1 / 15

National Water Company

National Water Company. Jeddah Water & Power Forum. December 7 th , 2011. Agenda. NWC Challenges and Strategic Roadmap NWC Business Development Initiatives NWC Expansion Plan. Saudi Water and Wastewater Sector is facing numerous challenges. Poor Infrastructure.

varden
Download Presentation

National Water Company

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. National Water Company Jeddah Water & Power Forum December 7th, 2011

  2. Agenda • NWC Challenges and Strategic Roadmap • NWC Business Development Initiatives • NWC Expansion Plan

  3. Saudi Water and Wastewater Sector is facing numerous challenges Poor Infrastructure • Ageing assets with unplanned interruptions • High levels of leakage • More focus on capital than operational expenditure (maintenance) Suboptimal Operational Costs • Inefficiencies in supply management and raw material consumption • Suboptimal staffing levels and compensation Shortages in Water Supply • Water rationing due to demand/supply gap • Low water pressure in network • Incomplete network coverage • Suboptimal reliability of distribution High Capital Expenditures • High capex requirements to meet water demand, expand sewerage networks and increase treatment capacity • Suboptimal project management Limited Sewerage Collection • Low collection network coverage • Need to cater for increasing water supply and consumption High Non Revenue Water and Low Collection Rates • High unaccounted for water levels • Low tariff collection Environmental Issues • High water spillages • No control over industrial effluent • Sub-standard TSE quality • Inadequate sludge disposal practices Inefficient Organization, Processes and Staff Development • Lengthy processes, especially planning, contracting and procurement • Inadequate asset management • Limited automation • Limited staff development and motivation Unsatisfactory Customer Service • Complex complaint management • Service not customer oriented • Delays in connecting customers to networks Incomplete Data • Inaccurate data on the state of the infrastructure, particularly leakages • Limited tracking of key performance indicators

  4. Rising per capita consumption, together with population growth is leading to rapidly increasing the existing water demand and supply gap Per Capita Water Supply 1) In liters/capita/day Projected Water Supply By City2) 2010-2015, in thousand m3/day 5,420 5,422 Greater Dammam 4,549 4,546 Madinah 4,265 3,859 Makkah/Taif Jeddah Riyadh 1) Total water supply divided by the population of the city 2) Total required daily supply to meet average daily demand (assuming improving supply continuity coupled with reduction in water losses)

  5. A clear strategic roadmap has been developed with five transformation themes to drive performance and health of NWC Vision “A world-class water utility company” A B C Financially sustainable water business World-class operator Shaper of water sector in KSA Performance pillars Health foundations (enablers for the future) D Streamlined organization structure with strong performance culture E Developing distinctive capabilities that will provide a competitive edge

  6. Agenda • NWC Challenges and Strategic Roadmap • NWC Business Development Initiatives • NWC Expansion Plan

  7. NWC is working on various initiatives aiming at establishing new profitable businesses to become financially sustainable Main Business Development Initiatives Initiatives Key Objectives O&M (Operations & Maintenance) • Position NWC as a leading O&M player, allowing opportunities to compete regionally • Reduce O&M costs/ promote Saudization • Expected to improve customer service and may harmonize processes and systems across cities within a cluster TSE (Treated Sewage effluent) • Effectively utilize waste water resources • Create a profitable TSE business

  8. Agenda • NWC Challenges and Strategic Roadmap • NWC Business Development Initiatives • NWC Expansion Plan

  9. City selection requirements were formulated based on the selected PPP models and NWC’s objectives City Selection Requirements Selection Criteria Description Implications Economic Efficiency • Cities with higher revenue potential and lower operating expenditure are preferred to ensure financial sustainability • Select cities with the highest economic efficiency under NWC for the period 2012-2020 Infrastructure Development • NWC should decrease its dependency on capex-related government subsidies and minimize the complexity of managing capital projects in order to reduce project delays and attract the private sector • Select cities with the relatively better infrastructure conditions, requiring the least intensive capital investment 1) Conservative, non-comprehensive estimates designed for city ranking purpose only

  10. The evaluation of cities based on infrastructure development and economic efficiency, results in the following city prioritization City Selection Matrix Cities Mapping Selection of Metropolitan Cities Tabuk Yanbu Hofuf & Mubaraz Madinah Al Kharj Greater Dammam Infrastructure Development Buraidah & Onaizah Khamis Mushait & Abha Hail Najran Hafr El Baten Cost Recovery 1) Including Riyadh, Jeddah, Makkah/Taif and Madinah contributing 18.7 %, 13.1 %, 9.8% and 4.4% respectively to national coverage

  11. Clustering cities promotes scale efficiencies, balanced competition, service consistency and control City Clustering Advantages Advantages Description Economies of Scale and Scope • Aggregation creates efficiencies such as shared overhead • Staff exchange, expertise and knowledge sharing between cities of the same cluster would fill gaps in skills and capabilities and reduce ramp-up period upon privatization Balanced Competition • Allocation of clusters of equivalent operational scale to the operating companies would facilitate comparison and benchmarking of performance between private operators Customer Service Consistency • Having the same operator across different directorates will reduce customer service discrepancies between covered cities Better Control • Granting fewer contracts minimizes the effort required for monitoring the performance of contractors

  12. = Part of the 60% target national coverage = Not part of the 60% target national coverage Operating contracts could be granted by regional cluster to improve the offer to private players and decrease complexity for NWC Suggested Regional Clusters Including City Ranking Based on Overall Ranking in Attractiveness Matrix Distribution of Cities Across KSA (Cities in Grey not needed for 60% National Coverage) Hail Province Tabuk Province Hafr El Baten Qassim Province Tabuk Hail Hafr El Baten Buraidah & Onaizah Hail Greater Dammam Tabuk Buraidah & Onaizah Madinah Province Eastern Province Greater Dammam Riyadh Hofuf &Mubarraz Madinah Al-Kharj Yanbu Riyadh Hofuf &Mubarraz Makkah & Taif Madinah Makkah Province Yanbu Al-Kharj Jeddah Makkah & Taif Jeddah Khamis Mushait & Abha Najran Province Khamis Mushait & Abha Najran Asir Province Najran Clustering Methodology Fourteen metropolitan cities were first assigned to their different provinces (9) across the Kingdom Then, grouping of neighboring administrative regions into clusters of equivalent operational scale and evaluation of clustering options resulted in the selection of the 4-cluster configuration

  13. This privatization growth strategy is fully in line with NWC vision Proposed Privatization Growth Objectives National Coverage • Become the dominant player in the water and wastewater sector in Saudi Arabia • Cover more than 60% of the population within the next 10 years by taking over select metropolitan cities Knowledge Transfer and Development of Capabilities • Bring knowledge of international best practices • Develop and build on existing operational and management capabilities (e.g. asset management) Customer Service • Improve operations (e.g. rationing) • Increase service levels and customer satisfaction • Introduce new technologies that improve efficiency and performance Financial Sustainability • Minimize dependence on government subsidies through rationalizing capital and operational expenditures and increasing revenues and collection Saudization • Contribute to the employment and development of Saudi nationals • Optimize the use of the national workforce Economic Development • Encourage competition in the sector • Ensure high transparency and accountability • Promote advanced privatization models Operating Model • Support the evolvement of NWC into a holding company • Provide support or transactional services, subject to economies of scale, through shared services

  14. NWC has defined the key success factors for the privatization growth strategy along three dimensions Contract Definition and Management Government Support Organization and Capabilities Privatization Growth Strategy Key Success Factors A B C • Appropriate allocation of risks and comprehensive contract terms • Accurate baseline and achievable performance indicators • Proper control post contract signature • Management of public expectations from contracts • Timely availability of funding • Enforcement of TSE regulations and groundwater abstraction policies to promote wider TSE usage • Restructuring of NWC to better manage its growth (review of operating model, organization structure, governance and processes) • Development of competencies • Improved project management capabilities • Systematic knowledge transfer across the organization

  15. Thank You

More Related