1 NWC Report 2011afixe - Compressed

National Water Commission Annual Report 2010/2011 3
TABLE OF CONTENTS
Vision and Mission Statements 1
Core Values and Value Propositions 3
Message From The Honourable Minister of Water And Housing 4
Message From the Chairman of the Board of Commissioners 5

TABLE OF CONTENTS
Board Of Commissioners (2010 - Present) 6
Board of Commissioners (2007-2010) 7
Message From the President of the National Water Commission 8
Senior Management Team 9
Report From the Chairman and President 11

Transformation & Change
Coverage & Service Reliability
Projects Implementation
Regulatory Compliance and Accountability
Operating Efficiency
Financial Viability
Parish Improvement Plans
Salaries and Emoluments for Senior Management 25
Payments Made to Board Members 26
Financial Performance Explanations 27
Audited Financial Statements 30
4 National Water Commission Annual Report 2010/2011

NWC Core Values
HI-TAPS
1. Honesty
CORE VALUES / VALUE PROPOSITIONS

2. Integrity
3. Transparency
4. Accountability
5. Professionalism
6. Self-Sufficiency
NWC Value Propositions

We promise our valued CUSTOMERS easy access to high
quality potable water and wastewater services while
being responsive to their needs.
We promise to work with our REGULATORS in being

compliant, accountable and transparent in all we do as
we provide value for money.

Message from the
Honourable Minister
of Water and Housing
Area (KMA) Water Supply Project, and the Kingston Wa-
ter and Sanitation Project.
Additionally, efficiency improvement projects funded

under the special K-Factor programme were under-
MESSAGE FROM THE MINISTER
I am pleased to be associated with this official presen- taken.

tation of the Financial Statements and Annual Report
for the National Water Commission for the financial In addition, the Commission improved process tech-
year 2010/2011. nology at water treatment facilities; developed and ex-
panded water supply systems to extend the service to
This Report contains information on the performance areas deemed economical and feasible, and completed
of the Commission in carrying out its mandate to pro- ongoing projects.
vide potable water and centralized wastewater services
to Jamaicans. It outlines the many positive steps being The National Water Commission continues to play a
taken to overcome the challenges, fulfill commitments critical role in realizing this governments policy objec-
and better serve our customers across Jamaica. tive of providing acceptable levels of potable water and
sewerage services to the people of Jamaica.
This Government is fully aware of the importance of
providing an adequate supply of water in order to im- To borrow a quotation from U.S. Representative Bud
prove of the quality of life for Jamaicans. We aim to ad- Shuster Clean Water is not an expenditure of govern-
here to the time frame set out by the Millennium Devel- ment funds; Clean water is an investment in the future
opment Goal for water by ensuring that all Jamaicans of our country.
have access to potable water by 2015.
I challenge the organization to provide an even greater
Significant changes took place at the National Water level of service as it continues to contribute to national
Commission during the financial year. A new Board of development.
Commissioners was appointed in November 2010 and
in January 2011 a new President was selected to over-
see the NWCs transformation.
..
The NWCs capital works programme throughout the Hon. Dr. Horace Chang, M.P.
year was focused primarily on improving overall opera- Minister of Housing, Environment and Water
tional efficiencies and optimizing production by reha- (September 2011)
bilitating water supply and sewerage facilities.
So far more than J$7 billion has been spent on capi-

tal projects centred around the Jamaica Water Supply
Improvement Project (JWSIP), Kingston Metropolitan

Message from the
Chairman of the Board
of Commissioners
The details of this transformation and change process are
provided in the Report from the Chairman and
President.
MESSAGE FROM THE CHAIRMAN

The Board of Commissioners and I are fully committed
to the success of the National Water Commission in
The National Water Commission provides more than providing the people of Jamaica with the kind of water
90% of the potable water distributed on the island. supply service that will match and even exceed public
The success of the NWC must therefore be of critical expectation. While fully aware of the enormity of the
national importance as it determines in a major way challenge, we remain resolute in our commitment. In
the quality of life of most Jamaicans. The Commis- fact, successful transformation for us is the only
sion also influences the potential for investments and option.
economic development in the country.
This presentation of the Annual Report of the National
The current Board of Commissioners took over Water Commission for 2010/2011, therefore not only
responsibility for the oversight of the operations of the outlines the major projects and achievements of the
National Water Commission in November 2010. Since entity during that period but also establishes the
then, we have recognised that if the enterprise is to base from which the major transformation is to take
be more effective in achieving its mandate there must place. The NWC cannot afford to rest on the its laurels;
be major transformation . This major transformation is it must improve the level of performance in virtually
aimed at enabling the enterprise to become the best every aspect of its operations its coverage across the
it can be at contributing to Jamaicas national devel- country, its quality and reliability of service, its operat-
opment by providing the highest quality water and ing efficiencies, its achievement of various regulatory
wastewater services. standards, its financial viability, and its public image.
To achieve this we have; I use this opportunity therefore to re-state the com-
Drafted the Strategic Plan for 2011-2014, identifying mitment of the Board of Commissioners to transforma-
major targets and performance gaps, value proposi- tion for the benefit of the people of Jamaica. I urge all
tions and strategic initiatives; Jamaicans cooperate with the National Water Com-
Consulted internally and externally on priority areas mission by honouring their obligations, protect ing
for positive transformation; the facilitaties in our communities, and facilitate the
Initiated discussions with our key stakeholders and various improvement projects.
regulators to garner support for the process;
Developed the outline of a new top level organiza-
tional structure to lead the Commission in keeping
with the new strategy, structure and vision;
...
Commenced the process of identifying persons to
occupy those positions. Mr. David Chung, P. Eng.
Chairman of the Board of Commissioners

BOARD OF
COMMISSIONERS
Nov. 2010 - Present
PRESENT BOARD OF COMMISSIONERS
Mr. David Chung Chairman,
Mr. Lennox Wallace Mr. Wayne Jones Mr. Baron Stewart
Mrs. Rosemarie Pilliner Mr. Dane Marsh Dr. Astor Bowers
Mr. Mark Myers Mr. Ransford Braham

BOARD OF
COMMISSIONERS
Nov. 2007 - Oct. 2010
PREVIOUS BOARD OF COMMISSIONERS

Mr. Russell Hadeed,
Chairman
Mr. Donovan Perkins Mrs. Genefa Hibbert Mr. Basil Fernandez

Deputy Chairman
Mr. Alston Douglas Mr. Vincent Wellesly Mr. Lennox Wallace
Mr. Frederick Moe Mr. Rodney Davis

Message from the
President of the National
Water Commission
MESSAGE FROM THE PRESIDENT
The financial year 2010/2011 was a most interesting

and challenging year for the National Water
Commission (NWC). This Annual Report gives an
overview of some of these activities and identifies
some of the continuing challenges being faced by
Given the current organizational capabilities and the
the National Water Commission to fulfill its commit-
state of the existing infrastructure, a major transforma-
ments and to better serve its valued customers across
tion exercise will be required to ensure
Jamaica.
success. We have already commenced this
transformation process and will be intensifying our
Operationally, the NWC started the year in the throes
efforts in the upcoming months.
of the worst el Nino induced drought to affect large
sections of the islands south coast, including the
I trust that this Annual Report clearly outlines the
Corporate Area. Later in the year sections of the island
context in which the NWC operates, the challenges still
were impacted by flood rains. The NWC started the
being faced, the projects now being undertaken and
financial year with significant financial deficits, yet
the major transformation projections.
notwithstanding the Commission undertook a range
of critical projects amounting to more than $7 billion.
Yours truly,
As part of that eventful year, I was appointed to the
position of President of the National Water
Commission after acting in that position for the last
.
three months of the financial year.
Mr. Albert Gordon
President
The provision of the best possible water and
wastewater services to the people of Jamaica is a
noble challenge and I am committed to doing
everything necessary to achieve this objective.

SENIOR MANAGEMENT TEAM
AUDITED FINANCIAL STATEMENTS

Albert C. Gordon Garth Jackson Fern Hamilton
President VP and Chief Engineer VP - Human Resource
Ajaykumar Vijayan Vernon Barrett Floret Pearson

Micheal Dunn VP - Western VP - Corporate & VP - Finance
VP - Eastern Strategic Planning
Patrice Mitchell Robert Gregory Geneva Locke Lewis Lakeman Kevin Williams
AVP - Internal Audit AVP - MIS AVP Budget and Cash AVP Corporate & Legal Counsel
Management Strategic Planning

SENIOR MANAGEMENT TEAM
Marcia Dunn Mark Barnnett Pauline Adams-Russell Guy McCallum

Area Manager Area Manager Area Manager Area Manager
St. James and Trelawny Kingston, St. Andrew St. Catherine Manchester and St. Elizabeth
& St. Thomas
Anthony Cornwall Phillipa Campbell-Francis Billy Meikle

Area Manager Area Manager Technical Services
St. Mary & Portland St. Ann Manager (Eastern)
Richard Eastwood Jennifer Wright Oneil Shand

Area Manager Area Manager Technical Services
Westmoreland & Clarendon Manager (Western)
Hanover

Report from the Chairman
and President
Report from the Chairman and President

Introduction
The 2010/2011 financial year represents a most significant year for the
National Water Commission. The year not only marked a period of
significant change itself but also marked the preparatory year for the
implementation of a critical transformation programme aimed at
enhancing the organizations ability to contribute to national development
by providing high quality water supply and sewerage services.
The National Water Commission (NWC) is the major provider of water and
wastewater services across Jamaica, harnessing and treating about 190
million gallons of water per day. While other water service providers also
exist, including the 13 municipal authorities and a number of private water
companies, the National Water Commission provides more than 90% of all
the potable water distributed across the island. From our 460 discrete
water supply systems with more than 9,000 km of pipelines, the NWC
delivers potable water to more than 400,000 customer accounts serving
more than 2 million persons daily.
Similarly, the National Water Commission is also the major provider of

wastewater services across Jamaica. Approximately 30% of all Jamaican
households are connected to central sewers attached to 67 sewerage
systems operated by the NWC primarily in urban centers and in housing
schemes.
Even in the face of persistent challenges including high rates of

delinquency and water theft, an inadequate tariff, an aged, vulnerable and
unwieldy infrastructure as well as exceptional costs relating to past
service pension liabilities, the Commissions sterling efforts at transforming
itself into a self-sustaining world class water and sewerage service utility
achieved some success during the year.
The task of providing these services is a complex and challenging one as it

requires NWC to cover a large number of discrete systems, across Jamaicas
rugged terrain. This is relatively unusual, as the vast majority of providers of
such services in the world manage a small number of more modern
systems that serve large and well-defined areas.
Transformation & Change

Early in the 2010/2011 financial year and coinciding with the Government
of Jamaicas Public Sector Transformation Programme, the National Water
Commission began a process of careful review of its operations and stra-
tegic direction. As part of that internal process, the NWC held a Strategic

Planning Retreat in November, 2010 and identified a number of areas that
needed to be changed.
The NWC has never been able to adequately deliver on its Mandate and
Mission. Neither has it been able to generate adequate resources to remain
viable. It is within this context that the leadership of the NWC decided to
develop the first draft of its Strategic Plan for April I, 2011 - March 31, 2014
using the Balanced Scorecard methodology.
An interactive, participative and facilitative approach was used. Activities

included:
1. Consultations with the President and his team
2. Review of relevant documents such as the existing Strategic Plan and

Balanced scorecard
3. Administering of a web-based assessment to all Retreat participants
4. A 2-day Retreat :
to confirm Mandate, Mission, Vision
to articulate major 3-year targets and performance gaps
to identify key issues affecting NWCs achieving its major
targets
to articulate the NWC value propositions
to map the strategy to close the performance gap and
articulate the strategic initiatives.
5. Documenting and submitting the draft strategic plan
Key Considerations of the 2-day retreat included:
1. Early realization that while the NWC must provide a surplus, profit is
not a motive
2.There is misalignment between the stated water policy and the actual
water policy which enables NWC to undertake liabilities and
accountabilities that it ought not to without the requisite resources
3. NWC is not limited, at least by its Mission, to enter into commercial
operations to bottle and distribute water
4.The existing structure and culture are misaligned to the strategy and
must be realigned for flawless strategy execution
5. There must be buy-in at all levels on any strategy developed.
Other internal and external fora have also identified other potential areas
for positive transformation. This strategic review process, in tandem with
the appointments of the new Board of Commissioners and the new
President of the National Water Commission, prepared the way for a
detailed stakeholder consultation process culminating in an official start
of the Strategic Transformation of the National Water Commission in April
2011.

That review process underscored a number of compelling reasons for an
NWC Transformation:-
1. Coming off losses before tax of $3.5 Billion for the year ending March
2010 and 1.7B for the year ending March 2011, the financial viability of
the Commission continues to threaten with the risk of financial
bankruptcy within another couple years unless there are dramatic
improvements in its financial performance. Given its own fiscal

constraints, it is unlikely that the Government of Jamaica will provide
significant financial assistance or re-capitalization.
2. Exacerbated by challenging national and international economic
conditions and extreme revenue collection difficulties, there are signifi-
cant cash flow problems with average monthly cash inflows being over
$300 Million less than corresponding payment obligations each month.
As a result, the Commission now owes nearly $4 Billion to suppliers. This
situation is not sustainable.
3. Operating efficiencies have not been improving with non-revenue
water being near 70% and energy costs ranging at approximately $400
Million per month.
4. Customers perceive NWC as generally unresponsive and the
Commissions public image is of serious concern.
5. For some of the reasons cited above, many NWC systems do not
provide the level of service reliability and continuity that is desired.
6. Many policy objectives of the Government of Jamaica for potable water
supply coverage and provision of central sewer systems for all major
towns are not being achieved.
Given these realities, it was clearly determined that the National Water
Commission could not continue along the same path.
We have also initiated discussions with our key stakeholders, including

the Office of Utilities Regulation (OUR) and the Ministry of Finance and the
Public Service (MFPS) to solicit their participation in our efforts to rescue
the NWC. We are also negotiating grant financing and concessionary loans
from the Inter-American Development Bank (IDB) and other financiers to
support our initiatives. These discussions have been very positive thus far.
Several strategic initiatives with the basic aim of providing an improved

quality of life for Jamaicans through better access to potable water and
wastewater services will be undertaken in keeping with a carefully defined
Strategic Map. These strategic initiatives will be implemented under the
broad headings of Learning & Growth; Coverage, Service Delivery & Image;
as well as Efficiency, Compliance & Viability. Under these headings, all of
the following will be completed:
Consultations
Organization Alignment
Staff Assignments
Culture Change Programme
Balanced Score Card Cascade
Performance Management System
Information Systems Improvement
Leadership Training & Development
Development Processing Improvement

System Development Plans
Potable Water Systems
Wastewater Systems
Customer Engagement Improvement
Response Systems Improvement
Image Improvement
Marketing Programme
Operational & Business Processes Review

Facilities Maintenance Improvement
Regulatory Compliance Improvement
Comprehensive NRW Reduction
Collection Improvement
Financial Management Improvement
The very dynamic transformation process is being proposed for implemen-

tation using a Balanced Scorecard methodology. Under this methodology,
people, organization, resource and technology re-alignment within the
enterprise will be the foundations to achieving improvements in national
coverage, supply reliability, compliance and operational efficiency as well
as financial sustainability. It is planned that the new NWC strategy, vision,
mission, core values and strategic targets that have been developed will
become an integral part of everything the NWC does and becomes as an
organization.
The new vision statement reads:
In 2015 NWC is the #1 water services utility in the Caribbean and Latin America
in terms of coverage, customer satisfaction, reliability, efficiency, compliance
and viability.
The new Mission Statement is:
To contribute positively to national development by providing high quality po-

table water and sewerage services to residents and businesses through a com-
petent and motivated team in a cost effective and sustainable manner.
For the first time, a set of Core Values has been articulated and established
for the National Water Commission. These Core Values that form the acro-
nym HI-TAPS are:
Honesty
Integrity
Transparency
Accountability
Professionalism
Self-Sufficiency
Additionally, for the first time, the Commission has committed itself to cer-
tain value propositions to its customers and its regulators. These are:
We promise our valued CUSTOMERS easy access to high quality potable
water and wastewater services while being responsive to their needs
We promise to work with our REGULATORS in being compliant, account-
able and transparent in all we do as we provide value for money.

By the end of the 2010/2011 financial year, a new top level organizational
structure was already developed. By that time employees were also be-
ing invited to apply for these new positions and were being encouraged
through a variety of mechanisms to contribute to this exciting process and
help to build the organization into an entity fulfilling its mandate and of
which all could be justly proud. It is further expected that between April
and July of 2011, the Balanced Scorecard methodology and other aspects

of the Transformation Process will be used to cascade the change process
down throughout the organization as well as to get all positions and per-
sonnel fully aligned and operating in keeping with the new strategy, struc-
ture and vision.
We are fully aware that the process of transforming the National Water
Commission will not be easy or instant. However, this Transformation is a
most necessary process if the organization is to become viable, more effec-
tive, more efficient, more accountable and more responsive and so we are
therefore committed to doing everything we can to implement the chang-
es in the best way and the shortest time possible.
Coverage & Service Reliability

Just over 70% of all Jamaican households are connected directly to a wa-
ter supply system while a further 12%-15% are within easy access and are
served by standpipes connected to water supply systems. Those figures
change from parish to parish based on a variety of factors including source
availability, population density, local history and topography with Kingston
having virtually universal house to house coverage while St. Elizabeth has
about 60% house-to-house access.
It is to be noted that despite Jamaica boasting abundant, sweet, flowing

streams in many parts of the country, highly rated raw water quality, and
a relatively high average annual rainfall rate, Jamaicas raw water resources
are very unequally distributed across the island and varies widely depend-
ing on the rainy or dry seasons. In addition, Jamaica is also very vulnerable
to the impacts of extreme weather events ranging from tropical storms and
hurricanes to prolonged periods of drought, severely affecting water sup-
ply delivery and reliability.
Approximately 62% of the water produced and distributed by the NWC is

sourced from underground sources (wells) while the other 38% is sourced
from surface water sources (rivers and springs). The type of source has sig-
nificant implications not only for the electricity needs and vulnerabilities of
the enterprise but also for the susceptibility to droughts and floods.
During the financial year ending March 2011, the Commissions legal
customer base increased from 424,978 known and properly established
customer accounts to more than 437,518 customer accounts. Given that
each account effectively represents a household or place of business, the
over 400,000 customer accounts actually represent service delivery to more
than 2,000,000 Jamaicans plus visitors who depend on the Commission
daily for essential water and wastewater services. This means that about
13,000 new accounts were added to our system during the year, extending
water supply service to more than 50,000 new persons.

Despite the negative effects of the drought and flood events, the
Commission maintained an average plant availability during the year near
to 95% for most of 2010/2011. The challenge is that often it is the same
facilities that are frequently out of operation. With minimal treated water
storage capacity, system redundancies and back-up capabilities, some
customers in some areas are frequently inconvenienced by service
unreliability. As clearly identified in the strategic review process, the NWC
recognizes that our overall plant and infrastructure needs to be improved

and expanded as well as rehabilitated and maintained better than they
have been in the past.
During the year, it was also recognized that the National Water Commis-
sions ability to deliver improved service across the country required the
significant improvement in the NWCs fleet of motor vehicles. Following on
that recognition, the Commission placed an order for a total of 200 motor
vehicles to replace or bolster its fleet.
The benefits to be derived from the acquisition of these vehicles include:

Reducing unusually high fuel cost,
Reducing dependency on motor vehicle hireage,
Reducing or eliminating hireage costs,
Reducing frequent vehicle downtime by 25% - 30%,
Reducing maintenance, servicing and repair costs by as
much as 40%,
Reducing delays in responding to system issues,
Increasing NWC mobility,
Increasing the productivity of operating teams, and
Increasing access to facilities, systems and customers.
Although the new vehicles received during the year only brought the
Commissions operating units up to about half of the 800 motor vehicles
needed including motor cars, pickups, small jeeps, panel vans, trucks,
backhoes, cranes, carrier units, vactor jets and other specialized units it
represented the single largest addition to the Commissions vehicle fleet at
any one time.
Then Chairman of the National Water Commission, Mr. Russell Hadeed,

speaking at the official handing over ceremony emphasized that the
vehicle purchases were being made at great cost to the Commission but
were necessary to improve the operating efficiency, to provide better
working resources for the staff and to improve the assets of the enterprise.
He also emphasized that the procurement process was long, transparent
and open.
Among the 200 new vehicles received by the NWC are 4 x 4 single-cab
pickups, double-cab 4 x 4 pickups, small panel vans, small Sports Utility
Vehicles (SUV) and All-Purpose-Vehicles (APV), and small mini-buses. The
vehicles were procured through competitively tendered contracting
processes in full compliance with the Government Procurement and
Contracting Guidelines.

Projects Implementation
Notwithstanding many challenges, not least of which is funding
availability, the National Water Commission undertook a number of capital
projects aimed at improving, restoring or extending water and sewerage
services in various parts of the country during 2010/2011. The larger
projects were managed by the Commissions Engineering Division while

several smaller projects were initiated and managed by local personnel.
During the year the Engineering Division worked on approximately 100
projects at various stages of development - progress through the
Government of Jamaicas procurement and contracting process or active
implementation.
These various projects were either funded directly from NWC revenues or
with the support of multi-lateral and bilateral loans either in the name of
the Commission or to be paid for by the Commission. Project activities
totaling approximately $7 billion were undertaken during the financial year
to the benefit of many Jamaicans. The general objectives of most projects
undertaken by the NWC, included:-
(a) improving the process technology at the various facilities
and systems to enable them to consistently meet our own
objectives and the related regulatory standards;
(b) improving operational efficiencies and optimizing production
volumes and consistency;
(c) developing and expanding water supply systems to extend
service to areas where it is determined to be economical; and,
(d) completing previously initiated ongoing projects.
The single most critical and significant project undertaking by the National
Water Commission in 2010/2011 was the Jamaica Water Supply Improve-
ment Project (JWSIP), Component A of which was being implemented
during 2010/2011. It is the largest project of its kind in the region aimed at
contributing much to addressing the medium to long term problem of
access to potable water with major elements of the Project including:
Replacement of the existing 600mm transmission pipeline between
Bog Walk & Flat Bridge;
Rehabilitation of the Constant Spring Water Treatment Plant;
Rehabilitation of the Constant Spring WTP Intake Facilities;
Rehabilitation of the Seaview Water Treatment Plant;
Rehabilitation of the Stony Hill Distribution Network;
Construction of the new Halls Green Supply System;
Supply and Installation of 70,000 Customer Meters.
Other elements of the project proposed under Component B but on which

no work was done during this financial year include construction of a new
Ferry to Red Hills Pipeline, improvements to the Forest Hills water supply
network, and construction of a new 15 mgd water treatment plant in
Spanish Town to provide additional water to meet demand in the KMA.
JWSIP is aimed at enabling the provision of nearly 20 mgd of additional

potable water to the KMA which would result in the elimination of major
water lock offs in the area due to supply shortage; reduction of system

losses and improvement in the operating efficiencies of NWC. JWSIP will
facilitate major developments in the KMA inclusive of greater Spanish
Town, Portmore and the Corporate Area of Kingston and St. Andrew - which
would otherwise not be possible including planned developments for
Caymanas and Hellshire areas; as well as increase in the supply of potable
water to specific identified rural areas.
During 2010/2011 the following were accomplished:

Pipelaying commenced along the Rio Cobre Gorge in July 2010 and
approximately 4,565 metres were laid by the end of the financial
year. Two sections totalling 2,200 meters have been successfully
pressure tested, while 3,425 meters of road surface has been
temporarily reinstated.
Installation of customer meters commenced in July 2010, and by
the end of March 2011 35,609 meters and related appurtenances
were successfully installed in Kingston and St. Andrew, St. Ann, St
Mary and St. Catherine.
Pipelaying commenced for the Kitson Town sub-project in
September 2010, and laid and tested 5,372 metres of 250mm and
3,355 m of 200mm pipes by the end of the financial year. The acqui-
sition of the tank sites had also been formalized and foundations
earthworks completed for both. The prefabricated tank sections
were also delivered to site and delivery of the pipeline materials for
the rehabilitation & extension of the existing distribution network
has commenced.
Arising from limited reliable yield suggested by development of
the first borehole at Halls Green, other sources/supply options for
the local area have been proposed for development instead and
were being explored.
Refurbishing of the first rectangular settling tank (second overall
clarifloculator) at the Constant Spring Water Treatment Plant was
completed & commissioned into service during the year and work
on the first filter nearly completed.
Preliminary work on the Seaview WTP was also in progress during
2010/2011.
Work progressed well on the rehabilitation/upgrading of the Stony
Hill distribution network to the extent that significant reductions in
technical losses were very noticeable by the end of the year.
Preliminary work on the refurbishing of the raw water intake & trans-
mission facilities which supply the Constant Spring and Seaview
Water Treatment Plants commenced. This despite the challenge
created by the fact that the audit of the condition of the facilities
indicated that works in excess of the originally proposed scope is
necessary, financing for which was now being assessed.
During 2010-2011, further progress was achieved in the implementation

of the Japanese funded US$85M Kingston Metropolitan Area (KMA) Wa-
ter Supply Rehabilitation Project. The project contributed significantly to
addressing the need to improve the availability, reliability and quality of

Physical Achievements for Category A Works March 31, 2011
Start date Progress
CATEGORY OF WORK as at End of F/
year
1. Replacement of Rio Cobre asbestos cement pipeline from Bog July 9, 55.0%
Walk to Flat Bridge - 5,974m of 600mm dia. DI pipes 2010
2. Rehabilitation of the Constant Spring Water Treatment Plant April 1, 50.0%

20 imgd 2010
2a Audit & rehabilitation of the Hermitage Dam Raw Water Intake April 1, 30.0%
Structures & Pipelines 2010
3a. Rehabilitation of the Seaview Water Treatment Plant - 2.0 Jan. 2011 10.0%
imgd
3b. Auditing of the Stony Hill Distribution Network and associated April 1, 50.0%
improvement of the Distribution System 2010
4. Construction of Halls Green wells, a 1,150 m3 reservoir, relift April 1, (7.5%)
station, chlorination facilities and 1,700 m of 200 / 300 mm 2010 Suspended
dia. Pipes
5. Supply and installation of 73,350 customer meters April 1, 45.0%
- KSA = 50,720 No. 2010
- St. Ann & other rural
parishes = 22,630 No.
6. Construction of Kitson Town rural water supply projects July 1, 45.0%
supply. 2010
the water supply to the population of 245,000 persons in Greater Spanish

Town and 180,000 persons in South East St. Catherine directly. Hundreds
of thousands of other persons in the KMA portion of the project area. also
benefitted. In fact, were it not for the benefits already being derived from
the KMA project the drought conditions experienced in the early part of
the year would have had a more severe impact.
The KMA project consists of four (4) major implementation components

including the rehabilitation of existing water supply facilities that provide
27 million gallons of potable water each day, development of new water
supplies to give an additional 5 million gallons of water and various
engineering and institutional strengthening consulting services.
The rehabilitation component of the KMA Project was completed in

September 2008 and involved improvements to the Spanish Town Water
Treatment Plant, rehabilitation of 19 production stations and Tulloch spring
well, rehabilitation of 13 storage reservoirs and some 18km of mains
replacement. During 2009/2010, work to develop new sources for the
abstraction of an additional 5 million gallons of water per day, the installa-
tion of 22 km of transmission mains and construction of 2.0 mg of storage
capacity began and were significantly advanced. During 2010/2011, this
phase of the works were completed and officially handed over to the

National Water Commission by the KMA Project team. The engineering and
institutional strengthening consulting component of the KMA project was
also well advanced during 2010/2011. Works under this contract compo-
nent included extensive engineering and hydro-geological investigation,
detailed engineering design and other activities to improve NWCs
operational efficiency.
The Kingston Water and Sanitation Project is another major project being
undertaken by the National Water Commission with the support of the

Inter-American Development Bank (IDB) and under which the following
major works are to be carried out:-
1. Rehabilitation of Mona and Hope Water Treatment Plants - Lot 1;
2. Design and Construction of the new Darling Street Wastewater
Pump Station - Lot 2;
3. Rehabilitation of 27 Drinking Water Supply Facilities to include
service storage tanks and Pumping Stations - Lot 3;
4. Water loss Management Program, Non Revenue Water (NRW)
5. Upgrading of the Customer Information System (CIS)
6. Reorganization and Modernization of NWC
Much preparatory work including the preparation of various Inception,

Conceptual and Detail Design Reports, Designs and Costing, Tender Docu-
ments, pre-qualification of short-listed Contractors and request for Bids
from short-listed Contractors, were completed during 2010/2011. During
2010/2011, all required technical studies and engineering designs were
completed for all 4 lots under the project and were being assessed or
actioned by the end of the year.
By the end of the 2010/2011 financial year fourteen (14) of the 23 electro-
magnetic flow meters procured under the project were already installed
and the others were scheduled for completion within the first month of
the new financial year.
The Kingston Water and Sanitation Project also funded aspects of the
upgrading of the Customer Information System (CIS) which had earlier
involved the procurement of the following items/systems/outputs totaling
approximately US$1M:
95 Computers and 2 Laptop Computers

Audio Visual Equipment
2 Bill Printers
Servers and Storage Area Networks for Customer Information
System-Installation of Services
Intrusion Prevention System
Interactive Voice Response Upgrade
Equipment for Disaster Recovery Plan
On top of what has already been done under the Kingston Water and
Sanitation Project, much more and especially the physical construction
work - is expected to be done in ensuing financial years at an estimated
cost of approximately US$80M.

These undertakings will include:
Civil Works
Rehabilitation of Mona and Hope Water Treatment Plants
Rehabilitation of 27 Drinking Water Supply Facilities
Construction of the new Darling Street Pump Station
Non Revenue Water Kingston and St. Andrew
Supply and Installation of 7 Electromagnetic Bulk Flow meters

Procurement/Upgrading of the Customer Information System (CIS)
An additional 105 Personal Computers, 6 File Servers, 10 Laptops
Telephone System Upgrade
Document Management System Network Equipment
Intrusion Prevention System
Payroll System
Financial Information System
Security Access and Attendance
IVR Upgrade
GIS/Asset Management System
Disaster Recovery Plan for Hardware
Oracle software license for Disaster Recovery Plan
Meter Reading Handhelds
10 water trucks were also purchased with funds from this project, 2 of
which were subsequently donated to Haiti to assist in the relief effort after
the devastation caused by the earthquake.
Operating Efficiency
2010/2011 again demonstrated that water supply and wastewater services,
around the world, are very vulnerable to extremes in weather conditions
from dry spells to droughts to floods to storms and hurricanes. During the
year the National Water Commissions operations and service delivery were
significantly affected by the most severe drought to affect sections of the
country in more than 25 years and soon thereafter suffered from the
punishing effects of flood rains related to Tropical Storm Nicole.
The drought conditions had the effect of reducing the NWCs water
production volumes and revenues, and at the same time, increased our
production costs as attempts were made to truck and otherwise deliver
water to drought-stricken areas. It is to be recognized as well that many of
the drought-stricken areas and systems were not directly the responsibility
of the NWC but nonetheless required our intervention and assistance.
Overall operating efficiency throughout the year was significantly

impacted by the inherent risks to NWC water and wastewater systems
including the fact that many of the 460 water supply systems across the
island, of necessity, have intakes in riverbeds and are susceptible to flood
damage and blockages; wells are often located in low lying plains and
susceptible to flooding; most systems are heavily dependent on the
National Power Grid for operations; the systems include more than 10,000
kilometres of undulating pipeline susceptible to land slides, pipeline
dislocation and breakages; water sources are at risk of contamination and
high turbidity after heavy rainfall; and most water systems are at least
partly situated in very remote areas that are difficult to access even under
normal conditions.
During the year 2010/2011, the National Water Commission undertook a

number of initiatives aimed at improving its operating efficiency while at
the same time maintaining or improving its level of service to customers.
Following an exercise aimed at analyzing the levels of reductions that

could be attained in Non-Revenue Water (NRW), infrastructural wear and
tear and energy consumption, the National Water Commission initiated a
number of changes to its mode of operations in several areas across the
island.
Recognizing that the company continued to lose much of the water it

produced to theft or undetected underground leaks even in the face of
long pumping hours during reduced demand times, timers were installed
at a number of facilities and a range of other measures employed to reduce
the energy consumption. These timers automatically shut down the facility
at pre-determined times each day based on the nature and expanse of
the particular system - both to avoid the most expensive
electricity consumption time-bands and to avoid production in periods of
low customer demand for water.
The Commission also implemented improved maintenance strategies to

reduce water loss as well as achieve a reduction in its energy bill to the
ultimate benefit of the customers.
In September 2009, NWC switched over to its new customer information

system (CIS) replacing its old Customer Accounting System (CAS) which
had been in place since the early 1990s. CAS had become outdated
technology and was no longer supported. NWC therefore had no choice
but to have it replaced.
Ventyx Customer Suite is the new CIS and is cutting-edge technology that
is not just a billing system but will be pivotal in supporting NWCs business
and will provide NWC staff with the information technology frame-work
for more efficient customer service delivery and strong back-office support
that will result in a more satisfied customer. During much of 2010/2011,
the NWC worked through the teething-pains of this major technology
change and sought to maximize the benefits of the new system.

Financial Viability
Despite being publicly owned and providing a Social good, not least of
which is the prevention of major disease outbreaks, the National Water
Commission (NWC) has been tasked to find the required financial resources
to meet its mandate in a sustainable manner. As it is with major utilities
with near-monopoly status, the NWCs revenue strategy is limited by price

regulation; whereas its operational strategy is limited by service standard
regulations. It is between these two limits that NWC must strike a balance
while being viable. (Further Comments on Financial Viability are outlined
in the Financial Performance Explanation on Page 27.)
Parish Improvement Plans

Starting during the latter part of the 2010/2011 financial year as part of the
overall transformation process, the National Water Commission
initiated a series of activities aimed at developing comprehensive water
supply improvement projects on a parish by parish base to cover the entire
country. The objective of this exercise is to undertake an evaluation and
assessment of the water supply requirements and needs for each defined
water supply scheme of each parish. Under this project, the current
physical and operational status of each water supply scheme is being
studied and documented. This is inclusive of the evaluation of total water
demand/requirements, assessment of the current level of Non Revenue
Water (NRW) and an evaluation of the present (2011) deficit/surplus of
each defined water supply scheme.
One outcome of this process is a detailed statement of work developed for

each water supply scheme. This is being prepared with a view to
implementing an upgraded and improved water supply system to satisfy
the present and future growth demands of the population within each
Parish. The following methodology provides a guide on how to approach
the preparation of the Water Supply Parish Plan for each Parish.
The Geographic Information /Asset Management System technology is

being used as the platform to assist with the preparation of the National
Parish Plans. In this regard, the GIS/AMS will provide key data and
information which includes but is not limited to the:
Definition/boundary of each defined water supply scheme

Spatial representation of each defined water supply scheme
Status and details of all sub-division applications
Population (Enumeration Division (ED)) of each defined water
supply scheme.
Using different pre-determined per capita consumption rates for urban

and rural areas as well as an established formula for commercial water
demand as a percentage of the total domestic demand and data relating to
NRW, Billed Volume, etc. for each defined water supply scheme, a team

coordinated by the Corporate and Strategic Planning Division is
determining not only the areas of need or surplus but also the strategic
initiatives to be undertaken to satisfy those unmet needs in the shortest
and most efficient way possible.
Once the surplus /deficit is evaluated for each defined water supply scheme,
a project profile on the specified water supply scheme will be prepared,
which will include but is not limited to the following key areas :
Description/outline of the existing Water Supply Scheme

Description of the current physical and operational challenges
of the particular water supply scheme
Statement of required upgrading work including scope of works
and requirements for the water supply scheme to improve the
operation of the water supply scheme
Beneficial impacts of the improved/rehabilitated water supply
scheme
Proposed Project Budget
Proposed implementation schedule
Project profiles will also be prepared for areas not now served by NWC
systems for which there are potential customers and for whom it would be
feasible for the NWC to serve.

SENIOR EXECUTIVE COMPENSATION FOR Y/E MAR 31, 2011
Travelling
Allowance OR Non-Cash
Value of Benefits {Group
Gratuity or Assigned Pension Or Other Allowances Insurance -
Performance Motor Vehicle Other Retirment {Housing, Robing, Health & Life}
Position of Senior Executive Salary (J$) Incentive (J$) (J$) Benefits (J$) Practising} (J$) (J$) TOTAL (J$)
President 8,698,249 2,174,562 1,303,800 - 1,304,737 167,468 13,648,817

VP, Chief Engineer 5,944,648 1,486,162 1,303,800 - - 149,893 8,884,503
VP, Finance & Risk Mgt. 6,015,678 1,503,920 1,303,800 - - 150,347 8,973,744
VP, Strategic Planning 5,610,197 - 1,303,800 - - 147,759 7,061,756
VP, Human Resource & Admin 5,169,259 - 1,303,800 - - 144,944 6,618,003
VP, Eastern 5,557,970 - 1,303,800 - - 147,425 7,009,195
VP, Western 5,557,970 - 1,303,800 - - 147,425 7,009,195
VP, Project Administration 6,015,678 1,503,920 1,303,800 - - 150,347 8,973,744
AVP, Budget & Cash Management 3,578,866 - 1,303,800 - - 134,794 5,017,460
AVP, Internal Audit 3,578,866 - 1,303,800 615,564.95 - 134,794 5,633,025
AVP, Legal Counsel 3,926,949 - 1,303,800 675,435.19 268,875 137,015 6,312,074
AVP,MIS 3,950,879 987,720 1,303,800 - - 137,168 6,379,567
AVP, Materials Management 3,618,685 - 1,303,800 - - 135,048 5,057,533
AVP, Development Planning 3,578,866 - 1,303,800 - - 134,794 5,017,460
Area Manager, KSA/St. Thom 3,699,781 - 1,303,800 - - 135,565 5,139,146
Area Manager, St. Catherine 3,699,781 - 1,303,800 636,362.33 - 135,565 5,775,509
Area Manager, St. James/Trelawny 3,699,781 - 1,303,800 - 135,565 5,139,146
Mgr, Technical Services (East) 3,699,781 - 1,303,800 636,362.33 - 135,565 5,775,509
Mgr, Technical Services (West) 3,699,781 - 1,303,800 - - 135,565 5,139,146
Snr. Project Mgr. 4,880,643 1,220,161 1,303,800 - - 143,102 7,547,706
Snr. Project Mgr. 4,436,947 - 1,303,800 - - 140,270 5,881,017
Mgr. Cap. Project 3,904,515 976,129 1,303,800 - - 136,872 6,321,316
TOTAL 102,523,769 9,852,572 28,683,600 2,563,725 1,573,612 3,117,292 148,314,571
National Water Commission Annual Report 2010/2011

27
PAYMENTS MADE TO BOARD MEMBERS

Financial Performance
Explanations for 2010/2011
Investments
During the year 2010/11 the National Water Commission (NWC) invested
Financial Performance Explanations

$5.5 Billion in assets - $5.4B in Property, Plant & Equipment and $77M in
GOJ USD bonds. This represented an increase of $0.7 B or 15% over the
$4.8B invested in the prior year. This brings the total investment over the
last six years to over $20 Billion and represents a continuation of the trend
of significant investments in the development of water and sewerage facili-
ties to increase coverage and improve the quality, efficiency and reliability
of service to customers.
Major projects undertaken during the

year include the following:
Kingston Metropolitan Area Water Supply and Rehabilitation Project which
focused on improving water supply in the Greater Spanish Town (GST) and
South East St. Catherine as well as the Kingston and St. Andrew Area (KSA)
achieved completion of the development of 5.0imgd of new sources, trans-
mission and storage facilities for GST.
Kingston Water and Sanitation Project which focused more specifically on

improving the water supply in Kingston & St. Andrew - particularly the
rehabilitation of major production and distribution facilities as well as the
rebuilding of the Darling Street Sewage Pumping Station. Work commenced
on the installation of bulk flow meters at the production facilities.
Jamaica Water Supply Improvement Project (JWSIP) is to be implemented

under two contracts. The Category A Works contract involved the replace-
ment of the major Rio Cobre Pipeline, rehabilitation of the Constant Spring
& Seaview water treatment plants, rehabilitation of the raw water facilities
supply at both plants, distribution network upgrading in Stony Hills, con-
struction of a comprehensive water system to serve Kitson Town and replace-
ment of 70,000 domestic & commercial meter. At the end of the FY, physical
achievement of this 2-year contract was estimated at 45% complete. Com-
mencement of the second Category B contract was on hold, pending the
finalization of financial issues.
K-Factor Programme which includes projects aimed at extending the sewer

network in the KSA as well as reducing water loss and rehabilitation or
retirement of small inefficient sewage treatment plants island-wide.
Included in the latter is the nonfunctioning Harbour View Sewage Treatment
plant which was approx 50% complete at the end of the FY.

Other investments in sewerage systems and water supply included a num-
ber of rural water supply projects, such as the expansion of the sewage
collection system in KSA, upgrading of the Christiana/Spaulding water
distribution network, as well as an extension of the potable water supply
transmission network to supply the new Falmouth Cruise Ship Pier.
These investments represent NWCs continued efforts to transform the

water and waste water sector through growth and development of the
capacity and the efficient use of its physical assets.
Financing
The NWCs capital activities were financed by the following:

Long/Short Term Loans $3.6B
K-Factor Fund $2.6B
Government and Other Grants $1.6B
Finance Lease $0.2B
$8.0B
During the financial year $325M in short term loans from NCB and First
Global Bank were converted to long term loans, the NWC repaid $1.3B in
Long/Short-Term Loan and Finance Lease.
Government Grants include $1.0B from the Japan International Coopera-

tion Agency (J.I.C.A.) for the completion of the KMA project (Lots 1 & 2A).
Major long term loan funds secured during the period include $123M
National Housing Trust, $167M Vinci Construction Grand Projects, $199M
Inter-American Development Bank (IDB) and $2.3B BNP Paribas.
The K-Factor is a special portion of the customer bills (2011: 20%, and 2010:
14%) which is set aside for implementing critical projects in the areas of
efficiency improvement, sewage collection network expansion, sewage
treatment plant rehabilitation or replacement and non-revenue water ac-
tivities.
Profitability
Operating revenue for 2010/11 financial year was $16.2B (2009/10 $14.1B)
this is an improvement of $2.1B over the previous year. This increase of
15% was mainly due to K-Factor revenue recognition from qualifying proj-
ects, of which the JWSIP project made a significant contribution.
Operating expenses increased by $0.6B, when compared to the previous

year, the major contributing factor was increases in the Provision for Bad
Debt as a result of a fall in the collection ratio.
The Operating profit for this financial year was $522.5M when compared
with an operating loss of $962.5M in the previous year.

Loss before taxation for the year was $1.7B (2010/11 $3.5B), this too showed
a better performance than the previous year.
After tax loss was $3.7B (2010/11 $2.7B). The major contributing factor to
this loss was a $1.9B write off of Deferred Tax Asset as it was not considered
prudent to carry forward this asset at this time. Whenever the Commission
is able to demonstrate that there will be future profits to utilize the asset
this amount can be brought back on the books for utilization.
Liquidity

The NWC had a net current liability of $367.8M at March 2011. The
major contributing factors to the net current liabilities are an increase in
trade payables of $655.4M, increase in current maturities of $235.8M offset
by K-Factor bank account of $954M. The K-Factor account is reserved for
qualifying projects under the programme.
Net cash provided by operating activities showed a positive cash flow of

$2.4B which is $1.6B or 200% better than the previous year. This is as a
result of increase in revenue of $2.1B, increase in accounts payable of $655M,
offset by a decrease in accounts receivable of $298.3M.
Balance Sheet
The 2011 Debt to Equity ratio, (as measured by Total Debt / Equity), is 65:1
(2010:8:1). The Debt ratio (as measured by Total Debt over Total Asset) is
98% (2010 89%). Cumulative losses over time have eroded the equity base;
however the Commissions assets comprising Property, Plant, Equipment
and Land are seriously undervalued, as the last valuation was done in 2002.
This is to be addressed as a matter of priority in the near future.

Audited Financial Statements













































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National Water Commission Annual Report 2010/2011 3

Core Values and Value Propositions 3

Message From The Honourable Minister of Water And Housing 4

Message From the Chairman of the Board of Commissioners 5

Board Of Commissioners (2010 - Present) 6

Board of Commissioners (2007-2010) 7

Message From the President of the National Water Commission 8

Senior Management Team 9

Report From the Chairman and President 11

Salaries and Emoluments for Senior Management 25

Payments Made to Board Members 26

Financial Performance Explanations 27

Audited Financial Statements 30

4 National Water Commission Annual Report 2010/2011

CORE VALUES / VALUE PROPOSITIONS

NWC Value Propositions

We promise to work with our REGULATORS in being

National Water Commission Annual Report 2010/2011 5

Additionally, efficiency improvement projects funded

I am pleased to be associated with this official presen- taken.

So far more than J$7 billion has been spent on capi-

6 National Water Commission Annual Report 2010/2011

MESSAGE FROM THE CHAIRMAN

National Water Commission Annual Report 2010/2011 7

Mr. David Chung Chairman,

Mr. Lennox Wallace Mr. Wayne Jones Mr. Baron Stewart

Mrs. Rosemarie Pilliner Mr. Dane Marsh Dr. Astor Bowers

Mr. Mark Myers Mr. Ransford Braham

8 National Water Commission Annual Report 2010/2011

PREVIOUS BOARD OF COMMISSIONERS

Mr. Donovan Perkins Mrs. Genefa Hibbert Mr. Basil Fernandez

Mr. Alston Douglas Mr. Vincent Wellesly Mr. Lennox Wallace

Mr. Frederick Moe Mr. Rodney Davis

National Water Commission Annual Report 2010/2011 9

The financial year 2010/2011 was a most interesting

10 National Water Commission Annual Report 2010/2011

AUDITED FINANCIAL STATEMENTS

Ajaykumar Vijayan Vernon Barrett Floret Pearson

National Water Commission Annual Report 2010/2011 11

Marcia Dunn Mark Barnnett Pauline Adams-Russell Guy McCallum

Anthony Cornwall Phillipa Campbell-Francis Billy Meikle

Richard Eastwood Jennifer Wright Oneil Shand

12 National Water Commission Annual Report 2010/2011

Report from the Chairman and President

Similarly, the National Water Commission is also the major provider of

Even in the face of persistent challenges including high rates of

The task of providing these services is a complex and challenging one as it

Transformation & Change

National Water Commission Annual Report 2010/2011 13

An interactive, participative and facilitative approach was used. Activities

1. Consultations with the President and his team

2. Review of relevant documents such as the existing Strategic Plan and

3. Administering of a web-based assessment to all Retreat participants

5. Documenting and submitting the draft strategic plan

Key Considerations of the 2-day retreat included:

14 National Water Commission Annual Report 2010/2011

Report from the Chairman and President

We have also initiated discussions with our key stakeholders, including

Several strategic initiatives with the basic aim of providing an improved

National Water Commission Annual Report 2010/2011 15

Operational & Business Processes Review

The very dynamic transformation process is being proposed for implemen-