Marafiq – Strategic Direction Statement (2015

Transcription

Power and Water Utility Company for Jubail & Yanbu - ‫شركة مرافق الكهرباء والمياه بالجبيل وينبع‬
1
Strategic Direction Statement (2015 - 34)
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Sr #
Particulars
1
Foreword
2
Company Introduction
3
Long Term Strategies
Pages
3
4 - 8
3.1
Meet Customers’ Demand by providing Reliable Utility Supplies.
9 - 20
3.2
Maintain high level of service to customers
21 - 23
3.3
Financial Stability & Sustainability
24 - 26
3.4
Compliance to Applicable Regulations
27 - 30
3.5
Risk Management Framework
31 - 32
3.6
Focus on Asset Management & Reliability
33 - 36
3.7
Maintain Fair, Sustainable and Predictable Tariffs
37 - 39
3.8
Implementing the National Policies of Promoting Development
and Employment in the Region
4
4.1
2
40
Annexures to SDS
Annexure-1: Demand Forecasting Process
42 - 51
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The Strategic Direction Statement (SDS) plays a key role in defining long-term forward-looking
strategy of a utility company. It sets out the current vision of how the things will look over the
next 20- 25 years. This is the first time that Marafiq has articulated long-term objectives and how
we plan to achieve them in the future years. The draft SDS was shared with the Regulator
Water Services and other stake-holders and based on the feed-back received, updates have
been done in this document.
Put in simple words, we will be endeavoring to achieve the following:
Meet customers’ demand by ensuring continuity of quality service to the customers.
Maintain very high levels of service to our customers.
Secure financial stability & sustainability.
Compliance to the applicable environmental regulations.
Risk management framework.
Focus on asset management & reliability.
Maintain fair, sustained and predictable tariffs structure for the utilities provided.
Implementing the national policies of promoting development and employment in the
region.
Implicit in achieving the above are the following:
Effective supply arrangements to meet with the utility requirements of existing and
future customers.
Periodic assessment of customer preferences to estimate their demand and
expected service levels.
Use of modern technology for better services.
Reducing utility services’ interruption to minimum level.
Meeting new challenges and obligations.
Proper maintenance of our asset base;
Compliance with all relevant applicable legislations, regulations and other
obligations;
Efficient use and conservation of national resources.
Promoting the culture of safe and healthy working environment.
Being a good and progressive employer.
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Power and Water Utility Company for Jubail and Yanbu (“Marafiq”) was established under Royal
Decree M/29 on 18 October 2000 (22 Rajab 1421 Hijra) as a joint-stock company. It is owned
by four major shareholders - the Royal Commission for Jubail and Yanbu (“RC”), Saudi Basic
Industries Corporation (“SABIC”), Saudi Arabian Oil Company (“Saudi Aramco”), and the Public
Investment Fund (“PIF”). These four investors own approximately 99.2% of Marafiq, whilst the
remaining shares are held by seven private-sector companies. Marafiq commenced commercial
operations on January 1, 2003 with the mandate to provide safe, efficient, reliable and cost
effective multi-utility services to all current and future customers in the twin industrial cities of
Jubail and Yanbu. Currently, it is providing following utility services:
Power: generation, transmission and distribution in Yanbu.
Water (Potable & Process): Production, Purchase, Transmission & Distribution in
Jubail & Yanbu.
Sea-Water for Industrial Cooling (SWC): Pumping and Distribution in Jubail &
Yanbu.
Industrial Waste Water (IWW): Collection and Treatment in Jubail & Yanbu.
Sanitary Waste Water (SWW): Collection and Treatment in Jubail & Yanbu.
Supply of Reclaimed/ Irrigation Water in Jubail & Yanbu.
Sales Gas Distribution at Yanbu (it was started effective September, 2011).
Marafiq continued to be regulated through its Board of Directors in initial years. However,
currently its services are being regulated by the three regulators as under:
#
Regulator
Regulated Services of Marafiq
1
Electricity & Cogeneration
Regulatory Authority (ECRA)
1. Power: Generation, Transmission &
Distribution & Retail Supply at Yanbu.
2. Potable & Process Water Desalination/
Production at Jubail & Yanbu (JY)
2
Regulator Water Services
(RWS)- RCJY BOD
1. Potable / Process Water Distribution (JY).
2. Sea-Water Cooling: Pumping &
Distribution (JY).
3. IWW: Collection & Treatment (JY).
4. SWW: Collection & Treatment (JY).
5. Irrigation/Reclaimed Water Supply (JY).
3
Ministry of Petroleum &
Mineral Resources
1.
Sales Gas Distribution at LIPE Yanbu.
In addition to the above regulated businesses, Marafiq has entered into a bilateral agreement
for supply of Industrial water (IWS) to SADARA that is based on Take-or-Pay mechanism. This
is a ring-fenced commercial arrangement and a dedicated SWRO plant is being built at
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customer’s site for the supply. Other utilities required by SADARA Industrial Complex like
treatment of Industrial Waste Water shall be as per normal regulated business.
Royal Commission for Jubail & Yanbu (RC) has also been mandated to manage development of
Ras-al- Khair Industrial City with the objectives of diversifying national economy, developing
local metal/ mineral industries to substitute imports and reduction of dependence on oil exports.
As a result, the Minerals Industrial City was developed to exploit the mineral deposits of
phosphate and bauxite found within Saudi Arabia. The newly developed Industrial port is the
major export hub for Aluminium products and Ammonium phosphate and for importing the
materials needed for the RIC. An MOU has been signed between RC and Marafiq for taking
over the water services (possibly the water distribution and waste water collection/ treatment
services) in Ras-al-Khair. Its detailed modalities are yet to be finalized.
Following are the vision and mission of the company:
Vision
To be the preferred supplier of utility services in major Industrial Cities in the
Kingdom of Saudi Arabia.
Mission
To meet customers’ needs by providing reliable and sustainable utility services
which comply with environmental regulations and maximize shareholders’
value.
Marafiq’s corporate faith declared through Vision and Mission statements is disseminated down
to the gross-root levels of the organization through dynamic and perpetual structure of long term
Corporate Perspectives, Wildly Important Goals (WIGS) and Corporate Key Initiatives. In this
process working levels of organizational hierarchy are duly involved in identifying Corporate Key
Initiatives and action plans thereof to address the opportunities brought out as per key focus
areas. The actions and efforts of every single member of Marafiq family are guided by the
Marafiq Core Values, i.e.,
Customer Focus
Team Work
Accountability
Transparency
People Oriented
Social Responsibility
As part of our long-term O&M strategy, Marafiq has entered into a Joint Venture (MaSa) with
French Company SAUR for O&M of Jubail Water Services effective April, 2012. It was done to
overcome the following:
Unreliability of facility operations.
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High operational risks having possible impact on business continuity.
Higher attrition exceeded 22% as over-all and 50% in the Engineering category.
No direct control on core business.
With the MaSa in charge of O&M Jubail, following improvements are visible:
Involvement of foreign expertise in the water business & knowledge transfer.
Performance and rewards based contract.
Potential for growth & expansion with sharing of profits.
Employee competency enhancement: 220 operators & tradesmen trained and
certified by 3rd party
Recently the long term O&M strategy has also been extended to cover the Wastewater service
at Yanbu.
Currently, Marafiq has a customer base of around 58,000 as of end 2014 in the industrial cities
of Jubail & Yanbu, of which industrial customers have the dominant share. Category-wise
customer mix is summarized below:
Table-1 Customers’ Mix: Marafiq Utilities
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Category-wise consumption mix and the revenue mix are also given below to highlight the
structure of Marafiq utility services:
Table-2 Consumption Mix: Marafiq Utilities
Table-3 Revenue Mix: Marafiq Utilities
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This was all about Marafiq customer base, utilities consumption mix and the revenue mix.
Marafiq being operational in the industrial cities, the current trends are likely to continue in the
coming years.
If we look at the physical assets of various service lines, the following picture emerges, as of
end 2014 (provisional):
Table-4 Physical Assets: Marafiq Utilities
This asset base does not include the ongoing CAPEX of around 9 Billion SAR on various water
and power projects.
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Since creation Marafiq, having a clear charter of providing reliable utility services in the
Industrial Cities of Jubail & Yanbu, has made concerted efforts to operate as responsible utility
service provider and has acted proactively to meet the demonstrated needs of the customers at
reasonable prices. Marafiq’s approach goes in line with its Strategic Direction Statement
embodied in the following priorities:
Being a utility provider in the major industrial cities of the kingdom, “Meet Customers Demand”
has been and will always remain the top most priority for Marafiq. Our demand outlook is guided
by the historical consumption pattern of existing customers and quantitative demands submitted
by prospective future customers within the medium term, i.e. first 10 years and pragmatically
estimated growth in the long-term. While the timing and size of future facilities is influenced by
said quantitative demand outlook; the technology selection for the facilities depends on
qualitative needs of customers together with environmental regulations. A detailed write-up on
our Demand Forecasting Methodology is provided in the Annexure-1 of this document.
In the long-term perspective, following are the estimates of demand and supply arrangements in
different service lines over the next 20 years. It may be noted that capacity enhancements
beyond 2024 are in the initial planning phase only. These proposals are not reflecting any
additional CAPEX requirement at this time and the scenario may change based on actual
demand supply positions in the next 10 years. These proposed figures give only the indicative
requirement of additional capacities in the upcoming years:
Potable Water Jubail
Table-5 PWJ Demand Supply Balance 2015-2024
Year
(Tm3/d)
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Peak Demand
418
423
441
455
464
464
465
465
465
465
Availability
100
95
95
95
95
95
95
95
95
95
Approved/ Prop. Expansion
-
-
-
-
-
-
-
-
-
-
Planned Retirement
-
-
-
-
-
-
-
-
-
-
Imports (from JWAP & Al Fatah)
375
375
375
375
375
375
375
375
375
375
Total Availability
475
470
470
470
470
470
470
470
470
470
Surplus / (Deficit)
57
47
29
15
6
6
5
5
5
5
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Table-6 PWJ Demand Supply Balance 2025-2034
Year
(Tm3/d)
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Peak Demand
Availability
474
95
484
190
493
190
503
190
513
190
524
190
534
190
545
285
556
285
567
285
100
-
-
-
-
-
100
-
-
-
-
-
-
-
-
-
-
-
-
-
Imports (from JWAP & AlFatah)
375
375
375
375
375
375
300
300
300
300
Total Availability
570
96
565
81
565
72
565
62
565
52
565
41
590
56
585
40
585
29
585
18
Planned Retirement
Surplus / (Deficit)
This indicates that during the period of 2015-2034, Marafiq will need two (proposed) capacity additions of
100 Tm3/day each, in year 2025 and 2031 to meet the projected future demand. However, any surge in
peak demand during the period of 2019-2024 can be met through short-term O&M measures like utilizing
the Storage capacity to meet the peak demand.
Potable Water Yanbu
Table-7 PWY Demand Supply Balance 2015-2024
Year
Peak Demand
Availability
Planned Retirement
Additional Availability
(From Process Water)
Total Availability
Surplus / (Deficit)
(Tm3/d)
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
76
69
20
-
84
88
22
87
66
-
89
66
-
91
66
65
-
91
131
-
92
131
-
93
131
-
94
131
-
93
131
-
15
20
22
15
-
-
-
-
-
-
104
28
86
2
88
1
81
(7)
131
40
131
40
131
39
131
38
131
37
131
38
Table-8 PWY Demand Supply Balance 2025-2034
(Tm3/d)
Year
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Peak Demand
Availability
Planned Retirement
Additional Availability
(From Process Water)
Total Availability
Surplus / (Deficit)
95
131
-
97
131
-
99
131
-
101
131
-
103
131
-
105
131
-
107
131
-
109
131
-
111
131
-
114
131
-
-
-
-
-
-
-
-
-
-
-
131
36
131
34
131
32
131
30
131
28
131
26
131
24
131
22
131
20
131
17
This indicates that during the period of 2015-2034, Marafiq will need two capacity additions, one for 20
Tm3/day (approved) in year 2015 and the other for 65 Tm3/day (proposed) in 2019 to meet the projected
future demand. The temporary shortfall in supply during 2018 is planned to be met through O&M
measures like utilizing storage capacity to meet the peak demand.
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Process Water Yanbu
Table-9 PRWY Demand Supply Balance 2015-2024
Year
Peak Demand
Availability
To Potable Water
Planned Retirement
Total Availability
Surplus / (Deficit)
(Tm3/d)
2015
88
99
2016
97
102
2017
103
125
2018
102
118
2019
104
125
2020
104
121
2021
104
125
2022
104
121
2023
104
125
2024
104
121
10
30
-
-
-
-
-
-
-
-
(15)
94
6
(20)
(14)
98
1
(22)
103
-
(15)
103
1
125
21
121
17
125
21
121
17
125
21
121
17
The above table shows capacity addition in water production spread over 2015 & 2016. Two units with
30,000m3/d each would be added in Yanbu-2 plant. One unit is expected to be online in 2015 and the
other in 2016. Out of 60,000m3/d production from Yanbu2 Plant, 20,000m3/d is reserved for potable
water and the rest for process water supply to industries.
Table-10 PRWY Demand Supply Balance 2025-2034
Year
(Tm3/d)
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Peak Demand
106
108
110
112
115
117
119
122
124
127
Availability
121
-
121
-
121
-
121
-
121
55
152
-
140
-
140
-
140
-
140
-
To Potable Water
-
-
-
-
-
-
-
-
-
-
Planned Retirement
-
-
-
-
(24)
(12)
-
-
-
-
121
15
121
13
121
11
121
9
152
37
140
23
140
21
140
18
140
16
140
13
Total Availability
Surplus / (Deficit)
During the period 2025-2034, one capacity addition of 55 Tm3/day (proposed) in 2029 will be required to
meet the projected future demand.
Sea-Water Cooling (SWC) Jubail
Table-11 SWCJ Demand Supply Balance 2015-2024
Year
(Tm3/Hr)
2015
2016
2017 2018 2019 2020
2021
2022
2023
2024
Peak Demand
Availability
815
995
834 840 840 840 840
1049 1043 1046 1046 1049
840
1043
840
1046
840
1048
840
1051
Planned Retirement
Total Availability
995
1049 1043 1046 1046 1049
1043
1046
1048
1051
Surplus / (Deficit)
180
216
203
206
207
210
11
203
206
206
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Table-12 SWCJ Demand Supply Balance 2025-2034
(Tm3/Hr)
Year 2025
2026
2027
2028
2029
2030
2031 2032
2033
2034
Peak Demand
857
874
892
910
928
946
965
1004
1024
Availability
1051
1051 1051
1051
1051 1051 1051 1051 1051
1051
985
-
-
-
-
-
-
-
-
-
105
Planned Retirement
-
-
-
-
-
-
-
-
-
-
Total Availability
1051
1051 1051
1051
1051 1051 1051 1051 1051
1156
Surplus / (Deficit)
194
176
141
123
131
159
104
85
66
46
This indicates that during the period of 2015-2034, Marafiq will be able to meet all the projected future
demand with the existing capacities except one capacity addition of 105 Tm3/Hr (proposed) in the year
2034.
Sea-Water Cooling (SWC) Yanbu
Table-13 SWCY1 Demand Supply Balance 2015-2024
Year
(Tm3/Hr)
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Peak Demand
536
473
474
459
475
475
475
475
475
475
Availability
590
-
589
-
588
-
590
-
608
-
608
-
608
-
608
-
608
-
606
-
-
-
-
-
-
-
-
-
-
-
Total Availability
590
589
588
590
608
608
608
608
608
606
Surplus / (Deficit)
54
116
114
131
133
133
133
133
133
131
Planned Retirement
Year
(Tm3/Hr)
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Peak Demand
477
479
482
484
487
489
491
494
496
499
Availability
606
606
606
606
606
606
606
606
606
606
-
-
-
-
-
-
-
-
-
-
Planned Retirement
-
-
-
-
-
-
-
-
-
-
Total Availability
606
606
606
606
606
606
606
606
606
606
Surplus / (Deficit)
129
127
124
122
119
117
115
112
110
107
This clearly shows that during the period of 2015-2034, Marafiq will be able to meet all the projected
future demand with the existing facilities without requiring any capacity addition.
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Year
Peak Demand
Availability
Planned Retirement
Total Availability
Surplus / (Deficit)
(Tm3/Hr)
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
172
275
275
103
172
275
275
103
177
275
275
98
178
275
275
97
178
275
275
97
178
275
275
97
178
275
275
97
178
275
275
97
178
275
275
97
178
275
275
97
Year
(Tm3/Hr)
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Peak Demand
179
180
181
181
182
183
184
185
186
187
Availability
275
275
275
275
275
275
275
275
275
275
-
-
-
-
-
-
-
-
-
-
Planned Retirement
-
-
-
-
-
-
-
-
-
-
Total Availability
275
275
275
275
275
275
275
275
275
275
Surplus / (Deficit)
96
95
94
94
93
92
91
90
89
88
demand with the existing facilities without requiring any capacity addition.
Industrial Waste Water (IWW) Jubail
Table-17 IWWJ Demand Supply Balance 2015-2024
Peak Demand
Availability
Year 2015
120
97
(Tm3/d)
2016
132
120
2017
157
120
2018
158
120
2019
165
120
2020
166
180
2021
167
180
2022
167
180
2023
168
180
2024
170
180
Approved/ Prop. Expansion/
Rehabilitation
-
23
-
-
125
-
-
-
-
-
Planned Retirement
-
-
-
-
65
-
-
-
-
-
120
(23)
120
(12)
120
(37)
180
(38)
180
15
180
14
180
14
180
13
180
12
180
10
Total Availability
Surplus / Deficit
Table-18 IWWJ Demand Supply Balance 2025-2034
Year
Peak Demand
Availability
Approved/ Prop. Expansion/
Rehabilitation
Planned Retirement
Total Availability
Surplus / Deficit
13
(Tm3/d)
2025
171
180
2026
172
180
2027
172
180
2028
173
180
2029
174
180
2030
175
180
2031
176
180
2032
177
180
2033
178
180
2034
179
180
-
-
-
-
-
-
-
-
-
-
180
10
180
9
180
8
180
7
180
7
180
6
180
5
180
4
180
3
180
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This indicates that during the period of 2015-2034, Marafiq will need two capacity additions, one for 23
Tm3/day (approved) in year 2016 (through rehabilitation of IWTP 8 Stage 1 Phase 2 with a capacity of
23,000 m3/day)and the other for 125 Tm3/day (proposed) in 2019 to meet the projected future demand.
However, in the years 2015-2018, any possible shortfall with regard to Peak Demand is planned to be
met through short term O&M measures.
Industrial Waste Water (IWW) Yanbu
Table-19 IWWY Demand Supply Balance 2025-2034
Year
(Tm3/d)
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Peak Demand
43
45
46
46
47
47
47
47
47
47
Availability
Planned Retirement
Total Availability
Surplus / (Deficit)
48
48
5
48
48
3
48
48
2
48
48
2
48
20
68
21
68
68
21
68
68
21
68
68
21
68
68
21
68
68
21
Table-20 IWWY Demand Supply Balance 2025-2034
Year
Peak Demand
Availability
Planned Retirement
Total Availability
Surplus / (Deficit)
(Tm3/d)
2025
2026
2027
2028
2029
2030
2032
2032
2033
2034
47
68
68
21
48
68
68
20
49
68
68
20
49
68
68
19
50
68
68
19
50
68
68
18
51
68
68
18
51
68
68
17
52
68
68
17
52
68
68
16
This indicates that during the period of 2015-2034, Marafiq will need only one capacity addition for 20
Tm3/day (proposed) in year 2019 to meet the projected future demand.
Sanitary Waste Water (SWW) Jubail
Table-21 SWWJ Demand Supply Balance 2015-2024
(Tm3/d)
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Peak Demand
142
149
153
157
206
212
218
230
234
240
Availability
159
159
159
159
159
218
218
218
272
272
-
-
-
-
110
-
-
90
-
-
Planned Retirement
-
-
-
-
(51)
-
-
(36)
-
-
Total Availability
159
159
159
159
218
218
218
272
272
272
Surplus / (Deficit)
17
10
6
2
12
6
0
42
38
32
Year
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Table-22 SWWJ Demand Supply Balance 2025-2034
Year
(Tm3/d)
Peak Demand
2025
240
2026
250
2027
260
2028
270
2029
281
2030
292
2031
304
2032
316
2033
328
2034
342
Availability
272
272
272
272
312
312
312
352
352
352
-
-
-
40
-
-
40
-
-
Planned Retirement
-
-
-
-
-
-
-
-
-
-
Total Availability
272
272
272
312
312
312
312
352
352
352
Surplus / (Deficit)
32
22
12
42
31
20
8
36
24
10
This indicates that during the period of 2015-2034, Marafiq will need four capacity additions to meet the
projected future demand:
i) 110 Tm3/day (proposed) in year 2019.
ii)
90 Tm3/day (proposed) in year 2022.
iii) 40 Tm3/day (proposed) in year 2028.
iv) 40 Tm3/day (proposed) in year 2032.
Sanitary Waste Water (SWW) Yanbu
Table-23 SWWY Demand Supply Balance 2015-2024
Year
(Tm3/d)
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
29
47
20
31
47
-
33
47
-
34
47
-
34
47
-
35
47
-
35
47
-
36
47
-
36
47
-
36
47
-
-
-
-
-
-
-
-
-
-
-
Total Availability
47
47
47
47
47
47
47
47
47
47
Surplus / (Deficit)
18
16
14
13
13
12
12
11
11
11
Peak Demand
Availability
Planned Retirement
Table-24 SWWY Demand Supply Balance 2025-2034
Year
(Tm3/d)
2025
2026
2027
2028
2029
2030
2032
2032
2033
2034
Peak Demand
Availability
37
47
-
37
47
-
38
47
-
39
47
-
40
47
-
41
47
-
41
47
-
42
47
-
43
47
-
44
47
-
Planned Retirement
Total Availability
Surplus / (Deficit)
47
10
47
10
47
9
47
8
47
7
47
6
47
6
47
5
47
4
47
3
demand with the existing capacities after completion of the ongoing rehabilitation of SWTP.
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Irrigation Water (IRRW) Jubail
Table-25 IRRWJ Demand Supply Balance 2015-2024
Year
(Tm3/d)
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Peak Demand
101
101
101
101
101
101
101
102
102
102
Availability
249
267
295
299
352
359
365
377
382
389
-
-
-
-
-
-
-
-
-
-
Total Availability
249
267
295
299
352
359
365
377
382
389
Surplus / (Deficit)
148
166
193
198
251
257
264
276
280
288
Planned Retirement
Table-26 IRRWJ Demand Supply Balance 2025-2034
Year
(Tm3/d)
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Peak Demand
106
110
114
119
124
129
134
139
145
150
Availability
389
389
389
389
389
389
389
389
389
389
-
-
-
-
-
-
-
-
-
-
Planned Retirement
Total Availability
Surplus / (Deficit)
-
-
-
-
-
-
-
-
-
-
389
284
389
279
389
275
389
270
389
266
389
261
389
256
389
250
389
245
389
239
This indicates that Marafiq will be able to meet all the projected future demand in the period under
consideration with the existing capacities without requiring any capacity addition.
Irrigation Water (IRRW) Yanbu
Table-27 IRRWY Demand Supply Balance 2015-2024
Year
(Tm3/d)
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Peak Demand
28
30
32
32
33
33
33
33
33
34
Availability
68
-
72
-
75
-
76
-
78
-
78
-
79
-
79
-
79
-
79
-
-
-
-
-
-
-
-
-
-
-
68
40
72
42
75
43
76
44
78
45
78
45
79
45
79
46
79
46
79
46
Planned Retirement
Total Availability
Surplus/Deficit
Table-28 IRRWY Demand Supply Balance 2025-2034
Year
(Tm3/d)
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Peak Demand
34
34
35
35
36
37
37
38
39
39
Availability
80
-
81
-
82
-
84
-
85
-
86
-
87
-
89
-
90
-
91
-
-
-
-
-
-
-
-
-
-
-
80
46
81
47
82
48
84
48
85
49
86
49
87
50
89
51
90
51
91
52
Planned Retirement
Total Availability
Surplus/Deficit
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This indicates that during the period of 2015-2034, Marafiq will be able to meet all projected future
demand with the available waste water treatment facilities.
Power (PWR) Yanbu:
Table-29 PWRY Demand Supply Balance 2015-2024
Year
Peak Demand
Planned Retirement
Maximum possible
production
Import from SWCC
Total Availability
Surplus / (Deficit)
(MW)
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
1,200
275
0
1,301
550
0
1,507
0
0
1,583
0
-383
1,696
0
0
1,698
0
0
1,699
0
0
1,700
0
0
1,701
0
0
1,702
0
0
1,340
1,693
1,707
1,433
1,403
1,450
1,411
1,423
1,457
1,453
0
1,340
140
0
1,693
391
0
1,707
200
250
1,683
100
400
1,803
107
400
1,850
153
400
1,811
112
400
1,823
123
400
1,857
155
400
1,853
151
Table-30 PWRY Demand Supply Balance 2025-2034
Year
(MW)
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
1,875
1,910
1,946
1,982
2,019
2,056
2,094
2,134
2,173
2,214
0
0
0
0
0
0
0
0
0
0
Planned Retirement
Maximum possible
production
Import from SWCC
0
0
0
0
0
0
0
0
0
0
1,453
1,453
1,453
1,453
1,453
1,453
1,453
1,453
1,453
1,453
500
500
500
650
650
650
650
650
650
650
Total Availability
Surplus / (Deficit)
1,953
78
1,953
43
1,953
8
2,103
121
2,103
85
2,103
47
2,103
9
2,103
-30
2,103
(70)
2,103
(111)
Peak Demand
demand with the following:



Existing facilities.
On-going project of additional capacity of 825 MW (gross) in Yanbu2.
Proposed import arrangement with SWCC.
Sales Gas Distribution (SGD) Yanbu
Table-31 SGDY Demand Supply Balance 2015-2024
Years
(MMSCFD)
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Peak Demand
13.31
15.46
30.91
20.65
20.65
20.65
20.65
20.65
20.65
20.65
Availability
17.5
19.98
19.98
19.98
19.98
19.98
19.98
19.98
19.98
19.98
Additional allocation
5.0
-
-
-
-
-
-
-
-
-
Total availability
17.5
19.98
19.98
19.98
19.98
19.98
19.98
19.98
19.98
19.98
Surplus / (Deficit)
4.19
4.52
59.0
(0.67)
(0.67)
(0.67)
(0.67)
(0.67)
(0.67)
(0.67)
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Table-32 SGDY Demand Supply Balance 2025-2034
Years
(MMSCFD)
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Peak Demand
21.65
22.65
23.65
24.65
25.65
26.65
27.65
28.65
29.65
30.65
Availability
24.96
24.96
24.96
24.96
24.96
29.95
29.95
29.95
29.95
29.95
Additional allocation
5.0
-
-
-
-
5.0
-
-
-
-
Total availability
24.96
24.96
24.96
24.96
24.96
29.95
29.95
29.95
29.95
29.95
Surplus / (Deficit)
3.31
2.31
1.31
0.31
(0.69)
3.30
2.30
1.30
0.30
(0.70)
demand with the following:




Current Gas Quota Allocation.
Additional Allocation of Gas Quota of 5 MMSCFD in 2015.
Security of Supply
Security of supply is an important requirement for a utility service provider. We believe Marafiq
is well prepared to meet the customers’ demand in the future years with its existing and or
proposed addition to the facilities’ capacities. For instance, if we take potable water system, it is
properly designed, operated, and maintained to meet customer demand throughout the year.
However there are some concerns regarding the availability of well water due to wide variation
depending on seasons. Also any leakages in the potable water network can affect the supply of
a single customer or a group of customers in industrial and/or community area. However, there
are multiple sources for potable water production utilizing different technologies like thermal
desalination, seawater reverse osmosis, and brackish water osmosis to ensure the production
of Potable water round the year. In addition to own production facilities, Marafiq has long term
supply contracts with TAWREED and Al-Fatah water suppliers to ensure sufficient supply of
water at all times. The inputs for these production plants come from various redundant sources
and are available throughout the year.
The strategic storage of Potable water is maintaining 7 days based on peak demand, strategic
storage of Potable water in tanks farms located at different locations to manage any emergency
situation. Also, all manned and unmanned pump stations are equipped with latest automation
system and are connected to the central control room. Roving crews are patrolling round the
clock for finding out any leakages or irregularities in the network. Furthermore, increased
awareness campaigns on need of water conservation and its techniques in industrial and
community area were launched by Marafiq. Security of supply in case of power is ensured
through inter-connection of network with the SEC whereby power is exchanged based on
mutual needs. Thus, based on the current and future plans, Marafiq is capable to meet the
customer demand in industries cities.
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Sewer Flooding
Sewer flooding is an environmental and health hazard and is unacceptable to all stakeholder,
including consumers, environmental regulator, industry regulator, area administration and the
utility itself. Marafiq as utility provider company is dedicated to its customers and environment
and is controlling the risk of sewer flooding by employing sustainable methods. Sewer flooding
occurs when sewage “wastewater” escapes through a manhole or drain. It can be caused by a
blockage in the sewer, the sewer lines does not have enough capacity to cope with the amount
of wastewater entering it or severe rainfall overloading the sewers. All pump stations and lift
stations are equipped with latest automation system and most of them are connected to the
wastewater central control room. Also the rounding crews are roaming round the clock for
finding out any such irregularities in the network. Our teams are well equipped with solving
such type of problems.
The drains inside and up to the boundary of a property belong to the property owner and are the
property owner or householders’ responsibility up to where they connect to the Marafiq sewer
network. Therefore the first type of sewer blockage is localized to individual customer and its
impacts are minimal. Marafiq has 24X7 customer support to address these types of sewer
blockages in our wastewater network. Most of sewer blockage issue at individual customer arise
due to entry of clogging materials like rags, papers, bottles etc., by keeping household waste
(such as fat and grease and unwanted materials) out of the sewer network, consumers can
reduce the risk of blockages to their own drains and the Marafiq sewers.
The inabilities of sewer lines to pass collected flow from collection area are well addressed by
Marafiq. Marafiq has a dedicated crew to tackle any emergencies arising due to malfunctioning
of equipment’s or blockages in the network. Emergency procedures are in place to overcome
any breakdown of pump stations and pipelines. Additionally Marafiq employs various simulation
tools to calculate the capacity of the network from time to time and accordingly upgrade its
network whenever required. Remote monitoring of waste water pump stations helps to have an
uninterrupted operation and thereby minimizing impact on customers and environment.
Finally, overloading of sewers due to rainfall events means that sewer networks could come
under greater risk of overloading due to excess surface water. The risk of sewer flooding is
reduced by stopping infiltration of rainwater to sewer network. Sustainable methods of stopping
infiltration of rainwater is diverting rainwater to storm water channels which are covered in all
parts of Jubail and Yanbu Industrial Cities. Marafiq seeks for continual improvement in the way
sewer flooding incidents are avoided so that the severity and consequence of a flooding incident
is avoided. This will lead to better prioritization of sewer flooding schemes, more informed
investment decisions and more transparency.
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Metering
The status of metering for all Marafiq water services is given below:
Table-33 Metering Status
S/Line
Jubail
Yanbu
Sea-Water
Cooling
All
connections
metered
All
connections
metered
Not Applicable
All connections
metered
All
connections
un-metered
All connections
un-metered
Potable
Water
Process
Water
Sanitary
Waste
Water
(SWW)
Remarks
All connections
metered
All connections
metered
a) Billing to Industrial Customers at Yanbu done as per
Utility User Agreement (UUA) viz., SWW consumption
taken at the rate of 50.6% of Potable Water
consumption. For Commercial & Government
Connections also, the same principle of 50.6% applied.
b) Billing to Industrial connections at Jubail done as per
Utility User Agreement (UUA) viz., SWW consumption
taken at the rate of 1.7% of Potable Water consumption
(here unlike Yanbu, there is only one type of water
which industries use for both potable and process
purposes).
c) Billing to Government & Commercial connections at
Jubail done on the basis of SWW consumption taken at
the rate of 50.6% of Potable Water consumption.
d) The SWW effluent received from the Jubail Town is
measured at the receiving pumping station of Marafiq.
Industrial
Waste
Water
(IWW)
Heavy
Industries are
metered and
Light
Industries
partially
metered.
All connections
un-metered
Power
Not Applicable
All connections
metered
(except some
residential that
are un-metered
since RC time)
Gas
Not Applicable
All connections
metered
20
a)
Billing at Yanbu done on the basis of IWW taken as
50% of the Process Water usage, as per Utility User
Agreement (UUA).
b)
Billing at Jubail done on the basis of recorded volume
for metered customers and an estimated volume for
unmetered customers.
FINAL-v-00
Being a dynamic organization keen to serve the customers, Marafiq has a systematic process to
evaluate and review the long term demand of its diversified products and services. While it is
known that Marafiq’s primary service domain rests with the industrial customer, the needs of
existing customers as well as the future industries (approved by Royal Commission) are
obtained through contacting the (existing ) customers and Royal Commission (for future). The
estimates of peak demand of industries are worked out. The estimates of demand from
communities created as a result of industrialization in the area are also made using statistical
tools. The demand so arrived at is fed into the models to assess the balance between the
forecasted demand and the existing plus planned capacities. Being a utility company
consistently striving for meeting customer demand the demand supply gaps, if any, are
accordingly planned for mitigation.
Marafiq aspires to be known by customers for a high level of reliability in delivering services and
trusted in our approach to customer service. Accordingly exceeding customer expectations has
been our motto and key driver in the decision making. If we review the Key Performance
Indicators (KPIs), developed to measure our performance on this account, the results for 2012 &
2013 were as under:
Table-34 KPIs related to Customer Services
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Marafiq has been conducting customer satisfaction surveys periodically. In the light of recent
surveys conducted in 2012, we have been moving forward to address the areas of concern
pointed out by various segments of the customers. These include:
 Timely issuance of bills to avail the credit period.
 Addressing the power quality issues.
 Reducing the service interruptions.
 Issuing SMS for communicating about bills.
 Understanding the bills.
 More options for bill payment.
The Customer Satisfaction Index (CSI) for Marafiq, as per recent survey, was very encouraging:
Table-35 CSI: Industrial Customers
Table-36 CSI: Commercial Customers
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Table-37 CSI: Residential Customers
Following is our vision for future improvement in services for our valued customers:
E-services (Marafiq website link) to be online (Target date: Q2 2016)
 All services to be included.
 Link to social media.
 Customer Satisfaction Surveys online.
 Mobile Apps.
Marafiq visibility
23

Marafiq stands (similar to booth) inside malls and schools, providing brochures.

Conducting awareness sessions (e.g. water/power saving tips)
FINAL-v-00
Financial sustainability is achieved when a business is able to deliver products and services to
the market at a price that covers their expenses and generates a profit. To operate a financially
sustainable business, a utility company needs to develop long term goals that outline where we
want our business to stand financially in the future. Marafiq has been well cognizant of the need
for pursuing the objectives of financial stability & sustainability and accordingly has been
implementing the following strategies:
a) Increase the capacity utilization, e.g. enhancing export of water to Madinah Water
Authority.
b) Controlling the Water Losses, e.g. optimizing network pressure, minimize time
duration while attending any reported leak (Isolation time) and introduce the leak
detection system to control underground leakages.
c) Controlling the mega-projects execution delays, e.g. completion of SWRO-4, EPS &
Yanbu-2 projects.
d) Improving the total cash costs, e.g. reduction in variable costs, rationalize
manpower costs and optimize R&M costs.
e) Managing net financing gaps, e.g. collection of outstanding dues & receivables and
RC lease payment deferral.
Current financial health of the Company
Over the last five years the revenue of the Company has grown by an annual average of 8%.
The revenue for the year 2014 was SR 2.6 billion and the projections for the next five years
indicate an average annual growth of 9%. Presently, the Company is in a very challenging
environment where it has to secure long-term financial viability, control and manage costs and
maintain its competitive position in the market place by providing safe, efficient, reliable and cost
effective services to its customers. Besides adding capacity for meeting the increasing customer
demand, the Company also has to invest heavily in replacing its ageing assets in the twin cities
of Jubail and Yanbu.
The Company has been able to maintain its cost structure under control. However, with the
growth of the organization coupled with the addition of new operating assets, there will be a step
up in the cash OPEX. This however, is projected to stabilize over the next five years and the
average annual increase in cash OPEX is projected to be around a nominal 5%. The higher
cash OPEX incurred to operate and maintain the new assets, meet the more stringent
environmental regulations and the cost of streamlining and optimizing various business
processes of the Company, are challenges that the Company has successfully met over the
past few years. The EBITDA % is currently around 28% and it covers adequately the Debt
Servicing requirements. The higher depreciation arising from the capitalization of various new
operating assets together with the controlled cost increase owing to a much higher range of
operations will have to be mitigated through sustainable tariffs that deliver a reasonable rate of
return. This is crucial for the long term sustainability of the business.
24
FINAL-v-00
Overall the Company has a strong balance sheet with the balance sheet footer growing by
almost 3x in the last five years. This is mainly driven by the substantial capital expenditure
incurred in order to meet the increasing customer demand for utility services as well as replace
some of the ageing assets (production/generation as well as transmission and distribution). The
capital expenditure program launched over the last four years has been to the tune of SR 19
billion out of which around SR 12.6 billion has already been spent. This has been financed
mainly through a mix of commercial borrowings as well as internal accruals. The cumulative
borrowings as of December 31, 2014 were SR 9.5 billion out of which the Company has drawn
down SR 9.0 billion. Additionally, the Company has also concluded a SR 2.5 billion Murabaha
facility in November 2014 to bridge the finance gap arising out of capex spend in the years 2015
and 2016. These borrowings together with the lease payments have stretched the debt
servicing capacity of the Company.
In order to mitigate this situation, the following steps have been adopted by the management:
a) Rationalization of the future capital expenditure program.
b) Deferment of the lease payments by the Royal Commission for a period of five years
beginning 2014 onwards
c) Agreement of the shareholders not to declare dividend for the year 2013 and revisit this
decision on an annual basis till the cash position of the Company improves to
comfortable levels.
Further, the tariff increase in water services for non-residential customers effective March 01,
2014 has provided some relief and has helped to improve the cash flows of the Company.
Owing to the above measures the Company has been able to maintain the covenant of Debt
Service Cover Ratio (DSCR) as required in the financing agreements with the banks.
Expected future position
During the years 2015-2019 the Company is expected to grow at a Compounded Annual
Growth Rate (CAGR) of 8% triggered mainly by the growth in demand for power and potable
water services. The cash operating costs are expected to increase moderately by an annual
average of around 5% to cater to normative increases in employee cost, repairs & maintenance
and overheads. With an average EBITDA of around 35%, the Company is expected to cover the
loan repayments which would hover around SR 1 billion annually (excluding the payment of
capital lease obligation which has been deferred for 5 years by the RC). The Net Income %
during this period will be under considerable pressure following the absorption of the high
depreciation arising from the increase in the fixed assets base on the capitalization of the
ongoing CAPEX projects. In order to ensure sustainability there would be the need to ensure
sustainable tariffs to cover the above costs.
The Debt Equity during this period is projected around 2.6x in the years 2015 & 2016 against a
bank covenant of 3x. It tapers down during the subsequent years. The Company is fully geared
up to evolve appropriate financing strategies in the years ahead to enable it to arrange the
necessary financing for possible expansion, replacement of ageing assets and run and maintain
capex.
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FINAL-v-00
The deferment of the RC lease liability during the period 2014-2018 and the decision of the
shareholders not to declare dividends in 2014 and to decide on dividend declarations in the
future years based on the cash generation by the Company are all steps that would greatly
enhance cash availability for servicing the debts. The Company will also be seeking fresh
opportunities for incremental revenue generation through supply of utility services emanating
from the surplus capacity if any.
From 2021 onwards the net income margin of the Company gradually starts improving following
the reduction in the debt following the repayment of the loans (Though the Sukuk is assumed to
be rolled over every five years as mezzanine capital till around 2030) as well as the fact that the
Company is not expected to add more commercial debt (except for limited purposes).
Accordingly, the DSCR is slated to improve significantly.
Efficient financing strategy to meet future requirements
The life of the operating assets of the Company are long term in nature and so too their revenue
generation capacity. Hence any financing for such assets would necessarily have to be an
optimal mix of long term sources comprising of both debt and equity.
Considering the rapid growth of the Company and the high level of capital expenditure spend,
there is immense focus on the financing strategy going forward. The capital structure of the
Company comprises of Equity and debt (ratios mentioned earlier) and the debt comprises of:



Bank market borrowings (Murabaha facilities)
Sukuk
Capital lease of fixed assets from the Royal Commission
The Company can also draw upon certain short term credit facilities in case of exigencies.
As mentioned earlier, the cumulative debt availed as of December 2014 is SR 9.0 billion and an
additional SR 2.5 billion Murabaha facility has been availed to bridge the finance gap for the
years 2015 and 2016 mainly arising out of Capex projects. Some of the infrastructure assets of
the Company particularly in the transmission and distribution side are built by the Royal
Commission and are turned over to the Company under a long-term capital lease arrangement.
Going forward at least for the next fifteen years, the Sukuk of SR 2.5 billion would be rolled over
in order to maintain a certain mezzanine level. Further, in the event that there are new business
opportunities over and above the normal demand projects, the use of project financing would be
explored as well. The optimal use of debt and equity would be explored within the covenants for
debt Equity (not greater than 3x) and DSCR (to be at least 1.1x).
In a nutshell, given sustainable tariffs, the Company is confident of evolving appropriate
effective financing strategies to help it meet its mission of providing profitable and
environmentally sensitive power and water services that meet customer needs at competitive
and sustainable prices in support of the economic development of Jubail and Yanbu.
26
FINAL-v-00
In accordance with our mission statement, Marafiq is an environmentally sensitive organization,
which follows environmental guidelines according to applicable environmental regulations
enforced by the regulator namely Royal Commission for Jubail and Yanbu, for all existing
facilities as well as new projects. In addition, Marafiq is an ISO 14001 certified company having
a comprehensive environmental management system towards continual improvement.
Marafiq ensures total compliance to Royal Commission Environmental regulations (RCER) &
Environmental Permits to Construct and Operate. Marafiq has established a comprehensive
strategy to monitor operations internally as well as through external parties to ensure that all
regulatory requirements are fulfilled and also has a minimum impact on the environment.
Marafiq submits monthly Self-Monitoring Reports and Quarterly Compliance Plans as well as
Annual Monitoring Reports for all facilities to the regulator. Marafiq conducts internal
Environmental Audits for all facilities to ensure full compliance to Environmental Regulations
and the environmental issues are addressed on priority basis to stay compliant with its social
and legal responsibility.
Marafiq is expanding the existing facilities as well as constructing new facilities in line with the
current and future developments as well as environmental compliance requirements. As an
active player, the organization is participating and arranging in-house environmental awareness
campaigns as well as for external agencies in fulfillment of social responsibility core value and
continually improving the environmental performance.
Major Environmental Issues & Mitigation Measures
The following table elaborates major environmental issues and the mitigation measures being
taken by Marafiq:
Table-38 Major Environmental Issues
#
Servic
e Line
Environmental
Issues
Impact
1
Waste
WaterJubail
Odor emissions
from the WW
Network
Odor emissions
cause nuisance to
public and thus affect
the image of Marafiq
with threat of
environmental
violations.
Mitigation Measures
Remarks,
if any
Short Term actions include
a) the flushing of the network
from selected locations;
b) injection of odor control
chemicals at critical lift
stations
the 6-monthly replacement of
activated carbon in the odor
control systems.
On-going
c)
Medium Term action includes the
installation of permanent odor
control systems at the main
sanitary wastewater pump stations
in the community areas.
27
Target
Date
Dec-2016
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2
Waste
WaterJubail
High Total
Dissolved
Solids (TDS) in
the Irrigation
Water from
Sanitary
wastewater
treatment plant
Affects the Irrigation
water quality and
environmental
violation of irrigation
water quality
standards
Short Term action plan is to
bypass the affected Sanitary
wastewater pump station causing
high TDS in the feed to Sanitary
wastewater treatment plant and
thus the product irrigation water.
Q2-2015
Permanent Action is to rehabilitate
the pump station to stop ground
water infiltration to the sanitary
wastewater pump station & the
sanitary wastewater treatment
plant.
Target
Date
Dec-2015
3
Waste
WaterJubail
Reclaimed
Water Quality
from
Wastewater
Treatment
Plants
Future Treatment
Designs
Future expansions will be planned
and designed according to the
applicable latest version of RCER.
Implement
ed
4
Potable
WaterJubail
Low Minerals in
the Potable
Water to
Community
Non-compliance to
minerals standards of
Royal Commission
Environmental
Standards is affecting
the Marafiq image as
well as resulting in
Environmental
Violations.
New PW Re-mineralization Project
planned for fulfilling the mineral
requirement in the Potable water
as per the RCER requirements.
Target
Date
All
facilitie
s
Yanbu
High Energy
Consumption
due to age of
plant
High energy
consumption affects
environment and
sustainability
Energy Audit for Marafiq facilities
planned to identify and implement
energy conservation opportunities
to protect environment by reducing
the carbon emissions.
5
Implementation of Energy
Conservation options based on the
Energy Audit
6
Power
Yanbu
28
SO2 and
particulate
Emission for
STG's 1,2&3,
and Nox issue
with GTGs (1 to
8)
Odor emissions
cause nuisance to
public and thus affect
the image of Marafiq.
It is also resulting in
environmental
violations.
For STG's (1 to 3) the retirement
plan and for GTGs (1 to 8) under
study
Dec 2016
Target
Date
Dec-2016
Target
Date
Dec-2017
& onwards
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Service Line-wise Compliance Status of RCER
Sea-Water Cooling Jubail
Sea-water cooling facilities are fully compliant to RCER.
Potable Water Jubail
Currently, the potable water to community is not strictly as per RCER for minerals and Marafiq is
working on priority basis to implement re-mineralization project to fulfill the RCER requirements.
It is expected that by end of 2016, the Potable water to community will be fully complying to
RCER.
Waste Water Jubail
Marafiq is treating all the industrial and sanitary wastewater received at both wastewater
treatment plants to ensure that the product water is in compliance to applicable RCER Irrigation
Water standards requirements. Most of the treated wastewater is used as irrigation water by
Royal Commission Irrigation department and the minor excess quantity is discharged to
Sabkha, a wetland managed by Royal Commission. However some treated water in excess of
Royal Commission Irrigation demands from IWTP is sent to Sea Water Cooling Return Canal
leading to the Arabian Gulf and RC has concerns over this discharge and Marafiq is in dialogue
with RC to resolve the issue.
Marafiq is strictly monitoring its treatment operations through internal and external laboratories
to ensure that all the WW received is fully treated and complies to RCER. Also annual
monitoring of ground water is conducted through external laboratories and so far no impact on
groundwater has been observed. As a responsible organization, action plans are fully tracked
for the environmental issues related to odor emissions in the community areas and high TDS in
irrigation water. For future consideration, Marafiq is planning and designing the Wastewater
Treatment plants as per the latest applicable RCER and International Standards where
applicable to ensure environmental friendly business and social responsibility.
Sea-Water Cooling Yanbu:
Sea-water cooling facilities are fully compliant to RCER.
Potable Water Yanbu:
Currently, Marafiq is compliant to potable water standards as prescribed by WHO and the PME.
However, as per RCER, our potable water to community is lacking in calcium and Marafiq is
working on ways to meet with RCER requirements.
Industrial Waste Water Treatment Yanbu:
Marafiq is treating all the industrial wastewater received at wastewater treatment plants to
ensure that the product water is in compliance to applicable RCER reclaimed & Irrigation Water
standards requirements. the plant is new and there is no problem to comply 100 % with RC
regulation as per EPO.
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Sanitary Waste Water Treatment Yanbu:
Most of the treated wastewater is used as irrigation water by Royal Commission, the new
project of expansion and rehabilitation this plant in progress. There is no issue for compliance to
RC regulations.
Power Plant Yanbu
Emission problem is due to STG#1,2,3 having No Flue Gas Treatment facility. Emission usually
exceed the limits for SO2 and particulate. The only solution is to retire these units. Situation of
NOx emission at GTGs is under study and the plan to solve this problem if required by water
injection will be carried out by end of 2016.
Groundwater contaminated wells (NOT for drinking water purpose)
As per RC requirements of monitoring the ground water to assess the environmental impact,
there are three wells out of more than 30 wells that need to be cleaned up from the contaminate
– LFO. It is planned to be remedied by end of 2015.
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Marafiq, being a utility provider to the industrial cities of the Kingdom of Saudi Arabia, is a risk
averse Company and has an overall low risk appetite for achieving its objectives, i.e., it is
unwilling to take huge risks or assume unfavourable circumstances. The discipline and corecompetence of the Company demonstrates that the risk management has always been an
integral part to its strategic direction and the way of doing business. The said approach of the
Company has been continuously adding value to all of its stakeholders, especially its
customers, employees and shareholders.
Marafiq has already embarked upon building reasonable risk governance structure, under the
supervision of the Board of Directors (BOD), which ensures the existence of and the
accountability for the effective and timely management of risks across the Company. Under the
authority delegated by the BOD, the Board Audit Committee (BAC), a board-level subcommittee, is responsible for ensuring the compliance and efficacy of the risk management
framework and the establishment of a sound internal control environment and its activities,
supported by the CEO and his Executive Management Team, the Enterprise Risk Management
(ERM) Committee and a dedicated ERM team.
The BOD approved risk management policy of Marafiq is commensurate with international
better practices and its business strategy. The policy encompasses the process of identification,
analysis and assessment, measurement, management, monitoring and reporting of all major
types of risks, i.e., strategic risk, operational risk, financial risk and compliance risk, and entails
a sound risk management culture and environment across the Company.
A strong risk management culture and attitude is practiced at every hierarchy-level across
Marafiq, and special consideration is given to reliability, quality, health and safety,
environmental compliance, meeting customer demand, crisis management, and financial
management.
With the passage of time, the risk profile of the Company is changing with the change in
underlying risk factors, mainly due to financial and operational expansions, ageing of assets and
market-driven forces, and which are well addressed and effectively managed under the
comprehensive risk management framework of the Company, functioning under strong internal
control environment and regulatory guidelines.
The risks in the risk radar of Marafiq are divided into four sections; viz.,
 Operational risks affect the processes, systems, people and overall value chain of a
business. These include project delays, impact of possible power failures, etc.
 Compliance risks originate from laws, regulations and corporate governance. For
example, non-compliance to drinking water quality standards of RC.
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 Financial risks stem from volatility in markets and the real economy. For example, noncompliance to loan covenants.
 Strategic risks that are related to customers, competitors, and investors. For example,
mismatch between demand and supply.
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Key elements of our strategy are:
Maintain our assets to enable reliable provision of services.
Make investments and operational changes that manage effectively the balance of
risk, service and cost over the whole lifetime of our assets.
Invest in renewal and replacement of groups of assets that are approaching the end
of their useful lives.
Collaborate with our suppliers using incentive-based commercial arrangements to
create value through innovation and continual improvement.
Marafiq aims to make operational changes and investments at the right time and in the right
place to manage the complex balance of risk, service and cost. The performance of our assets
affects the services to customers, risks to compliance with standards and the efficiency with
which we operate.
Our approach to asset management is being enhanced so that we can better understand:
The operational characteristics of individual assets, processes and operational sites,
the risk of asset failure and the resulting impact on services.
How risks change over time assuming different levels of investment and
maintenance.
The financial, environmental and social costs and benefits of different types of
investment.
How long-term investment plans over time will achieve objectives related to service
delivery, performance of assets or risk.
How decisions about investment plans can be linked to better tactical maintenance
and to day-to-day operational management decisions.
Reliability Program:
With the establishment of Reliability and Asset Management Department under Technical
Function, Marafiq Reliability and Asset Management program is under implementation for last 5
years now. The scope of R&AM is applicable for all Marafiq assets.
The approach to Reliability and Asset Management is to have a proper structure to the program
supported by appropriate business processes under the guidance of a consultant. Further there
is focus on skill up-gradation of Reliability engineers and various plant teams to understand the
reliability structure and correctly use the developed business processes.
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Over the past years, the structure of the program has evolved with experience from a pilot plant
to begin with to application of Reliability principle Marafiq wide. The current structure enables
both Top – Down as well as Bottoms-Up communication to expedite actions related to
Reliability.
Reliability Program Structure:
Reliability Executive Committee – We have created a Marafiq Reliability Executive Committee
(REC) to support and drive Reliability across all the functions of Marafiq. The REC is chaired by
the Chief Operations Officer (COO) and aims to provide the Strategic leadership and tackle the
high level cross functional Reliability issues. REC also involves the General Managers from
concerned functions.
In Yanbu – Two Reliability Steering Committees (RSC) have been created, one for “Water &
Gas” and the other for “Power” under the chairmanship of the GM O&M (YI) and GM (Technical)
respectively. These committees also include all stakeholder Department Managers. In Jubail –
A Jubail Reliability Steering Committee has been created under the chairmanship of the GM
O&M (J). The committee also include the MaSa management team and all stakeholder
Department Managers.
Plant Reliability Management teams (PRM) are formed at business unit level to take ownership
of Reliability related issues at plant level. A PRM team comprises of Operations, Technical
Services, Maintenance and Reliability representatives at superintendent levels. This team is
responsible for all reliability issues in their respective area of operations. PRM team is headed
by Supdt. Operations. PRM prioritizes reliability issues, ranks them and keeps top 10 issues
under focus for resolution. PRM periodically apprises RSC on the status of actions plans for top
10 and seek their support on issues of priority.
Currently 7 such PRM teams are formed and are focusing on Reliability driven actions on O&M
issues. PRM teams are supported by BU Manager as well as by another BU Manager
(supporting management partner) to expedite actions in matters related to Reliability. At REC
and RSC level, the Reliability related KPIs are monitored. Periodic updates are given by
respective BU Managers and Functional Heads. The gaps are analyzed and respective PRM
teams are challenged to demonstrate control on the issues. This ensures communication in both
directions.
Reliability Business Processes:
Following Business Processes are approved for implementation:
Reliability Centered Maintenance – RCM
Risk Based Inspection – RBI
Problem Solving and Root Cause Analysis – RCA
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Following supporting documents are approved for implementation:
Production Loss Equation – PLR.
Risk Assessment Matrix – RAM.
Following Business Processes are under development:
Instrumented Protective Function – IPF.
Reliability & Asset Management - R&AM.
R&AM is responsible for doing the RCM studies for plant equipment as per RCM business
process and develop the Maintenance strategy, the RBI studies for plant equipment as per RBI
business process and develop the Inspection strategy, the IPF studies for plant equipment as
per IPF business process and develop the maintenance strategy and inspection plan for
identified critical instruments and equipment.
Root Cause Analysis (RCA) is carried out by trained skill level RCA engineers for any incident
categorized and level 2 or level 3. This enables Marafiq to identify the root causes and initiate
appropriate actions for correction and prevention of various incidences affecting reliability and
asset performance.
Reliability and Asset Management department monitors and supports PRM teams to ensure
proper and efficient utilization of plant assets across all business units.
R&AM has also reviewed the CapEx procedure for Project implementation along with the
Consultants and have come up with various recommendations to improve the control and
quality of the actions during various project management stages for issues interfacing reliability.
Maintenance:
The Maintenance department ensures the execution of Maintenance developed as per the
Reliability Centered Maintenance (RCM) process. This includes the preventive maintenance
activities as well as the condition monitoring of plant equipment.
A living program to ensure effectiveness of the maintenance strategy and condition monitoring
program is in place. This enables fine tuning of maintenance activities based on the equipment
performance and corrective maintenance requirements. All the maintenance history is captured
in SAP and is available for future reference.
The Maintenance representative updates respective PRM teams on any issues related to
Maintenance affecting reliability. Also, KPIs are generated and reported, which reflect the
control on various processes.
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Inspection:
The Inspection of water production units is covered by structured Risk based Inspection (RBI)
program. By this program, various degradation mechanisms applicable to generation units are
studied for normal operations, start up and shut down operations as well as long outages.
Appropriate locations for inspection are identified by a team of specialists from Operations,
Maintenance and Technical departments and facilitated by skilled level RBI engineer from
Reliability department. The approved Inspection activities are then transformed in to Specific
Written Scheme of Examinations (SWSE) for each equipment/piping along with the details of
NDT to be used and the thickness measurement sheet.
Currently, MED units are under RBI review for development of inspection strategy. Thereafter,
appropriate review of other units will be undertaken for formulating structured inspection
program.
Asset Condition Assessment
A structured Asset Condition Assessment procedure is developed for all assets to proactively
identify issues with assets and correct these at the inception. This is developed and
implemented as a 5 year plan so that all assets are covered. Asset Condition Assessment is
conducted by Technical Services Department (TSD) and the report is approved by GM
(Technical). Time bound actions are initiated on the recommendations from TSD.
In case, if the remaining life of the asset being inspected is found below 5 years, then the matter
is reported to Facilities Planning Department to take a decision with regard to rehabilitation or
replacement. This assures healthiness and service-ability of the asset throughout its operating
phase.
Performance Review:
The PRM teams formally meet weekly to review the units performance as well as to review any
trips. The minutes of meeting are documented. Area KPIs are reported to RSC each month. SC
meetings are formally held once every two weeks. The minutes of meeting are documented.
REC meets once every month. The committee meeting proceedings are documented.
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Marafiq’s overall revenue requirements are met through tariffs. Marafiq’s original tariff structure
was entirely inherited from the Royal Commission at the time of corporatization in 2003, with the
exception of industrial and sanitary waste-water treatment for which new tariffs were introduced
in 2003 as part of the privatization plan. Among other things, one key consideration of the
commercialization plan of Marafiq was the stability and simplicity of the consumer-end tariffs
structure, moving forward, as a necessary tool to maintain the competitive edge of the industries
operating in Jubail & Yanbu and to attract more new investments in Saudi Arabia. Marafiq has
so far been successful in achieving these objectives and will continue ensuring that the
competitive advantage of Jubail & Yanbu is maintained in line with the purpose for which these
two industrial cities were created.
As per Council of Ministers’ resolution No. 57 dated, 11th July 1999, Marafiq Board of Directors
was appointed as Company Regulator till the appointment of a new independent regulator. On
15th Feb 2010, the Council of Ministers through their Decision #53 of 2010 further determined
that all Marafiq services relating to power and water production shall be regulated by ECRA
(Electricity & Co-generation Regulatory Authority) under the principles set-forth in the earlier
Decision 57 of 1999. Consequently all other Marafiq activities which were earlier being
regulated by the Marafiq Board of Directors would be regulated by the Board of RC for Jubail
and Yanbu. Subsequently, RC Board of Directors established an independent office of
Regulator Water Services (RWS) that became fully operational in 2012.
Since 2003 Marafiq was able to keep the tariffs unchanged since revenue generated was
enough to meet operational requirements along with a reasonable return on invested capital.
However, in 2009, Marafiq’s BOD, in its capacity as Regulator, decided to allow a one-off flat
10% increase on all water tariffs for non-domestic use which was implemented effective January
2010. The power tariffs for non-residential customers were also revised by ECRA effective July,
2010. However, since Marafiq had launched extensive capital investment program to
rehabilitate/ replace the aging assets of 1980s & 1990s, there was requirement for further
adjustment in water tariffs that was eventually approved by the Regulator Water Services for
non-residential customers, effective March, 2014. The revised tariffs shall remain valid till the
end of 2016. For Gas Distribution business at Yanbu, Ministry of Petroleum approved a tariff
revision effective January, 2014.
For future period also, Marafiq plans to work closely with the Regulators to have fair, sustained
and predictable tariffs. Regulator Water Services has also put in place a mechanism to ensure
more customer participation in the tariff review process and the plans to finalize the future tariff
determinations well in time to be incorporated in customer industries’ budgets/ business plans.
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The fundamental belief of Marafiq is to provide profitable and environmentally sensitive power
and water services that meet customer needs at competitive and sustainable prices. ; the utility
has always endeavored to seek prudent and least costs in terms of O&M and expansion
programs. While it is clearly understood that O&M variable and direct fixed costs, allocated
common cost, depreciation and return on investment has to pass the strict tests of prudence
and least cost, therefore, the said tests are the corner stones to revenue requirement
assessment policy of Marafiq. Out tariff policy is governed by the following commonly accepted
rate / tariff making principles:
Cost causation
In efficient utility rate design, customers that cause a cost to be incurred should pay that cost. In
a situation where cost causation can be perfectly identified, cross subsidies (both within and
between customer classes) can be avoided. Therefore, it is important, where possible, for
Marafiq to identify which customers are responsible for which capital investments, operations
and maintenance costs, and which costs should be socialized (spread across all customers). It
should also be noted that cost causation is useful as a demand-side management instrument,
helping ensure the efficient use of Marafiq’s utility services.
Marafiq also believes that robust demand assurance mechanism in place shall allow only
serious future customers to enter in Marafiq’s services; thus insulating existing customers from
the possible price shocks caused by unfulfilled demand requests. This is intended to be done
through requesting all potential customers to submit; prior to final approval of utility services, a
cash/bank guarantee towards fulfillment of milestones to ensure utilization of committed
services. Upon satisfactory commencement of service utilization, the submitted guarantee will
be returned to submitter.
Non-discrimination
Tariffs should ensure that costs are allocated in a fair manner across customer classes.
Consumers with similar consumption patterns and demands should thus face similar terms and
conditions. As monopoly utility customers do not have the opportunity to change suppliers in the
event of better terms becoming available, non-discriminatory rate design principle is usually a
focus area at regulators.
Administrative simplicity and transparency
Rates should be straightforward for customers, lenders and service providers to understand and
apply. The rate setting process should provide stakeholders with the confidence that it is
conducted in an unbiased fashion. Customers should be able to calculate their monthly bills
themselves, and be able to understand why the rate is calculated in the prescribed fashion.
Complex rate design can be an administrative burden, increasing accounting costs, billing costs
and leading to time spent proving that rate design is fair to all customers. This could increase
costs to consumers, regulators and Marafiq itself and should be avoided. The ratemaking
process for Marafiq should also be transparent, relying upon public filings and customers’
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consultation periods. This will provide assurances that it is unbiased and allow the regulator to
obtain feedback from other stakeholders.
Financial sustainability of Marafiq operations
Rates should be set at a level that allows Marafiq to meet its statutory obligations of operating,
managing, expanding, and owning key infrastructure facilities in both of Yanbu and Jubail
industrial cities. Tariff rates should allow Marafiq to earn a fair return and remain financially
viable, generating sufficient cash flow to support what are deemed necessary investments or
future systems’ expansion.
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Marafiq recognizes its responsibilities towards all its stakeholders, and especially the industrial,
commercial and residential communities in which it operates. The company strives to make and
manage its charitable contributions in support of community activities in a way that will contribute to
the national economic development agenda in line with Marafiq’s business strategies and
operations.
Education
Education is one of the main focal areas for Marafiq in which to exercise its social responsibility.
There is regular interaction with local schools to recognize and encourage achievement, and to
promote environmental awareness and stress the need to use water and power sparingly.
Developing Saudi talent
Marafiq’s Professional Development Program for university graduates and On-the-Job Training
Program for school graduates provide young Saudis the opportunity to enter the job market in the
framework of learning through doing. They work in various environments where they can apply
their talents and acquired skills to new situations. They develop their expertise to enhance their
own and also the company’s performance and productivity.
Saudi Responsible Competitiveness Index
Marafiq was one of the three overall winners of the 2010 King Khalid Responsible Competitiveness
Awards and scored the highest marks of all entries in the “Social Responsibility” category. Marafiq
was also adjudged the growing company that best followed safety, health and environmental
procedures.
The coveted annual King Khalid Awards mark the culmination of the annual Saudi Responsible
Competitiveness Index (RCI), which is led by the Saudi Arabian General Investment Authority
(SAGIA) and the King Khalid Foundation. The RCI analyses how Saudi companies build
competitive advantage by managing their social and environmental impacts. The index determines,
amongst others, how companies attract and retain employees, implement strong environmental
policies and work with their suppliers.
The King Khalid Responsible Competitiveness Award goes to the three strongest performers on
the Index that make the most progress in aligning their core operations to environmental and social
development.
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DEMAND FORECAST PROCESS:
METHODOLOGY & PROCEDURES
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INTRODUCTION
Demand forecast is aimed at establishing a medium to long term outlook of MARAFIQ’s
demand growth. This facilitates the decisions making regarding medium to long term
investments. Demand Forecast output is used as an input to other planning activities at
MARAFIQ such as Supply planning, Revenue planning, Production planning, CAPEX planning,
Maintenance planning etc.
Demand Forecast covers a total of 15 utilities service lines. 9 service lines in Yanbu Industrial
City and 6 service lines in Jubail Industrial City. These service lines are:
Jubail
Industrial
Waste
Waster
Sanitary
Waste
Water
Irrigation
Water
Industrial
Water –
Sadara
Customer
Category
Sea
Water
Cooling
Potable
Water
Industrial
√
√
√
√
√
√
Community
X
√
X
√
√
X
Internal
X
√
X
√
√
X
Export
X
X
X
√
X
X
Yanbu
Customer
Category
Sea
Sea
Industrial Sanitary Irrigati
Water Water Process Potable
Power
Waste
Waste
on
Cooling Cooling Water Water
Waster
Water Water
1
2
Sales
Gas
Industrial
√
√
√
√
√
√
√
√
√
Community
√
X
X
X
√
X
√
√
X
Internal
√
√
√
√
√
√
√
√
X
Export
X
X
X
X
√
X
X
X
X
Also, Marafiq has classified its customers into 4 main categories which are industrial,
community (including residential, commercial, government etc.), internal and export. These
categories have further subcategories which is shown in the below figure:
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Our approach is doing the demand forecast for each customer category.
DEFINITIONS & ACRONYMS USED IN DEMAND FORECAST
44

Existing Customers: Existing industrial customers that have no expansion plans.

Under Construction: Industrial customers that have on-going construction work of
their facility in Jubail or Yanbu Industrial City.

Under Design: The industrial customers who already have an intention of building a
facility in Jubail or Yanbu Industrial City, submitted their requirements to RC and
have utility approval from Marafiq but haven’t started the construction of their plant.

Success Rate: It is the rate of whether the customer continues to construct their
facility or not.

Utilization Factor: It is the factor utilized by the Heavy and Light Industry Customers
out of their Peak Demand requirement. A 75% utilization factor is considered in the
DF Model based from their average actual historical consumption. This applies to all
service lines.

Adjustment Factor: Factor used to adjust the demand based on 5 year historical
accuracy.

DF: Demand Forecast.

BP: Business Plan.

CRD: Customer Relations Department.

FPD: Facilities Planning Department.

RC: Royal Commission Jubail and Yanbu
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DEMAND FORECAST PROCESS:
Demand forecast is prepared based on input from internal sources within Marafiq as well as
external sources. The overall Demand Forecast Process has made the approach to each tasks
more systematically, each major process has its own sub-processes to be accomplished in
order to have a more efficient way in doing the overall activities in Demand Forecasting.
The major processes includes PLAN for what we need, EXECUTE the tasks to be done and
simulate the demand forecast model more efficiently, AUTHENTICATE the resulting forecast by
running a Quality Assurance/Quality Control system and buy-in from the stakeholders,
CALIBRATE the model if there are any faults or disagreements found during the buy-in process
and lastly EVALUATE the overall performance in preparation for the planning cycle for the next
demand forecast exercise.
overall DF Process
PLAN
The following are the sources of information that are the most critical input in preparing the
Marafiq DF:
Information
Source
List and Status of New Industries
CRD, RC
Utility Approval Request (UAR)
FPD, CRD
Utility User’s Agreement (UUA)
CRD
New Community Demand
RC
Maximum Possible Production
FPD
Historical Data of the existing Customers
CRD/SAP
Note: These are Critical Inputs of DF Model
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Other than the specified information and sources, the integrity of the figures provided is also
critical. Demand Forecast team needs to do some clarifications on the information provided by
the sources. For the actual consumption of existing customers (Industry, Community, Internal
and Export), Historical Data are being updated on a monthly basis once information is already
available in SAP Billing System.
EXECUTE
Execution of Demand Forecast is simply simulating the DF Model once all the information are
being considered and assumptions are already updated in the spreadsheet model.
AUTHENTICATE
The output of the initial simulation of the DF Model is called the Provisional Demand Forecast.
The result is presented first to the Corporate Strategy Departments for concurrence before
being presented to the other internal stakeholders of DF in Jubail and Yanbu. After the
presentation, Provisional Demand Forecast is reviewed by the internal stakeholders, give their
comments and initialize their respective plans. If there are valid issues raised in the issuance of
Provisional DF, then the next step is to calibrate the model. It is therefore important for the
stakeholders to challenge the DF at this point because otherwise, if there are no comments or
issues, the same will be prepared and considered in the Final Demand Forecast. (Note: Internal
Stakeholders include Facilities Planning Department, Tariff and Regulatory Department,
Business Development Department, Financial Planning Department, and Business Units of
Operations)
CALIBRATE
Upon issuance of the Provisional Demand Forecast, the stakeholders are only given a certain
period to review and send their comments, clarifications and verification to Demand Forecast
team. The Demand Forecast team will review and discuss the comments that was being raised
and do the necessary corrective actions by adjusting the DF model. At this point, recently
approved customers are being included as well.
EVALUATE
On a monthly basis, Demand Forecast team evaluate the actualization of the Demand Forecast
and issue a Variance Analysis Report. This explains what are the reason of the variance, which
expected customers did not operate and which area we need to improve and focus more as we
move forward.
The total forecasted demand of Heavy Industries, Light Industries, Government, Commercial,
Residential, Mosques, Internal Sales and Export Sales are the main focus and highlight the
performance of forecasted demand per customer category of each service line for both Jubail
and Yanbu by comparing it with the actual recorded consumption for the year 2014.
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The resulting accuracy indicates whether or not our forecast is more than the actual or the
actual is more than what we have forecasted, thereby giving us a clear indication on how to
adjust our future forecast depending on the result. Criteria for determining the confidence level
of accuracy are as follows:





Above 105% accuracy – To be reviewed
101% to 105% - Not Desired
90% to 100% - Very Good
85% to 89% - Warning
Below 85% - Unacceptable
At the year end, this will be the basis of adjusting the assumptions that is used to drive the
forecast of the following years.
METHODOLOGIES
Industrial Customers
The industrial customers contribute a huge portion of the total demand. In order to calculate the
industrial demand, the individual demand of each industry is determined based on historical
data and the commitment by Marafiq. The industrial customers can be grouped into two main
categories which are existing industrial customers and new industrial customers. Based on the
status of the project, different probability is assigned for different categories as shown in the
table below:
PROJECT
STATUS
EXISTING
NEW
NEW
STAGE
PROBABILITY
COMMITMENT
100%
UTILIZATION
FACTOR
N/A
OPERATIONAL
UNDER
CONSTRUCTION
UNDER DESIGN
100%
75%
Committed
75%
75%
Committed
Committed
Overall DF methodology for Industrial Customers
Adjustment factor is then applied to the demand of the future industries. Adjustment factors are
derived by calculating the actual accuracy that happen over the previous 5 year run of Demand
Forecasting. We use the average accuracy of the previous first years and apply it on the first
year of this year’s demand forecast, then use the average accuracy of the previous 2nd
years and apply on the 2nd year of this year’s DF and so on. If the resulting factor doesn’t
provide a logical demand behavior, it can be modified by averaging further the subsequent 5
year accuracies.
The table below shows the specific way to apply the assumptions for Industrial Customers from
the current year to 10th year:
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All Service Lines other than Wastewater:
TYPE
Existing
Under Construction
Under Design
DF Calculation
Previous Year x (1 + growth rate%)
Demand* x 100% Success Rate x 75% Utilization Factor x
Adjustment Factor
Adjustment Factor
Note: * refers to the demand requirement of new industries wherein on the 1st year of expected operation only 50%
of the requirement is considered.
Wastewater Service Lines
TYPE
Existing
Under Construction
Under Design
DF Calculation
Linked to Water Demand
Adjustment Factor
Adjustment Factor
Note: * refers to the demand requirement of new industries wherein on the 1st year of expected operation only 50%
of the requirement is considered.
For the first 5 years, the industrial demand forecast is very firm since it includes the committed
projects which are either in operation, under construction or in design stage.
Community Customers
Community category consists of 3 sub categories namely residential, government and
commercial. In order to forecast the demand for community customers, the first step is to
calculate the estimates of the Level, Trend and Seasonality by using the equation below:
Forecast = Level x Trend x Seasonality
where
Parameters
Description
Level
Average Actual Demand over a period of time
Trend
Average Growth Rate over a period of time
Seasonality
Actual Seasonality over a period of time
Internal Consumption
Internal consumption is the demand projected for Marafiq own facilities. Internal consumption
demand is based on correlation between the production and the internal utility requirement
between service lines.
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Export Sales
Export sales are dependent upon the demand requirement of the customers and the availability
of surplus production.
Peak Demand
Peak demand is being calculated after the calculation of the average demand based from the
methodology mentioned above. To come up with the peak demand, average demand is
multiplied by a peaking factor. Peaking factor is derived from the average of the ratio of
historical actual peak demand and historical actual average demand over a period of time.
PROCEDURES
#
Procedure
1
Historical
Data
Preparation
Description
Process Flow
Historical data is prepared from Operations
report and Billing report based on actual data.
Billing information being available in SAP BW
system, data will be uploaded to Historical
Data template of the DF model.
Information from Operations report will be
entered directly in the model.
2
Calculate
Assumptions
The following assumptions are used in the
Demand Forecast Model:
• Adjustment factor: Factor of uncertainty as a
result of the previous 5 year accuracies
between forecast and actual sales.
• Utilization Factor: 75% is used to assume
how much the industries utilize their allocated
quantities for both under construction and
under design.
• Success Rate: 100% is assumed for industries
which are under construction and 75% for
industries under design.
• Peaking Factor – is being used to derive the
peak from average consumption which is
based from the actual average of the (t-n)
years of data. Peaking Factor is computed as
(Peak Demand / Average Demand)
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#
Procedure
Description
Process Flow
• T&D Losses for most of the service line are
derived from the actual average % loss of the
(t-n) years, other service lines are assumed
according to Corporate Direction.
• Linking SWW and/or IWW to Water (potable
or process) is computed as Wastewater
Collection / Water Sales. It is described as
utilization of potable or process water a certain
percentage of it will go as SWW or IWW.
• Maximum Possible Production will be
downloaded in SAP after Facilities Planning
Department globalizes the Supply Availability
figures.
Input
New On a quarterly basis, Customer Relations
Department is issuing the Customer Dashboard
Customer
List to Demand Forecast Section to inform us of
Demand
3
the update and status of each expected
customers. Upon verification with Customer
Relations Department regarding the New
Customer Demand, Demand Forecast will enter
the requirements of the new customers in the
DF model. Consideration of their quantity will
depend on the start-up date indicated in the
updates of the Customer Dashboard List and
are subject to the DF methodologies
mentioned in 6.1
4
Collate
Inputs and
Prepare
Provisional
DF
5
Issuance of
Provisional
Demand
Forecast
50
Once all the assumptions have been calculated
and new customer have been included in the
model, Provisional Demand Forecast will be
computed automatically since the model is
designed to have predefined calculations.
Result of which are reports indicating the
demand forecast in a monthly basis on the first
year plan and yearly on the 2nd to 10th year
plan.
Provisional Demand Forecast will be issued /
circulated via electronic mail in PDF or excel
format to all stakeholders for information,
review and to consolidate their comments.
Demand Forecast team will list down all the
comments raised and verify its validity before
the modification of the DF model. At this
point, the stakeholders should not use the
Provisional Demand Forecast to initiate their
respective plans.
FINAL-v-00
#
Procedure
6
Incorporate
Valid
Comments
(Calibration
of DF Model)
7
Concurrence
of
Final
Demand
Forecast by
GM
Corporate
Strategy
8
Description
Process Flow
After consolidating and reviewing the valid
comments of the stakeholders, demand
forecast will be modified according to the
comments / valid issues raised by the
stakeholders. At this point, Demand Forecast
should also consider the latest update of
Customer Dashboard list issued by Customer
Relations Department.
Final Demand Forecast will be presented to the
GM Corporate Strategy for his concurrence. In
case there are issues that will be raised by the
GM during the presentation, Demand Forecast
team will recalibrate the model accordingly
and send the result to GM Corporate Strategy
for approval.
Uploading of
Demand
Results of the calculations of Demand Forecast
Forecast
will be uploaded in SAP. Quality Assurance /
Data in SAP
Quality Control (QA/QC) of the data shall be
done after uploading of the data in the system
in manner of where each of the items in the
Demand Forecast Model compared to the data
uploaded in SAP should be the same.
9
Issuance
Final
Demand
Forecast
of Once the Final Demand Forecast has been
concurred by the GM Corporate Strategy, the
stakeholders will be informed via electronic
mail that Demand Forecast is already available
in SAP to initiate their respective plans.
=====================End of Document======================
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Marafiq – Strategic Direction Statement (2015

Transcription

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