1. Water Management Initiative (WMI)
Performance Improvement Plan for Yarmouk Water Company
Dead Sea, March 20, 2017

2. Water Management Initiative
Performance Based Contract
Duration of 5 years, ends on April 2021
Total amount $29 Mill. TA + $6 Mill. Inv.
Focuses on Yarmouk, Zarqa & JVA but covers the whole Kingdom
Tetra Tech with Orient, SEGURA, W4LS and Jordan Social Marketing Center

3. Approach: Catalyzing Activities
Substantial improvement in the water sector
Under existing Jordanian law and national policy
Lay the groundwork for broader sector reform
Emphasis on building autonomy
Increasing performance-based accountability
Moving toward commercialization

4. Aligned with the National Water Strategy
More decentralization, commercialization and consolidation of water and wastewater services as well as increasing private sector participation (Pg. 2).
The Strategy aims to create new momentum for the sector to be better prepared; do business differently and more efficiently (Pg. 6).
Each operating agency/unit that is part of MWI would have a clear purpose and incentives to perform effectively and efficiently, a sustainable source of funding and effective regulation. (Pg. 19)

5. Evolution of the Water Sector in Jordan
Before 1990s
Early 2000s
2017
Management Contract for Amman
Water Authority of Jordan
Water Authority of Jordan
YWC
Reg. Co. North
Aqaba Water Company
Miyahuna +
Zarqa + Madaba
Reg. Co. Center
As Samra
BOT
Disi
BOT
As Samra BOT
Red-Dead
BOT
AW +
Ma’an
Reg. Co. South
Population: 4 Mill
Population: 9.5 Mill

6. Yarmouk Water Company (Operation and Maintenance)

7. Yarmouk Water Company Operating Income (000 JOD)
2011
2012
2013
2014
2015
2016
Revenues
26,360
27,676
28,615
34,630
36,488
38,429
Expenditures
32,653
38,863
39,854
50,822
54,601
56,589
Operating income
-6,293
-11,186
-11,239
-16,192
-18,113
-18,160

8. YWC Financial Indicators of Operating Performance
2011
2012
2013
2014
2015
2016
Cost recovery
81%
71%
72%
68%
67%
Net losses /revenues
-45%
-68%
-60%
-63%
-67%
-66%
Wages and electricity/revenues
84%
99%
110%
117%
122%
121%

9. Net Increase of Revenues 2011-2016
Increase of Revenue from tariffs
Increase of Customers
Net increase
Total Revenues Increase
46%
26%
16%
Revenues from Water
38%
24%
11%
Revenues from sanitation
97%
48%
33%

10. YWC Increase of Operating Costs 2011-2016
Increase of operating costs
Wages and salaries
73%
Electricity
144%
Maintenance
-64%
Others
15%
Total costs

11. WMI Support

12. Performance Improvement Plan
YWC’s Relaunch
Financial Restructuring
ERP
System Implementation
Workforce Achievement Program +
New Headquarters + Infrastructure

13. WMI Activities supporting YWC
Debt Collection Campaign (creation of incentives, procedures)
Organizational structure (min. qual., job descriptions, recruitment)
Business Plan 2017
Finance and Accounting Procedures and HR procedures
X7 - Billing and Collection system
Update of Oracle ERP system in finance, procurement and HR
Financial agreement with WAJ
FARA accreditation
New building guidelines
Training (strategic planning, finance and accounting, customer services)

14. YWC

15. Projected Operating Revenues (000 JOD)

16. Projected Operating Expenses (000 JOD)

17. YWC Projected Operating Loss before Subsidies (000 JD)

18. Factors Contributing to Decrease in Operating Loss (Mill. JOD)
2017 Operating Loss
-19.8 1
Increase in water revenues from 40 MM3 of additional water supply per year
11.7 2
Decrease in NRW from meter replacements and water main rehabilitation projects
7.2 3
Retirements and normal attrition of approximately 200 employees 4
Improvement in customer collection rate from 91% to 97%
1.3 5
Increase in sewer revenues and 3% sewer tax from more sewer connections
1.2 6
Decrease in electricity expense due to PMU pump replacement program 7
Increase in electricity expense due to additional water supply
-12 8
Operating expense of Wadi Arab project starting in 2021 -4 9
Labor and vendor inflation, net of other minor improvements
-3.5
2021 Operating Loss
-17.4

19. Electricity Tariffs vs. Water Tariffs

20. Projected Cash Flow Before and After Subsidies (Mill. JOD)
2017
2018
2019
2020
2021
Operating loss
-19.8
-17.9
-17.1
-14.5
-17.4
- Capital maintenance expenditures
-8.0
-8.2
-8.4
-8.6
-8.8
- Loan principal payments
-2.3 -
= Cash shortage before subsidies
-30.1
-26.1
-25.5
-23.1
-26.2
- Electricity subsidy
17.1
17.6
18.5
23.8
- Capital maintenance subsidy
8.0
8.2
8.4
8.6
8.8
- OPEX subsidy
5.0 .3
= Net cash flow
1.4
9.3
6.4