Outline of the Project

Project Name

The Project on Capacity Building for Urban Water Supply System (Phase 3)

Country

Kingdom of Cambodia

Project Site

Phnom Penh, Siem Reap, Preah Sihanouk, Battambang, Kampong Cham, Kampong Thom, Kampot, Pursat, Svay Rieng

Date of R/D signed

July 18, 2012

Term of Cooperation

From November 10, 2012 to November 9, 2017

Implementing Organization

Department of Potable Water Supply (DPWS), Ministry of Industry, Mines and Energy (MIME)

Targeted Waterworks

8 Provincial Waterworks in Battambang, Kampong Cham, Kampong Thom, Kampot, Pursat, Siem Reap, Preah Sihanouk, and Svay Rieng

Japanese Cooperation Organization

Ministry of Health, Labour and Welfare
Water and Sewer Bureau, City of Kitakyushu

Project Background

After the end of the civil war in the 1990s, the Government of Japan and other donors assisted Phnom Penh Water Supply Authority (hereinafter referred to as "PPWSA") in rehabilitating water supply system and enhancing operation and maintenance of the facilities. This contributed to expansion of the capacity of water supply system and enhancement of the capacity of human resources at PPWSA. On the other hand, the production capacity of provincial waterworks was low and could not sufficiently supply water to the residents. The Cambodian Millennium Development Goals set the target of supplying safe drinking water to 80% of the urban population in 2015. The results of "Overview on urban water supply sector in the Kingdom of Cambodia" conducted by MIME in 2012, which supervises the water supply in urban areas, revealed that the water supply level was still low and only 58.6% in 2010 of urban population had access to the potable water in the cities.

To tackle this problem, a new construction or rehabilitation of water supply system were carried out at eight (8) cities including Siem Reap by Japanese Grant Aid, six cities by Asian Development Bank (hereinafter referred to as "ADB"), and Preah Sihanouk by World Bank (hereinafter referred to as "WB"). Moreover, JICA has been implementing the technical cooperation project of "Project for Capacity Building for Water Supply System (Phase 2)", aiming to enhance the operation and maintenance capacity of water supply facilities at eight provincial waterworks from May 2007 to March 2012. Through this project, the target eight provincial waterworks have enhanced their technical capacity on operation and maintenance and have better conditions of water supply facilities.

However, the problems of financial management and unstable management still remain at the provincial waterworks. Lack of mid-term and long-term plans of facility maintenance and replacement causes the unstable conditions on water supply facilities resulting in the low water supply coverage. Necessary legal/institutional frameworks or guidelines in water supply sectors are not well established in Cambodia and MIME's capacity of supervising the performance of provincial waterworks is limited. This limits provincial waterworks to receive the sufficient supports from MIME on water supply management.

To take effective actions toward these problems, the Royal Government of Cambodia requested the Government of Japan for the technical cooperation on capacity building for water supply system focusing on the enhancement of management capacity.

Overall Goals

Water services provided by Target Provincial Waterworks (TPWs) are enhanced.

Project Purpose

TPWs are able to manage water supply more stably.

Outputs and Activities

Output 1: Capacity of managing data for ten-year financial management plans

Activities

1-1	Develop customer ledger
1-1-1	Review the existing customer ledger and the information recorded
1-1-2	Identify the necessary data items on customer ledger and revise the format of existing ledger
1-1-3	Conduct customer survey
1-1-4	Input data/information acquired through customer survey
1-1-5	Update the customer ledger including new connection, suspension and cancellation
1-2	Develop asset ledger
1-2-1	Review the existing customer ledger and the information recorded
1-2-2	Identify the necessary information to be recorded in asset ledger and revise the format of existing ledger
1-2-3	Record the current conditions, present value, and remaining useful life
1-2-4	Update the asset ledger when the facilities are replaced or newly installed
1-3	Prepare the financial statements complying with Cambodian Accounting Standard (CAS) including Balance Sheet (B/S), Statement of Profit and Loss (P/L), and Cash Flow (C/F)
1-3-1	Review the existing financial statements
1-3-2	Prepare training plan on the preparation of financial statements
1-3-3	Conduct group training on the financial statements complying with CAS
1-3-4	Conduct OJT on preparation of financial statements

Output 2: Capacity of formulating ten-year financial management plans

Activities

2-1	Develop an expenditure plan on replacement and improvement of facilities and equipment
2-1-1	Identify facilities which need to be included in a replacement and improvement plan from asset ledger developed through activity (1-2)
2-1-2	Estimate costs necessary for facility replacement and improvement
2-1-3	Prioritize the facilities to be replaced and improved
2-1-4	Develop an expenditure plan for facility replacement and improvement
2-2	Develop a plan of expansion of water supply
2-2-1	Decide water supply area and carry out water demand forecast
2-2-2	Identify the framework (capacity, length, etc.) of expansion with options
2-2-3	Estimate cost for each option of expansion
2-2-4	Select optimum expansion plan based on the results of activity (2-4)
2-3	Develop an expenditure plan on Operation and Maintenance (O&M)
2-3-1	Collect data necessary to develop an expenditure plan on O&M
2-3-2	Estimate the O&M cost based on the options set up in activity (2-2-2)
2-3-3	Prepare the expenditure plan for O&M for each option
2-4	Develop financial plans (estimation of funds and expenditure)
2-4-1	Estimate water revenue for each option set up in activity (2-2-2)
2-4-2	Examine available funding sources including self-finance, government subsidies, or funds from development partners including loan and grant
2-4-3	Prepare the financial statements (P/L, C/F, and B/S) for respective scenarios combining options, tariffs, and funding sources
2-4-4	Analyze the financial statements prepared activity (2-4-3)
2-4-5	Select optimum scenario
2-5	Prepare the Annual Business Plan based on activity of (2-1) to (2-4)
2-6	Review the ten-year financial management plans and the Annual Business Plan based on the results of activities through Output 3 and 4
2-7	Organize seminars on the ten-year financial management plans to share the experience and what the provincial waterworks learn
2-8	Organize the public awareness activities to share the information and strengthen the relationship between the provincial waterworks and public.

Output 3: Capacity of monitoring ten-year financial management plans

Activities

3-1	Monitor the progress of the plans prepared in "Output 2," and analyze the causes if there is discrepancy between plan and actual progress
3-2	Review the financing plans and the Annual Business Plan based on the analysis of activity (3-1)
3-3	Submit the reports on the progress and the results periodically (monthly, quarterly, biannually and annually)

Output 4: Capacity of monitoring, evaluating ten-year financial plans and support for funding

Activities

4-1	Review the internal collecting and monitoring system of Performance Indicators: PIs (items monitored, definitions, methods, frequency, responsible personnel, compilation and analysis, and reporting)
4-2	Identify the PIs to be monitored at TPWs
4-3	Participate in trainings on the appropriate collecting system on PIs
4-4	Ensure TPWs to submit the PIs to MIME regularly
4-5	Analyze the PIs submitted by TPWs and provide advice to TPWs
4-6	Participate in group trainings or OJT to be carried out through activities in Output 1, 2 and 3
4-7	Participate in group trainings or OJT to acquire the knowledge of how to set the appropriate water tariff through activities in Output 2
4-8	Review whether the ten-year financial management plans and Annual Business Plan submitted by TPWs are feasible, and request the revision of the plans to TPWs
4-9	Prepare the documents necessary for funding and submit the proposals or detailed plans to the government agencies or development partners
4-10	Discuss the future situations of MIME and public water utilities such as a autonomy

Output 5: Capacity of analyzing human resources development and improvement measures at TPWs

Activities

5-1	Review the existing job description of all offices at TPWs
5-2	Discuss ideal situation ("should be" situation) at TPWs
5-3	Revise the job description base on activity (5-2)
5-4	Identify the current situation of capacity level (performance level), and current function of each office
5-5	Analyze the gap between the ideal situation and the current capacity level/function of each office (including needs assessment and review of incentive system)
5-6	Discuss the prioritized areas which TPWs needs to be strengthened
5-7	Monitor the operation of water supply facilities in each TPWs from the technical aspects
5-8	Identify the necessary actions to be taken to reduce the gap
5-9	Discuss how to maintain the developed human resources at TPWs

Input
from Japanese Side:

1. Experts

   Long-term Experts
   1) Chief Advisor
   2) Project Coordinator

   Short-term Experts
   1) Accounting
   2) Asset Data Preparation
   3) Replacement and O&M Planning
   4) Expansion Planning
   5) Financial Planning
   6) Technical Evaluation of Plan
   7) Financial Evaluation of Plan
   8) Human Resources Management

2. Equipment

3. Overseas Training Program

   Training in Japan and/or　neighboring countries

4. Local cost

   1) Expenses related to Cambodian short-term experts for training to be conducted for TPWs
   2) Expenses related to training at the Cambodian Institutes

from Cambodian Side:

1. Counterpart personnel
2. Office space and facilities
3. Necessary data/ information
4. Local cost for implementation of the Activities