Planned merging of water services firms welcomed

By Wainaina Ndung’u and Boniface Gikandi

KENYA: Stakeholders have supported proposed amendments to Water Act of 2002 that seek to ensure there is smooth management of water resources after adoption of county governments.

The amendments, published last year, have called for, among other things, creation of water services institution in every county.

The proposals that will be brought before next Parliament also seek to abolish up to 57 Water Services Providers (WSP), who have fiercely protected their fiefdoms in the past.

Eng Wangai Ndirangu of WaterCap, a water advocacy network, says the merger of service providers will provide opportunity to save costs through economies of scale.

“Once the companies in every county are merged, this will result in better services and even reduce costs of water because of large operations,” said Ndirangu.

Eng Timothy Kibaki, Planning and Strategy Manager of Nyeri-based Tana Water Services Board, noted that Government policy even before the proposed Act has advocated for merging of water companies.

“Clustering has numerous advantages because it leads to improved services for water users and even the companies themselves,” said Kibaki.  He noted that besides economies of scale, companies will have streamlined operations. “With merging, companies will attract and retain competent technical staff, who they will pay better salaries and better services,” he noted.

Kibaki further observed clustering of water service providers as proposed will also increase companies’ revenue base.

“Their revenue bases will rise enabling expansion of services and, more importantly, regulation will become easier,” he added.

Kibaki noted that there will be no job losses, especially among middle and low-level employees.

“I do not foresee job losses except in the top cadre because merged operations will be under a centralised command,” said the official, who spoke as discussions on the proposals are ongoing in central Kenya.

Job losses

The engineer believes that better revenue bases will translate into expansion and job creation.

“If anything, workers will get pay rises as efficiency increases,” said Kibaki, one of the founders of the Nyeri water company.

However, Ndirangu dismissed the assertion noting that merging of companies may lead to job losses. “The process will lead to job losses or result to large corrupt monoliths that will push water provision beyond the reach of the poor,” he said.

A managing director of a water company in Kiambu County noted currently, the preoccupation of various service providers is to emerge the best in their counties so that they are chosen to lead the merged outfits. 

Studies are being carried out by eight regional water services boards with the aim of identifying the best way to merge water providers at county levels in line with the Constitution.

According to water services performance report card of last year, Impact, Issue No 4 released by Water Services Regulatory Board (Wasreb), the WSPs put up a lot of resistance when the Government proposed clustering so that new entities could benefit from economies of scale.

“Thus, many WSPs continue to operate with little regard to their long-term sustainability. They either have to restructure to remain in business or risk collapse,” said Wasreb in a preamble to Impact, Issue No 4.

Kenya has about 104 water service companies. The number dropped from 124 in 2008/2009 as a result of clustering mainly in Tanathi region.  The proposed Water Act will reduce the WSPs to 47.

Companies merged

Tana Water Services Board, for instance, is in charge of 24 water providers spread in six counties located in Murang’a, Kirinyaga, Embu and Meru counties, which will be merged to six.

In Murang’a County, six companies to be merged if Parliament passes the proposals are Murang’a Water and Sanitation, Murang’a South Water and Sanitation, Gatamathi, Kahuti, and Gatanga. The firms produce 14 million cubic metres of water collecting Sh192 million annually.

In Nyeri County, the providers are Nyeri Water and Sewerage Company, Tetu Water and Sewerage Company, Mathira Water and Sanitation Company and Othaya-Mukurwe-ini Water and Sewerage Company. 

In Kiambu County, water services providers include Nairobi Water and Sewerage Company. There are autonomous companies in Limuru, Kiambu, Kikuyu, Ruiru-Juja, Karuri, Thika and Runda.

However, the proposed Act provides compensation to land owners but not county governments. This opens possibilities for conflicts between counties such as Kiambu, Murang’a and Nyandarua, which are the source of Nairobi water as well as Taita-Taveta, which supplies Mombasa city.

Only community-based water projects will not be much affected by the proposals since they will remain under their management committees.