WSSB Capacity Enhancement Workshops 1

1. The Uganda Performance Contract & Purpose 2. Performance Key Elements 3. Water Board’s Rights & Obligations 4. Ministry of Water & Environment’s Rights & Obligations 5. Dispute Resolution 6. Annex & Schedules 2 WSSB Capacity Enhancement Workshops

3 MWE Water Board Customers Private Sector Performance Contract Management Contract Customer Contract WSSB Capacity Enhancement Workshops

 Contract between Minister of Water and Environment and local Water Board to transfer care and management of water and sanitation system to Board 4 WSSB Capacity Enhancement Workshops

 Defines: ◦ Work to Be Done and Term ◦ Amount to Be Paid for the Work ◦ Performance Standards ◦ Adjustments for Changes ◦ Allocation of Risk ◦ Insurance and Bond Requirements ◦ Termination for Cause Uganda Small-Scale Infrastructure Providers - Water Contract Administration Training5

 Definition of Terms Used and Abbreviations  Recitations (who has authority and laws) ◦ Local Governments Act—Requires transfer of water and sanitation responsibilities from central to local government ◦ Water Act—Requires the Minister of Water and Environment (MWE) to enter into performance contract with local water board 6 WSSB Capacity Enhancement Workshops

 Validity of the contract ◦ Term of contract (dates of starting & finishing) ◦ Ability of the MWE to renew the contract with the Board  Purpose of the contract ◦ Sets forth Board’s role, duties, performance targets, and dates for achieving goals 7 WSSB Capacity Enhancement Workshops

 Achieve minimum performance standards as outlined as Key Performance Indicators (KPI)  Water sales  Nonrevenue water  Collection efficiency  Water quality compliance  Achieve minimum satisfactory score on technical inspection by MWE 8 WSSB Capacity Enhancement Workshops

 Properly maintain water assets (pumps, pipes, meters, borehole…)  Board shall subcontract day-to-date operations to private sector company  Charge and collect tariffs in accordance with Tariff Policy  Allow MWE to inspect assets of Board 9 WSSB Capacity Enhancement Workshops

 Prepare a 3-year Business plan, which is updated each year ◦ Plan objectives ◦ Services provided by Board ◦ Performance standards to be achieved ◦ Revenue and cost forecasts and financial reserves to be kept ◦ Required capital forecast 10 WSSB Capacity Enhancement Workshops

 Establish escrow accounts for investment and operation of the water system ◦ Pay management fees to private-sector operator ◦ Pay Board’s operating expenses including taxes 11 WSSB Capacity Enhancement Workshops

 Prepare an Annual Report to MWE: ◦ Report of prior year’s operations  Performance indicators  Other information required by MWE ◦ Financial statements for year  Audited financial statements  Assessment of costs of carrying out community service obligations 12 WSSB Capacity Enhancement Workshops

 Provide overall management of the Water Board and assess Board’s KPI performance  Review reports from the Water Board  Amend service standards and recordkeeping of the Board, as required  Provide capital for needed assets  Terminate the Performance Agreement if Water Board has not complied 13 WSSB Capacity Enhancement Workshops

 Disputes referred to the Director DWD for resolution by Minister  If Minister is unable to resolve dispute within 14 days, will notify Board of additional procedures under Arbitration and Conciliation Act of Uganda. 14 WSSB Capacity Enhancement Workshops

 Specific clauses for particular Water Board ◦ Dates and duration of contract ◦ Number of Water Board members ◦ Amount of capital expense (CAPEX) to be deposited into investment escrow account ◦ Payment to Water Board based upon number of members 15 WSSB Capacity Enhancement Workshops

1—Authority of Board and Service Area 2 – Assets Managed by Water Board 3 – Performance Indicators 4 – Capital contributions to escrow account 5 – Performance Review Methodology 6 – Terms of Reference for Water Boards 7 – Standards of Service and Recordkeeping Requirements 16 WSSB Capacity Enhancement Workshops

17 WSSB Capacity Enhancement Workshops