Zarqa Water Administration Commercialization
Corporatization and Management Contract
The water sector pursues a policy of creating regional water and wastewater companies throughout Jordan.
WAJ decided that Zarqa Water Administration has to undergo a process of commercialization, this includes two stages:
1. Establishment of a limited liability company (Zarqa Water Company ZWC). So that it will be an independent legal entity with its own separate finances and management.
2. ZWC to go for a full performance based Management Contract, with a professional utility operator to be assigned as the Management Contractor.
The main objectives of the Management Contract are to:
(a) Improve the water and wastewater services to customers in Zarqa Governorate;
(b) Improve the financial position of ZWC
(c) Establish, the foundation for sustainable operational and business effectiveness and efficiency
(d) Reduce the NRW.
(e) Manage the capital investments projects (by Japan, China, EU) and coordinate with MCC investment projects in Zarqa Governorate.
The service area covers Zarqa Governorate with a population of around 800,000 people.
Management Contract Period:
Five years, the contract may be extended by a period of two years for two times.
Performance-based service contract
1. Corporatizing ZWA:
· Corporatization documents, Memorandum of Association (MOA) and Article of Association (AOA) are under preparation. Zarqa Water Company ZWC will be the legal successor of ZWA, and will be a legal entity with its own separate finances. Its management committee members will be from both the public sector and the private sector. The duties and responsibilities of ZWC will be defined in MOA and AOA.
· The same duties and responsibilities of ZWC will be defined in the "Assignment Agreement" between the Water Authority of Jordan (the assignor) and ZWC (the assignee). The Assignment Agreement which is under preparation will be governing the working relationship between ZWC and WAJ and is the basic framework to be followed by the Management Contractor.
· Registering the company requires the cabinet approval, it is expected that the draft Assignment Agreement will be ready to be submitted with other required documents for cabinet approval in Jan. 2011.
2. ZWA Management Contract :
· CH2 M Hill Consulting Co. has been assigned by the Millennium Challenge Corporation (MCC) on 1st Sep. 2010 to do the transaction advisory (the technical) part, their duties include assisting PMU in the preparation of tender documents for the services of the Management Contractor for ZWC, as well as assisting PMU in the tendering process.
· The transaction advisor together with PMU had prolonged discussions between 10 and 14 Oct. 2010 and had agreed on the management contracting strategies, organization roles and responsibilities, risk allocations, and procurement process.
· It is expected to announce the Expression of Interest (EOI) to potential bidders internationally by July 1st 2011.