CLIENT: BOTSWANA WATER UTILITIES CORPORATION

Country:  Botswana

Sector:  Utility/Infrastructure

Service:  Financial Management/Management Consulting

Project:  Tariff/Rate Study and Financial Management Services


Project Description: WUC is a parastatal organization, wholly owned by the Botswana Government. It was established in 1970 by an Act of Parliament (Laws of Botswana Cap 74:02) with a mandate to manage a single project for the supply and distribution of water in what was then called the Shashe Development Area. Under the Water Sector Reforms Program a study to rationalize the water sector in Botswana and ensure uniform service levels for all was initiated. The Corporation presently supplies over 76 million cubic meters of potable water annually to its total Client base. With a property, plant and equipment value of over P5 billion ($500 million), the Corporation’s infrastructure includes nine dams: Gaborone, Nnywane, Bokaa, Shashe, Ntimbale, Letsibogo, Dikgatlhong, Lotsane, Thune as well as the North South Carrier Scheme which comprises a 360km long pipeline, water treatment plants and associated pump-stations. Additional dams, the Dikgatlhong, Thune and Lotsane are under construction.

 

IBS was engaged as a subcontractor to Paul Bender Consulting (PBC) to provide Consultancy services for the development of the National Tariff on Water and Wastewater and Financial Modeling, Analysis and Review for the Water Utilities Corporation. This tariff and financial study is to determine the financial requirements for WUC to operate on a financially stable and sustainable basis. To understand these requirements, a 10-year financial model was prepared incorporating key assumptions for revenues, recurring expenditures, capital budgets and financing requirements. A 10-year planning timeframe was used for this study because the requirements for long-term financial sustainability must include WUC’s operations once it has taken over all water and wastewater operations.

 

The project also includes: developing demand and growth forecasts, Client demographic and use patterns, operating cost components and cost drivers, revenue and rate requirements, alternate rate modeling, and a review of operations to determine opportunity areas for business improvement and operational efficiency/improvement.

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