 The present report builds on previous reports by Chemonics International in the area of
financial management in WAJ Aqaba/AWC. Some of the key, relevant findings of these
previous reports are summarized below for the readers’ convenience and ease of
reference.
The Aqaba Water Company Prefeasibility Study (January 2003) developed a long term
financial plan and indicative budget of annual investment costs, operations and
maintenance (O&M) costs, revenues, net income and cash flow. The study also presented
a financial analysis of the long-term financial viability of AWC, and indicated how some
of the future financing needs might be met. The study indicated that the proposed
corporatization of AWC was technically, institutionally, legally and financially feasible,
although, owing to an increased cost structure, AWC’s financial performance will not be
as strong as it formerly was.
The Proposed Financial Management and Accounting System for the Aqaba Water
Company: Initial Design and Training Recommendations, (March 2003), assessed how
AWC can best meet its new needs and requirements in the area of financial management
as it is being transformed into the AWC. The report examined the current state of
financial management in WAJ headquarters. At present, WAJ headquarters assumes
virtually all the responsibility for financial management and accounting, a fact which will
have several implications for WAJ Aqaba's path of transition during 2003. The report
also recommended some training needs for WAJ Aqaba/AWC to meet its new financial
responsibilities. As the present report argues, it is now time to begin to address those
training needs.
The Billing and Collection System for the Aqaba Water Company, (August 2003)
provided a detailed income generation framework for AWC, and assessed how AWC
could continue to make improvements in the efficiency of billing and collection so that it
could increase revenue and income generation. It noted the concerted, successful ongoing
efforts by the management of WAJ Aqaba to improve billing and collections
during the last 5 years, and how their plans for future improvements are consistent with
best practices.
Section II outlines the future financial environment for AWC and implications for
financial management. In order to understand these challenges, and to design technical
assistance and training to help AWC address them, this section of the report first
summarizes the general business environment in which AWC will operate. It does this by
discussing the strengths, weaknesses, opportunities and threats that AWC has or will
shortly face. The chapter then discusses the particular financial challenges that AWC will
need to address, with a focus on the short to medium term, and what the implications for
financial management will be.
Section III first summarizes the current state of financial management in WAJ Aqaba. It
then identifies and discusses the key areas of financial management that WAJ
Aqaba/AWC will need to develop: financial accounting and reporting, financial analysis,
financial planning and budgeting, and financing activities. Tariffs, which also play a key
role in financial management, are another important factor in financial management,
though one at present outside the control of WAJ Aqaba/AWC.
Section IV discusses the TAPS strategy and a set of five specific activities to assist AWC
to develop financial management capacity during the coming months.
The present report, drawing on previous submissions, builds upon themes and
recommendations developed in these works to presenting a strategy and set of specific
activities that TAPS is prepared to undertake during the coming months to support the
development of financial management capability in AWC.
TABLE OF CONTENTS
Acronyms
Executive Summary
SECTION I INTRODUCTION
SECTION II AWC’S BUSINESS ENVIRONMENT: IMPLICATIONS FOR FINANCIAL MANAGEMENT
AWC Strengths
AWC Weaknesses
AWC Opportunities
AWC Threats
Specific Financial Management Issues Facing AWC
SECTION III FUTURE NEEDS OF AWC IN FINANCIAL MANAGEMENT
Current State of Financial Management in WAJ Aqaba
New Needs in Financial Management at AWC
Financial Accounting and Reporting
Financial Analysis
Financial Planning and Budgeting
Financing Activities
SECTION IV TAPS STRATEGY AND ACTIVITIES FOR FINANCIAL MANAGEMENT
Strategy to Support AWC in Financial Management
Activities to Implement Financial Management Strategy
Persons Contacted
References
Post Date : 12 Januari 2010
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