The survival of Embu Water and Sanitation Company (Ewasco) is under threat due to Sh380 million owed by customers.
And leadership wrangles at the company and the ever falling levels in rivers where the firm sources its water from have only served to compound the situation.
The firm has also been facing the challenge of illegal connections that have led to the loss of water.
The company has resorted to rationing water because of shortage.
Ewasco is owed by individuals as well as private and government institutions with some of the debts dating back to 2015.
Among the company's debtors are the county government of Embu that owes it Sh61 million while national government institutions, including police stations, have a total debt of Sh15 million.
Ewasco's acting managing director Dickson Njiru said the company's flow of cash has been hit because of the debts that are set to rise further if payments are not made.
Njiru is inviting those who owe them for talks so they can agree on a payment mode that will allow consumers to clear their debts in installments.
"Under the strategy, the company has waived penalties for late payment for those who will clear their debts by December 31," said Njiru.
"Unscrupulous people have diverted water from the main pipes and therefore the water is not billed, worsening the already bad situation," said Njiru.
This came as the company and its workers clashed over the removal of former MD Felix Mutura whom they want to be reinstated.
Last month, the workers went on strike accusing the management of highhandedness.
Mr Obed Mwathi, the secretary of Kenya County Government Workers Union, Embu branch, threatened they would disconnect water and withdraw all services if Mutura is not given back his job.
At the same time, some of the workers accused the company of failing to promote them. Others have been working on contract terms since 2005 and the company has not considered changing their terms of employment over the years, they said.
The workers downed their tools and only resumed after the management promised to look into the issues they had raised.
However, they are unhappy that Mutura is yet to be reinstated.
A private citizen has since moved to court seeking to have the grievances raised looked into and in the process end the poor working relationship between the staff and members of the firm's board.
And as factions in the company's management continued flexing muscles, some parts of lower Embu were facing water rationing due to shortage, receiving supply on three days a week.
Njiru said water rationing in Embu town and the upper region will start next week should there be no rains to increase water levels.
"The adverse weather conditions have affected water levels thereby affecting service delivery on the part of our company," Njiru said.
He also blamed the fall in water levels on Rutingazi Irrigation project which extracts water from River Rutingazi, the main source of water for Ewasco.
