PURA ANNUAL

REPORT

2008

Table of Contents

ACRONYMS ...................................................................................................................... 3

CHAIRPERSON’S STATEMENT – DRAFT FOR REVIEW .......................................... 4

INTRODUCTION .............................................................................................................. 6

BOARD OF COMMISSIONERS....................................................................................... 7

HEADS OF DEPARTMENT ............................................................................................. 7

PART I: CORPORATE GOVERNANCE & HUMAN RESOURCE REVIEW ............... 8

PART II: FINANCIAL REVIEW .................................................................................... 11

PART III: MARKET DEVELOPMENT REVIEW ......................................................... 13

PART IV: CONSUMER AFFAIRS REVIEW ................................................................. 25

PART V: LEGAL AND COMPLIANCE REVIEW ........................................................ 32

PART VI: REGULATORY ACTIVITIES ....................................................................... 36

PART VII: OUTLOOK FOR 2009 AND BEYOND ....................................................... 49

APPENDIX: 2007 AUDITED FINANCIAL STATEMENTS ........................................ 50

List of Figures

Figure 1: PURA Organisational Chart .............................................................................. 10

Figure 2: Growth in communication sector 2003-2008 .................................................... 13

Figure 3: Investment in the telecoms sector ..................................................................... 14

Figure 4: Employment in the telecoms sector................................................................... 15

Figure 5: Subscriber base for all networks ....................................................................... 16

Figure 6: Penetration levels for all networks .................................................................... 17

Figure 7: Call traffic figures for 2008 ............................................................................... 18

Figure 8: Cost of service for the different telecom services ............................................. 19

Figure 9: Market share of sms .......................................................................................... 20

Figure 10: Sales of energy against revenu collected. ........................................................ 22

Figure 11: Map of WAPP Zone B countries including the Gambia (Source WAPP). 34

Figure 12: Schematic showing the need to harnomise the emergency numbering system40

Figure 13: load vs. installed capacity in the provinces (2008) ......................................... 43

List of Tables

Table 1: Budgeted vs. Actual Income in dalasi (2008) ..................................................... 11

Table 2: Service Providers Number of Subscribers .......................................................... 20

Table 3: Number of customers per category (2005 - 2008) .............................................. 21

Table 4: Status of the electricity market. .......................................................................... 22

Table 5: Current status of wellfields being operated by nawec. ....................................... 23

Table 6: Volume of water sold and revenue collected. ..................................................... 23

Table 7: Showing the tail-end voltages on both circuits of the transformer before and

after the Pilot Project ........................................................................................................ 46

ACRONYMS AFUR - African Forum for Utility Regulation CTO - Commonwealth Telecommunications Organisation CFL – Compact Fluorescent Lamp DOSCIT – Department of State for Communications, Information and Technology DOSEN – Department of State for Energy DOSFEA – Department of State for Finance & Economic Affairs DWR – Director of water resources ECOWAS - Economic Community of West Africa States GAMCEL - Gambia Cellular Company GAMTEL - Gambia Telecommunications Company GEG – Global Electric Group GPPA – Gambia Public Procurement Authority GRTS - Gambia Radio and Television Services GSM - Global System for Mobile Communications IEC International Electrotechnical Committee ICT - Information Communication Technologies IP - Internet Protocol IP3 - Institute for Public Private Partnerships IPP - Independent Power Producers ISP - Internet Service Providers IT – Information Technology ITU - International Telecommunications Union kV - Kilo Volts kWh - Kilowatt Hour NAWEC - National Water and Electricity Company NEA National Environment Agency NCC - National Communications Commission of Nigeria POI - Point of Interconnection PPA – Power Purchase Agreement PPIAF - Public Private Infrastructure Advisory Facility PURA - Gambia Public Utilities Regulatory Authority SMS4DC – Spectrum Monitoring Software for Developing Countries SOS – Secretary of State SSHFC – Social Security and Housing Finance Corporation UNDP - United Nations Development Programme WAPP - West African Power Pool WATRA - West African Telecommunications Regulatory Assembly

CHAIRPERSON’S STATEMENT – DRAFT FOR REVIEW Welcome to PURA’s 2008 Annual Report. As has been customary, the Annual Report provides a review of PURA’s concentrated effort on key regulatory activities emanating from the period January 2008 to December 2008. The year in review marked a noteworthy maturity of utility regulation in The Gambia. This was demonstrated by PURA through effective regulatory interventions in its drive to ensure an equitable and level playing field as a precursor to effective competition in the regulated markets. I am pleased to report that based on feedback I have obtained from many of PURA’s stakeholders and also measuring the general response and feedback from consumers specifically, the Authority has come of age. During the period under review, PURA increased its capacity to provide effective interventions across its three current main sectors of focus i.e. Telecommunications, Electricity and the Water (including sewerage and sanitation). In this regard, reflecting on my statement for the last year under review (2007) I made mention that PURA would concentrate on the three sectors referred to “in a bid to develop more capacity and strengthen regulatory experience prior to shortly taking on regulatory activities in the areas of Transport and Broadcasting..” I am happy to be able to report that such capacity and regulatory experience has been strengthened in 2008. This realistically positions the Authority to consider the challenges associated with taking on additional sectors as prescribed by the PURA Act 2001. The guiding principles of Affordability, Accessibility and Availability of services to The Gambia remain core to PURA’s work and role in national development. The ability to ensure that public utilities deliver services based on these guiding principles will continue to be buttressed by adherence to the core values of Professionalism and Partnership.

The consumer has been at the centre of attention in respect of PURA’s work and the year under review witnessed major outputs. First, was the establishment and formal launch in July of the Consumer Complaints Resolutions Mechanism. PURA developed a Customer Query Logging Database, trained staff on its use and put into place a structured process for management and resolution of complaints. This is based on a professionally manned helpdesk and underpinned by a dedicated line that is free of charge to all consumers who have use for it – an important deliverable of PURA’s mandate.

This was followed by the holding of the first ever Consumer Parliament in December. For the first time in the history of The Gambia, the general public were afforded a forum enabling them to come face to face with service providers. The event was conducted in an atmosphere of dialogue and understanding enabling providers and consumers to collectively address their concerns and problems affecting the regulated sectors.

Through this process consumers were able to walk in from the streets and automatically become “parliamentarians”. They were also able to lodge complaints that were handled

and resolved either at the forum of the Parliament or within a clear timeline subsequently.

Finally, a high profile campaign was also launched to raise awareness, through educating and informing consumers of electricity on how to save energy. The centre piece of this activity was the commissioning, implementation and evaluation of a pilot project. Two thousand Compact Fluorescent Lamps (commonly referred to as CFL) bulbs were installed in approximately 200 houses in Kanifing South, a suburb of the Greater Banjul Area. A small team of PURA and NAWEC personnel removed the old incandescent bulbs wherever they existed and replaced it free of charge with new CFLs. CFLs provide a cost effective and easily accessible option for demand side management targeting residential households. The results of the pilot show that in some cases electricity bills came down by as much as 60%. The way forward for 2009, will be driven by a review of the Authority and its resources and how best it positions itself to take on new sectors under is mandate. Working with all its key and relevant stakeholders, a consultative approach will be taken by PURA in delivering a review its operations, ensuring that by 2010, a strategic plan to guide its work in the medium to long term will be fully operational. Compliance and Enforcement will therefore become hallmarks in the delivery of effective and efficient public services through” Equity in Development” underpinned by the authority’s guiding principles of “Professionalism and Partnership”.

INTRODUCTION The Annual Report for 2008 complies with PURA’s obligation under the PURA Act 2001 to report on its activities during the preceding year. It describes the achievements of the Authority, highlighting the challenges that were faced, while setting out the outlook for the coming year and beyond. The first part - the Corporate Governance and Human Resources Review - looks at the organizational structure of PURA. It identifies the regulatory capacity building activities embarked upon during the year. It also identifies the challenges that need to be addressed in terms of governance and human resource development to facilitate the effective implementation of PURA’s regulatory mandate. The second part - the Financial Review - looks at the financial status of the Authority during 2008. It highlights the incomes received against budgeted income and overall performance as regards PURA’s operations during the year in review. The third part - the Market Development Review – provides a detailed update on the activities of regulated utilities as well as providing an overview of their status during the course of the year. This year, this review also provides more insights into the work of the Authority in developing its capacity to regulate the Water sector in particular whilst strengthening its work in the Electricity and Telecommunications sectors. Part four - Consumer Affairs – focuses on cross-cutting activities used as vehicles and tools by PURA to engage its domestic and external stakeholders. The review of this area for 2008 also highlights progress on PURA’s implementation of a Complaints Resolution Mechanism as part of its regulatory tools and interventions in monitoring and evaluating the performance of regulated utilities. Part five - Legal and Compliance Review – highlights the impact and status of existing and impending legislation that empowers PURA by providing it with its legal basis to discharge its regulatory mandate. This part of the review also looks at the status of compliance of the regulated utilities in terms of their obligations under the regulatory process. Part six focuses on key regulatory activities embarked on by the Authority during the course of the year. The seventh and final part of the report provides an outlook for 2008 and beyond on the sectors being regulated.

BOARD OF COMMISSIONERS

HEADS OF DEPARTMENT

PART I: CORPORATE GOVERNANCE & HUMAN RESOURCE REVIEW The governing Board of PURA is appointed by the President of the Republic of the Gambia on the recommendation of the Minister of State for Finance and Economic Affairs. The Board which was appointed in October 2004 had a term limit of three years which ended in September 2007. The Board was reconstituted in December 2007 with the Chairman and Commissioner Mr. Carvalho re-appointed for a further term of three years. The Board comprises a Chairperson, two non-executive commissioners, an ex-officio member as the Permanent Secretary of the Ministry of Finance and Economic Affairs, two Executive Directors and the Director General. The Head of Administrative and Human Resources Management is the Secretary to the Board. The Board had a boost in February when Mrs. Amie Joof – Conteh was appointed to complete the Board to seven Members. The staff strength of the institution was considerably enhanced during the year under review; following the appointments of the Senior Telecommunications Engineer in January 2008, the Administrative Assistant and Consumer Affairs Assistants in July 2008, an Information Technology Officer in September 2008, a Water Engineer in October 2008 and a Legal, Licensing and Enforcement Manager in December to boost the capacity of the Legal, Licensing and Enforcement Directorate. An induction programme was arranged for all the said staff at which the key areas of PURA’s mandate were presented by the various departmental heads. However, despite the increase in professional staff it should be noted again that few vacant positions are yet to be filled, amongst which is that of a Policy Analyst. The staff complement of the institution is now 32. These employments have significantly improved the performance and service delivery of the authority. PURA didn’t host any international workshop in 2008, but has engaged in conjunction with the International Telecommunications Union (ITU), the services of two international consultants from the United States of America, these are;

• An Interconnection expert who carried out a study to interconnection rates within the country in June 2008, the result of which led to the significant reduction of telecommunication tariffs within the country; This was co-sponsored by PURA and ITU.

• An Expert legislation Consultant who worked on the Communications and Information Bill of the country in consultation with the Ministry of Communication, Information and Information Technology and other stakeholders during the months of September and October 2008.

On all the above occasions PURA had contributed tremendously and housed the consultants as well as provided them with the necessary logistics during the course of their assignments in the country.

ORGANISATIONAL STRUCTURE Director General: - Responsible for the day to day Management of PURA with the objective of improving the efficiency with which public utility services are provided and increasing the percentage of citizens having access to these services. He/she advises the PURA Board on the appropriate framework for regulation of public utilities in The Gambia, in accordance with relevant legislation. Legal, Licensing and Enforcement Directorate: – The Executive Director Legal, Licensing and Enforcement advises the Board and management on all legal matters affecting the Authority. This directorate drafts all legal instruments such as licenses, contracts and regulations of the Authority. This directorate also monitors compliance with regulations. Technical Directorate: – Advises the Board (through the Director General) on issues relevant to the regulation of the water, electricity and telecommunications sector, including spectrum management, numbering administration. Economic Regulation Directorate: – Advises the Board (through the Director General) on rates and tariffs; performs economic and financial analyses; conducts research and develops special studies and forecasts. The directorate also monitors investment programs. Administration and Human Resource Management Unit: – Directly under the office of the Director General, oversees Human resources functions, welfare hygiene of staff, coordinates administrative activities, and procurement functions of the institution. Policy and Strategy and Consumer Affairs Directorate: – Receives consumer complaints of utility services and reviews these with the relevant service providers. It monitors the level of consumer satisfaction with services provided by utilities and also PURA’s response to Consumer complaints. It evaluates the performance of the utilities against the respective quality of service standards and assists the Board in publishing information relating to PURA’s functions and activities. It also advises the Board (through the Director General) of the public’s perception of PURA’s performance, and, where appropriate, suggests actions to improve PURA’s image. It also manages the information technology functions. DPSCA also handles PURA’s sensitisation activities, organizes workshops, manages PURA’s internal and external communication and analyses government policies for the sector implementation. Finance Unit: - Directly under the Office of the Director General, this unit oversees and manages the Budget and funds of the office as well as drawing of the monthly management accounts and giving the necessary financial advice. It is also responsible for the invoicing of regulatory fees and the follow up on the payment of the said invoices and subventions due to the office.

FIGURE 1: PURA ORGANISATIONAL CHART

TRAINING AND DEVELOPMENT During the year 2008, PURA was able to accomplish the following training programmes, the Director General and Executive Director Technical Regulations attended the PURC training in Florida, USA, while the Executive Director Legal, Licensing and Enforcement and the Spectrum Manager also attended training courses at USTTI, in Washington, USA. The Senior Communications Manager, Consumer Affairs Manager and the Senior Economist also attended training courses at TEMIC, in Canada. Though the PURC training courses were fully funded by PURA, the USTTI and TEMIC were partially funded by ITU. It is worth noting that by the recommendations of the framework study that set up PURA, it should be mandatory for all the professional staff of the institution to attend the fundamental course of utility regulation at PURC. So far, PURA has only been able to train three of the existing staff on this basic regulatory course due to the lack of sufficient resources. PURA has not undertaken any study tour during the year under review however Guinea Bissau and Sierra Leone attended a training session hosted by PURA in spectrum management software for developing countries.

BOARD OF

COMMISSIONERS

DIRECTOR GENERAL

DIRECTOR –POLICY,

STRATEGY &

CONSUMER AFFAIRS

HEAD OF UNIT –

ECONOMIC

REGULATION

EXECUTIVE DIRECTOR –

LEGAL, LICENSING &

ENFORCEMENT

EXECUTIVE DIRECTOR –

TECHNICAL

REGULATIONS

HEAD OF UNIT –

FINANCE

HEAD OF UNIT – HUMAN

RESOURCES & ADMIN

PART II: FINANCIAL REVIEW

PURA depends on two main sources for its income. These are regulatory fees from regulated utilities and government subvention. The amount demanded from operators as regulatory fees is based on the annual budget of PURA, which is approved by the Board of Commissioners. The amount collectible as regulatory fees was pegged at a ceiling of 1.5% of the operators’ turnover, which is one of the lowest rates charged by regulatory authorities in Africa. The ceiling was determined to ensure that operators do not incur exorbitant regulatory charges which are passed on to consumers. In the year 2008, 1.3% of operators’ turnover was invoiced. Despite that consideration, the payment of regulatory fees by NAWEC and GEG has not been encouraging. Out of the amount of D37.988 million budgeted as regulatory fees income, only D29.910 million was collected and Government subvention budgeted was D5.5million and the amount collected was D5.5million, as shown in the table below. Undoubtedly, the non compliance by NAWEC and GEG has continued to hamper the implementation of some of PURA’s regulatory activities in the electricity sector.

TABLE 1: BUDGETED VS. ACTUAL INCOME IN DALASI (2008)

SOURCE OF FUNDS

BUDGET (D)

ACTUAL

AMOUNT OUTSTANDING

Government

D 5,500,000.00

D 5,500,000.00

D 0.00

GAMTEL 9,017,723.00 9,017,723.00 0.00

AFRICELL

6,171,477.00

6,171,477.00

0.00

GAMCEL

7,080,489.00

7,080,,489.00

0.00

COMIUM

1,040,000.00

1,040,000.00

0.00

G.E.G

6,195,024.00

1,000,000.00

5,195,024.00

QUANTUMNET

50,000.00

50,000.00

0.00

NETPAGE SOLUTIONS

50,000.00

50,000.00

0.00

NAWEC

8,383,191.00 0.00 8,383,191.00

TOTAL

43,487,904.00

29,909,689.00

13,578,215.00

The status of regulatory fees payment and government subvention is depicted in the table above. All the telecoms operators and ISPs have fully paid their regulatory fees for 2008. GEG only paid D1,000,000.00 leaving an outstanding balance of D5.195 million and NAWEC did not pay their regulatory fees, leaving a balance of D8.383million as 2008 regulatory fees arrears. The major expenditure of the Authority has been on staff cost similar to the previous year. The Authority has been very prudent in utilising its financial resources. However, with the recruitment of more staff, and the outlook for the next nine months it is envisaged that more resources would be spent on the procurement of essential Spectrum monitoring equipment and Drive test tools for network monitoring, staff training, consumer outreach and sensitisation programmes, Consumer Parliament sessions, consultancies and other staff incentive policies.

PART III: MARKET DEVELOPMENT REVIEW

Macroeconomic Performance

The Gambian economy registered a real GDP growth rate of about 6.1% in 2008, compared to the 7% registered in 2007, a positive but decelerated growth rate in real terms. The positive growth was mainly as a result of the bumper crop harvest in Agricultural activities which grew by about 23.4%, accounting for 78.3% of the overall GDP positive change. Primary production industries grew by 15.1%, while the Service sector, which accounts for about 59% of GDP, also grew by 2.6%. Electricity and Water activities grew by 8%, while ‘Mining & Quarrying’ and ‘Building & Construction’ grew by 6%. Manufacturing declined marginally by about 2.5%. Industrial activities grew by 2.6%. Communications and Hotels & Restaurants registered growth rates of 10% and 6.3% respectively. Distributive Trade Services, which form about 22.8% of GDP, and contributing 19.2% of overall economic growth, witnessed a downturn of about 5.7%. Transportation activities are projected to grow by about 6%. The regulated sectors (communications, electricity and water) all have witnessed a decline in 2008. The communication sector registered a 10% growth compared to the 18% and 25% growth witnessed in 2006 and 2007, and the Electricity and Water sector grew by 8 % compared to the 17% growth registered in the sector in 2007. The reversing trends in both sectors can partly be attributed to the global financial crisis and recession in many advanced economies, as exports, remittances, foreign direct investment and tourism all contracts in 2008.

Communication Sector Growth Rate

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Figure 2: Growth in communication sector 2003-2008

Reported Annual Investment in the telecommunications sector was estimated at D847 million in the year 2008. This shows a 46.4% increase in investment in the sector from D578.6 million in 2007. The reported figures show COMIUM with the highest investment figures in both 2007 and 2008, which could be explained by the fact that they came into the market in mid-2007. AFRICELL also reported a significant investment figure during the year, which could also be explained by the building of their new backbone, additional cell sites and switches to cater for their business expansion. However GAMCEL and GAMTEL did not report any investments over the period.

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GAMTEL GAMCEL AFRICEL COMUIM TOTAL

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INVESTMENT IN THE TELECOMS SECTOR

2007 2008

FIGURE 3: INVESTMENT IN THE TELECOMS SECTOR

The employment level reported in the sector stood at 2,262 people at the end of 2008 from a 2007 level of 1,840 employees. This shows that the sector has registered a 23.2% growth in employment during the period under review.

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EMPLOYMENT IN THE TELECOMS SECTOR

2007 1235 215 326 60 1836

2008 1202 247 462 65 1976

GAMTEL GAMCEL AFRICEL COMUIM TOTAL

FIGURE 4: EMPLOYMENT IN THE TELECOMS SECTOR

The Telecommunication Market Structure

The Gambia telecommunications industry comprises of a fixed network operator; GAMTEL and three mobile operators GAMCEL, AFRICELL and COMIUM. The fixed network operator offers telephone and internet services. Whilst the mobile operators GAMCEL, AFRICELL, and COMUIM came into the market in May 2001, October 2001 and April 2007 respectively to provide GSM cellular voice and data services. In August 2008, a 3G licence was issued to Q-Cell as the fourth entrant into the mobile market. The new entrant is expected to commence operations in the early part of 2009.

The Voice Market

Subscriber Figures In 2008, the telecoms sector reported 1,215,004 voice subscribers, compared to 848,371 voice subscribers in 2007. This resulted to a net addition of 366,633 new voice subscribers, which represented a 43.2% increment. Of the 1,215,004 subscribers 1,166,136 are mobile subscribers and 48,886 are fixed line subscribers. The impressive growth in the mobile subscriber numbers in 2008 was the result of an aggressive marketing campaign amongst mobile operators as a result of the strong competition in the sector.

TELEPHONE SUBSCRIBER LEVELS

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FIGURE 5: SUBSCRIBER BASE FOR ALL NETWORKS

The telephone penetration level (teledensity) measured as the percentage of the population owning a fixed and or mobile service has been very impressive registering levels of 21.59%, 54.47% and 76% in 2006, 2007 and 2008 respectively. This impressive performance in the penetration level is as a result of the strong performance registered in the mobile subscriber base. The mobile penetration level has increased from 51.4% in 2007 to 72.9% in 2008, whilst the fixed line penetration level been steadily dropping from 2006

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Fixed Mobile

FIGURE 6: PENETRATION LEVELS FOR ALL NETWORKS

Voice Traffic Figures Total volume of voice traffic reported for 2008 was 610.2 million minutes compared to 583 million minutes reported in 2007. Of these 416.2 million minutes was for local traffic and 39.1 million minutes for international traffic. The interconnection traffic generated about 234 million minutes.

Share of Telecoms Traffic figures for 2008

Local calls

68.21%

International out

6.41%Roaming

0.04%

Interconnections

25.35%

FIGURE 7: CALL TRAFFIC FIGURES FOR 2008

Tariffs In 2008, like in 2007, the reported average mobile on-net local peak call charge was D2.88 per minute and the average fixed line on-net local call charge was D0.73. However the off-net local peak mobile and fixed call charges in the first three quarters of 2008 remained the same as was in 2007 being D4.38 and D3.93 respectively. These rates went down in the last quarter of 2008 to D3.23 and D2.98 respectively, as a result of an Interconnection Charge Determination by PURA emanating from the Interconnection Study by an ITU consultant. The average peak international call charges for zones 1, 2, and 3 are D8.00, D14.60 and D17.90 respectively.

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FIGURE 8: COST OF SERVICE FOR THE DIFFERENT TELECOM SERVICES

With the Short Messaging Services (SMS) the on-net average tariff is D0.46 and D1.00 off-net, while the international rate for SMS is D3.00. The Data Market Data Services in The Gambia comprises internet services provided by the commercial ISPs and text and picture messaging services provided by the mobile operators GAMCEL, AFRICELL, and COMUIM. There were five commercial ISPs in The Gambia, GAMTEL’S ISP, NETPAGE SOLUTION QUANTUMNET, AIRTIP AND UNIQUE SOLUTION which came into the market at the beginning of 2008. All the ISPs channelled their internet traffic through one international data gateway owned by GAMTEL.

FIGURE 9: MARKET SHARE OF SMS

The data market has experienced a significant surge in 2008. The text and picture messaging from the mobile services registered 198.06 million messages in 2008. AFRICELL and GAMCEL reported the highest, representing 49% and 48% of the messaging services in 2008.

Service Providers 2005 2006 2007 2008

GAMTEL’S ISP 1260 586 4108 1567

NETPAGE SOLUTIONS 150 206 303 525

QUANTUM NET 650 650 403 n/r*

UNIQUE SOLUTIONS 430

AIRTIP n/a n/a n/a n/a

Total 2060 1442 4814 2522 n/r*: not reported n/a: not available

TABLE 2: SERVICE PROVIDERS NUMBER OF SUBSCRIBERS

The total reported ISP subscriber base has grown significantly during 2007 from 1,442 to 4,814 subscribers, which is equivalent to 234% growth.

TEXT & PICTURE MESSAGING BY OPERATORS

GAMCEL

48%

AFRICELL

49%

COMIUM

3%

GAMCEL AFRICELL COMIUM

THE ELECTRICITY AND WATER MARKETS.

Electricity Generation NAWEC still maintains its Kotu Power Station supported by a number of stand alone power stations in the major provincial towns. The current maximum available capacity at Kotu Power Station is 25.3 MW at peak load. Transmission and Distribution Electricity is transmitted for distribution via five radial 11kV feeders and three 33 kV feeders that form a ring in the GBA. The 33 kV feeders supply medium voltage substations where the voltages are transformed to 11 kV for further distribution. By end of 2008, NAWEC had a total customer base of 86,349 in 990 zones grouped in seven categories as shown in Table in the tables below.

CATEGORY NUMBER OF CUSTOMERS

2005 2006 2007 2008

Domestic 45,874 46,512 48,517 50390

Commercial (NGO’S, Schools, etc 6,050 6,139 6,159 6,177

Major consumers (Industries, Banks, S/markets etc

521 568 598 636

Agriculture 54 55 54

Local Government Authorities 1,076 1,078 1,084 1,093

Central Government 1,401 1,391 1,409 1,415

Prepayment Customers n/a 10,662 17,212 26,584

TOTAL 54976 66405 75034 86349 TABLE 3: NUMBER OF CUSTOMERS PER CATEGORY (2005 - 2008)

ITEMS 2004 2005 2006 2007 2008

Customer population

35,329 54,976 66,405 75,034 86,349

Sales (billed) GWh -Credit

80.2 92.0 111.3 119.0 116.0

Rev. collection Credit (D million)

418 559 703 1,065 971

Prepayment sales (000)

N/A N/A N/A N/A 300.4

System Losses Power House Consumption

37.3% 41.25 40.8% 39% 33.34%

Power Demand MW

60 66 78 88 90

Energy Demand GWh

289 312 369 416 473

Customer growth p/a %

N/A 35.7 20.7 7.5 15.1

Energy Demand Growth rate

18.5 7.4 18.18 N/A N/A

Power Demand Growth rate

20.9 18 18 N/A N/A

TABLE 4: STATUS OF THE ELECTRICITY MARKET.

An analysis of the megawatt-hour sales on the credit meters from 2004 to 2008 indicates a steady growth in the above table. From a growth rate of 14% in 2005, it rose to 21% in the following year. However in 2007 and 2008, the growth rate dropped by 6% and 2% respectively. The reason for this drop in sales could be as a result of a policy shift which lay emphasis on the supply of prepaid meters and the sales from this service component were not reported in the previous years. If the above scenario is contrasted against the revenue collected, the company realized an increase of 33% in revenue in 2005 and 25% in 2006. The company in 2007 nearly doubled its revenue by registering 51% increase over the previous year’s figures and slightly lower figure of 19% in 2008. The reason for this rise in revenue could be attributed to the increased supply coming from the Brikama IPP which came into operation in mid 2006.

Graph of Revenue and Sales GWh (billed)

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FIGURE 10: SALES OF ENERGY AGAINST REVENU COLLECTED.

Water Service Provision

In the water sector, NAWEC continues to be the sole provider of potable water in the country especially in the Provincial Growth centres as well as the Greater Banjul Area. Even though there are other potential sources of water for household and industrial use, NAWEC still depends on ground water for its services due to its comparative advantage compared to other water sources. The table below shows the various well fields and the number of boreholes in each well field.

Well fields No. of Boreholes Status

Salagi & Jambur 15 Operating

Wellingara & Sukuta 11 Operating

Fajara 6 Operating

Brikama 2 Operating

Yundum 3 Operating

Kanifing 1 Operating

Kerr Sereigne 1 Operating TABLE 5: CURRENT STATUS OF WELLFIELDS BEING OPERATED BY NAWEC.

NAWEC has not added any new borehole to the network during the course of the year under review, but the company has undertaken a major rehabilitation of all the major boreholes by air flushing them to open up the screens to avoid clogging. This was a remarkable exercise and has improved the water quality and could prolong the live span of the existing boreholes. The provision of potable water in the five administrative divisions still remains ad hoc even though the local governments have a legal mandate to provide the service. The rural water supply is characterized by numerous actors with UN agencies and NGO the principal actors. Various technologies are used ranging from solar energy to wells fitted with hand pump. Water Quantity Sold and Revenue The quantity of water sold and revenue generated during the period of 2004 and 2008 is shown in table below.

Year Quantity sold in (million) m3 Revenue Generated ( million Dalasi)

2004 2005 2006 2007 2008

13.4 12.7 12.7 15.1 14.0

96 99 106 149 139

TABLE 6: VOLUME OF WATER SOLD AND REVENUE COLLECTED.

The table above depicts a negative growth in sales in the year under review. This does not reflect the anticipated growth in the sector following the lifting of the embargo on new connections witnessed in 2004 – 2006. In 2007 the sector registered a growth in quantity sold of 19% which subsequently dropped by 7% in 2008. This represents an anomaly considering the population shift within the Greater Banjul Area, One would have expected a higher demand for the service. One reason for the drop in sales could be attributed to metering error. A study tour conducted by PURA engineers earlier in the year recognized this fact and a recommendation was made to the company to address the situation of the faulty meters in the system.

PART IV: CONSUMER AFFAIRS REVIEW

Overview

During the period under review the Directorate employed an Information Technology Officer and another Consumer Affairs Assistant. Detailed below are the areas of work progressed and activities carried out during the period under review:

Work Progressed

A complete framework and work plan was developed in the early part of the year to better address the interest of consumers. These interests are their rights, obligations as well as needs. This working manual, entitled the “Development of a Consumer Protection Mechanism” serves as the basis for the work embarked on during the year. The key thematic areas of activity by the directorate as outlined in this document were –

• Protection & Advocacy;

• Codes Development & Monitoring and;

• Information & Education. PROTECTION AND ADVOCACY Consumer Help Desk In June of this year, the helpdesk was officially launched and became operational. The Help Desk is fully staffed and a Toll Free number – 148 was also activated. All consumers in The Gambia are now able to call the Help Desk using any of the networks available in the country free of charge. A formal “Guidelines for Resolving Consumer Complaints” was

PURA Consumer Affairs Assistants online handling complaints

developed and jointly agreed upon by the service providers and the Authority. Through this framework, Consumer complaints can be followed-up with operators and where they are not resolved an escalation mechanism has been put in place. The system is integrated with a Consumer Query Logging Database (CQLD) in which all complaints are stored. The CQLD acts as a backbone that would allow PURA to periodically evaluate the patterns of complaints. This in turn can effectively guide regulatory intervention but more importantly the frequency, nature of complaints gives an insight to the current issues in a particular sector. A detailed report of all the complaints received and processed has been compiled to be published.

The Hon. SOS for Health Launching the 148 Consumer Helpdesk

The Director, DPSCA, explaining the key aspects and operations of the helpdesk

Consumer Parliament Another innovative project called the Consumer Parliament was launched in December 2008. This nationally televised programme brought together consumers, service providers and PURA together to address the concerns of consumers. The event was graced by high level government officials including the Secretary of State of Finance and Economic Affairs, the Secretary of State for Trade and Industry, and the Secretary of State for Communications Information and Information Technology. Among the benefits of this quarterly event is that it:

i. Puts operators and the industry regulator in the spotlight enabling consumers to have access to them.

ii. Raises greater awareness of the rights of consumers and the obligations of the service providers, since a better informed consumer goes a long way in alleviating some of the problems that are being encountered between consumers and providers of service.

iii. Serves as a platform to enable operators to clarify issues pertaining to service delivery, since service providers need as many vehicles as possible to communicate with their customers – this platform is thus an extension of their customer care services.

iv. Enables operators to publicly give account of the ways in which they provide service to their customers. Transparency is very important for issues raised be fully explained in an open and frank manner. It is good for the general state of health of the sectors.

v. Assist the regulator to initiate regulatory interventions. A better informed regulator will be able to address problems with a holistic view, having taken on board all the benefits and potential repercussions prior to intervening.

vi. Enables the regulator to create an enabling environment for competition among operators. One of the goals of the regulator is to ensure that services rendered by providers are up to standard, and the cost of the service is not too high for the consumers. Thus, facilitating competition on these key points is extremely important. It promotes qualitative and efficient service delivery throughout the country.

vii. Promotes the creation of a platform for dialogue and action by all stakeholders for better service delivery in a holistic manner. Dialogue is an important regulatory tool. Consumers will be able to highlight problems they are encountering with their services, Operators will be able to take these issues on board and work on solving them, and give explanations regarding their constraints. The regulator will be able to identify the problems and devise appropriate interventions.

The Consumer Parliament serves as a forum where complaints would be heard in a parliamentary style forum. This approach will further allow resolution of disagreements between operators and their customers and also bring to light regulatory matters to the public.

‘’Parliamentarians’’ (consumers) asking questions about the services they are receiving

Operators(L:GAMTEL, R:AFRICELL) responding directly and offering solutions to the questions

Ensuring Safe Drinking Water In October, following a series of complaints received by the Consumer Help Desk from residents of Kololi concerning the quality of their domestic tap water, a sample was collected and sent to the Water Quality Laboratory of the Department of Water Resources for scientific testing. During the course of the investigation, it was brought to light that the laboratory was greatly handicapped. The lab was also not in a position to conduct a complete and accurate test (physical, chemical and microbiological) and analysis of the potable water in the country due to shortage of reagents, equipment and other logistical constraints. In view of the high priority safe drinking water has on the national agenda of the country, meetings were organized with key stakeholders to urgently address the needs of the laboratory. This is in line with one of the mandates of the regulator, which is to monitor the quality of the services of the operators in the sectors it regulates. CODES DEVELOPMENT AND MONITORING Consumer Codes Consumer Codes drafted and circulated for comments by the relevant stakeholders. All comments were received and incorporated into the document. In addition, the Customer Care standards within the African Forum for Utility Regulators (AFUR) Guidelines for Minimum Standards for Quality of Service in Electricity, Water and Communications were harmonized with these Codes. This way, the African regional standards are incorporated while taking into consideration the local environment. Customer Care Visits Technological advances, competition, cultural changes, and escalating customer expectations in The Gambia have rendered post-sale customer support more demanding than ever. Understandably, this has created a need for exemplary post-sale services, in ensuring all customer interactions result in satisfaction as the aim and core target of all customer contact centres.

To ascertain this need, customer care centre monitoring visits were embarked upon by DPSCA after agreeing at a directorate level that in preparation for the implementation of the CQLD and PURA’s standards of codes, we would set out to visit all customer care centre’s of those bodies that we regulate, in order to determine and appreciate the conditions that they work under, how they handle a variety of customer complaints and how they go about resolving these problems. This involved a trip across the country, visiting the customer care centre’s of GAMCEL, GAMCEL, AFRICELL COMIUM and NAWEC; this report was therefore, premised upon the findings and observations of these visits. Tariff Monitoring The directorate of Policy strategy and consumer affairs in yet another demonstration of its crosscutting activities through its consumer affairs assistants began, a tariff monitoring exercise, whereby operators’ subscribers are called at random for a duration of a week. These test results are meant to be used as a mechanism in maintaining the interventional arm of PURA, with regards to maintaining an acceptable standard of performance and fair play within the regulated sectors. Internet Monitoring The preliminary stages towards the development of a robust framework for the monitoring of the quality and performance standards of the ISPs was started. Collaborating with specialized bodies on the international platform, such as AfriNIC, ISOC and ICANN, capacity is being developed gradually. INFORMATION AND EDUCATION

A sustained campaign to raise public awareness on the TV and radio on energy efficiency and the conservation of electricity has been going on through out the year. The picture shows PURA staff on one of the radio stations in the GBA answering to questions from consumers, taking comments and also disseminating information. All radio programmes are also conducted in some of the local

languages to maximise the outreach. LOCAL STAKEHOLDER RELATIONS Underpinning PURA’s regulatory interventions has been the development and enhancement of local stakeholder relations. During the period under review emphasis was placed on a proactive approach with policy makers in particular. Meetings were

initiated with various Secretaries of State (Ministers) with the objective of bringing to the fore and providing clarity as to the role and responsibilities of the regulator. Most importantly however was that the process involved engaging them by directly aligning our objectives with the national development policies. A specific example of this was PURA’s engagement of the Secretary of State for Fisheries and Water Resources with specific responsibility for National Assembly matters. Here we were able to articulate our position as to the development of the Water sector and the type of regulatory interventions we believe were necessary. The Directorate also participated in a study tour in Ghana on water regulation together with the DWR to learn from Ghana’s experience with water regulation and regulatory framework. PURA also highlighted the importance and need for sector specific legislation not only for Water but also for the Information and Communications Technology (ICT) sector. PURA supported and sponsored the Department of State for Communications, Information and Information Technology (DOSCIIT) in holding a validation workshop for the ICT Bill in an effort to get it enacted in 2009. The Energy sector is an important sector that falls under the remit of PURA in respect of regulatory interventions. During 2008 the world price for oil put immense pressure on all energy utilities dependent on oil. The Gambia was no exception. The National Water and Electricity Corporation (NAWEC) was and is therefore, more so now than before, challenged both financially and economically. As such, as a monopoly utility (in terms of distribution of electricity and water), it needs to gear and position itself to be part of the solution in improving the way the energy sector responds to existing threats and new opportunities. Against this background PURA has worked closely with the Department of State for Energy (DOSEN) and presented various options and solutions for Ministerial consideration to assist and facilitate the shaping of policy in this sector.

In late July the DG and PURA staff made a presentation to the Hon. Secretary of State for Energy on the way forward for the electricity sector in The Gambia. The presentation highlighted the need to take advantage of private capital to pay for the expansion of the network but also discussed other issues such as coordinated long term electricity planning. This gives us a platform to build upon and 2009 will hopefully begin to bear the fruits of such proactive engagement. Local stakeholder relations took a turn for the better after PURA’s visit to The Speaker of The National Assembly. The Speaker was brought up to date on progress in the various sectors we regulate and the opportunity was also seized to impress upon her the need for the ICT Bill to be passed. The National Assembly has since been visibly active and involved in the affairs of PURA and the relationship between the two institutions grows from strength to strength.

International Stakeholder Relations In October 2008 a major highlight of PURA’ work in the area of international stakeholder relations was the signing of a memorandum of understanding (MOU) with the Nigerian Communications Commission – the regulator for communications in Nigeria. The MOU allows for individual and group work placements as well as study tours. Such an agreement also ensures that as a knowledge-based institution we keep in touch with innovation and application of knowledge to circumstances where we share similarity in purpose and implementation of regulatory interventions. Staff of PURA also in various ways participated in a number of programmes, conferences and meetings that provided excellent networking opportunities. In addition these relationships also facilitated the further development of capacity within PURA. Ongoing relationships were maintained with the International Telecommunication Union (ITU), the Telecommunications Executive Management Institute of Canada (TEMIC), The Public Utilities Regulatory Centre (PURC) of the University of Florida – USA, The United States Telecommunications Training Institute (USTTI), The Commonwealth Telecommunications Organisation (CTO), African Forum for Utility Regulators and The West African Telecommunications Regulators Assembly (WATRA). Information Technology and Multimedia Services The website – www.pura.gm was revamped, with new and more content uploaded. It is anticipated that the website will be another avenue for PURA to communicate its mandate to its wider audience.

PART V: LEGAL AND COMPLIANCE REVIEW

Domestic Legal Framework in the Telecoms Sector

The year 2008 is historical in utility regulation in The Gambia in that it saw the first tariff refund ever in the history of the telecoms Industry in The Gambia. A legal notice was issued on 13th March 2008 to the incumbent fixed line company GAMTEL which calumniated in their refund to customers of monies collected under a new tariff structure not approved by the Regulator. The amounts that could be credited to customer accounts accruing to calls made in Telecenters were donated to the Royal Victoria Teaching Hospital due to the fact that there was no way of identifying the people who placed these calls in these Telecenters over the material time. This recipient was chosen as it was felt that their services had a general and significant enough impact on the lives of all Gambians to qualify the utilitarian test. Another historic event for PURA in 2008 is that this was the year in which on the 28th June for the first time in the country’s history a public hearing was held in the regulatory process to enable consumers in The Gambia have a say in an application to increase tariffs brought by the incumbent fixed line company to PURA. The Authority publicized this through publication on the national newspapers and on our website. The Authority also opened up telephone lines on which public views on the proposed tariff increase application by GAMTEL could be given. On the day of the public Hearing simultaneous translations into all the major local languages of the Gambia were offered and made available to ensure that no Gambian was left out of the process. The views collated from this Public Hearing was put together by PURA and was used in the evaluation process to come to the determination on the justification or otherwise of the applied increase. In this instance the tariff increase was mainly not allowed and the full reasons for this would be given in another part of this report. Following this very significant milestone other tariff refunds have followed in others areas such as that following the determination of Interconnection charges and AFRICELL’s refund to consumers. Albeit these very noteworthy achievements, it would be interesting to note that the Regulator has managed to execute these regulatory functions in still a very skeletal legal framework made up chiefly and mainly by the PURA Act 2001. The sector specific legislation in the telecoms section is still at large and to be enacted. However significant development has been registered in the long walk to the enactment of the said Bill in that it has in the period under review been now transformed to the ICT Bill with provisions not only on Telecommunications but now extended to cover Information society issues, Dispute Resolution, Processing of personal Data and protection of privacy, Computer misuse and Cyber crime, protection of minors, Electronic records and Electronic signatures and licensing of Broadcasting Services. As a result of these new changes that have been made, The Gambia will become a pace setter if this Bill is passed by the National Assembly as it will be among the first African countries to have a converged piece of legislation on a sector that has convergence as a fixed principle in its considerations and evaluations. As the Regulator, the feeling is that if the

ICT Bill passes into law with all the necessary changes that have already been identified and extensively discussed, it will have been worth the wait. Our vital need for information from the Regulated Utilities saw the development of templates to elicit this information from operators last year. During the course of the year under review PURA has built on these templates by adding additional parameters that were found to be necessary if the information is to serve any meaningful purpose. There has however been considerable improvement in the rate of compliance of operators with their obligations to pay regulatory fees over the year with the result that all operators with the exception of two (2), have fully complied and paid all their fees for 2008. The Authority is already examining its various options vis-a-vis the two defaulting operators and expect to agree on a strategy early next year on the way forward with them. Progress still has to be registered in the water sector with the finalizing of the Water Bill still pending. One of the issues that emerged glaringly during the course of the year under review is the need to amend the PURA Act and all relevant legislations so that the Authority has the final say in the passing of Regulations. This amendment would ensure that the necessary delays associated with obtaining the signatures of the relevant Secretaries of State, who are very busy government officials within their own departments, are removed. This would also insulate the Authority and enhance its autonomy as is the case with best practice. It would also breathe life into the intent of government in enacting section 15 of the PURA Act 2001 which provides that: ‘’The Authority shall not be subject to the direction or control of any person or authority in the performance of its functions or exercise of its powers under this Act and shall act in all matters and at all times impartially.’’ As a result of the foregoing it is almost needless to say that we are still waiting for signature of the Enforcement Regulations 2007.

Regional Legal Frameworks

Telecommunications

On the ECOWAS Supplementary Acts that have been adopted by our Heads of States and

Government on 19th of January 2007, the agreed time frame of two years for their adoption

has expired. As a result from the 13-15 October 2008 a meeting of National Experts and

Ministers of Telecommunications was held in Cape Verde to consider the progress made by

various countries in the region and to chart the way forward. The objectives of the meeting

were to:

(i) review the status of the transposition of the Community Acts on

Telecommunication and ICT;

(ii) validate the legislative and regulatory texts governing electronic transactions,

cyber crime, personal data protection, and

(iii) consider the memorandum on ECOWAS Member States’ contribution to the

Global Digital Solidarity Fund (DSF).

All the fifteen Member States OF ECOWAS were represented at the meeting as well as the

following institutions and development partners:

• International Telecommunications Union (ITU)

• West African Economic and Monetary Union (UEMOA)

• L’Ecole Supérieure Multinationale des Télécommunications (ESMT) de Dakar

• Global Digital Solidarity Fund

Due to the varying degrees of progress by different countries it was resolved that an extension of one year be given to all for the harmonization processes to be completed. Once this is done, it would herald the Common Market in ECOWAS in this area.

Electricity

The Regional Electricity Regulatory Body in the ECOWAS Region is now in the process of recruitment. The technical project of setting up a regional transmission grid being implemented by the West African Power Pool (WAPP) has advanced and the existing infrastructure can be seen in the diagram below;

FIGURE 11: MAP OF WAPP ZONE B COUNTRIES INCLUDING THE GAMBIA (SOURCE WAPP).

Under the Directorate of Legal Licensing and Enforcement work is divided into three areas:

Legal Affairs Unit

This Unit handles all aspects of contract in which PURA is a party as well as internal legal documents including Bills of Sales etc. It also advises on legal issues pertaining to procurement to ensure that GPPA Rules and Regulations are adhered to.

Licensing Unit

The draft NAWEC licence submitted to the Ministry of Energy for signature by the Secretary of State had continued to undergo further consultations and changes between the Ministry of Energy and the Authority during the course of the year under review. It is hoped that after the

said changes the final draft will be ready for signature and we hope to see this legal framework put in place for NAWEC. This would be the first comprehensive legal framework this company would have to guide its operations and form the basis of regulating this utility to the benefit of the Government and people of The Gambia. PURA had received an application from TAF Group Holding company Ltd. for and distribution licence for the Brufut Housing Estate in July 2008. The Authority evaluated and processed the application and came up with a recommendation that a Distribution License be issued to this Company. The Ministry of for Energy have however not signed this licence contrary to the intent of the Energy policy and the objective of the Electricity Act 2005 as contained in its long title which provides that it is “an act to promote the development of the electricity sub-sector in The Gambia on the basis of the principles of a competitive and market –oriented economy, to regulate electricity service providers and activities of persons required to be licensed and for matters connected therewith” The authority is considering a strategy to address this issue and will issue an indication of the way forward in 2009 after adopting its strategic plan for the next five years. On a more positive note a Generation and Distribution Licence, also applied for and processed by the Authority, has been issued to Batakunku Wind Project to generate and distribute Electricity using wind energy. The issuance of this licence was also an historic event and pacesetter in that it is one of the first projects of electricity generation using renewable energy in this instance the wind, and The Authority looks at this project with great hope and interest as a pilot to be replicated in many other locations in The Gambia.

Enforcement Unit

The Authority continues to sensitize all stakeholders to participate in to the regulatory process by ALL. However different options are been considered in the case of the two defaulting operators on regulatory fee payments PURA is considering taking concrete steps against them as well to ensure compliance.

Compliance

Overall operators should be commended generally for their level of compliance. By and large the supply of requested information has been forthcoming and where there have been bottlenecks, the Authority has discerned that this goes beyond an unwillingness to supply data but appears to be unavailability of the said data or the absence of the knowledge and or systems by operators to collect the required data. This has, however, to be differentiated from instances where operators have the data but are under the misguided notion that the data is confidential or for their eyes only. The Authority realizes that some data is confidential and has put in place mechanisms to ensure that data that is infact confidential and requested by PURA is treated as such. However let us hasten to say that as the Regulator we have eyes for everything and we will request and ensure that we see everything we must and operators can rest assured that we will use all information properly and to further the ends of utility regulation in The Gambia. Having said that, we as an Authority have taken precautions by ensuring that all our professional staff take an Oath of office affirming to keep all confidential information obtained during the course of their employment confidential.

PART VI: REGULATORY ACTIVITIES

TELECOMMUNICATIONS

The key activities of PURA in the telecommunication sector during the course of 2008 include the following INTERCONNECTION Interconnection rates have proved problematic as disputes have been going on amongst operators about prices to charge for terminating calls on fixed and mobile networks. More often than not, interconnection rates are unrelated to costs and can be used to discourage competition through different own network and off network pricing structures. Although retail competition has existed, PURA determined that telecommunication network operators exercised a monopoly over the termination of calls on their networks and decided to regulate interconnection rates. This had been until recently left with the operators to resolve, with PURA only becoming involved, where operators cannot agree. This approach has result in the high and non-uniform interconnection rates between the various network operators and the impasse among some operators to negotiate and agree on interconnection rates. PURA therefore decided to take a more proactive approach to establish interconnection rate ceilings. PURA obtained the services of an ITU consultant on 26th June 2008 to conduct a study on interconnection charges between telecommunication operators in The Gambia. After a one month study during which he consulted with the relevant stakeholders, his report examined the interconnection rates of telecommunications carriers in The Gambia and concludes that:

• current interconnection rates are too high

• current interconnection rates are responsible for high off-network calling rates paid by end-users

• high off-network calling rates impose unreasonable direct and indirect costs on customers

• high off-network calling rates result in customers needing multiple phones to conduct telecommunications in a cost-effective manner

• continuing restrictions on international calling gateways impedes the development of competition in the area of international calling rates and quality of service.

The report made the following recommendations:

• current termination rates of all carriers should be unified and lowered to a target rate of 0.5 Dalasi per minute of use over a multi-step phase-down period

• other traffic-sensitive interconnection rates should lowered proportionately

• the remaining exclusivity agreements on international gateways should be ended

• all carriers should be free to make their own arrangements for international calls. Following the conclusion of the consultants report, PURA following stakeholder consultations made a determination for all operators to reduce their interconnection rates from D2.50 to D1.00 with effect from October 2008 and a further reduction to D0.50 by April 2009. It is worth noting that all operators have complied and have implemented the first and second phases. The retail tariffs of all telecommunication operators are continuously being monitored by PURA and published on the news papers on a quarterly basis.

Prepaid Tariff change On Fixed Lines

On 5th March 2008 PURA received complaints from Telecenter proprietors that GAMTEL had increased their tariff without prior notice or consultation. PURA reacted quickly by conducting an investigation into the alleged tariff increase by Gamtel. Investigations revealed that the tariff increase to fixed lines, mobile and international calls affected only prepaid and not post paid customers. During the course of investigations it was also revealed that, on the advice of Gamtel, most of the Telecenters proprietors that were still in business had converted their lines to prepaid on the GAMTEL Intelligent Network. A number of residential customers had also been encouraged by GAMTEL to change their lines from post paid to pre-paid. Prepaid customers who paid GAMTEL upfront where charged a more expensive tariff than their post paid counterparts. The tariff discrepancy is highlighted below:

• For every call made from a GAMTEL prepaid fixed line to another fixed line, it was charged D0.73 (tax inclusive) if the call lasted 1 second compared to D0.01 for post paid customers. Post paid customers were benefiting from one second per D0.01 (one butut per second) as displayed on the GAMTEL bill boards.

• For every call made from a GAMTEL prepaid fixed line to a mobile phone, it was charged D5.11 (tax inclusive) if the call lasted 8 seconds compared to D0.73 for post paid customers.

• For every call made from a GAMTEL prepaid fixed line to a customer in the UK for instance, it is charged D15.33 (tax inclusive) if the call lasted 8 seconds compared to D2.19 for post-paid customers.

This resulted in disputes between Telecenter proprietors and their customers who felt cheated by them. Many proprietors decided to close their shops which resulted in a decrease in revenue for GAMTEL within this range of customers. PURA requested GAMTEL to revert to the old tariff which was homogeneous to all customer segments. PURA’s intervention to resolve this dispute resulted in a refund to affected customers/consumers. Furthermore, they were asked to write a cheque in favour of RVTH for the benefit of customers who could not be identified. This was necessary to rectify the unauthorized increase in tariff that occurred for a period of about one month. GAMTEL complied by reverting to the old tariff and refunding affected customers. MOBILE COVERAGE Universal service and access to ICTs are important policy goals to ensure citizens can participate in and reap the benefits of the Information society. One of the universal access indicators is the percentage of the population covered by a mobile signal. This is especially important in The Gambia given the prevalence of mobile communication. PURA undertook a countrywide trek in April 2008 to determine the extent of coverage of mobile signals in the country. All cites, towns and major villages were visited, coupled with test calls and interviews of customers. The extent of signal interference to GAMCEL’s prepaid customers that were unilaterally given roaming access to Senegal was determined. The report that emanated from the trek was shared with all stakeholders. Prior to the trek, PURA had been receiving many complaints from customers who never requested for roaming service to Senegal yet had their air time used up when they receive calls in addition to being charged at an international rate whilst making local calls. This was rectified by the affected operator, GAMCEL following presentation of the trek report.

The report also concluded that while mobile coverage in the urban area is adequate, coverage in the rural areas is much lower. Nevertheless, due to mobile competition and despite numerous barriers (e.g. inadequate electricity, tax, terrain, and roads) country wide coverage by GSM operators range from 58% to 78%. The absence of a mobile signal by all three GSM operators though more prominent in the North Bank due to an inadequate national transmission backbone was found to be less than 15% in the whole country. The un-equitable geographic distribution of telecommunications infrastructure in the North and South bank of country is a cause for concern. The operators were advised to improve quality of service issues and not to advertise claims that they have 100% coverage when they have not as this was misleading customers. Operators have since engaged in expansion, engineering and optimising their networks to improve coverage, reliability, security and other quality of service related issues. PURA continues to monitor networks to ensure customers are provided service according to international standards. INTERNATIONAL GATEWAY LIBERALISATION The contribution of Communication to economic development and poverty reduction has been recognized by Government which accordingly requires the formulation of the necessary policy frameworks to encourage development of communication and its application in all economic sectors of the country The recently concluded Interconnection study by an ITU consultant made some recommendations on the liberalisation of the International Gateway to ensure that the full impact of competition in the Communications market will be felt by consumers in the form of accessible, available and affordable services. In September 2008, PURA wrote a position paper buttressing the recommendations of the study on interconnection rates and the international gateway recently carried out by the ITU consultant. The position paper highlighted the experience of a range of countries that liberalised their international gateway services. The overall impact of liberalisation in terms of price reduction, increase in traffic volumes, internet service penetration, increased tax revenues where highlighted among other benefits. It will also facilitate the provision of innovative offerings such as seamless roaming in some West African countries where operators have regional presence. EMERGENCY SERVICES Since ITU’s recommendations on the Universal Services also relates to emergency call numbers, PURA needed to make the necessary organisational arrangements best suited to the national organisation of the emergency systems in order to ensure that calls are adequately handled and answered. It is one of PURA’s duties to support the provision and widespread use of communications services, thus creating choice for consumers. Whilst PURA is committed to the provision of emergency services, and had facilitated the waiving of interconnection charges for its usage, the sustainability of the interconnection agreement cannot be guaranteed. This should therefore be looked at holistically with the possibility of sourcing funds from other agencies.

Call Centre Proposal Even though PURA through consultation with the telecommunication services providers made it possible for the emergency services to be accessed by all customers free of charge, the following deficiencies were identified in the handling of emergency services:

• Call routing to emergency service is dispersed and uncoordinated

• No log/recording of calling / caller details

• No performance monitoring of response by emergency service provider

• No accountability in terms of response, call handling, line abuse, etc

• There as no systems in place to take care of unpredictable events such as locust invasion, flood, etc:

• Customers are confused on which numbers to call to get the relevant emergency service provider. In an emergency situation, the need to remember to call 116 for Police, 117 for fire service, 118 for hospital ambulance and 199 for child help line.

• Routing of calls to the nearest service provider cannot be guaranteed

• There is a need to harmonize operations PURA therefore carried research to make organisational arrangements of a Call Centre to assist with the handling of emergency calls that can further the success of communications services, and thereby promote consumer interests. The policy aim of the Call Centre is to improve citizens’ experience of reporting or gaining advice in relation to non-emergency issues of policing, crime and anti-social behaviour by providing a single point of contact using a memorable telephone number. Consumer interests would be promoted by the selection of the most memorable number, increasing the likelihood that when required, it can be recalled by consumers On 24th April 2008, PURA undertook consultations punctuated by a series of meetings with key stake holders (communication operators, representatives form the police, fire services, UNDP, NEA, , Disaster Relief Committee under Office of the Vice President, to discuss the call centre proposal and we have therefore been requested during the course of the meetings to champion the project. The National disaster relief committee has included the concept of having a single number and Call Centre to handle emergency services in their national strategy. Customers will call 112 from their fixed or mobile phones and be routed to whatever emergency service they required. This is in line with the ECOWAS Supplementary Act which states that member countries should work towards having the universal number 112 for all emergency services which will mirror what happens in the US with 911 and 999 in the UK.

FIGURE 12: SCHEMATIC SHOWING THE NEED TO HARNOMISE THE EMERGENCY NUMBERING SYSTEM

SPECTRUM MANAGEMENT A tailor-made two weeks training workshop for the ITU Spectrum Management System for Developing Countries (SMS4DC) was held from 3rd to 14th March 2008 in Banjul, The Gambia, at the headquarters of the Public Utilities Regulatory Authority (PURA). The course was attended by the technical staff of PURA, delegates from Guinea-Bissau Communications Institute (ICBG) and Sierra Leone’s National Telecommunications Commission (NATCOM) respectively. At the end of the programme, the delegates agreed that the software is a good starting point for spectrum management until a more commercially automated system can be procured.

Single

Emergency

Number

112

Un-predictable event

Above: Windows of the SMS4DC acquired by PURA for spectrum management and monitoring. Right: Regional counterparts from Guinea- Bissau and Sierra Leone who were invited to the Gambia to a two-week training programme on the software

In addition to the SMS4DC’s core modules such as (Land) Mobile, Fixed and Broadcasting services, with a function for coordination of Earth Station, the SMS4DC software includes other modules such as ITU Notification, Frequency Allocation Tables (ITU and National), Spectrum Management tools included with SMS4DC (including propagation models) and software installation. The importance of coordination and notification to ensure protection of services was looked into and emphasized. The electronic notification function of SMS4DC was demonstrated. At the end of this module, it was decided that coordination and notification procedures should be seriously looked at and action taken as and when necessary. From the ITU website, it was observed that most developing countries do not notify the ITU of National spectrum assignments Regional Coordination Meetings The first meeting on regional frequencies coordination was held on the 29th and 30th of July, 2008 in Dakar, following the invitation of the Agency for Regulation of Telecommunications and Post (ARTP) of Senegal. The administrations of the following countries took part in the meeting:

• The Gambia

• Guinea Conakry

• Guinea Bissau

• Mali

• Mauritania

• Senegal All the above administrations expressed willingness to exchange data relating to the use of the frequencies in their border areas. This information will be exchanged electronically between the countries concerned with coordination, but copied to other countries within the co-ordination group. Furthermore, some administrations expressed their availability for others to come and share from their experiences in the field of spectrum management and monitoring, training, implementation process for the migration from Analogue to Digital Television and in addition proposed to place at their disposal the tender documents for acquisition of spectrum management and monitoring systems. Spectrum Database Work on a comprehensive spectrum database is still ongoing although a bit slow due to the difficulty in getting accurate information from users of the spectrum. PURA is optimistic that after the passing of the ICT Bill 2008 and the procurement of a basic monitoring spectrum

system which can be used to verify some of the information supplied by spectrum users the development of the database would be completed.

ELECTRICITY and WATER

Monitoring Nationwide Trek 1 As part of its mandate PURA regularly conducts tours of all the facilities in the country to ensure compliance and also to keep itself fully abreast of project implementation. In February 2008, the first Trek by the electricity group was conducted which visited all the power plants in the country from Kotu to Basse. It gave us the opportunity to assess the level of electrification and level of service delivery in the country. The main findings of the Trek were the need for attention to be paid to the following:

• Training especially in Health and Safety

• Low connectivity to the Grids

• High costs of meters for the rural population

• Mobility

• Limited vending stations to purchase pre-payment electricity units

• Water Quality issues in the Provinces.

A second Trek was conducted just before the end of the year and it was clear that serious challenges are ahead especially for rural electrification. Demand for Electricity in the provinces has increased steadily and there is need to upgrade the infrastructure. The Figure below shows the increase in demand during the course of one year. A key observation from these treks is that Universal Access to electricity is something that both PURA, the Department of state for Energy and NAWEC will have to work towards.

FIGURE 13: LOAD VS. INSTALLED CAPACITY IN THE PROVINCES (2008)

Regulatory Interventions

Health & Safety Workshop

In late 2007, PURA had developed Health & Safety Guidelines for the Electricity Sector to be implemented by all companies participating in the sector. Following a fatal electrocution of a NAWEC staff, and following our monitoring activities, PURA realised that Health & Safety standards in the sector were very low and thus made it a priority. A Health & Safety Training workshop was organised for private electrical companies and technicians working for NAWEC. During the workshop, participants were exposed to various electrical hazards and how to avoid them in the work place. PURA sourced local expertise to make presentations from the Fire Service, Red Cross, MRC (as a Case Study), and the Commissioner of Labour enlightened participants on the national injuries compensation scheme of the Government managed by the Social Security and Housing Finance Corporation (SSHFC). A key outcome of the Workshop has been that operators and NAWEC in particular are to appoint Health & Safety Officers, therefore giving workplace safety the importance it deserves. NAWEC was also presented with a laminated safety sign design and printed by PURA as shown on the right.

CFL Pilot Project

A Regulatory Intervention Using Compact Fluorescent Lamp (CFL) to help consumers save money A unique aspect of the electricity sector in The Gambia is that our electricity tariffs are amongst the highest in Africa with consumers paying about US $ 0.33 /kWh. mainly as a consequence of the high network losses, which average around 35% and the mode of generation, which is solely based on fossil fuels. PURA thus took up energy efficiency as one of the key initiatives to ameliorate the impact of high tariffs in the electricity sector. Helping consumers reduce their energy consumption has been a win-win-win solution for the regulator, the utility and consumers. The Energy Efficiency programme was two fold:

i. Consumer Awareness Programme: Since January 2008, PURA has been producing leaflets, and published energy saving tips on all national newspapers, city and community radio stations and on the TV.

ii. CFL Pilot Project: This project was to demonstrate within a pilot area that consumers can make significant savings by installing energy efficient lighting.

CFL technology offers a more cost effective alternative to inefficient lighting. CFL bulbs consume about a quarter of the energy of conventional incandescent light bulbs and also last longer, typically up to 3 years (6000hrs). The objectives of the Pilot Project were as follows:

• Reduce the losses on the low voltage feeders.

• Reduce the current levels on feeders

• Advise Consumers on how to save Energy

• Help Consumers to save energy

• Provide CFL lamps for consumers to realise Energy savings

• Reduce the unnecessary loads on the Pilot Transformer Substation

• Reduce the Voltage drop on the feeders and improve the voltage level at the consumer premises

To implement the Project, the Electricity Engineer at PURA was identified as the Project Team leader. A Project Document was prepared and circulated to all stakeholders including the utility, NAWEC the National Environmental Agency and the relevant ministries for consultations. Together with NAWEC, the pilot area was identified based on the following criteria

• Ease of access

• Level of overloading on the transformer and circuits As the project was being implemented during the rainy season, Kanifing South residential area was chosen as the best location with 150 households selected within that community. Once the pilot site was agreed upon, a questionnaire was circulated to all the households in the area to obtain baseline data on their monthly consumption, typical household appliances

and number of people per household. The meter readers of the utility company were used to conduct the survey as they were already familiar with the target area. Other data collected before and after the project include;

• Current load on the circuits,

• Voltage readings at ends of feeders,

• Kilowatt-hours reading on Meters at Substation and Consumer premises,

• Monthly bill of consumers One initial challenge was to distinguish between good and bad CFL lamps in the procurement of CFL lamps for the pilot project. The poor quality CFL lamps cost around 25 Dalasi, while the good quality lamps had a retail price of around 100 Dalasi each. Thus after a careful market survey and sampling, PURA decided to award the contract to a local electrical company, General Engineering Company. In total 2000 CFL were ordered of which 1500 pieces were 11W lamps by OSRAM and 500 pieces of 14W by Philips. Prior to the execution of the Project Team had extensive consultations with NAWEC to acquire all the baseline data from both the consumers and at the transformers as well. A questionnaire was also circulated during the subsequent NAWEC meter reading cycle at the end of August 2008. The project was launched by the Secretary of State for Trade and Industry, Hon Abdou Kolley on the 6th of September 2008. The implementation team comprised about 60 staff of both PURA and the utility, NAWEC.

The Hon. SOS for Trade & Industry installing the first CFL and returning the replaced incandescent to the Project Leader and the Director General of PURA.

Following the implementation, the response from the general public was overwhelmingly positive. PURA continued with the sensitisation campaign which triggered the Department of State (ministry) of Energy, with support from the Economic Community of West African States, ECOWAS, to request PURA to assist in scaling up the pilot project into a National CFL project to swap all incandescent lamps with CFLs throughout the country. The project was monitored for three months and the results confirmed that consumers’ consumption had decreased significantly in many households as much as 50% of their previous month’s bill. For the utility company, losses on the network also improved dramatically. The Standard for supply voltages in The Gambia is 220-230V. However, due to overloaded distribution lines it is very typical for consumers to experience low voltages at home. Current reading as well as tail-end voltages on both circuits improved considerably thus improving Quality of Service as well.

CIRCUIT DATE VOLTAGE DATE VOLTAGE

1 5TH Sep. 2008 185 (bad) 8th Sep. 2008 208 (better)

2 5TH Sep. 2008 207 (bad) 8th Sep. 2008 222 (good)

TABLE 7: SHOWING THE TAIL-END VOLTAGES ON BOTH CIRCUITS OF THE TRANSFORMER BEFORE AND

AFTER THE PILOT PROJECT

The CFL Pilot project was a success that demonstrated the competence of the regulator in initiating a national debate on ways to address the energy needs of the country. Since its completion, PURA has been receiving investors eager to promote energy efficient technologies. A company from Holland flew in to promote the use of LED lighting in The Gambia.

Batakunku Wind Energy Project – Phase 1

The Public Utilities Regulatory Authority received an application for a licence to distribute electricity at Batakunku village, in Kombo South, in December 2007. PURA immediately dispatched its engineers on a fact finding mission to the village to gather all the necessary information to process the application.

Ownership at Community level Erecting the tower and

blades The completed turbine

The project comprises of a 150 kVA generator using wind energy. The Batakunku windmill is a philanthropic project for the villagers of Batakunku which will provide electricity for the villagers when there is wind and any excess will be pumped into the transmission network and power obtained from NAWEC in case there is no wind. About eighty (80) compounds have been connected to an underground distribution network. The main sponsor is a resident German called Mr. Peter Weissfeldt and his main contribution is the engineering components such as:

• 200kVA Transformer (33kV/400V);

• The distribution network (parts of which are underground) and;

• Wind turbine.

The Village development community has contributed land as its contribution to the project. During our investigations we realised that there was an impasse between NAWEC and the Project Manager (investor) and a conclusion could not be reached on a Power Purchase Agreement. PURA held independent discussions with both NAWEC and the Project Team at Batakunku and managed to convince them that promoting renewable forms of energy was an integral objective of the National Energy Policy. Moreover, with a 200kVA transformer sitting at Batakunku for more than two years, any impasse was simply delaying providing the people of Batakunku with electricity. A final agreement was reached in April and the initialled PPA was approved by the NAWEC Board a month later. We also informed the Project Team that although the project was using wind energy, which is renewable, an EIA was still required as stipulated by the NEMA Act of 1994. NEA subsequently issued the necessary Environmental Clearance. Following the issuance of the Licence the first phase of the project was inaugurated. Implementing such a project in The Gambia comes with serious engineering challenges. Firstly because of the extended rainy season the civil works was delayed till November. Furthermore obtaining a crane capable of lifting weights up to 30m high was also a challenge.

Standards & Guidelines Both the PURA Act and the Electricity Act emphasised the need to have standards within the sector. PURA has taken advantage of its membership in international bodies to rely on best practices and adopt international standards. Copies of these standards and the minutes of the National Electrotechnical Committee are available on the PURA website for downloading. Minimum Quality of Service and Reliability Standards The minimum standards are to be applied in all the electricity industries in the AFUR member countries. The Standards were developed through international benchmarking looking at the current standards being used all over Africa. It gives an indication of the types and levels of standards and the determination of compliance and how they are to be measured. In line with well established regulatory practices, the document has been sent to the operators for consultation and it is hoped that in 2009, PURA will engage all operators for validation and continuous development of the standards. Membership of the Affiliate Programme of the International Electrotechnical Commission (IEC). Part of PURA’s mandate is not only to regulate specific industries but to protect consumers and ensure fair practice in the respective industries. Also Type Approval is a process designed to protect the end user by making sure the manufacturers and importers of equipment and appliances comply with a set of minimum safety, technical and regulatory requirements.

Operators will also make sure that equipment they bring into the country are compatable with others already in place to allow smooth integration of our infrastructure. Membership of these institutions will bring credibility to PURA as Licensees and other players in the market will know that the standards being set are international standards and this will also enhance the visibility of the institutions. A National Electrotechnical Committee (NEC) has been established with key stakeholders and it has met more than six times in the last 8 months. The work of the NEC is to participate in the work of the IEC and also towards adaptation of IEC standards.

PART VII: OUTLOOK FOR 2009 AND BEYOND After what has been a successful year for utility regulation in The Gambia, 2009 will be a challenging year as PURA intends to implement bolder regulatory interventions. There remain several issues in the sectors which will have to be addressed such as the following: SIM registration: Following concerns expressed publicly and privately by officials and private individuals of the abuse of SIM cards, a meeting was held with the relevant stakeholders to determine how we proceed nationally with the challenges evolving around SIM card registration. PURA intends to follow this process through during the course of the year. Quality of Service: A prerequisite to effective quality of service management is the availability of a monitoring tool with proven features that can accurately represent customer perception and commonly accepted standards. PURA intends to purchase a quality of service monitoring tool, which can be used to benchmark quality of service standards of communication service providers with international standards. Spectrum Monitoring: PURA intends to purchase a spectrum monitoring equipment that will enable it to monitor and enforce the most effective and efficient usage of the National Spectrum (frequency) in The Gambia. It will also ensure compliance with the communications services regulatory framework through the management and monitoring of quality of service. Type Approval: Develop and validate a type approval regime for controlling, certifying and monitoring telecommunications, radio communications and electrical equipments/ accessories that enters and are use in this country for international standards. PURA is in an advanced stage of developing a five year strategic plan (2009-2013) to guide the implementation of its regulatory mandate. The strategy development process which kicked off with a series of internal and external stakeholder retreats and consultations will review the current mandate of PURA and determine the scope of regulating sectors that are not currently being regulated namely, broadcasting, postal services and transportation.

APPENDIX: 2008 AUDITED FINANCIAL STATEMENTS

PUBLIC UTILITIES REGULATORY AUTHORITY (PURA)

FINANCIAL STATEMENTS AND REPORTS

FOR THE YEAR ENDED 31st DECEMBER 2008

AUGUSTUS PROM

CHARTERED CERTIFIED ACCOUNTANTS

REGISTERED AUDITORS

2 KAIRABA AVENUE

SERREKUNDA,

THE GAMBIA

DATE: FEBRUARY 2009

PUBLIC UTILITES REGULATORY AUTHORITY (PURA)

FOR THE YEAR ENDED 31ST DECEMBER 2008

INDEX

PART A PAGES

I. BACKGROUND 2 - 3

II. AUDIT OBJECTIVES 4

III. WORK PERFORMED 4

IV. BOARD OF COMMISSIONERS’ REPORT 5 – 6

V. INDEPENDENT AUDITORS’ REPORT AND

THE FINANCIAL STATEMENTS 7 – 8

VI BALANCE SHEET 9

VII INCOME AND EXPENDITURE 10

VIII CASHFLOW STATEMENT 11

IX NOTES TO THE ACCOUNTS 12 – 17

X FINANCIAL HIGHLIGHTS 18

XI MANAGEMENT LETTER 19 - 21

1

PART A

PUBLIC UTILITIES REGULATORY AUTHORITY (PURA)

I. BACKGROUND

The Public Utilities Regulatory Authority was established under section 3 of The Gambia

Public Utilities Regulatory Authority Act 2001.

The objectives for which the Authority was established among others are as follows:

• To provide guidelines on rates and fees for the provision of regulated public

services.

• To examine rates and fees chargeable for the provision of regulated public

services.

• To protect the interest of consumers and of public utilities.

• To monitor and enforce standards of performance by public utilities.

• To initiate and conduct investigations into standards of services by public

utilities.

• To promote fair competition among public utilities.

• To conduct studies relating to economies and efficiency in the provision of

regulated public services to consumers.

• To collect and compile data on regulated public services and their provision

necessary for the performance of the Authority’s functions.

• To provide advice in respect of regulated public services and their provision.

• To maintain a register (which may be in electronic form) of public utilities and

the services they provide.

• To publish in such manner as it considers appropriate, information relating to

the Authority’s functions and activities.

• To recommend and administer, in accordance with this Act, a licensing system

in respect of public utilities.

• To provide advice or assistance to a public utility to assist or enable the public

utility to comply with a requirement of this Act or of any license.

• To prepare or cause to be prepared any relevant documentation(including

drafts of any required legislation) necessary to give the Authority the power to

regulate public utilities in accordance with this Act; and

• Perform such other functions as may be imposed on it by any other legislation.

BOARD OF COMMISSIONERS

Mr. Abdoulie M. Touray - Chairman & Non Executive Commissioner

Mr. Anthony Carvalho - Member (Non Executive Commissioner)

Mrs. Amie Joof Conteh - Member (Non Executive Commissioner)

Mr. Alagi B. Gaye - Director General & Executive Commissioner

Mrs. Ida M. E. Jallow - Executive Director

Permanent Secretary (DOSFEA) - Non –Executive Commissioner Ex Officio

Maleh Saine - Executive Director

Mr Malamin Darboe - Secretary

2

PUBLIC UTILITIES REGULATORY AUTHORITY

(PURA)

BANKERS

Trust Bank Limited ECO Bank (G) Limited

ECOWAS Avenue Kairaba Avenue

Banjul KMC

The Gambia The Gambia

Guaranty Trust Bank (G) Limited Access Bank (G) Limited

56 Kairaba Avenue 47 Kairaba Avenue

KMC KMC

The Gambia The Gambia

REGISTERED OFFICE

1 Paradise Beach Place,

Bertil Harding Highway,

Kololi

The Gambia

AUDITORS

Augustus Prom

Chartered Certified Accountants

Registered Auditors

2 Kairaba Avenue

Serrekunda

K.M.C.

The Gambia

3

PUBLIC UTILITIES REGULATORY AUTHORITY

(PURA)

II. AUDIT OBJECTIVES

(1) FINANCIAL AUDIT

The objective of the financial audit is to express a professional opinion on the

financial statements of Public Utilities Regulatory Authority as to whether they give a

true and fair view of the state of affairs of the Authority and of its surplus resulting

from Income and Expenditure account of the authority for the year ended 31st

December 2008.

The audit will be carried out in accordance with International Standards on Auditing and

includes such tests and controls deemed necessary under the circumstances.

The professional opinion will include specific references as to whether:

(a) The subvention and other receipts for the year have been used in

accordance with the Authority’s objectives.

(b) All necessary supporting documents, records and accounts have been

kept in respect of all expenditures.

(c) The financial statements audited have been prepared in accordance with

consistently applied International Accounting Standards and it gives a

true and fair view of the state of affairs of the Authority and of its

Income and Expenditure for the year audited.

III WORK PERFORMED

In order to collect the information necessary for this report, we interviewed various members of staff of Public Utilities

Regulatory Authority relevant to the work being done.

We performed the review of the internal control procedures adopted by the Public Utilities

Regulatory Authority.

We checked the Authority’s financial position and performance based on the

accounting documentation submitted by the Authority.

We evaluated the management and staff capacity of the Authority in relation to the

management and execution of its functions as stated in section 16 (1-3) of the Gambia

Public Utilities Regulatory Authority Act 2001.

We perused The Gambia Public Utilities Regulatory Authority Act, 2001 establishing

the Authority.

4

IV. PUBLIC UTILITIES REGULATORY AUTHORITY (PURA)

BOARD OF COMMISSIONERS’ REPORT

FOR THE YEAR ENDED 31ST DECEMBER 2008

1. The Commissioners present their report and Audited Financial Statements for the year

ended 31st December 2008.

2. STATE OF AFFAIRS:

The Authority’s reports for the year ended 31st December 2008 are as set out in the

attached Financial Statements.

3. PRINCIPAL ACTIVITIES

The principal activities are to provide guidelines on rates and fees for the provision of

regulated public services, examine rates and fees chargeable and to protect the interest

of consumers and of public utilities. The objective for which PURA was established is

given on page 2 of this report.

4. BOARD OF COMMISSIONERS MEMBERS

The members of the board of Commissioners who remained in office during the year

are listed on Page 2.

5. BOARD OF COMMISSIONERS MEMBERS’ RESPONSIBILITIES FOR THE

FINANCIAL STATEMENTS

It is the responsibility of the Board of Commissioners to prepare Financial Statements

for each financial year, which give a true and fair view of the state of affairs of the

Authority and of its Income and Expenditure for that period. In preparing those

financial statements the commissioners are required to:

- Select suitable accounting policies and then apply them consistently;

- Make judgements and estimates that are reasonable and prudent;

- State whether applicable accounting standards have been followed, subject to

any material departures disclosed and explained in the financial statements;

- Prepare the financial statements on the going concern basis unless it is inappropriate

to presume that the Authority will continue in business.

The Board of Commissioners are responsible for keeping proper accounting records,

which disclose with reasonable accuracy at any time the financial position of the

Authority and to enable them to ensure that the financial statements comply with the

Statements of Standard Accounting Practices and The Gambia Public Utilities

Regulatory Authority Act, 2001.

They are also responsible for safeguarding the assets of the Authority and hence for taking

reasonable steps for the prevention and detection of fraud and other irregularities.

5

PUBLIC UTILITIES REGULATORY AUTHORITY (PURA)

BOARD OF COMMISSIONERS’ REPORT

FOR THE YEAR ENDED 31ST DECEMBER 2008

6. AUDITORS:

The Authority’s external auditors, Augustus Prom, Chartered Certified Accountants, have

indicated their willingness to continue in office pursuant to section 155 (2) of the Companies

(Gambia) Act 1955.

BY ORDER OF THE BOARD OF COMMISSIONERS

------------------------------------------

DIRECTOR GENERAL REGISTERED OFFICE

1 Paradise Beach Place,

Bertil Harding Highway,

Kololi

The Gambia.

Date-------------------------------------

---------------------------------------------

SECRETARY TO THE BOARD

Date----------------------------------------

6

V. INDEPENDENT AUDITORS’ REPORT

ON THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST DECEMBER 2008

7

AUGUSTUS PROM

CHARTERED CERTIFIED ACCOUNTANTS

___________________________________________________________________________ 2 Kairaba Avenue – P O Box 587, Banjul, The Gambia – Tel: (220) 4378146 4392376 4378147 – Fax (220) 4378148

E-mail: augustus.prom@gamtel.gm www: augustusprom-gm

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF PUBLIC UTILITIES REGULATORY AUTHORITY (PURA) ON

THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST DECEMBER 2008

We have audited the financial statements and the notes thereon set on pages 9 to 17, which have been

prepared under the historical cost convention.

RESPECTIVE RESPONSIBILITIES OF THE COMMISSIONERS AND AUDITORS

The Board prepares the financial statements for each accounting period which gives a true and

fair view of the state of affairs of the Authority at the end of the accounting period. In

preparing the financial statements, suitable accounting policies are selected and applied

consistently, and reasonable and prudent judgements and estimates are made. Applicable

accounting standards are followed. The financial statements are prepared on the going

concern basis. The Board is also responsible for ensuring that proper books of accounts are

kept and that internal control procedures are maintained in order to safeguard the assets and

prevent and detect fraud and/or other irregularities.

It is our responsibility to form an independent opinion, based on our audit, on those financial

statements and to report our opinion to you.

BASIS OF OPINION

We conducted the audit in accordance with International Standards on Auditing. An audit

includes an examination, on a test basis, of evidence relevant to the amounts and disclosures

in the financial statements. It also includes an assessment of the significant estimates and

judgements made by the Authority in the preparation of the financial statements and of

whether the accounting policies are appropriate to the circumstances of the Authority,

consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we

considered necessary in order to provide us with sufficient evidence to give reasonable assurance that

the financial statements are free from material misstatements whether caused by fraud, error or other

irregularity. In forming our opinion, we also evaluated the overall adequacy of the presentation of the

information in the financial statements.

OPINION

In our opinion, the Financial Statements give a true and fair view of the state of affairs of the Public Utilities Regulatory Authority as at 31st December 2008, its surplus and cash flow statement for the year ended 31st December 2008 and have been prepared in accordance with

International Accounting Standards and the Gambia Public Utilities Regulatory Authority Act, 2001.

AUGUSTUS PROM

CHARTERED CERTIFIED ACCOUNTANTS

REGISTERED AUDITORS

DATE: ………………………………

8

PUBLIC UTILITIES REGULATORY AUTHORITY (PURA)

BALANCE SHEET AS AT 31ST DECEMBER 2008

NOTES 2008 2007

GMD GMD

ASSETS

Fixed Assets 2 3,391,774 5,405,106

_________ _________

Current Assets

Debtors & Prepayments 3 18,265,710 18,494,748

Cash and Bank Balances 4 6,146,088 2,197,287

_________ _________

24,411,798 20,692,034

_________ _________

Less: Current Liabilities 5 (333,383) (258,000)

________ ________

Net Current Assets 24,078,415 20,434,034

_________ _________

Total Assets 27,470,189 25,839,140

======== ========

REPRESENTED BY:

Accumulated Fund 6 27,470,189 25,839,140

_________ _________

27,470,189 25,839,140

======== ========

…………………………………………………….…. DATE…………………...

CHAIRPERSON BOARD OF COMMISSIONERS

…………………………………….………… DATE……………………

THE DIRECTOR GENERAL

THE NOTES ON PAGES 12 TO 17 FORM AN INTEGRAL PART OF THE FINANCIAL STATEMENTS

9

PUBLIC UTILITIES REGULATORY AUTHORITY (PURA)

INCOME AND EXPENDITURE ACCOUNT

FOR THE YEAR ENDED 31ST DECEMBER 2008

NOTES 2008 2007

GMD GMD

INCOME

Subvention – Gambia Government 7 5,500,000 3,800,000

Regulatory Fees 8 37,987,904 19,114,208

Application Fees - 30,000

Interest Earned 30,792 22,670

Interest on Loan Repayment 13,817 4,686

Other Income 9 36,000 12,000

__________ _________

43,568,513 22,983,564

========= ========

EXPENDITURE

Staff Cost 12 7,029,017 4,396,026

Administrative Expenses 10 16,396,169 11,458,919

Depreciation 2 2,880,020 2,606,111

_________ _________

Total Expenditure 26,305,206 18,461,056

======== ========

Excess of Income over Expenditure 17,263,307 4,522,508

Write off – Regulatory Fees (Nawec) - (7,240,000)

Write off – Regulatory Fees

(Gamtel / Gamcel) 11 (15,632,258) -

_________ _________

Surplus / (Deficit) for the year 1,631,049 (2,717,492)

======== ========

THE NOTES ON PAGES 12 TO 17 FORM AN INTEGRAL PART OF THE FINANCIAL STATEMENTS

10

PUBLIC UTILITIES REGULATORY AUTHORITY (PURA)

CASH FLOW STATEMENT

FOR THE YEAR ENDED 31ST DECEMBER 2008

2008 2007

GMD GMD

OPERATING ACTIVITIES

Surplus/ (Deficit) for the year 1,631,049 (2,717,492)

Depreciation 2,880,020 2,606,111

Decrease/ (Increase) in Debtors 229,038 1,174,840

Increase/ (Decrease) in Creditors and Accruals 75,384 20,469

________ ________

Cash Inflow from Operating Activities 4,815,491 1,083,928

________ ________

INVESTING ACTIVITIES

Purchase of Fixed Assets 866,690 2,270,684

________ _________

866,690 2,270,684

_________ _________

NET CASH FLOW 3,948,801 (1,186,756)

======= ========

ANALYSIS OF CHANGES IN CASH & BANK

Cash and Bank Balance at 31st December 6,146,088 2,197,287

Cash and Bank Balance at 1st January (2,197,287) (3,384,044)

_________ _________

Net Cash Inflow/ (Outflow) 3,948,801 (1,186,756)

======== ========

THE NOTES ON PAGES 12 TO 17 FORM AN INTEGRAL PART OF THE FINANCIAL STATEMENTS

11

PUBLIC UTILITIES REGULATORY AUTHORITY (PURA)

NOTES TO THE ACCOUNTS

FOR THE YEAR ENDED 31ST DECEMBER 2008

Note 1: ACCOUNTING POLICIES

(i) Accounting Convention

The Financial Statements are prepared under the historical cost convention of

accounting and in accordance with applicable International Accounting Standards.

(ii). Tangible Fixed Assets

Tangible fixed assets are stated at cost less accumulated depreciation less impairment

losses where applicable.

(iii) Depreciation

Depreciation is charged to the income statement on a straight line basis over the estimated

useful lives of the assets. Full depreciation is charged in the year of acquisition and no

charge in the year of disposal.

The Depreciation rates are as follows:

Vehicles 25%

Computers 25%

Furniture and Fittings 20%

Others 20%

(iv) Income Recognition

Income comprises regulatory fees, contribution by the Gambia Government, External

funding and any other income accruing on accounts. Revenue grants are recognized in

the income statement on receipt. Capital grants are recognized in equity and are

released to income statement to meet related costs.

(v). Foreign Currency Transactions

Transactions in foreign currency are translated at the rates of exchange ruling at the

date of the transaction.

(v). Employee Benefits

Obligation for contribution to the Social Security and Housing Finance Corporation

administered pension scheme at a rate of 15% on employee gross earnings

are recognized as expenses in the income and expenditure account. Authority’s

contributions of D15.00 per month per employee to the social security and Housing

Finance Corporation as injury compensation are recognized as expenses in income and

expenditure account.

(vi) Loans

Loans given to the staff of the Authority are as contained in the service rules of the

Authority.

12

PUBLIC UTILITIES REGULATORY AUTHORITY (PURA)

NOTES TO THE ACCOUNTS (CONTD.)

FOR THE YEAR ENDED 31ST DECEMBER 2008

Note2: FIXED ASSETS – Tangible

Motor

Vehicles Computers Furniture Others Total

COST GMD GMD GMD GMD GMD

At 01/01/8 4,706,645 2,505,484 3,798,842 580,534 11,591,505

Additions - 458,300 40,240 368,150 866,690

_________ _________ _________ _______ _________

At 31/12/08 4,706,645 2,963,784 3,839,082 948,684 12,458,195

======== ======== ======== ======= ========

DEPRECIATION

At 01/01/08 2,402,483 1,512,739 2,198,908 72,270 6,186,401

Charge for the Year 1,176,661 728,446 767,176 207,737 2,880,020

Disposals - - - - -

________ ________ ________ _______ ________

At 31/12/08 3,579,144 2,241,185 2,966,084 280,007 9,066,421

======= ======= ======= ====== ========

Net Book Value

At 31/12/08 1,127,501 722,599 872,998 668,677 3,391,774

======= ====== ======= ====== =======

At 31/12/07 2,304,162 992,746 1,599,934 508,264 5,405,105

======= ====== ======= ====== =======

13

PUBLIC UTILITIES REGULATORY AUTHORITY (PURA)

NOTES TO THE ACCOUNTS (CONT’D.)

FOR THE YEAR ENDED 31ST DECEMBER 2008

2008 2007

GMD GMD

3. DEBTORS

REGULATORY FEES AND STAFF LOANS

Global electrical Group (GEG) 5,195,023 -

National Water & Electricity Co. Ltd. (Nawec) 10,230,147 1,846,956

Gamtel - 15,723,396

Staff Loans (Personal) 470,972 324,850

Staff Loans (Car) 1,693,611 287,500

_________ _________ 15,425,170 17,570,352

PREPAYMENTS

Rent prepaid 499,275 312,047

Insurance – Motor Vehicle 14,682 -

Insurance – Medical 162,000 -

_________ _________

18,265,710 18,494,749

======== ========

4. BANK BALANCE

Trust Bank Ltd., Banjul 2,917,330 2,197,287

Guaranty Trust Bank Ltd. 1,200,279 -

ECO Bank (G) Ltd. 999,899 -

Access Bank (G) Ltd. 1,028,580 -

________ ________

6,146,088 2,197,287

======= =======

5. CREDITORS AND ACCRUALS

Support services – rent ancillary services 63,751 65,000

Provision on Telephone bills 169,632 123,000

Audit Fees accrued 100,000 70,000

_______ _______

333,383 258,000

====== ======

6. ACCUMULATED FUND

Opening Balance 25,839,140 28,556,632 Surplus / (Deficit) for the year 1,631,049 (2,717,492)

_________ _________

Surplus c/f 27,470,189 25,839,140

======== ========

14

PUBLIC UTILITIES REGULATORY AUTHORITY (PURA)

NOTES TO THE ACCOUNTS (CONT’D.)

FOR THE YEAR ENDED 31ST DECEMBER 2008

7. SUBVENTION

This represents the total subvention received from the Government of The Gambia during the

course of the year, details of which are as follows:

2008 2007

DATE DETAILS AMOUNT (GMD) AMOUNT (GMD)

16/01/08 Subvention 400,000 200,000

11/02/08 ,, 500,000 300,000

20/03/08 ,, 500,000 100,000

08/04/08 ,, 500,000 100,000

13/05/08 ,, 500,000 100,000

10/06/08 ,, 500,000 100,000

16/07/08 ,, 500,000 300,000

01/09/08 ,, 500,000 300,000 10/09/08 ,, 500,000 600,000

08/10/08 ,, 500,000 700,000

26/11/08 ,, 500,000 1,000,000

12/12/08 ,, 100,000 -

________ ________

5,500,000 3,800,000

======= =======

8. REGULATORY FEES

These are fees from regulated public and private enterprises as follows:

2008 2007

NAME AMOUNT AMOUNT

INVOICED INVOICED

GMD GMD

Gamtel Co. ltd. 9,017,723 6,851,746

Nawec Co. Ltd. 8,383,191 5,346,956

Gamcel Co Ltd 7,080,489 3,823,192

Africell Ltd. 6,171,477 1,798,552 Comium 1,040,000 893,762

Airtip Ltd. - 50,000

Netpage Ltd. 50,000 50,000

QuantumNet Ltd. 50,000 50,000

G. E. G Ltd. 6,195,024 250,000

__________ _________

37,987,904 19,114,208

========= ========

15

PUBLIC UTILITIES REGULATORY AUTHORITY (PURA)

NOTES TO THE ACCOUNTS (CONT’D.)

FOR THE YEAR ENDED 31ST DECEMBER 2008

NOTE 2008 2007

GMD GMD 9. OTHER INCOME

Sale of tender documents 2,000 12,000

Operators ITU Day contribution 34,000 -

______ ______

36,000 12,000

===== =====

10. OTHER OPERATING COSTS

Administration & office expenses (13) 13,268,031 9,672,722

Membership Contributions 386,283 481,499 Audit Fees 103,000 70,000

Board Fees 385,580 296,360

Travel & Training Expenses 2,253,275 938,338

_________ _________

16,396,169 11,458,919

======== ========

11. REGULATORY FEES WRITTEN OFF

Regulatory fees of D15,473,396 & D158,862 of Gamtel & Gamcel respectively are written off in the Income and Expenditure account as stated in the letter from DOSFEA

referenced MF/C/278A/(4) of October 9th 2007.

2008 2007

GMD GMD

12. STAFF COST

Salaries & Wages 2,599,907 1,686,622

Income Tax 934,706 616,559

Pension Contribution 866,946 433,472

Injury Compensation 4,995 3,495 Responsibility Allowance 959,284 708,176

Telephone Allowance 232,500 185,000

Car Allowance 466,500 300,005

Residential Allowance 332,400 231,752

Acting/charge Allowance 3,465 -

Staff leave Allowance 195,064 107,195

Professional Allowance 433,250 123,750

________ ________

7,029,017 4,396,026

======= =======

16

PUBLIC UTILITIES REGULATORY AUTHORITY (PURA)

NOTES TO THE ACCOUNTS (CONT’D.)

FOR THE YEAR ENDED 31ST DECEMBER 2008

13. ADMINISTRATIVE AND OFFICE EXPENSES

NOTE 2008 2007

GMD GMD

Medical Expenses 82,929 331,243

Local Travel Expenses 55,583 44,125

Stationery/ Office supplies 519,523 537,254

Fuel & Lubricants 512,795 410,949

Rent/ Facility Mgt. services 1,153,528 1,420,638 Advertisement 160,519 165,360

Promotional Mat/ Activities 135,000 38,000

Subscription – Journal/Magazines 26,186 35,403

Postages 556 9,478

Communication 1,143,563 862,381

Stakeholder Relationship 412,961 350,877

Repairs & Maintenance 270,560 142,896

Consumer Outreach Program 560,079 150,825

ITU/TAF Meeting Expenses - 660,268 Staff Car Scheme 1,850,000 350,000

Consultancy Fees 1,308,794 179,093

Conference & Meetings 4,379,529 3,842,676

Vehicle Insurance/ License 82,880 137,010

Corporate Social Responsibilities 565,120 -

Staff Uniform 13,600 -

Bank charges / Int. Payable 326 4,246

Operators ITU Day Expenses 34,000 -

_________ ________

13,268,031 9,672,722

======== =======

17

PURA - 2008 FINANCIAL HIGHLIGHTS

-GMD 3,000,000

GMD 2,000,000

GMD 7,000,000

GMD 12,000,000

GMD 17,000,000

GMD 22,000,000

GMD 27,000,000

GMD 32,000,000

GMD 37,000,000

GMD 42,000,000

GMD 47,000,000

2006 2007 2008INCOME 21,981,741 22,983,564 43,568,513

TOTAL EXPENDITURE 12,757,331 18,461,056 26,305,206

SURPLUS / (DEFECIT) 9,224,410 -2,717,492 1,631,049

SUBVENTION -GOTG, GMD 5,500,000.00

REGULATORY FEES, GMD

37,987,904.00

INTEREST EARNED, GMD

30,792.00

INTEREST LOAN REPAYMENT, GMD

13,817.00

PURA - INCOME FOR 2008

18

PUBLIC UTILITIES REGULATORY AUTHORITY

MANAGEMENT LETTER FOR THE

YEAR ENDED 31ST DECEMBER 2008

AUGUSTUS PROM

CHARTERED CERTIFIED ACCOUNTANTS __________________________________________________________________________________________________

2 Kairaba Avenue – P O Box 587, Banjul, The Gambia – Tel: (220) 4378146 4392376 4378147 – Fax (220) 4378148

E-mail: augustus.prom@gamtel.gm www: augustusprom-gm

IN CONFIDENCE

Ref. AP/C/573/09/(02) 5th February 2009

The Board of Commissioners,

Through: The Director General

Public Utilities Regulatory Authority

1 Paradise Beach Place,

Bertil Harding Highway,

Kololi, The Gambia.

Dear Sirs,

PUBLIC UTILITIES REGULATORY AUTHORITY (PURA)

AUDIT OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST DECEMBER 2008

We have completed the audit of your Authority’s financial statements for the year ended 31st

December 2008 and wish to bring to your attention the following observations and findings,

which came to light during the course of the audit exercise with suggestions and

recommendations for possible improvement as necessary.

For your information, the purpose of the audit is to express our professional opinion on the

financial statements presented to us by the Board of Commissioners. The audit should not be

relied upon to disclose all defalcations or other irregularities, but if such exist and are

discovered in the course of the audit, they would of course be disclosed.

We bring to your attention that there is marked improvement in the Finance Department and

recommendations made last year where implemented.

We also wish to thank the management and staff of your Authority for the co-operation

accorded to us during the audit exercise.

Should you require any information on the matters raised, please do not hesitate to contact us.

Yours Faithfully,

AUGUSTUS PROM

CHARTERED CERTIFIED ACCOUNTANTS

20

1.0 PAYMENT VOUCHERS

1.1 OBSERVATION

During our assessment of the internal control system, we observed a great

improvement in the filing system in line with the requirements of the Gambia Public

Procurement Authority (GPPA); having separate files for Request for quotations,

single sourcing as well as non procurements. However, the limitation in the way it is

being done presently is that the sequence of the payment voucher numbers could not

be traced as there is no distinction between the three types of payments.

1.2 IMPLICATION

We could not trace the sequential numbering of the payment vouchers as they are

separated between three file headings.

1.3 RECOMMENDATION

We recommend that separate pre-numbered payment vouchers be maintained for the

three types of payments which would make them easily traceable in a sequential

manner.

1.4 MANAGEMENT RESPONSE

The recommendation on a separate sequential pre-numbered payment vouchers has

been adopted and a request for printing of the books to implement this

recommendation has already been done.

2.0 OUTSTANDING STAFF LOAN BALANCE

2.1 OBSERVATION

In conducting the audit exercise, we observed that a balance f D42,083 is being owed

by a former employee of the Authority since November 2006 which is still lingering in

the accounts and very little efforts were made to recover the said amount.

2.2 IMPLICATION

This is not in line with the provisions of the PURA Service Rules (Chapter XI 1104).

2.3 RECOMMENDATION

We recommend that adequate steps be taken by the Authority to recover the said

amount.

2.4 MANAGEMENT RESPONSE

A follow up letter (REF: PURA/FIN 01/2009/(043) has been delivered to the wife

(Mrs. Keway John Njie) of Mr. Lamin A.M. Njie in Brusubi Housing Estate for the

repayment of the personal loan balance of D42,083.34.

21