LESOTHO ELECTRICITY AND WATER AUTHORITY

Transcription

1 LESOTHO ELECTRICITY AND WATER AUTHORITY STRATEGIC PLAN 2014/ /19 JANUARY 2014 LEWA Strategic Plan 2014/ /19 Page 1

2 Contents EXECUTIVE SUMMARY - STRATEGIC PLAN DASHBOARD INTRODUCTION IDENTITY AND MANDATE METHODOLOGY AND APPROACH THE VISION, MISSION AND VALUE STATEMENTS ANALYSIS OF THE OPERATING ENVIRONMENT ANALYSIS OF STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT) STRATEGIC OBJECTIVES FOR 2014/ / QUICK WINS GOVERNANCE STRUCTURE LOGICAL FRAMEWORK MATRIX BALANCED SCORE CARD REPORTING.44 LEWA Strategic Plan 2014/ /19 Page 2

3 List of Acronyms AfDB CGHB COW DOE DRWS IFRS LCA LEC LEWA LRA MDGs MEMWA NGOs NSDP PPAP PRS PS QOSSS RERA UNDP VAT WASCO WB African Development Bank Corporate Governance Hand Book Commissioner of Water Department of Energy Department of Rural Water Supply International Financial Reporting Standards Lesotho Communications Authority Lesotho Electricity Company Lesotho Electricity and Water Authority Lesotho Revenue Authority Millennium Development Goals Ministry of Energy, Meteorology and Water Affairs Non-Governmental Organizations National Strategic Development Plan Planet, Profit and People (Integrated Reporting) Poverty Reduction Strategy Principal Secretary Quality of Service and Supply Standards Regional Energy Regulators Association of Southern Africa United Nations Development Programme Value Added Tax Water and Sewerage Company World Bank LEWA Strategic Plan 2014/ /19 Page 3

4 VISION EXECUTIVE SUMMARY - STRATEGIC PLAN DASHBOARD MISSION TO BE A WORLD CLASS UTILITIES REGULATOR THAT FACILITATES DELIVERY OF AFFORDABLE, SUSTAINABLE AND QUALITY SERVICES. TO REGULATE THE ELECTRICITY, URBAN WATER AND SEWERAGE SERVICES IN THE INTERESTS OF ALL STAKEHOLDERS THROUGH TRANSPARENCY, CONSISTENCY, PROFESSIONALISM AND TEAMWORK. STRATEGIC OBJECTIVES To determine Tariffs and Charges To ensure Security of Supply To develop and Implement Regulatory Frameworks To monitor Licensees Performance and Compliance To build and Operate a Sustainable Organization To promote Stakeholder Awareness, Empowerment and Protection To increase access to electricity and water and sewerage services STRATEGIES Determine Electricity Tariffs and Charges Determine and implement Security of Supply Options for Electricity Review the LEWA Act Monitor Licensees Performance and Compliance Review and Implement: Board Governance processes and Administrative policies, processes and procedures Develop and implement stakeholder communications programme Manage Universal Access Fund for electricity Determine Tariffs and Charges for WASCO Determine and implement Security of Supply Options for Water Develop and review Subsidiary Legislation and Regulatory Tools for Water and Electricity Resolve Customers and Licensees complaints Develop and Implement: Integrated and Statutory Reporting, and Integrated Information Management system Determine stakeholders awareness about LEWA and stakeholders information requirements Establish UAF for Water and sewerage services Develop and implement: Pro poor mechanism in electricity, Principles for Generation tariffs determination, Power Procurement guidelines and Electricity Resale Guidelines Implement Regulatory Frameworks Sustain a participatory Peer Review exercise Review organizational structure and Recruit staff Collaborate with other Regulatory Bodies locally and in the region Ministerial Consultations and Anniversary celebrations Determine options for increasing access to sewerage services Construct LEWA House, Acquire Testing facilities and equipment Publish and disseminate LEWA information <<<<<<<<<< OUR CORE VALUES >>>>>>>>>> Integrity Efficiency Excellence Professionalism Teamwork LEWA Strategic Plan 2014/ /19 Page 4

5 1.0 INTRODUCTION 1.1 The Strategic Plan has defined LEWA s vision, mission, strategic objectives and a comprehensive action programme, and has sought to grasp and understand in a deeper and more meaningful way an operational mechanism that will enable the Authority to effectively and efficiently deliver on its mandate for the period 2014/ / As an organization established to formulate a reformist regulatory regime, considering that regulation is a relatively new phenomenon in our part of the world, it becomes imperative therefore, in drawing up and creating suitable regulatory instruments, that the driving forces behind this process are fully appreciated and managed, in which case the Strategic Plan becomes a perfect tool to permit all these intentions to be actualized. 1.3 The Strategic Planning exercise that LEWA undertook in developing the Strategic Plan, can best be described as a process of devising a framework that will enable the Authority to pursue a disciplined effort to produce fundamental decisions and actions that will shape and guide what the organization is, what it does, and the underlying reasons for its actions. 2.0 IDENTITY AND MANDATE 2.1 Genesis and brief history Prior to its current form and structure, the Lesotho Electricity and Water Authority (LEWA) was established and known since coming into operation under the Lesotho Electricity Authority Act of 2002, as the Lesotho Electricity Authority, for the reason that its primary mandate was limited to regulating the electricity industry only. The founding legislation makes provision for all matters pertaining to the governance and internal administration of the Authority, including a proper delineation of its functions with particular reference to ensuring the security of electricity supply under economic and cost-effective conditions in Lesotho. Creation of the Lesotho Electricity Authority arose as a direct product of the Lesotho Utilities Sector Reform Project which was implemented under a funding arrangement by the Government of Lesotho with the International Financing Institutions that included the World Bank (WB) and the African Development Bank (AfDB). 2.2 Structure of LEWA LEWA is headed by a Chief Executive who reports to the Board of Directors and directs the work through six Departments: LEWA Strategic Plan 2014/ /19 Page 5

6 2.2.1 Technical Regulation Electricity Technical Regulation Water Legal Services Economic Regulation Customer Affairs Human Resources, Finance and Administration 2.3 Revision of Mandate The Lesotho Electricity Authority Amendment Act of 2011 was passed to broaden the mandate and scope of the former LEA to also cover and provide regulatory services for the urban water and sewerage services sub-sector. As part of the Amendment Act under reference, a Statement of Objects and Reasons underlying the Amendment Act were circulated by the authority of the Minister responsible for Natural Resources, and thus effectively changed the name of the organization to the Lesotho Electricity and Water Authority, or LEWA in its short form. 2.4 The rationale for a new Strategic Plan All the regulatory instruments developed by the Authority were focusing primarily on the electricity sub-sector, until the point when the Act was amended to make provision for the regulation of the water sub-sector, which development occasioned the development of additional instruments to enable the Authority to adequately handle its expanded mandate. The impact of this development touched on the core of the functions of the Authority, and thus necessitated fundamental structural adjustments to be made to handle the additional responsibilities. Apart from developing new regulatory instruments, some of the essential requirements revolved around amendment of the organizational structure and recruitment of additional personnel. It is the change of the core business of the Authority that has made it necessary for a new Strategic Plan to be developed to ensure that, as processes get cascaded down from the changed mandate, there is a clear harmonization in the development and roll-out of strategies. Furthermore, the previous strategic plan, ending in March 2014, has necessitated the development of the new one for continuity. 2.5 Review of the previous Strategic Plan In order to craft a clear road map for the next 5 years, It was deemed prudent to assess the Authority s performance on the previous Strategic Plan. The resulting outcomes have served as a useful input into the strategic planning exercise. Strategic Focus Assessment per rating scheme below Underlying reasons Internal process (operations management processes, regulatory and social processes and business processes) 3 Inability to meet some statutory timeframes Public Awareness, Education and Branding 2 LEWA is partially known LEWA Strategic Plan 2014/ /19 Page 6

7 (sustainable public empowerment on electricity and regulation issues) Advocacy (networking and collaboration with key stakeholders) Facilitating Universal Access (accessible and affordable electricity and water for all) Ensuring Security of Supply (water and electricity supply efficiency and sufficiency) Human resource management and development (improved employee productivity and performance at the work place) to the public 4 Government support Regional integration 4 Collection, disbursement of funds on approved projects 4 Active participation and implementation of electricity Bulk Pass through costs principle 4 Training of staff and continuous professional development. This is the rating scale used to evaluate the performance of the previous Strategic Plan: 1 = Did not meet requirements 2 = Partially met requirements 3 = Met requirements 4 = Partially exceeded requirements 5 = Exceeded requirements 2.6 Parameters for the new Strategic Plan The Strategic Plan takes into account the broadened scope of services of the Lesotho Electricity and Water Authority as derived from the portfolio of functions as outlined in Section 7 of the LEA Amendment Act of Some of the key developments that have occurred as a consequence of the expanded mandate include the revision of the organizational structure, as well as the design and publication of new regulatory instruments. The Strategic Plan therefore recognizes that the business of the Authority has changed from what it was 5 years ago, and that a set of incremental activities and projects forms part of the planned strategic initiatives. LEWA Strategic Plan 2014/ /19 Page 7

8 3.0 METHODOLOGY AND APPROACH 3.1 Literature Review A number of documents which provided guidance on the mandate and nature of operations of the Authority can generally be classified into the following broad categories: i. Founding Legislation, Governance and Administrative Policies ii. Regulatory Instruments (Rules and Regulations) iii. Regulatory Guidelines and Reports 3.2 Staff consultations All inclusive staff consultations were carried out and that provided assurance that the strategic plan has the necessary employees buy-in. 3.3 Strategic Planning Workshop An interactive strategic planning workshop was held to create a forum for the Management Team to review the Authority s performance under the previous Strategic Plan, and to set new strategic objectives for the 5 year planning period commencing in April 2014 through to March The Strategic Plan was subjected to a validation process by a combined group of internal and external stakeholders, as a way of ensuring that the latter group s perspectives are taken on board within the process of formulating the new strategic objectives. 3.4 Board of Directors In fulfillment of its responsibilities as the custodian of the Strategic Plan, the Board of Directors actively participated in the development of the Strategic Plan. 4.0 THE VISION, MISSION AND VALUE STATEMENTS VISION To be a world class utilities regulator that facilitates delivery of affordable, sustainable and quality services LEWA Strategic Plan 2014/ /19 Page 8

9 MISSION STATEMENT To regulate the electricity, urban water and sewerage services in the interests of all stakeholders through transparency, consistency, professionalism and teamwork. Our motto A partner to all for sustainable services Re selekaneng sa moshoelella Value Statements The value statements reflect what the Authority stands for and how it is going to conduct itself. In its quest to comply with the LEA Act 2002 as amended, legislation relevant to regulation, and good corporate governance practices, the Authority has adopted the following values: Professionalism The Authority shall undertake, at all times, a competent and committed approach in line with professional ethics and standards. Teamwork The Authority shall at all times, embrace team work, mutual cooperation, extensive consultation and appreciation of diverse perspectives in the discharge of its duties and functions. Efficiency The Authority shall make regulatory decisions without undue delay using minimum resources available. Integrity The Authority s decisions and practices shall be honest, reliable, ethical and unbiased. Excellence The Authority shall be a high quality, continuously improving and self-aware institution. LEWA Strategic Plan 2014/ /19 Page 9

10 Regulatory Principles The Authority s adherence to sound regulatory principles as a Regulator is key to delivering on its mandate and achieving its objectives. In this regard, the Authority within its legal mandate, has adopted the following internationally accepted regulatory principles Consistency and Predictability The Regulator should endeavor to act in a consistent manner and its decisions should have a reasonable degree of predictability based on previous rulings in similar matters in line with best practices obtaining in similar regulatory settings. Transparency The Regulator should ensure, at all times that the entire regulation process is transparent and open to public scrutiny and stakeholders participation. Accountability The Regulator should recognize its responsibility to stakeholders and the public and ensure accountability at all levels Neutrality The Regulator should be neutral, fair and non-discriminatory to all. 5.0 ANALYSIS OF THE OPERATING ENVIRONMENT The operating environment, as depicted in the schematic presentation below, is characterized by the following: Identity, Roles and Interests of the Direct Stakeholders. Direct Stakeholders are critical for the realization of the strategic objectives of the Authority Identity, Roles and Interests of the Indirect Stakeholders. Indirect Stakeholders, if not adequately dealt with in terms of their interests and requirements may present impediments, but not an absolute cessation, to the operations or realization of the strategic objectives Practices and Prejudices which may hinder fruitful engagement within institutions identified in the operating environment. Legal and Regulatory Framework Pieces of Legislation, Regulations, Guidelines which the Authority has to operate within. Shaping Forces or Forces that compel change (often induced externally) these include human rights awareness, political landscape, economic factors and ICT. LEWA Strategic Plan 2014/ /19 Page 10

11 ICT Human rights awarene Indirect Stakeholders Practices and Attitudes LEWA Legal Framework Direct Stakeholders Indirect Stakeholders Political landscape Economic factors 5.1 Direct Stakeholders Identity LEC, WASCO and LHDA Our Interest from them Cost effective (economic and financial viability) Affordable, reliable, efficient, sustainable, and high quality services Compliance Their Interests from us Tariffs that will ensure cost recovery and good returns Information asymmetry LEWA Strategic Plan 2014/ /19 Page 11

12 Identity Our Interest from them MEMWA (DoE Clear segregation and COW) and implementation of responsibilities Environmental Protection Formulate clear policy, regulatory legislative framework Budget support Timely approval of budget Identification of UAF Projects Parliament Timely Approval of amendments and subsidiary legislation Raising awareness about LEWA Their Interests from us Increase in access to quality services Universal access to quality services Private Public Partnership Policy implementation Increase in access to quality services Universal access to quality services Private Public Partnership Policy implementation Competent Authorities Collaboration and cooperation Fair, transparent regulatory processes Consumers Efficient use of electricity and water services Timely payments of customer bills No illegal connections and vandalism DRWS Quality services Compliance Public Support of the regulatory systems No vandalism Employees High performing and Suppliers of goods and services ethical staff Compliance to tendering procedure Competitive services Timely provision of quality goods and services Affordable, reliable, efficient, sustainable and quality services Timely resolution of complaints Guidance on Best practice Information Fair processes and practices Competitive remuneration package and benefits Transparent and fair procurement processes Timely payment LEWA Strategic Plan 2014/ /19 Page 12

13 Note: The Board is recognized as an integral part of the Authority, which can also assume a status of an external stakeholder in terms of their expectations from the Management, such as reports and service standards. 5.2 Indirect Stakeholders Identity Our Interest from them Their Interests from us Media Good/accurate publicity NGOs Buy-in and commitment Development and Financial and technical Cooperating support partners Political parties Understanding of the role of LEWA Potential licensees Regulatory Associations Buy-in Application for License to conform with regulatory instruments Participation in the provision of electricity, water and sewerage services Collaboration, cooperation and harmonization of the regulatory instruments Business Sector Support the licensees in complying with the set standards and regulations Academic and Research institutions Carrying out of research, learning and teaching in regulation of electricity, water supply and sewerage services Access to Information (Regulatory) Adverts Transparent Regulatory processes Clear objectives and strategies Publicity/ mileage Publicity / mileage Meeting political agendas Clear, fair and transparent regulatory processes for licensing, tariff setting and compliance monitoring and enforcement Collaboration, cooperation and harmonization of the regulatory instruments Fair regulation and affordable tariffs. Support in research, learning and teaching of electricity, water supply and sewerage services LEWA Strategic Plan 2014/ /19 Page 13

14 5.3 Legal and Regulatory Environment The documents below provided guidance on the development of the Strategic Plan as it relates to the Authority s mandate Water and Energy Policies, Vision 2020, Millennium Development Goals (MDGs), Poverty Reduction Strategy (PRS), National Goals/Targets under the National Strategic Development Plan (NSDP) LEA Act of 2006 as amended, Water Act, Environment Act, Public Health Order, Interpretation Act (as amended), Land Act, Companies Act of 2011, Local Government Act, Public Finance and Management Act, Income Tax Act, Value Added Tax, LRA Act, WASCO and LEC (Establishing and Vesting) Acts Relevant Subsidiary Legislations (include regulations and other by-laws) Corporate Governance Hand Book, LEWA Operational Policy Framework Regulatory Instruments such as QoSSS, License and Standards International Financial Reporting Standards (IFRS) 5.4 Situational Analysis key considerations Governance In terms of the assessment carried out, the Authority has attained a reasonable level of maturity and made satisfactory strides in setting up the governance structures and processes that are contemplated under the King III Code of Governance and similar documents. The Board and Committee Charters have been developed to guide the established bodies on how to conduct their routine functions Administrative Policy Framework Financial Management The internal control systems are generally embedded and will need to be continually monitored to strengthen the already existing financial discipline. Financial Reporting systems are adequately developed, but will constantly need to be reviewed to respond to the stakeholder information requirements. Human Resources Management and Development In the endeavor for the Authority to be served by a productive and motivated workforce, a review of the Human Resources Policies and Procedures will need to be undertaken. The exercise will be informed in this instance by the need to align such policies to the best industry LEWA Strategic Plan 2014/ /19 Page 14

15 practices, as well as the desires and aspirations that came to light during the staff interviews and workshop sessions. A Human Resources Development Plan has featured as a crucial initiative that will continue to be pursued to ensure that a comprehensive set of skills is developed to effectively undertake the specialized regulatory functions of the Authority. This will be coupled with internal information sharing sessions through staff presentations and reports, and enhancement of reading culture through establishment of the library. Procurement To strengthen the Authority s procurement policy for purposes of transparency and fairness, policies and procedures shall be reviewed to ensure that the Authority derives value for money (VFM) in all its procurement transactions. Communications Strategy The Authority will intensify the awareness campaigns within the respective communities that it interfaces with through implementation of a well structured and responsive communications strategy Operational Challenges Adequacy of the Regulation Instruments and National Policy The Authority has developed a number of regulatory instruments. However, there is still a need to develop and/ review some regulatory instruments due to the expanded mandate to regulate the urban water and sewerage services in addition to the evolving nature of the regulation of service provision. Notwithstanding the above, the critical issue is the lack of a national energy policy on which some of these new instruments would be anchored. Performance Monitoring of the Licensees Another area of strategic focus in the planning period relates to monitoring of Licensees performance to ensure compliance with the regulatory prescripts and service targets. A suite of strategies are contemplated in this Strategic Plan to facilitate delivery on this important mandate of the Authority. LEWA Strategic Plan 2014/ /19 Page 15

16 Universal Access Fund (UAF) At the point of preparing the Strategic Plan, the Universal Access Fund had about M30m as funds earmarked for projects that would facilitate access to electricity supply, especially in the remote areas of the country. In liaison with the appropriate stakeholders, the Authority will explore mechanisms that will facilitate utilization of the UAF for the purposes that it was created. Consolidation of Regulatory Training The Regulator (LEWA) is faced with the challenge of developing appropriate regulatory skills across the broad spectrum of the regulated industries, and may in this instance rely heavily on external consultancy interventions. This situation alone calls for a huge investment in the skills development of the Authority s staff to ensure that the competency levels are raised to a point where they can match those obtaining within the ranks of the Licensees or service providers. Occasions have arisen and will continue to arise where the Licensees may find difficulty embracing the new ethos of regulation, and may involve themselves in acts which at times may appear to be hostile and uncooperative. When such signs are picked up, it is often an indication of the lack of understanding and appreciation of the expected role to be played by the regulator, more especially when regulation itself is a new phenomenon in the local environment. LEWA Strategic Plan 2014/ /19 Page 16

17 6.0 ANALYSIS OF STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT) This process has been undertaken through a range of techniques, among which was the use of the conventional SWOT Analysis, the results of which are presented in Figure 1 and matrix below in Table 1. Figure 1 OPPORTUNITIES AND THREATS Represent conditions out there (surrounding the Authority) which are critical for its SUSTAINABILITY, RE-POSITIONING OR GROWTH STRENGTHS WEAKNESSES {Largely within the control of the Organization} STRATEGY: Maximize Opportunities Table 1 SWOT ANALYSIS RESULTS STRENGTHS WEAKNESSES Financial Independence Skilled Employees Independence in decision making Low staff turnover (stability) Small and Manageable organization Professionalism Offer market related remuneration Poor teamwork Failure to meet statutory obligations (eg reporting targets) Partial implementation of PMS Lack of dedicated IT personnel Experience or knowledge gap Inadequate understanding of governing legislation LEWA Strategic Plan 2014/ /19 Page 17

18 Clear governance framework and structure Performance Management System Drive to do work Substantial experience in regulation Regional integration Lack of own office building Not well branded OPPORTUNITIES THREATS Change in stakeholders needs and preferences Change in policy Collaboration with other regulatory bodies and competent authorities Possible donor support Reforms and extended Authority s mandate Dependency on licensee for funding Licensees non-compliance Change in policy Change in stakeholder needs and preferences Inadequate security of supply Dependency on imported supply- Tariffs The concept of water as a human right. 7.0 STRATEGIC OBJECTIVES FOR 2014/ / Strategic Goals Strategic Goals, by definition, represent the primary purpose(s) for which an organization has been established. LEWA s Strategic Goals: i) Regulation of the electricity sector ii) Regulation of the urban water and sewerage services 7.2 Strategic Objectives Strategic Objectives flow from the Strategic Goals to define the key initiatives that will be pursued to attain the organizational mandate. LEWA s Strategic Objectives for the Planning Period 2014/ /19: Strategic Objective 1 To determine Tariffs and Charges Strategic Objective 2 To ensure Security of Supply LEWA Strategic Plan 2014/ /19 Page 18

19 Strategic Objective 3 To develop and implement Regulatory Frameworks Strategic Objective 4 To monitor Licensees Performance and Compliance Strategic Objective 5 To build sustainable organization Strategic Objective 6 To promote Stakeholder Awareness, Empowerment and Protection Strategic Objective 7 To increase access to electricity, water and sewerage services. 8.0 QUICK WINS To facilitate a smooth roll-out of the Strategic Plan, a set of initial actions is outlined in this section in a manner that clearly establishes the strategic poise and preparedness by the LEWA to pursue the proposed Strategic Objectives and undertake the related planned activities. 8.1 Review and Update the Policy Framework The strategic planning process has provided a good opportunity for the Authority to undertake introspection and reflect on areas where gaps exist in the Policy Framework and in the general manner of doing business. The results of the consultation process should serve as a crucial input into the review and update of the various policies and procedures. Teamwork as reflected on the development of the Strategic Plan must be entrenched within all the sections of the Authority going forward. The development of the action plans to implement the plan are critical. 8.2 Stakeholders Awareness and Engagement Given its previous endeavors, the Authority has been set out to communicate with the Authority s stakeholders and has been partially successful. Howeve,r there is a need to continue refining current engagement activities with stakeholders to engender the latter s buy-in increased awareness and education that are critical for the successful regulatory system. 8.3 Advocacy with the Ministry for Projects identification LEWA Strategic Plan 2014/ /19 Page 19

20 The Authority has recorded considerable achievements in the mobilization of funds for the Universal Access Fund. In view of the purpose for which the UAF was established, a considerable amount of work needs to be done to ensure that the collected funds are applied to the deserving projects, and this will call for an effective process of mobilizing the key players to roll-out the utilization of the Fund. Specifically sustained advocacy for the identification of the UAF projects by the Ministry is a priority. 8.4 Review of Job Descriptions The job descriptions shall be reviewed in line with the new organizational structure and major activities to be undertaken by the Authority. 9.0 GOVERNANCE STRUCTURE The Board is responsible for the Authority s corporate governance and provides effective leadership based on ethical foundation. In this regard the Board is responsible for providing the strategic direction of the Authority for the executive management. The Authority s board is also responsible for considering the legitimate interests and expectations of the Authority s stakeholders in its deliberations, decisions and actions. 9.1 Board Committees The Board has further established four Committees that are charged with specific responsibility which they discharge under the direction and on behalf of the Board. For each Committee a clear set of Terms of Reference has been developed and approved by the Board as a way of providing a framework within which each Committee can and should conduct its business. The Board Committees are presented here below as follows: The Audit and Risk Committee Risk management process involves the planning, arranging and controlling of activities and resources in order to minimize the impact on the business or organization. For effective risk management in LEWA, it is prudent that the Committee responsible for risk should also deal with audit function of the organization. This is premised on the interrelation between internal controls and inherent risk management. The role of the Audit and Risk Committee is to assist the Board with discharging its responsibilities with regard to risk management and audit. With respect to risk, the Committee shall: Consider the risk strategy and policy; LEWA Strategic Plan 2014/ /19 Page 20

21 Monitor the process at operational level and report to the Board thereon; and Consider the results of risk management and internal control processes. With respect to the audit function, the Committee shall Assist the Board with developing and maintaining effective systems of internal control; Review the work of the Internal and External auditors; and Review the Annual Financial Statements and the Audit Report. The Audit Committee is therefore renamed Audit and Risk Committee to fully reflect the functions of the Committee in relation to both audit and risk management functions The Human Resources, Finance and Administration Committee The role of the Human Resources, Finance and Administration Committee is to assist the Board with discharging its responsibilities as an employer and ensuring that the LEWA is managed in a financially sustainable manner Customer Services Committee The role of the Customer Services Committee is to assist the Board in the discharge of its responsibilities to ensure that proper quality standards are adhered to in the provision of services Pricing and Tariffs Committee The Pricing and Tariff Committee has been established for the purposes of evaluating and reviewing tariff adjustment submissions from the service providers and approving appropriate pricing and tariff regimes. The terms of reference of one of the committees must be amended or a new committee be formed to deal with the Board and the Authority in relation to ethics. 9.2 Organizational Structure The organizational structure presented here below has been considered to be both suitable and adequate to facilitate the discharge by LEWA of its mandate during the period 2014/ /19 including improvement of the Authority on its public awareness activities and on both compliance monitoring and risk management. Compliance Monitoring and Risk Management Following an assessment of the previous Strategic Plan, it has become necessary to focus more on compliance and risk management. Over the years, the main source of concern has always been non-compliance by the licensed utilities. Related thereto is the need to ensure that LEWA is adhering to its own internal policies, procedures, LEWA Strategic Plan 2014/ /19 Page 21

22 manuals and standards. To this end, the compliance function has been identified as one of the key functions that will drive the current strategy. The function shall include both the internal and external compliance matters of the organization and the monitoring of licensees compliance to the regulatory requirements. Having recently developed a comprehensive risk management strategy and plan, its implementation under the proposed Strategic Plan becomes critical. Cognizant of the costs related with monitoring the implementation of the risk policy, it is considered practical that compliance and risk functions should reside in the Legal Services Department with a creation of a position of Compliance and Risk Officer during the 2014/15 financial year. The Authority s stakeholders communication In line with the assessment of the implementation of the past strategic plan, the Authority has to improve on its public awareness and stakeholders empowerment. The understanding is that all functions of the organisation that deal with stakeholders communication must be coordinated and integrated under one Department. This will be helpful in ensuring effective monitoring, coordination and control. From a knowledge centric perspective this will help in designing programs that are designed to assist the organisation manage both internal and external communication efforts. Hence both Consumer Affairs and Public Relations activities must be under one Department, namely, Consumer Affairs and Communications Department (CACD) in place of Customer Affairs department. The Department shall be responsible for all the consumer affairs and public relations activities of the Authority. Its staff compliment should be made up of: Manager, Consumer Affairs officer and Public Relations Officer. This development means the public relations function is moved from the CE s office to the newly constituted CACD. Secretarial functions within the Authority The Authority currently has two different grades for Executive Secretary Grade 3 and the Administrative Secretary Legal services (ADSL) Grade 4. In assessing the Authority s progress on the previous Strategic Plan, it became evident that there is a need to align the terms of reference of each position with the workload and expertise required thereto. All positions, save that of Administrative Secretary Legal Services, have been found to be appropriately matched with the job requirements. With respect to the Administrative Secretary, the workload in the position has increased significantly and it is anticipated that it will continue doing in the foreseeable future. The functions and responsibilities of the position and that of the Executive Secretary have been found to be similar in all material respects in relation to the required skills, responsibilities, abilities and knowledge. LEWA Strategic Plan 2014/ /19 Page 22

23 In order to address this anomaly, the grade 4 of the Authority is abolished and the ADSL is moved to grade 3. This effectively means that the LEWA now has 6 grades and must be renumbered accordingly following the abolition of the current grade 4. LEWA Strategic Plan 2014/ /19 Page 23

24 Lesotho Electricity and Water Authority (LEWA) Organogram Chief Executive Executive Secreatry Driver CE Manager Technical Regulation Water Manager Technical Regulation Electricity Manager Finance,HR&Admin Manager Economic Regulation Manager Consumer Affairs and Communications Manager Legal Services Performance Analyst Water Water Quality Officer Performance Analyst Electricity Accountant Human Resources Officer Economic Analyst cunsumer Affairs Officer Public Relations Officer Legal Officer Compliance and Risk Officer Inspector water Inspector Electricity Assistant Accountant&Admin Admin. Secretary Legal Services Receptionist Driver Office Assistant LEWA Strategic Plan 2014/ /19 Page 24

25 9.3 LEWA Departments Technical Regulation Electricity The Department takes a lead role in technical regulation of the electricity sector, with particular emphasis on safety, security and quality of supply, as well as development and implementation of technical rules, codes and standards Technical Regulation Water The Department takes a lead role in technical regulation of the urban water and sewerage services sub-sector, with particular emphasis on safety, security and quality of supply, and development and implementation of technical rules, codes and standards Economic Regulation The Department s primary responsibility is to regulate electricity, urban water and sewerage services tariffs and charges. The Department also plays a key role in developing pricing and regulatory instruments that are essential in determining how prices are set in these sectors Legal Services The Department is charged with the responsibility of ensuring that there exists a fully developed and adequate Regulatory Framework as constituted by a suite of rules, regulations and procedures, which the service providers have to be compliant with at all times. The Department also provides secretarial services to the Board and legal advice to the Authority. Compliance and risk functions are coordinated by the Department Consumer Affairs and Communications The Department acts an interface between the consumers and the service providers, with emphasis on resolution of complaints, or other related issues that must be adequately attended to. Furthermore it deals with stakeholders awareness, outreach and education programmes with the ultimate goal of attaining their sustained empowerment. Another key area is that of discharging public relation functions of the Authority paying special attention to the promotion of the LEWA brand. LEWA Strategic Plan 2014/ /19 Page 25

26 9.3.6 Human Resources, Finance and Administration The Department is responsible for financial management of the Authority including the preparation and presentation of financial statements. It also takes lead role in the development of the Authority s human resources and administration policies and ensures their efficient and effective implementation. LEWA Strategic Plan 2014/ /19 Page 26

27 10.0 LOGICAL FRAMEWORK MATRIX LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 1 To determine Tariffs and Charges Strategies Activities Performance Indicators Risks and Assumptions Time Profile Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 1- Determine Electricity Tariffs and charges Review submission by Licensees Electricity end-user Tariffs and charges approved by the Board and publicized Thorough consultations will yield fair price/tariff structure Adequate and credible data submission by the licensee 2- Determine Tariffs and charges for WASCO Review submission by WASCO Water end- user Tariffs and charges approved by the Board and publicized Thorough consultations will yield fair price/tariff structure Adequate and credible data submission by the licensee 3- Formulate pro-poor pricing mechanism in electricity Prepare consultation document in line with Government Policy Carry out stakeholder consultation Construct a tariff re-balancing model Implementation of the mechanism Record of consultations Board Approval Pro-poor tariffs Government Policy will provide guidance Cooperation and support will be obtained from the Licensees Acceptability by customers 4- Develop and implement: Procurement and engagement Consultants Secured funding confirmed LEWA Strategic Plan 2014/ /19 Page 27

28 LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 1 To determine Tariffs and Charges Strategies Activities Performance Indicators Risks and Assumptions Time Profile Principles for Generation tariffs determination and Related Economic and Financial Model 5- Develop and implement Procurement of Power Guidelines. 6. Develop and implement: Guidelines for the Sale of electricity by Landlords to tenants of consultants Stakeholders consultations Complete the principles and the Model Capacity Building of LEWA on the Model Implementation Procurement and engagement of consultants Stakeholders consultations Complete the guidelines Implementation Finalise resale consultation paper Prepare TOR for the engagement of a consultant Procure the services of the consultant Monitor project implementation procured Record of consultations Board Approval Record of consultations Board Approval Electricity Resale Guidelines and adequate Secured funding confirmed and adequate Data collection in ten districts. LEWA Strategic Plan 2014/ /19 Page 28

29 LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 2 To ensure Security of Supply Strategies Activities Performance Indicators Risks and Assumptions Time Profile 1- Determine Security of Supply options for electricity 2- Implement security of supply options for electricity 3- Determine Security of Supply options for water Acquire and review generation master plan study report from DoE/LEC Continue participation in MEMWA s efforts for determining supply options e.g. Kobong pumped storage Request transmission Licensee (LEC) to prepare system capacity statements Request Transmission Licensee (LEC) to prepare interconnector capacity statement Require LEC to meet Operating Security standard Implement Bulk Supply Costs Pass -Through Principle Participate in Ministerial meetings to establish and review long term water and sanitation strategies Report acquired and reviewed Final report available Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Participation in meetings and comments on documents MEMWA invitations Transmission system LEC cooperation capacity statements approved by the Authority Interconnector LEC cooperation capacity statements approved by the Authority Operating Security LEC cooperation standard met Bulk Supply Costs Pass LEC report -Through Principle implemented Minutes of Meetings Consensus reached on recommended supply options LEWA Strategic Plan 2014/ /19 Page 29

30 LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 2 To ensure Security of Supply Strategies Activities Performance Indicators Risks and Assumptions Time Profile Request and monitor the installations of the technological devices for WASCO s operating efficiency Acquire and approve WASCO leakage reduction program in all networks Request and monitor production capacities and storages Develop and publicize guidelines for efficient use of potable water Acquire and approve the WASCO Master Plan for all water supply networks GIS Mapping and Hydraulic Models for all WASCO water supply networks WASCO leakage reduction program Substantial reduction of leakage Optimal Water storage Optimal production capacity Guidelines WASCO Network Master Plans Professional staff and funds available in WASCO Funds available for undertaking measures to reduce NRW Operational Manuals available Customers buy-in Expertise and Funds available for production networks Master Plans. LEWA Strategic Plan 2014/ /19 Page 30

31 LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 3 To develop and implement Regulatory Frameworks 1.Review the Act Strategies Activities Performance Indicators Risks and Assumptions Time Profile Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 2- Develop and review Subsidiary Legislation and Regulatory Tools for Water and Electricity Obtain submissions from relevant parties on areas that require amendment Prepare a draft for consultation with Parliamentary Counsel Submit draft to MEMWA for policy clearance Submit final approved draft to Law Office for amendment by Parliament Procure consultants Undertake stakeholder consultations Develop Power producers guidelines/rules/regulation Gap analysis report (year 1) Concurrence from the Ministry on gaps to be addressed (year 1) Draft amendments (year 2) Consultant engaged Stakeholders consultation reports Power Producers guidelines Power Producers Regulations/Rules Implementation Process will move without hindrance through the legal and parliamentary system. secured funding adequate Procure consultants Undertake stakeholder consultations Develop licensing models for the power sector Consultant engaged Stakeholders consultation reports Licensing Models Secured funding adequate LEWA Strategic Plan 2014/ /19 Page 31

32 LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 3 To develop and implement Regulatory Frameworks Strategies Activities Performance Indicators Risks and Assumptions Time Profile Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Procure consultants Undertake stakeholder consultations Develop Power Purchase Agreements guidelines/rules/regulations Make an assessment of the existing Regulatory Framework and determine gaps Consultant engage Stakeholders consultation reports PPA guidelines PPA rules/regulations Inventory and assessment record of regulatory framework Secured funding adequate Gaps will be identified and addressed Update and develop Regulatory instruments for Electricity Update and develop Regulatory instruments for Water Benchmark developed regulatory instruments against the best practice regulatory models Consult and train the Licensees on the revised or proposed new regulatory instruments (Rules and Regulations) and guidelines Proposed drafts of the revised or developed regulatory instruments Revised or proposed instruments will facilitate the regulatory process As above As above Refer to guidelines and prototype instruments and align accordingly Record of consultative sessions and training of stakeholders There will be enough body of evidence and instruments to benchmark against Stakeholders will give maximum support and participation Yes LEWA Strategic Plan 2014/ /19 Page 32

33 LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 3 To develop and implement Regulatory Frameworks Strategies Activities Performance Indicators Risks and Assumptions Time Profile Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 3- Implement Regulatory Frameworks Obtain Board approval and legislative clearance Publishing Implementation Board Approval Legal Notices Gazettes Record of noncompliance Wide publicity will be given to the promulgation of new instruments Licensees will cooperate LEWA Strategic Plan 2014/ /19 Page 33

34 LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 4 To monitor Licensees Performance and Compliance Strategies Activities Performance Indicators Risks and Assumptions Time Profile 1- Monitor Licensees Performance and Compliance Carry out inspections Inspection Reports Licensees cooperation Undertake compliance audit Compliance Reports Licensees cooperation Carry out performance assessment Performance assessment Licensees provides reports reports Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 2- Resolve Customer and Licensee complaints Identify key performance indicators (KPIs) for the electricity sector; Develop Performance Assessment Tools (PATs) for electricity Approve KPIs and PATs for water and sewerage services Two Executive Management meetings annually with each Licensees One Board session with each Board of non-complaint licensees Implement customer complaints rules and procedures Approved KPIs and PATs Funding secured Approved KPIs and PATs Meetings Compliance Meetings Compliance Number of complaints resolved within specified timeframes Consultancy work completed on time Non-compliance issues Non-compliance after management intervention Cooperation from affected parties LEWA Strategic Plan 2014/ /19 Page 34

35 LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 5 To build and operate a sustainable organization Strategies Activities Performance Indicators Risks and Assumptions Time Profile 1. Review and Implement: Board Governance processes Administrative policies, processes and procedures Review Board Charter Review Terms of reference for the Committees Approved Board Charter Approved Terms of reference for the Committees Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 The Board will facilitate the speedy conclusion of the process 2. Review and Implement: Administrative policies, processes and procedures Review, update and implement CGHB Review and update: HIV and AIDS Policy, and external communications strategy Review and update Training and Development Policy Policy gap analysis report Updated and approved CGHB Develop new set of human resources and administration Policies and Procedures Updated and approved Updated and approved Completion of review on time Funding and Consultancy secured to augment internal review Funding and Consultancy secured to augment LEWA Strategic Plan 2014/ /19 Page 35

36 LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 5 To build and operate a sustainable organization Strategies Activities Performance Indicators Risks and Assumptions Time Profile Review and update: Performance Management system Review and update Remuneration Policy and Strategy Staff Costs to company survey Updated and approved Updated and approved Survey and recommendations internal review Funding and Consultancy secured to augment internal review Funding and Consultancy secured to augment internal review Data received from Organizations to benchmark against Formulate Team building sessions and activities (to move to review and implement policies) Organize internal information sharing sessions to promote a culture of reading and learning.(same as above) Team building sessions programme and report Program of information sharing sessions with presentation and activities Staff will participate Staff will participate Review ICT policy ICT Policy Funding available Implement the Administrative policies, processes and procedures Implementation of policies, processes and procedures LEWA Strategic Plan 2014/ /19 Page 36