QUARTERLY REPORT OCTOBER-DECEMBER 2013 PREPARED BY MANAGEMENT CONTRACTOR TABLE OF CONTENTS 1. COMMERCIAL DIRECTORATE .................. 5 2. EXPLOITATION & TECHNICAL CONTROL ......................................................... 10 3. WASTEWATER TREATMENT PLANTS AND WASTEWATER REMOVAL DIRECTORATE ................................................ 35 4. ADMINISTRATIVE & FINANCIAL DIRECTORATE ............................................... 41 5. HUMAN RESEOURCE MANAGEMENT DEPARTMENT ................................................. 47 6. INVESTMENT PROGRAMS COORDINATION DIRECTORATE ................ 51 7. QUALITY & ENVIRONMENT DEPARTMENT ................................................. 68 8. PUBLIC RELATIONS DEPARTMENT ....... 71 9. AMENDMENT #4 TO MC ........................... 74 10. INDICATORS ............................................. 80 11. APPENDIX ................................................. 93 1. COMMERCIAL DIRECTORATE 1.1 Billing, billing center ...............................................6 1.2 Payment ...................................................................7 1.3 Customers service center ..........................................8 The improvements of commercial indicators has been correspondingly recorded for the quarter IV 2013. These are a result of complex commercial activities which have been undertaken during the reporting period. Though the overall billing has increased by 18 million compared with that in quarter IV 2012 however a slight decrease of billing improvement rate was recorded, this is due to extremely cold temperatures in some regions particularly in December which in turn had a negative impact on an average consumption as well. SMSs are sent to customer on a regular bases, the messages provide information concerning monthly charges applied to the consumers as well as contain notifications and alerts for not payers. Analysis show that the payments were significantly improved by the customers who receive SMS services. Paper notifications and alerts were also sent to around 8000 customers through “Haypost” mail service, these were the customers who had a signed debt repayment agreement and were not fulfilling their financial obligations towards AWSC with more then 10 000 AMD debt. The actions that have been taken on increased the income to unprecedented level reaching up to 419 million AMD in December 2013. The ongoing project of the new billing software implementation which is called to address the needs of the current situation got closer to its end in the fourth quarter of 2013. The new approach requires significant changes in the methodology of water meter data collection processes. Upgraded software allows calculations based on customers average consumption which will in turn reduce the number of visits for water meter data readings by 3 to 4 times. As a result it will prominently increase the effectiveness of the operations with less resources in- volved, the activities of such groups data receiving and supervision will become faster and more reliable, well-equipped supervising groups will make possible to have relatively less number of experienced Employees with higher salaries. The visits are organized as follows: groups of 2-3 Employees organize a complex investigation (record of water meter readings, elimination of illegal connections, checking of water meter operation, etc.) of a concrete unit of Customers, separated from the billing system. Presently the mentioned activities are implemented through separate vis- its, which is very ineffective, regularly visits to the distant settlements is almost impossible (visits are implemented 1-2 times per month), which does not allow daily control of the activities and is not productive. The new method of data collection processes is planned to implement in 2014. 1.1. BILLING Table 1. Invoiced billing One of main goals of the 2% commercial actions that 1200 have been implemented was 1 124 1 142 to form an accurate billing 1000 which is in turn the guaranty 800 of steady payments. As was 600 mentioned above though the mln AMD 2% 1% improvement rate was slight- 400 2% 393 400 ly decreased, for the report- 379 383 353 359 ing period it has recorded 2% 200 increase of billing for around 0 18 million AMD, compared October November December Total 4th quarter with that in 2012. 2012 2013 growth % 6 Commercial Directorate Table 2 contains information about the average water consumption of the customer during the year 2013. As it is seen in the diagram the average consumption rate was decreased in November and December by 0.3 and 0.2 accordingly, this is due to relatively cold weather in November and ex- tremely low temperatures in December. The low average consumption is also related to the savings that the customers do concerning the recent increases of tariffs for gas and electricity. Table 2. Consumption of AWSC 12.0 11.4 11.5 11.1 11.0 10.9 10.8 10.5 11.1 9.8 9.8 9.9 10.0 10.4 9.7 9.9 9.5 9.0 9.9 9.1 8.8 9.0 9.0 9.6 9.4 9.1 /customer/month 8.5 8.8 3 m 8.0 8.3 2012 8.1 7.5 8.0 2013 7.0 July May June April March August January October February December November September 1.2 INCOME High income was recorded during the last quarter of 2013. Compared with the same period in 2012 it has increased by 6% or around 68 million AMD. The main share of increase belongs to December roughly 33 million AMD or 9%. The significant increase of income in December is mainly condi- tioned by 2 times payment of Ministry of Defense as well as due to the actions that has been taken. Though the income is high for the year 2013 particularly in quarter IV however there is a signif- icant amount of not paid bill around 520 million AMD out of which 260 million by water meter. Table.3. Income of AWSC 1400 6% 1200 1 204 1 136 1000 800 mln AMD 600 7% 2% 9% 400 404 419 376 374 381 386 200 0 October November December Total 2012 2013 Commercial Directorate 7 1.3 CUSTOMERS’ SERVICE CENTER During the October-decemberr of 2013 Customer service center registered 3 816 calls, 3 108 out of which were about AWSC CJSC activity and 708 didn’t refer to the company (Yerevan Djur, etc). During the quarter Customer service center registered more than 620 voice mails which were studied and were accordingly processed. Table 4 Customer Service Center con- Number of calls according to issue type tinues to receive calls and com- plaints from customers, informs OCTOBER NOVEMBER DECEMBER TOTAL 1 817 about current repair works, 1 135 emergency situation and about expected time for water supply 787 565 recovery. 465 360 395 380 Customer Service Center greatly 35 38 50 123 assists branches in accomplish- Commercial ing daily activities to receive Exploitation the calls from the customers and Other solve them as soon as possible. In comparison with the same period of the previous year a sharp increase of phone calls has been registered during the reporting period which certifies about the growth of confidence Table 5 among the customers towards call center Number of received calls and specifically towards the Company as OCTOBER NOVEMBER DECEMBER TOTAL well as about quick responses to raised is- 3 108 sues and availability of their operative solu- tion. The increase of this indicator is mainly due to information availability and positive 1 216 1 080 solution of the calls. 958 934 432 364 284 The comparative diagram of 2012 and 2013 2012թ. is presented above. 2013թ. To increase the customer awareness level, the notification of the population on water cuts via individual SMSs has a continuous character. Due to this service it became possible to relieve the overload of the “1-71” Call Center. During this quarter the operators of the center carried out a telephone monitoring. The employ- ees contacted those customer-residents of Echmiadzin town who had consumed water during one month (November) and didn’t do any payment. As a result once again the reasons of non-payment were clarified. It became possible to survey only 131 customers out of 275 included in the list. While analyzing the results of the phone calls it should be mentioned the outcomes are rather sat- isfactory. 8 Commercial Directorate Table 6. The results of telephone monitoring in November Number of the paying customers 80 Amount paid (thous. AMD) 509 As in previous quarter this quarter also the Company decided to conduct a survey among non-pay- ing customers. A structured questionnaire was developed where the majority of questions refer to the reasons of non-payment. This time the survey was conducted in Charentsvan and Ararat towns as well as in Alapars village. The survey conductors also tried to find out the awareness level of the Company’s Customer Service Center (1-71) among our customers. It was found that majority of them were unaware about the Center which means that in future necessary steps should be taken raise the awareness level. Be- sides the employees of customer service center conducted training among the customer–residents about the project on “transmission of water meters readings to 81-71 four digit number through SMS” in the above mentioned communities. Here are the results of the survey analysis: only 62 customers out of 152 from the list participated in the survey because 83 are closed doors, 5 are unknown customers and 25 refused to answer: While analyzing the results of the survey it should be mentioned the outcomes are rather satisfac- tory. The project will have a continuous character and will be implemented in other communities of the Company as it is considered to be a successful one. Table 7. The