Senate asks Kisii, Nyamira counties to split Gusii water company

Kisii Governor Simba Arati operates an excavator during the extension of a water pipeline at Kiogoro in Nyaribari Chache, Kisii County, in August 2023. The project is funded by GWASCO. [Sammy Omingo, Standard]

Senate County Public Funds and Special Funds Committee has asked Kisii and Nyamira counties to agree on the modalities of splitting the Gusii Water and Sanitation Company (GWASCO).

The Committee Chairperson Vihiga Senator Godfrey Osotsi said that Kisii Governor Simba Arati and Nyamira Governor Amos Nyaribo should sit down and agree on how the two counties will share assets of the company after Nyamira county expressed the intention of forming its water company.

Osotsi said that the two counties should learn from Bungoma and Trans Nzoia counties which formed a task force that aided in the amicable split of Nzoia Water Company to ensure reliable water supply to residents.

"Given that Nyamira county government has expressed its intentions of seeking to have its own water company it is prudent that Governor Nyaribo and Governor Arati engage to ensure that the company is split evenly with each county getting its fair share of the Gwasco Company resources," he said.

Nyaribo who appeared before the committee in Nairobi yesterday said that it was long overdue for Nyamira to have its own water company since his administration was not consulted in most activities of the GWASCO Water Board despite being a key shareholder.

The governor revealed that he was not involved in hiring the company's Managing Director Lucy Wahito and GWASCO received Sh91 million grant of which Nyamira was to get Sh18 million which was instead utilized in Kisii county.

Nyaribo said that the company took a Sh300 million loan for the last mile project without involving his administration and they were also not involved in board meetings which was a clear indicator that their input was not considered to be crucial in the running of the company activities.

"Nyamira county government is keen to have its own water company since the residents feel that they are not being well served under the Gusii Water and Sanitation Company which is jointly owned with Kisii county government, that is why we are keen to form our company," he said.

Nyamira Senator Okong'o Omogeni said that they want a split of GWASCO that will benefit the residents of Kisii and Nyamira counties urging the governors to meet and expedite the process in an amicable manner so that they can manage their water companies independently.

In March, there were concerns over the plundering of the water firm's millions of shillings following the Auditor General report for the financial year ending June 2021 which showed some discrepancies.

Osotsi said then that the Ethics and Anti-Corruption Commission had been asked to table a report detailing the time required to investigate financial misappropriation in the water company.

"We would like to ask the Ethics and Anti-Corruption Commission to come up with a report on the duration it will require to investigate the financial embezzlement witnessed at the Gusii Water and Sewerage Company for action to be taken against those involved," he said.

The audit report showed that the financial statements reflect trade and other payables balance of Sh39,670,600 as at 30 June 2019 and Sh35,155,141, which was due to various suppliers for the acquisition of water assets which had accrued for more than 90 days.

According to the audit report, GWASCO management did not provide supportive documents for the balance with the accuracy and completeness of the Sh35,155,141 not confirmed which raised questions on the expenditure of the funds.

Arati agreed with the Auditor General observation on unsupported trade payables as at the time of the audit telling the committee that the management regrets having provided the auditor with unreconciled supporting schedule of outstanding Service Provision Agreement fee payable amounting to Sh29,366,100.

"It was established through the Kenya Gazette Notice and communication from the Water Services Regulatory Board that the Service Provision Agreement charge of 4 per cent had been abolished, this shows that the unsettled amount owed to Lake Victoria South Water Service Board for that year was Sh20,855,100," he said.

According to the audit report, the statement of comparison of budget and actual amounts for the year under review reflects total budgeted receipts of Sh252,825,074 and actual revenue of Sh155,452,400 resulting to an under-funding of Sh97,372,674 or 39 per cent.

"Similarly, the statement reflects the approved final budgeted expenditure of Sh252.825,073 and actual expenditure of Sh177,178,200 resulting in under absorption of Sh75,646,873 or 30 per cent. The under-funding and under-performance affected the planned activities and may have impacted negatively on service delivery to stakeholders," the report reads in part.

GWASCO Chief Executive Officer acknowledged the Auditor General's report saying that the issue was occasioned by Non-Revenue Water arising from physical losses due to dilapidated water infrastructure and commercial losses from the billing system.