Institutionalizing the Business Planning strategy in Water Utilities

Institutionalizing the Business Planning strategy in Water Utilities of the Montenegrin Coast 18 May 2017, Vienna

Water Supply and Sanitation Adriatic Coast Project Kf. W € 127 mil. loan € 19 mil. grant Go. M

Vodacom’s role in the Project Agency for implementation of infrastructural projects in water and waste water sector on the Montenegrin Coast Coordinator for raising organizational, technical and financial efficiency of the local water utilities

V Phases of the Project Infrastructure Investments Providing proper wastewater disposal system for the purpose of long term economic development and particularly tourism development Institutional capacity development Rehabilitation of existing and construction of new water supply systems so as to raise the quality of services that local water utilities provide to citizens and businesses Approximation to EU standards in the field of environmental protection

Situation analysis Ø WUs prepare only annual plans Ø No decision making Ø No systematic data collection-poor quality of data Ø No action plans Ø Resistance of management and sector to make long term plans Ø Lack of controlling system Ø No monitoring system by shareholders (Municipalities) First capacity development program in 2006

Ø Big investments should be made in water sector Ø Capacity improvements of WUs were needed Employment structure Financial analysis Tariff structure Management of WUs Vodacom as a coordinator Technical improvements

Business Planning Institutional capacity development Commercial Efficiency MIS Reporting/ Benchmarking Leak detection/ Reduction of NRW Financial Management Accounting Operation and Maintenece PR/Customer Relations Campain

What is the Purpose of a Business Plan for the WUs? Ø Strategic document Ø Management tool for making decisions Ø Defining the shortcomings of performance Ø Pursuing defined goals and acivities Ø Possibility to identify problems at an early stage Ø Financial plan Ø Investments plan Ø Tariff adjustmensts Ø Action plans Ø Monitoring aspect

Vodacom as a coordinator Ø Ø Ø Difficulties Animate WU to make decisions, goals BP Define mission and vision of WUs Define strategic goal Develop a detailed action plans for each sector Monitoring Make BP as annual activity Actions Ø Form working group in each WU Ø Coordination of activities Ø Tariff adjustments Ø Investment plans Ø Improving communication between local governments and their water utilities regarding planning and implementation of investment priorities

Ø Producing 3 -5 year Business Plans serving as a company management tool for Vodacom and WUs Ø Training staff to produce Business Plans through defining measures and activities for the planned period in order to implement defined goals Ø Monitoring carried out activities defined by the BP Ø Regular annual update of the BP by the management of the WU in coordination with Vodacom

Results Ø Made guide for updating of BPs Ø Financial model for financial planning Ø Changed management staff of WUs Ø Changed tariffs for water and wastewater services Ø Reduction of NRW Ø Improved collection and billing rates Ø Trained staff Ø Established monitoring system Ø Ongoing support by Vodacom to five WUs

Monitoring of Business Plan Ø Periodic monitoring Ø Where are we? Ø Achieved results Ø Deviations (deviations from planned results/defined goals) Ø What can be done to achieve desired results?

Monitoring of Business Plan_WU Kotor

Monitoring of Business Plan_WU Kotor Konto 52 520 521 522 526 529 TROŠKOVI PLAN ZA 2014 UKUPNO OSTVARENO (jan-jun) 548, 801. 13 Troškovi zarada, naknada 1, 149, 118. 29 zarada i ostalih ličnih rashoda Troskovi zarada i naknada 999, 168. 29 475, 102. 01 zarada TROŠKOVI Troškovi poreza na zarade i Konto 128, 000. 00 62, 046. 87 naknade zarada na teret poslodavca Troškovi materijala Troškovi naknada po ugovoru o 51 1, 800. 00 622. 60 djelu 511 9, 600. 00 Troškovi materijala za izradu Troškovi upravnog odbora 4, 592. 16 OSTVARENJE % 48% 48%PLAN ZA 2014 35% 333, 865. 20 ? 48% 79, 865. 20 Ostali lični rashodi i nadoknade 51210, 550. 00 6, 437. 49 materijala, 61% 13, 000. 00 Trošak kancelarijskog ? rezervnih djelova i sitnog inventara 513 Troškovi električne energije i 241, 000. 00 goriva UKUPNO OSTVARENO (jan-jun) 115, 401. 21 OSTVARENJE % 39, 861. 33 35% ? 50% 3, 888. 02 30% 71, 651. 86 30% 513000 Električna energija 200, 000. 00 56, 950. 49 28% 513300 Troskovi goriva 41, 000. 00 14, 701. 37 36%

Outcomes

Thank you for your attention! “Let’s take initiative ourselves to make improvements, rather than waiting to be led by others. ” Sanja Bujisa Financial Analyst, Vodacom d. o. o. , Tivat sanja. bujisa@vodacom. co. me www. vodacom. me