current year is accounted for in the statement of financial performance based on the expenses incurred for the year less income received from other sources during the year. Any funding received in excess of / short of the expenditure incurred by the Bureau, is refunded to / recovered from licensees every two years.
Notes to the financial statements
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(c) Employees’ end of service benefits
The Bureau provides end of service benefits to its employees. The entitlement to these benefits is based upon the employees’ final salary and length of service, subject to the completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment.
With respect to its national employees, the Bureau makes monthly contributions to Abu Dhabi Retirement Pensions and Benefits Fund, calculated as a percentage of the employees’ salaries. The Bureau’s obligations are limited to these contributions, which are expensed when due.
(d) Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any.
Cost includes expenditure that is directly attributable to the acquisition or construction of the asset.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
Gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and is recognised net within other income / other expenses in the statement of financial performance.
Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that future economic benefits embodied within the component will flow to the Bureau and its cost can be measured reliably. The carrying amount of the replaced component is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in the statement of financial performance as incurred.
Capital work in progress
The Bureau capitalises all costs relating to assets as capital work in progress, until the date of completion and commissioning of these assets. These costs are transferred from capital work in progress to the appropriate asset category upon completion and commissioning and depreciated over their useful lives from the date of such completion and commissioning.
Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components of individual
assets are assessed and if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately.
Depreciation is recognised in the statement of financial performance on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. Depreciation methods, useful lives and residual values are reviewed at each reporting date. The estimated useful lives for the current and comparative periods are as follows:
Years
Computer equipment 3
Office equipment and furniture 5
Motor vehicles 3
(e) Intangible assets
Intangible assets that are acquired by the Bureau, which have finite useful lives, are measured at cost less accumulated amortisation and accumulated impairment losses, if any. Subsequent expenditure is capitalised only when it increases the future economin benefits embodied in the specific asset to which it relates. All other expenditure are recognised in the statement of financial position as incurred.
Intangible assets comprise of software acquired by the Bureau. The cost of the intangible assets is amortised on a straight-line over a period of 3 years.
(f) Financial instruments
Non-derivative financial assets
The Bureau initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets are recognised initially on the trade date at which the Bureau becomes a party to the contractual provisions of the instrument.
The Bureau derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or if it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in such derecognised financial assets that is created or retained by the Bureau is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Bureau has a legal right to offset the amounts and intends to either settle on a net basis or to realise the asset and settle the liability simultaneously.
The Bureau classifies non-derivative financial assets into the loans and receivables category. Loans
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and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, where the time value of money is material, loans and receivables are measured at amortised cost using the effective interest method, less impairment losses, if any.
Loans and receivables include security deposits, advances to employees, prepayments and receivables, and cash and cash equivalents.
Cash and cash equivalents consist of cash in hand, bank balances, and short-term deposits with an original maturity of three months or less.
Non-derivative financial liabilities
Non-derivative financial liabilities are recognised initially on the trade date, which is the date that the Bureau becomes a party to the contractual provisions of the instrument. The Bureau derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Bureau has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
The Bureau classifies non-derivative financial liabilities into the other financial liabilities category. Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest method.
Other financial liabilities include balances with licensees and payables and accruals.
(g) Impairment
Financial assets
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably. Objective evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Bureau on terms that the Bureau would not consider otherwise or indications that a debtor will enter bankruptcy.
Losses are recognised in the statement of financial performance and reflected in an allowance account. When a subsequent event causes the amount of impairment loss to decrease, the decrease in
impairment loss is reversed through the statement of financial performance.
Non-financial assets
The carrying amounts of the Bureau’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If such an indication exists, then the asset’s recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. An impairment loss is recognised if the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of financial performance.
Impairment loss recognised in prior periods, if any, is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
(h) Finance income
Finance income comprises interest income on deposit accounts. Interest income is recognised in the statement of financial performance as it accrues, using the effective interest method.
(i) Operating leases
Lease of assets under which the lessor effectively retains all the risks and rewards of ownership are classified as operating leases. Payments made under operating leases are recognised in the statement of financial performance on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.
(j) Provisions
A provision is recognised if, as a result of a past event, the Bureau has a present obligation (legal or constructive), that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
(k) Current versus non-current classification
The Bureau presents assets and liabilities in statement of financial position based on current / non-current classification.
An asset is classified as current when it is:
• Expected to be realised or intended to sold or consumed in normal operating cycle
• Held primarily for the purpose of trading
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• Expected to be realised within twelve months after the reporting period, or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is classified as current when:
• It is expected to be settled in normal operating cycle
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months after the reporting period, or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
The Bureau classifies all other liabilities as non-current.
4 - New standards and interpretations not yet adoptedA number of new standards and amendments to standards are effective for annual periods beginning after 1 January 2014, none of which are expected to have a significant impact on the financial statements of the Bureau.
5 - Property, plant and equipmentDetails of property, plant and equipment are set out in Schedule I.
6 - Intangible assetsDetails of intangible assets are set out in Schedule II.
7 - Prepayments and receivables 2014 2013 AED AED
Advances to employees 14,009,532 10,386,808
Less: non-current portion (1,870,348) (786,042)
Advances to employees - current 12,139,184 9,600,766
Prepayments 2,860,922 1,246,761
License fees receivable 105,320 8,891
Other receivables 192,000 348,555
15,297,426 11,204,973
Advances to employees comprise payments to them associated with their remuneration entitlements. These payments will be recognised in the statement of financial performance in the period to which these payments relate.
8 - Cash and cash equivalents 2014 2013 AED AED
Cash in hand 14,489 20,205
Cash at bank
- current account 20,083,408 18,977,600
- deposit accounts 19,029,608 20,039,958
39,127,505 39,037,763
The Bureau carries out its banking transactions through a commercial bank with which it has a related party relationship.
Balances held in deposit accounts are denominated in UAE Dirhams, short term in nature, carrying effective interest rate of 0.05% (2013: 0.11%).
9 - Transactions and balances with licenseesTransactions with licensees included in the statement of financial performance are as follows:
2014 2013 AED AED
License fees received during the year 103,555,795 82,515,777
License fees received in prior year for 2014 20,000,000 15,538,489
License fees receivable for 2014 (refer note 7) 105,320 -
Less: excess recovery of license fee for 2014 (11,829,207) (858,219)
License fees recognised in the statement of
financial performance 111,831,908 97,196,047
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Balances with licensees included in the statement of financial position are as follows: 2014 2013 AED AEDExcess recovery of license fees:
- Prior year 858,219 7,872,976
- Current year 11,829,207 858,219
12,687,426 8,731,195
Net funding received for projects undertaken on behalf of licensees (refer (a) below) 16,574,260 6,479,632
License fees received in advance - 20,000,000
Net amount due to licensees 29,261,686 35,210,827
Less: non-current portion (11,829,207) (858,219)
Balances with licensees - current portion 17,432,479 34,352,608
(a) Movement for net funding for projects undertaken on behalf of licensees is as follows:
2014 2013 AED AEDNet funding / (expenditure) at 1 January 6,479,632 (325,363)
Funding received during the year 32,432,000 36,467,543
Expenditure during the year (22,337,372) (29,662,548)
Net funding at 31 December 16,574,260 6,479,632
(b) The licensees under the Bureau predominantly include entities related to the Government of Abu Dhabi.
10 - Employees’ end of service benefits 2014 2013 AED AED
At 1 January 17,037,500 14,026,120
Provision during the year 4,347,845 3,193,089
Payments during the year (3,583,585) (181,709)
At 31 December 17,801,760 17,037,500
11 - Payables and accruals 2014 2013 AED AED
Accounts payable 12,614,281 8,545,133
Accrued expenses 9,417,306 7,820,954
22,031,587 16,366,087
12 - Personnel expenses 2014 2013 AED AED
Salaries 35,852,013 30,083,333
Accommodation allowance 16,007,677 14,219,244
Employees’ end of service benefits (note 10) 4,347,845 3,193,089
Employers’ contribution to Abu Dhabi Retirement Pensions and Benefits Fund 1,849,540 1,431,096
Bonus - 1,389,720
Other benefits 20,931,958 19,810,624
78,989,033 70,127,106
13 - Related parties Related parties represent Government of Abu Dhabi and related departments and institutions, associated companies and key management personnel of the Bureau. Pricing policies and terms of transactions with related parties are approved by the Bureau’s senior management.
(a) Compensation of key management personnel
Key management personnel include Board of Directors (“the Board”) and senior management of the Bureau. Senior management consists of the Bureau’s Director General, Deputy Director General and the heads of division. In December 2014, the former Director General vacated his office and was replaced by the acting Director General appointed by the Executive Council, who is not remunerated by the Bureau.
The aggregate remuneration of the Board and the number of members receiving remuneration are as follows:
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2014 2013 AED AED
Board of Directors’ remuneration (refer note 2) 300,000 1,200,000
Number of directors (refer note 2) 5 5
The aggregate remuneration of the members of the senior management and the number of managers are as follows:
2014 2013 AED AED
Salaries and short-term benefits 16,128,443 16,372,297
Pension and end of service benefits 1,773,865 1,410,462
17,902,308 17,782,759
Number of persons 10 10
(b) Other significant related party transactions
2014 2013 AED AED
Rent expenses 7,632,923 7,632,923
Office service charges 1,738,743 1,425,569
These expenses represent rent and related charges paid to Al Sowwah Square Properties LLC, a company owned by the Government of Abu Dhabi.
(c) Related party balances
Balances with Government of Abu Dhabi entities included in payables and accruals are as follows:
2014 2013 AED AEDAbu Dhabi Retirement Pensions and Benefits Fund 241,814 187,915
Abu Dhabi Media Company PJSC 88,057 23,198
Abu Dhabi National Oil Company 29,406 27,496
Abu Dhabi Distribution Company PJSC 1,728 1,723
Also refer notes 8 and 9 for other related party balances and transactions.
14 - Commitments
Capital commitments
Estimated capital expenditure contracted for, but not yet incurred, at the reporting date, amounted to AED nil (2013: AED 176,810).
Operating lease commitments
The Bureau has entered into commercial leases for office premises. The lease is for a term of 10 years (started in 2012), with a renewal option included in the contract. There are no restrictions placed on the Bureau in respect of the lease arrangement.
The base rental shall be reviewed in 2018 as agreed with the lessor or determined by a surveyor.
Future minimum lease payments under the operating lease as at 31 December are as follows:
2014 2013 AED AED
Within one year 9,160,055 5,088,920
After one year but not more than five years 25,902,632 35,062,687
Total operating lease expenditure contracted for 35,062,687 40,151,607
15 - Accounting estimates and judgementsEstimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the process of applying the Bureau’s accounting policies, which are described in note 3, management has made the following judgements which have a significant effect on the amounts recognised in the financial statements.
Impairment losses
At each reporting date, management assesses whether there is any indication that its assets may be impaired. The determination of allowance for impairment loss requires considerable judgment and involves evaluating factors including the performance, industry and market conditions.
Useful lives and residual values of property, plant and equipment
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Management assigns useful lives and residual values to items of property, plant and equipment based on the intended use of the assets and the expected economic lives of those assets. Subsequent changes in circumstances such as technological advances or prospective utilisation of the assets concerned could result in the actual useful lives or residual values differing from the initial estimates. Management has reviewed the useful lives and residual values of the major items of property, plant and equipment and has determined that no adjustment is necessary.
16 - Financial instruments and risk managementThe Bureau has exposure to the following risks from its use of financial instruments:
• credit risk
• liquidity risk
• market risk
This note presents information about the Bureau’s exposure to each of the above risks and the Bureau’s objectives, policies and processes for measuring and managing these risks. Further quantitative disclosures are included throughout these financial statements.
The acting Director General, with inputs from the Head of Finance and Accounts, has the overall responsibility for the establishment and oversight of the Bureau’s risk management and he is responsible for developing and monitoring the Bureau’s risk management policies.
Credit risk
Credit risk is the risk of financial loss to the Bureau if a customer or counterparty to a financial instrument fails to meet its contractual obligations.
The Bureau collects licence fees from its related parties. Licence fees are collected based on an annual budget. The Bureau is exposed to credit risk from its operating activities (primarily for other receivables and amounts due from licensees) and from its financing activities, including deposits with a bank. The carrying amount of the financial assets represents the maximum credit exposure at the reporting date.
Liquidity risk
Liquidity risk is the risk that the Bureau will not be able to meet its financial obligations as they fall due. The Bureau limits its liquidity risk by monitoring its current financial position in conjunction with its cash flow forecasts and close communication with licensees on a regular basis to ensure funds are available to meet its commitments for liabilities as they fall due. Accounts payable are normally settled within 30 days of the date of purchase. The contractual payment terms of
all financial liabilities of the Bureau as at 31 December 2014 were less than three months (2013: less than three months).
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Bureau’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Currency risk
The Bureau’s currency risk is limited as a significant proportion of the transactions, monetary assets and liabilities are in AED or currencies currently pegged to the AED. The Bureau does not have hedging contracts to mitigate the fluctuation in foreign exchange rates. However, management is aware of the risk and closely monitors the exchange rate fluctuations.
Interest rate risk
The Bureau earns interest on its short term deposits with a bank at variable interest rates.
Cash flow sensitivity analysis for variable rate instruments
The following table demonstrates the sensitivity of the Bureau’s financial performance to a reasonably possible change of 50 basis points in interest rates at the reporting date, with all other variables remaining constant. There is no direct impact on the Bureau’s equity.
2014 2013 AED AEDEffect on income for the year:
Increase of 50 bps 99,715 100,200
Decrease of 50 bps (99,715) (100,200)
Fair values
The fair values of the Bureau’s financial instruments are not materially different from their carrying amounts.
17 - Comparative informationFollowing comparative information has been reclassified to conform to the presentation adopted in these financial statements:
Security deposits have been classified as non-current assets and accordingly, reclassified from the prepayments and receivables balance.
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Schedule I
Property, plant and equipment
Office
Computer equipment Motor
equipment and furniture vehicles Total
AED AED AED AED
Cost
At 1 January 2013 6,430,752 18,039,627 190,000 24,660,379
Additions 899,453 649,387 762,000 2,310,840
------------ ------------- ------------ -------------
At 31 December 2013 7,330,205 18,689,014 952,000 26,971,219 ------------ ------------- ------------ -------------
At 1 January 2014 7,330,205 18,689,014 952,000 26,971,219
Additions 1,083,433 223,117 79,000 1,385,550
Disposals (22,464) - (429,000) (451,464)
------------ ------------- ------------ -------------
At 31 December 2014 8,391,174 18,912,131 602,000 27,905,305 ------------ ------------- ------------ -------------
Accumulated depreciation
At 1 January 2013 3,838,717 3,215,829 111,571 7,166,117
Charge for the year 1,361,718 3,607,391 107,907 5,077,016
------------ ------------- ------------ -------------
At 31 December 2013 5,200,435 6,823,220 219,478 12,243,133 ------------ ------------- ------------ -------------
At 1 January 2014 5,200,435 6,823,220 219,478 12,243,133
Charge for the year 1,351,080 3,740,944 284,753 5,376,777
Disposals (8,489) - (275,686) (284,175)
------------ ------------- ------------ -------------
At 31 December 2014 6,543,026 10,564,164 228,545 17,335,735
------------ ------------- ------------ -------------
Carrying amounts
At 31 December 2013 2,129,770 11,865,794 732,522 14,728,086
========= ========= ========= =======
At 31 December 2014 1,848,148 8,347,967 373,455 10,569,570 ========= ========= ========= =======
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Schedule II
Intangible assets
Software
AED
Cost
At 1 January 2013 2,752,844
Additions 377,124
--------------
At 31 December 2013 3,129,968
--------------
At 1 January 2014 3,129,968
Additions 253,077
--------------
At 31 December 2014 3,383,045
--------------Accumulated amortisation
At 1 January 2013 746,470
Charge for the year 844,748
--------------
At 31 December 2013 1,591,218
--------------
At 1 January 2014 1,591,218
Charge for the year 880,443
--------------
At 31 December 2014 2,471,661
--------------
Carrying amounts
At 31 December 2013 1,538,750
==========
At 31 December 2014 911,384
==========
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The Regulation & Supervision Bureau PO Box 32800, Abu Dhabi United Arab Emirates [email protected]