CHAPTER 4: RESULTS AND DISCUSSION
4.3 Key Respondents: Category 2
4.3.1 ZINWA’s Business Strategy
Generally they all articulated well the vision, mission statement and core values of ZINWA as laid down in the strategic plan. ZINWA’ current vision, mission statement, core values, strategies and their drivers are well articulated in Section 4.2.2 above. The respondents also gave the strategies and their key drivers as illustrated in the strategic plan. The challenges that hampered the full implementation of the strategic plan were given as inconsistence in governance policy, incompatible organizational structure, financial, decentralization of the procurement system, use of obsolete technology, low usage of raw water. The challenges faced in implementation of the set business strategy are summerised in Table 4.8 below:
Table 4.8: Challenges faced in ZINWA
RESPONDENT CHALLENGES REASONS
Director-Special Projects -Inconsistency in governance policies
- Incompatible organogram -Finances
- No strong policy driver - Absence of a governance policy framework
- Consumers not paying.
Sub-economic tariffs.
Operations Manager -Use of old technology -Finances
-lack of funds and instruments for investment -Consumers not paying.
Sub-economic tariffs Commercial Manager -Finances
-Decentralisation of procurement
-Incompatible organogram
-Consumers not paying.
Sub-economic tariffs.
-Empowerment of SBUs -Lack of strategy support from top management
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Inconsistence in governance policies was sited as the most important causer for failure of full implementation of the strategic business plan at ZINWA. The parent Ministry did not have a standing Water Policy and is in the process of crafting it. The strategic business plan for ZINWA had to be guided by the National Water Policy and as such the board had often been changing its corporate direction without allowing the standing business strategy and structure to live their lives. This also happened in the water pricing system where the tariffs were slashed by the parent Ministry without prior consultation with the service provider ZINWA. This made ZINWA fail to fully realize the benefits of its strategies. A ban of disconnecting defaulting customers by the central government also left ZINWA with no means of enforcing their customers to pay for the water they would have consumed.
The existing organogram was reported to be not enabling full implementation of the set business strategies. There was no specific driver of the commercialization thrust which was adopted to bring the authority to profitability. Of all the strategies that had been adopted, non of them have really taken shape. Moreover the Commercial department which was supposed to be the main driver co-ordinating all the commercial activities as laid down in the strategic business plan was left with only developing new businesses.
The department head even reported to a Director of Ground Water and Drilling Services yet it was supposed to be a stand alone unit working with all the departments and SBUs and reporting to the CEO. The various SBUs did not get a chance to carry out all the commercial projects that had proposed to carry out. Each SBU was supposed to recruit a person to drive sales activities but that did not happen three years down the line. As such ZINWA could not accomplish its commercial business strategies.
Financial challenges were reported to be emanating from non payment of service delivered by customers. The major debtor reported was government (through various departments such as Zimbabwe National Army, Zimbabwe Republic Police, Zimbabwe prison Services, Ministry of Health and Child Welfare and Ministry of Agriculture, Irrigation Development and Mechanisation); irrigators, general households and
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commercial companies. The restricted inflow of revenue to government from taxes, customs duty and levies due to the depressed economy has contributed to the financial challenges in government. Ironically, ZINWA could not stop supplying water to these key departments but they were forced to channel all the few resources they had towards that. However, payments were done at most twice a year in bulk but not in full to cover all the arrears accrued by government. Individual households and some companies were equally affected by the liquidity challenges making them being unable to settle their water bills. With a directive from central government not to disconnect defaulters, ZINWA continued to supply treated water to non paying consumers. This made ZINWA accrue huge debts to its suppliers of key materials such water treatment chemicals, pumps, motors, pipes, valves and fittings and legging behind in paying salaries by two months. Irrigators who were mostly resettled farmers did not settle their irrigation water bills in full although they were successfully using the water to grow their crops. Some of the irrigators used political influence to avoid paying for their water.
An unviable tariff structure was also reported to have contributed towards limited revenue inflows into the Authority. The fact that ZINWA was spatially distributed with different types of water supply systems and dams meant it was very difficult to come up with a viable tariff structure. There was a national blend pricing structure, but with a weakness of failing to finance the operations of the organization as the operating conditions were not uniform. Although, there was no clear cut policy of system specific prices of water, this was perceived to be a good way of making the business viable.
Decentralisation of procurement from head office to Catchments which are SBUs was reported as causing challenges to the smooth operations of ZINWA. The organization could have enjoyed benefits of economies of scale through centralised purchasing of universal stock items such as water treatment chemicals, pipes, motors, bearings, meters, belts, fuels and oils in bulk. Centralised purchasing would also allow the procurement of goods and services from renowned suppliers with quality goods at credit terms. However, SBUs were buying these items in smaller quantities and at unauthentic
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suppliers who would supply sub-standard goods and usually on a cash basis. This made the authority lose money that could be channeled towards some other more deserving areas. Moreover whilst these suppliers were operating on a cash basis most of ZINWA’s customers were paying their bills at a cycle of more than 60 days thus leaving ZINWA with very limited working capital all the time.