public sector excellence and efficiency:...

PUBLIC SECTOR EXCELLENCE AND

EFFICIENCY: THE STORY OF NATIONAL

WATER AND SEWERAGE CORPORATION

UGANDA

Presented by: Alfred Okot Okidi

Deputy Managing Director Finance and Corporate Strategy

National Water and Sewerage Corporation

Aug 2015

PRESENTATION OUTLINE

Background

National Water and Sewerage Corporation

Governance structure

NWSC Situation Analysis 1998

NWSC Business Model and Reforms

Key Strategies and Success factors incorporating role of Finance and Corporate Strategy

Performance Improvements

Conclusion

NWSC´S MANDATE

Background of NWSC

NWSC is a Ugandan Parastatal set up in 1972. Owned by Ministry of Finance and regulated by Ministry of Water and Environment

Mandate to provide Water and Sewerage Services in Large Urban Centers on a Commercial and viable Basis

Currently serves -110 major towns; 2,752 staff members. 30 CA

STRATEGY AND PROMOTION OF

EXCELLENCE

Vision: to be a leading customer centered water utility in the world.

Mission: To sustainably and equitably provide cost effective quality water and sewerage services to the delight of all stakeholders while conserving the environment

Vision, Strategy, tactical and operation plans are nothing without consistent execution; again and again with passion.

GOVERNANCE STRUCTURE

BOARD OF DIRECTORS

MINISTER OF WATER AND

ENVIROMENT

MANAGING DIRECTOR

DIRECTOR INTERNAL AUDIT

GOVERNANCE STRUCTURE

MANAGING DIRECTOR

DIRECTOR AUDIT

DEPUTY MD- FCS •DIRECTOR COMMERCIAL

•DIRECTOR FINANCE& ACCOUNTS

•HEAD IT

•HEAD LOGISTICS

•MANAGER CORPORATEPLLANNNG AND STRATEGY

DEPUTY MD-TS •DIRECTOR PLANNING & CAPITAL DEVT

•DIRECTOR ENGINEERING SERVICES

CORPORATION SECRETARY •HEAD HUMAN RESOURCE

•HEAD ADMINISTRATION

NWSC’S SITUATION 1998

Large and inefficient labor force with

conflicting and overlapping roles. Staff

Productivity was 36 staff for every1000

connections

Poor customer care coupled with

just under 6hrs of water supply.

Monthly Deficit of $ 300,000 Corrupt field staff etc.

Low collection efficiency (60-70%) Huge Government Debt US $ 100

million

High NRW (60-65%) High operating expenses, i.e.

administration, medical, transport

etc.

Huge level of debtors of about 14

months.

Poor organizational culture.

Qualifications in the accounts

NWSC Challenges (1990’s)

NWSC’S SITUATION 1998

Emphasis on budgeting.

Centralised controls of Finance and Accounts and other functions.

Very few professionals in the corporation.

Inconsistent applications of accounting standards.

Late submission of statutory reports.

Recourse to Central government for operational support.

Government fed up and put on block for privatisation.

KEY STRATEGIES AND

OPERATIONAL INITIATIVES

NWSC adopted a two-tier process or business model after a detailed

change management process.

Long-term strategies was formulated through a Corporate Plan. This

is done in Finance Business Stream.

Performance Contract with Government, establishing a platform for

subsequent tailor-made activities at a tactical level.

Within the overall framework of the Corporate Plan and the Performance

Contract with Government, a series of activities were implemented at

operational level.

Secondly, the NWSC adopted several high impact short term

performance improvement programmes based on home grown

solutions/approaches meant to operationalize the long term plans.

These were accompanied by financial/commercial reforms including a

strengthened MIS and Tariff structure changes.

KEY STRATEGIES AND


Corporate Wide Involvement in Strategy Development: The NWSC

adopted a strong element of “worker involvement” to enhance

transparency and strategy ownership. The Tone is set from the top. In line

with this, workers union, all professions including the finance and accounts

professions are involved in the strategy development.

Delegated Management of the Corporations Activities: The NWSC

delegated management of its operations to the various operational areas. In

the process of delegation, the function of financial management and

reporting was also cascaded to the operational areas therefore increasing

autonomy and accountability of the business units.

Cultural and attitude Change: The Corporation adopted a cultural and

attitude change re-aligning staff organisational behaviour to operate with

strong commercial and customer care orientation.

Contracts based on Performance replaced permanent staff. Staffing

policy was streamlined staff encouraged to attain Professional & higher

levels of Education and Multi skilling.

KEY STRATEGIES AND


GOVERNANCE

Adopted simplified and easy to understand reporting of the corporation

activities. Delved more into analysis.

Bi-Annual performance evaluation and reward of successful areas based on

key drivers of the business. We use it to set new targets. We celebrate

every success

Area Targets published in media and circulated to local leaders.

Staff members bid for management of areas based on Business plans,

strategies etc.

Checkers activities to catch areas doing correct things.

Area level dialogue based on no boss no subordinate and no victimisation

Open staff appraisal and training

KEY STRATEGIES AND


Promotions based on performance and for senior position professional

qualifications required.

Incentives based on performance for operational staff.

Emphasis on Transparency and ethical behaviour

Staff Incentive Framework: In order to ensure sustained staff motivation.

The incentives required a delicate balance in sharing of rewards, a principle

that was formulated with the active participation of the financial division.

Areas rewarded monthly while HO is annual.

Staff capacity development programmes including establishment of the

vocational training facility

Enhanced Customer Management and Care: The Corporation improved

its customer care by adopting the motto “the customer is King and the

reason we exist”. Activities related to customer care included;

establishment of Customer week and call Centres, introduction of in-house

water apps, expansion of settlement channels etc.

KEY STRATEGIES AND


Every 6 months we hold a Water Baraza (parliament) to meet our

customers and stakeholders.

Enhanced credibility and networking with Stakeholders:

Performance Contract, strategic alliances with the public, customers,

suppliers, civil society, academic institutions and other regional

companies operating similar business. Open door policy with

Development Agencies, We provide tailor made information for the

various stakeholders.

Strengthening Information Management and Communication: The

Corporation addressed problems related to Information Asymmetry.

The Corporation also established a comprehensive database and

management information system which now spans over 20 years of

historical data. Reporting has gone beyond financial reports to cover

aspects of operational and service quality standards for both water and

sewerage services. We in addition use social media, places of

worships, council meetings etc.

KEY STRATEGIES AND


Adoption of new Technological Approaches to management of

business processes

Computerized management information systems. Introduced home grown

E-water Payment Solutions and E-Procurement Solutions. The

Corporation has developed an in-house billing solution which has saved the

Corporation about US $ 300,000 per annum in costs. These electronic

systems have all been introduced by the Finance and Accounts Division.

Adoption of a User Friendly Tariff Policy: The NWSC also adopted a

user friendly Tariff policy which included the reduction of the connection and

reconnection fees, the introduction of a new Water and Sewerage

Connection Policy aimed at giving subsidised access.

Financial Novelties

Mutual Reliance Initiative (MRI)

Credit Rating Process

Business Continuity Plan

KEY STRATEGIES AND


Enhanced Traditional Finance and Accounts roles

Annual Budgets incorporating rolling forecast budget mechanism as

a means to ensure accuracy and realism of the budgeting process.

Ensuring the effective financial management of public money by

supporting the planning and implementation of policy objectives,

making financial decisions and advising key bodies and individuals,

such as management boards and budget holders, using financial

management information;

Preparing and monitoring budgets and accounts and preparing annual

accounts and reports for the external auditors among other

stakeholders.

Embraced sustainability and Integrated reporting.

THE FIVE YEAR STRATEGIC DIRECTION

2013-2018

Provides the Corporation’s outlook and key strategic interventions for the next 5 years and builds upon the existing corporate plan taking into account the wider stakeholder expectations, policy directions and competitive direction.

Strategic themes

Financial Sustainability

Infrastructure growth

Increased coverage for water & sewerage

Learning and innovation

Customer delight

Meeting stakeholder aspirations

THE INFRASTRUCTURE SERVICE DELIVERY

PLAN (ISDP)

ISDP programme entails water and sewer mains extensions aimed at

increasing accessibility to water and sewerage services.

The ISDP programme is in line with NWSC Strategic goal of ensuring

100% service coverage in all NWSC gazetted towns, and it

underscores the importance NWSC is taking towards its Vision with

Action.

As a result of ISDP implementation , 1,448 kms of water mains and 38

kms of sewer mains were extended during the FY 2014/15.

Over 1900 kms of water mains have been extended since the ISDP

was launched in January 2014

WATER SUPPLY STABILISATION PLANS

(WSSP) & WATER QUALITY PLANS

Aimed at improving water supply reliability and providing WHO standard

portable water in the NWSC operational Areas.

Infrastructures such as water reservoir tanks, Standby Generators,

boosters and standby pumps were installed in the various Areas together

with laboratory equipment.

Restored and stabilised supply of water, especially in areas which were

devoid of water supply and considered water stressed or dry zones.

PERFORMANCE IMPROVEMENT

Performance Indicator 1998 2015

Service Coverage 48% 78%

Total Connections 50,826 417,938

New Connections per year 3,317 33,982

Metered Connections 37,217 417,938

Staff per 1000 Connections 36 6

Collection Efficiency 60% 105%

NRW 60% 31.2%

Proportion Metered Accounts 65% 100 %

Annual Turnover (Billion Shs) 21 221.1

Profit (Before. Dep) (Billions Shs)

Qualifications in Financial Stmts

Annual extensions kms

8.0 (loss)

10

60

33 (Surplus)

0

1448

PERFORMANCE IMPROVEMENT

CAPITAL EXPENDITURE 2010 TO 2015 69% INCREASE

PRODUCTION 2010 TO 2015 36% INCREASE

GOVERNMENT DEBT CONVERTED TO EQUITY

REMOVED FROM LIST OF ENTITIES TO

BE PRIVATISED.

MAIN PERFORMANCE DRIVERS

=> Hard working and committed leadership with clear vision.

=> Autonomy

■ Devolution of power from centre to areas

■ Institution of Performance Contracts (APCs and IDAMCs)- output

driven

=> Customer Focus and Effective communication

=> Team Work & Effective change management.

■ Collective participation in the development and formulation of the

programmes.

■ Work outs through the “stretch out programme” in which workers were

free to air out any of their grievances and needs.

■ Performance Contracts for all staff coupled with Performance based pay or penalties

MAIN PERFORMANCE DRIVERS

=> Monitoring and Evaluation Systems

■ Checkers un announced visits: both process ad outputs oriented

=> Human Resource

■ Strong incentive systems and equitable gain sharing plans

■ Open door policy

■ Performance Contracts for all staff coupled with Performance based pay or penalties

CELEBRATING SUCCESS

CHALLENGES

Government arrears accumulation

Old and dilapidated network

High Non Revenue Water

Full cost recovery Tariff not yet possible

Low margin business that is not well appreciated by financial systems.

Limited choice of technology

Lack of internal capacity in-country to handle major construction in water and sewerage.

Infrastructure development that is taking place at a much faster rate, overwhelming the NWSC’s capacity to provide constant water supply to all its customers the result: creation of dry zones hence leading to ‘water rationing’ in some areas.

WAY FORWARD

In line with the NWSC Strategic Direction 2013 – 2018, and the Corporate Plan 2015-2018. Going forward, all our undertakings will be focused on 4 strategic priority Areas that include;

SMART Systems, Business Continuity and Infrastructure Growth: Investment projects, Infrastructure service delivery plans, water supply stabilization plans, Energy reduction, water quality improvement, NRW reduction initiatives, asset mgt.

Financial Growth and Sustainability: Establishment of Water infrastructure fund, improved debt management (pre-paid meters), breakeven of new towns, resource mobilization, diversification of income, cost optimization

Customer and Stakeholder Delight: Enhancement of Customer engagement at all levels

Productivity and capacity Development: staff capacity building, improved welfare and performance management, research and development

ACCOLADES

ACCA Accredited employer since 2010

Financial Reporting Awards (FIRE) for two consecutive years 2011 and

2012.

FIRE Awards in November 2013 which included; an award for outstanding

achievement in Financial Reporting, Sustainability Reporting, 2013

Financial Reporting Award and improving quality of Financial Reporting.

FIRE Awards for outstanding achievement in financial reporting in the

public sector category for the year 2014. PPDA Award. Most Compliant

Procurement Entity (Central Government) FY 2013/2014.

Best Compliant Procurement Entity from PPDA in 2012. This was in

recognition of the streamlined processes and strict adherence by the

NWSC of the Procurement rules and regulations as established by the

PPDA. Procurement Entity of the Year Award (PEYA) – Nairobi 2014.

ACCOLADES

Procurement Award for 2014 where NWSC was recognised as one of

the best performing entities in public procurement and disposal of public

assets.

PPDA Award. Most Compliant Procurement Entity (Central Government)

FY 2013/2014.

Annual Communications Innovations Award” for E-Government and

E-Governance in 2012.

Named best utility in Africa 2014. in recognition of NWSC’s remarkable

operational achievements and fostering corporation amongst utilities

Won the Global Water Leaders Award 2014.

Quality and Customer Care Award in recognition for high quality

performance and best customer satisfaction.

Best Customer Care of the Year – social media award 2014.

The Golden European Award for quality and commercial prestige –

Geneva Switzerland 2014

ACCOLADES

The Global award for perfection, quality and ideal performance –

Berlin 2014 Germany.

Century International Quality Award ERA, Golden Award – Geneva.

Manager of the year award, presented to MD NWSC, Dr.Silver Mugisha

in London at the Achievements Forum organized by the Europe Business

Assembly.

CONCLUSION

In conclusion therefore the Public Sector can transform and become efficient

thru homegrown solutions.

Effective Leadership (Board &Management) at the top is crucial.

These included realistic and continuous strategic & operational planning,

forecasting.

Align human resource to organizational goals with effective rewards.

Setting up a robust Management Information System geared towards

financial sustainability and modernization of business processes and

provision of relevant information and reports.

There is need to go beyond numbers and ensure visibility of enterprise wide

activities through enhanced communication and embracing of roles beyond

typical budgets management.

CONCLUSION

Simplified communication for easy decision making is Crucial and can

endears Accountants to the leadership.

There is need to move away from number crunching into analytical reporting

and articulating strategies.

Regularly review & reinvent processes and systems

Need to better inform stakeholders through enhanced reporting e.g.

sustainability and integrated reporting.

It helps to have a good legal framework and supportive leadership at

National level.

Good governance, Accountability, value for money and priotization are key to

transformation & efficiency.

The transformation that you desire or want starts with you.

THANK YOU FOR YOUR

ATTENTION

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