Guyana Water Incorporated

Annual Report

Annual Report 2008
During the year under review the Guyana Water Incorporated (GWI) overcame many challenges as it continued to pursue its’ Mission, viz., the delivery of safe, adequate and affordable water ensuring safe sewerage systems for improved public health and sustainable development. A non exhaustive list of the challenges faced by the company include the following:-

* A high proportion of Non Revenue Water (NRW)
* High cost and the unreliability of the power supply and
* A paucity of critical skills.

Several strategic initiatives were taken to meet the challenges with some having almost immediate rewarding results, while others are expected to come to fruition in the near future.

The implementation of “The Turnaround Plan” was responsible for a reduction of Non Revenue Water as the number of metered consumers expanded, a number of service connections were upgraded and the customer database was regularized. Problems with the billing system and the accounting software were also resolved. The outcome was that billings increased and revenue from G$2,821M in 2007 to G$5,272M in 2008, an 87% increase. Inspite of these results the company ended up in the red owing to several factors, including escalated costs.

Consistent with the “Turnaround Plan,” a capital investment programme was pursued which resulted in improvement in water supply to a number of communities across the length and breadth of the country. A capital investment programme is planned for the improvement of the sewerage system in the Georgetown municipality. The report gives details of the achievements. The company has been acquiring information technology and supporting the training of employees as a means of enhancing productivity. The net assets for the company at the end of the reporting period stood at a value of G$21,7678B compared to G$19,633B in the previous year.

Good governance, corporate responsibility, transparency and fairness that have helped to repair the image of the corporation must be maintained for continued improvement in the fortunes of the company. There is still much work to be done to take the corporation to an acceptable level of performance.

On behalf of the Board, I should like to extend thanks to everyone who contributed to the achievements of the GWI in 2008. I would also like to acknowledge the commitment of the Board, Management and Staff who have contributed greatly to a successful year through a critical thinking and assiduity they brought to the company. Our gratitude goes out to the many contractors and our loyal customers, the Government and the donor community without whose support our tasks would have been that more daunting. We look forward to working together with you for the good of all in the years ahead.

Dr. Cyril Solomon
Chairman, Board of Directors

Annual Report 2007

The year 2007 was an exciting one for the Guyana Water Incorporated, (GWI), as the corporation sought to transition to a higher level of efficiency, sustainability and financial
viability. The beginnings of improvements could be detected in spite of the upheavals caused by the transition.

The truncation of the company’s relationship with the management contractor, Severn Trent Water International (STWI) created a management vacuum which was filled by a team of young managers supported by the Board of Directors. The management team was constrained to take action to reassure the donor community as a consequence of an external audit report that made several recommendations for the improvement of the enterprise and threatened the funding of several projects.

Identifying the need for a plan of action that would guide the water and sewerage sector to it’s short, medium and long term goals, the Corporation consulted key GWI officials and stakeholders advocating the need for fundamental reform of the operations of the enterprise. The key elements of the reform were identified as:

• The reduction of Non Revenue Water
• The Improvement of Collections
• The Metering of Customers
• The Rationalized Use of Boreholes and
• The Improvement of Sewerage Disposal
• Improved Customer Service and Public Image

As a result of the consultations the corporation arrived at the instrument named “The Turnaround Plan,” the road map to guide GWI to greater efficiency, sustainability and financial viability. The foci of the Plan are:

• Improved Governance
• Human Resource Development and Institutional Strengthening
• Improved Application of Information Technology
• Improved Financial Management Financial Integrity and
• The Consolidation of Present Operation

The plan placed emphasis on improving the present distribution network by reducing leaks and re-establishing pressure zones, improving the commercial operations of billings and collections and extracting greater efficiencies from pumping systems in the short to medium term.

For the furtherance of the plan a new Board of Directors and a Managing Director with a wealth of experience in the water sector going back to GUYWA, the antecedent of GWI, were appointed in August and September consecutively. These appointments gave a boost to the image and performance of the company.

Though too early there are signs of improvement in the fortunes of the company. The Donor community has expressed greater confidence in the corporation as the recommendations of the audit have been addressed. Suspended funding has been resumed and the Donors including DFID, the EU and IDB have committed funds to support the Turnaround Plan.

The road ahead will not be easy for much works still has to be done to take the corporation to an acceptable level of performance. The customers will develop greater confidence in the corporation as product availability and quality improve and the shareholders will become satisfied as the operating efficiencies improve and capital projects are better managed.

This has been an exciting year for the company but more is yet to come. The corporation will continue pursuit of the goals of the Turnaround Plan and the achievement of the Millennium Development Goal that pertains to the universal availability of potable water.

The institutional changes that are consonant with the advancement of the corporation will be pursued assiduously. On behalf of the corporation I should like to express sincerest gratitude to everyone who contributed to the achievements of the corporation in 2007 and look forward to continuing to work together with you for the benefit of the customers and Guyana in the years ahead.

Dr. Cyril Solomon
Chairman, Board of Directors

Annual Report 2006

The past year brought into greater focus the strategic and operational development of Guyana Water Inc. Many of the challenges of the previous year still persisted; however, there were several significant developments during the year which served to improve the overall outlook of the company. Human Resources, Operations, Asset Development (capital works) andCustomer Service were some of the areas where there were positive developments. These provided critical indicators to the progress of the utility in fulfilling its mission to provide improved quality and levels of service to its customers throughout the country.

There were concerted efforts between the Board and management to complete the 5-year Strategic Plan for GWI during 2006. This Plan is vital for the strategic development of thecompany and, based on the GWI Management Contract, was two years overdue. A final draft of the Plan was submitted by mid-year and was forwarded to the Minister of Housing and Water for consideration by Government. The overarching strategy of the plan was to harmonise the strategic targets and indicators with the GWI License whilst recognizing the realities confronting the utility.

The new Customer Information and Billing System (CIMBS) was finally procured and the contract signed early in the year. Installation and training was ongoing during the first half year. The system was commissioned around mid-year and implementation and roll-out proceeded on phased basis towards year-end. It was expected that the system would be fully operational in all Divisions by year-end and the benefits of improved billing and collections and all associated customer relations matters will be realised during next year.

Notwithstanding these developments, the financial performance of the company continued to be disappointing. Billing and collections were below targets and the accounting systems faltered due to failure of the newly installed accounting system compounded by staffing problems. This impacted negatively on all aspects of the company’s financial operations and caused serious difficulties for the Board, Donors and the Auditors. The Board and Management continue to work with the various stakeholders to resolve this situation to develop a sound, professional and
efficient Finance Department. The strengthening of the financial system is a top priority for the utility during the coming year.

GWI managed to improve its service delivery and levels of service to consumers through
systems improvements and capital works. The Operations and Asset Development Teams vigorous prepared and executed numerous projects aimed at improving transmission and distribution systems and expanding services to previously un-served communities. Many areas benefited from improved water pressures through our leak detection and repair programmes.

Several major investment projects were finalized for implementation in 2007, including the Japanese-funded Corriverton Water Supply Programme. The Board anticipates that the coming year will bring significant improvements in the company’s performance. GWI look forward to the continued support of all our customers and stakeholders in the future.

Dr. William Wilson
Chairman, Board of Directors

Annual Report 2005

Several major challenges confronted GWI during 2005 as the utility struggled to consolidate the gains of the first three years of existence. The expected internal challenges of an infant company undergoing transformation were compounded by the challenges of responding to the serious environmental threats imposed by the prolonged
flooding of the coastland Region 4 (GWI Division 3) during the first half of the year. As a public utility, GWI was obligated to fulfill its role of ensuring adequate and safe water and sewerage services to the affected communities throughout this catastrophic event, while continuing to fulfill its obligations to its customers throughout the rest of the country. The Management and staff deserve much commendation for their performance to that crisis. In striving to position itself towards achieving its vision and mission the Utility continued to experience many difficulties. The performance during the year, in terms of achieving its organizational targets, fell below expectations in most areas. The financial performance of the company was particularly disappointing. This was also the case in the area of Customer Relations and Commercial Services. Billing and collections were below targets, attributed mainly to ongoing problems with the existing computerized Billing system which caused severe delays to bill production. Despite the approval of a tariff increase by the Public Utility Corporation in July 2005, the Utility was unable to capitalise on this to enhance its financial position due to these problems. Further, our inability to fill critical senior vacancies coupled with cash flow problems also contributed significantly to this poor performance.

On the positive side, a new Managing Director, Mr. Michael Clarke, assumed duties at the beginning of the year and injected renewed vigour and enthusiasm to the company. There were also important appointments at the Executive Directorship level. The management of the company was restructured and operational changes implemented to ensure more effective functioning and improved service to customers. Relationships between the Board and Management also improved significantly facilitated by several important internal and external interventions.

The procurement process for the new billing system was well advanced and a suitable customer information and billing system (CIMBS) was recommended for acquisition by the end of the year. This, along with the implementation of a new accounting system, is anticipated to significantly enhance the quality and timeliness of billing and all associated accounting and customer relations matters during the next financial period. The company, its shareholders and customers could therefore look forward to improved performance and sustained development in 2006.

William Wilson (Dr.)
Chairman, Board of Directors

Annual Report 2003

The year 2003 was one of consolidation for the newly established Guyana Water Incorporated. The much anticipated DFID Performance-Based Management Contract took effect on 1st January with Severn Trent Water International (STWI) assuming full responsibility for the day-to-day management of the company. The transition to this status was well accomplished by the interim management team under the guidance of the Board of Directors during the latter half of 2002. The necessary instruments to facilitate good corporate governance within the utility were instituted, and the foundations for effective management of the utility were well established. Thus, GWI embarked on its mission of providing improved and affordable water supply and sewerage services to its consumers on a sound footing.

The performance targets for the Management Contract were synchronized with the operational targets specified in the GWI License issued by Government in November 2002. The first year of the Management Contract provided great challenges with the new management forging ahead with the reorganization and consolidation of the utility and mobilizing the necessary resources to satisfy the performance targets specified in the Contract and GWI License.

The Management Contract required that STWI provide five (5) long-term positions to spearhead the Corporate Management Team. These included the Managing Director, three Executive Directors (Operations, Corporate Planning and Customer Relations & Commercial Services) and the Hinterland Manager. Three of these posts (Managing Director, Executive Directors of Operations and Corporate Planning) were occupied throughout the year. However, the positions of Customer Services Executive Director and Hinterland Manager remained unoccupied for the most of the year; the original candidates having resigned within two months of being mobilized. This situation impacted negatively on the successful implementation of the Management Contract and the performance of the company, especially in these critical areas. Mobilization of various short-term experts as provided for in the contract somewhat mitigated the impact of these vacancies.

Within the company there was noticeable excitement among staff as the change management processes took effect. Positive attitudinal changes were evident as workers developed a greater sense of pride in their company with its newly defined vision and mission. The advent of the Management Contractor served to raise expectations of staff at all levels and was manifested by enhanced efforts throughout the company. There were, as expected, some negative influences which sought to impede the change management process and retard the development thrust. However, these forces never gained a foothold within the utility and proved to be futile.

The financial status of the company remained critical throughout the year. The cash flow situation was severely affected by GWI’s inability to achieve revenue collection targets. Operational costs, exacerbated by the extremely high electricity costs, impacted negatively on the liquidity of the company. Management continuously lamented the lack of working capital and its effect on the ability of GWI to honour its commitments to its creditors.

There were some successes within the utility during the year. The company continued to benefit from heavy financial inputs from donors in the form of loans and grants for capital projects. These included projects funded by DFID, EU, IDA and CDB. Major projects completed during 2003 included the Pouderoyen Water Treatment Plant (funded by the European Union), the Bartica Major Scheme (funded by the World Bank), LBI Major Scheme (funded by the World Bank), and Eccles Major Scheme (funded by the World Bank). The Linden Emergency project was initiated with funding provided by the European Union to address emergency rehabilitation works to the Linden water supply system. Several minor schemes funded through Government of Guyana funds were also executed throughout the coast land and in the hinterland. The completion of these capital projects resulted in improved levels of service and brought much relief to consumers who hitherto experienced great inconvenience due to inadequate water supplies.

Despite the challenges, the utility has been able to consolidate and forge ahead with its mission to provide improved service to its customers. The new STWI Head management team has established control and has remained focused on satisfying its contractual obligations. Its plans for the management of the utility and guiding it towards satisfying its License targets were well conceptualized in the Inception Report which was presented after the first six months of the contract. For the final quarter of the year all five long-term positions were occupied and these were ably supported by the local Executive Directors of Finance and Human Resources. The critical vacancies within the Customer Service Department were filled and this promoted improved performance within this critical department.

The Board is encouraged by these developments and continues to provide support and promote a harmonious working relationship with management. The Board is committed to provide all necessary support to facilitate management in achieving its objectives and to motivate staff to perform in an atmosphere of job satisfaction. The success of GWI as a utility is highly dependent on the support of all stakeholders and, in particular, its customers playing their role in contributing to the development of the company. GWI attaches strong value to this partnership with its consumers.

As Chairman it is my desire to promote strong relationships with all stakeholders and together ensure that our company progresses steadily towards achieving its targets for the succeeding years of its License.

William A. Wilson (Dr.)
Chairman, Board of Directors

Annual Report 2002

On June 1, 2002 a new water utility was born in Guyana. The Guyana Water Incorporated was established by amalgamating the two entities; Guyana Water Authority (GUYWA) and the Georgetown Sewerage & Water Commissioners (GS&WC) that had faithfully provided water services to the nation in the past. This merger represented a significant milestone in the Guyana Water Sector Modernisation Programme (GUYWASP), which was initiated by the Government of Guyana in 1998 with the support of the donor community. The donors actively involved in this programme were the Department for International Development (DFID), the Inter-American Development Bank (IDB), the World Bank (IDB), European Union (EU) and the Caribbean Development Bank (CDB).

This establishment of GWI was predicated by the need to integrate and consolidate resources to foster service improvements and expanded coverage while achieving economies of scale and financial sustainability. We all started the year brimming with optimism about the prospects for our new company. Massive investments over the years in the water sector through GS&WC and GUYWA, had failed to satisfy the needs of Guyanese consumers for enhanced potable water supply and sanitation services. Many coast land communities were suffering from poor levels of service and water quality; whilst the majority of hinterland communities were experiencing depleted or zero service altogether. This situation had to be redressed in keeping with the National Development Strategy and the Millennium Development Goals - to halve by 2015 the proportion of people without access to sustainable safe drinking water and sanitation. The formation of GWI is intended to propel Guyana towards achieving these goals and it is anticipated that these issues will be satisfactorily addressed within the MDG time frame.

Amidst a swirl of skepticism, Government and the donor community decided that the new utility will be managed for the first five years by a Management Contractor. Following an international tendering process and extensive transparent negotiations, Severn Trent Water International (STWI) has been contracted to manage the utility from January 1, 2003. A transition management team comprising Guyanese managers was installed to set the foundation for the new company and ensure continuity through to the initiation of the Management Contract. Despite some difficulties, trials and tribulations we have managed to complete the transition and are forging ahead with consolidating and strengthening GWI.

From January 1, 2003 Guyana Water Inc. had a new management spearheaded by STWI under a Performance-based Management Contract. The Management Contractor was responsible for the day-to-day management of GWI over the next five years (2003-2007) and was expected to achieve significant improvements in the operational and financial performance of the utility on an annual basis. This was intended to be achieved through the positioning of five long-term Directors on the GWI Corporate Management structure and the infusion of several short-term experts to provide specialist support in various areas throughout the contract period.

Two local Directors complemented the new Corporate Management structure. An investment plan with significant financial inputs from the various donors (DfID, IDB, CDB, EU, IDA) has been formulated to ensure success of this programme.

We have made it successfully through the initial gestation period thanks to the sterling efforts of our staff, the confidence of our shareholders - Government - and patience of our consumers. Henceforth, with the guidance of our new management team, we should be well poised to provide improve water and sanitation services to the entire nation in our quest to achieve the Millennium Development Goals as it relates to Guyana.

On behalf of the Board of Directors, I extend an enthusiastic welcome to the new Corporate Management Team. We are optimistic that GWI will consolidate and mature into a successful utility and accomplish its corporate goals during the next five years.

William A. Wilson (Dr.)
Chairman, Board of Directors