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Turning around the city water firm challenge for Sonko team

For the new governor of Nairobi, Mr Mike Sonko, the boot was on the other foot.

Two years ago, irate employees acting at the behest of the CEO of Nairobi Water Company, Mr Philip Gichuki, literally threw him out of the company premises after mocking him and threatening to deflate his car tyres.

Last week, it was time for revenge. Wearing the hat of the governor of Nairobi, and, therefore, the sole shareholder of the company, he quietly summoned the board members and directed them to meet with Deputy Governor Polycarp Igathe to discuss its affairs.

BOYCOTT

Details about what transpired at the meeting remain scanty.

But insiders say that the board tabled a dossier on financial mismanagement at the company.

Apparently, it was at this meeting that the board was given the nod to send Mr Gichuki and three top managers home.

As it turned out, the sending home of Mr Gichuki nearly triggered full-scale industrial action, with employees loyal to him threatening to stage workplace boycotts. It did not happen. Mr Sonko had the last laugh.

FINANCE

Yet firing Mr Gichuki and the company’s top managers was just but the easy part.

Mr Sonko and his team must commit to delivering financially sustainable water operations in Nairobi.

At the rate at which Nairobi is growing, we can no longer leave the fate of this critical utility in the hands of a poorly managed and inefficient company tottering towards insolvency.

Truth be told, the company is currently in a total financial mess.

DEBT

According to a recent analysis of its debt portfolio, collectable debts stood at whopping Sh4.7 billion as of March.

A deeper dive and the picture you see when looking at the numbers in this recent audit is a litany of cases of shady dealings, especially reversal of accounts and irregular issuing of credit balances to customer accounts.

The audit unearthed cases where several customers with accounts owing millions were found not to have water meters at their premises, suggesting unethical practices with insiders.

There were hundreds of cases where some large customers owing big amounts, and whose supply had been disconnected, were found to be still getting water through parallel accounts linked to their neighbour’s meters.

FORENSIC AUDIT

This is a company that continues to service many expensive loans despite the fact that it is owed billions of shillings by customers.

In April, the management presented a request to the board to borrow Sh4 billion to fund ICT projects even as it was owed billions.

And, Nairobi Water Company has a poor record of paying suppliers, the implication of which is that most of its tenders have not been attracting responses.

If Mr Sonko and his team are serious about reforming and restructuring its operations, let them start by ordering a forensic audit on the accounts of customers who owe the company money.

OPERATING COSTS
My own prediction is that a forensic audit will reveal massive irregular transactions, especially cases where insiders post irregular credits in accounts of big consumers in exchange for backhanders.

The most daunting task facing the new administration will be much larger than chasing and punishing thieves within the water company.

What we need is an efficient company operating on a cost recovery that allows it to recover all its operating costs.

The solution must include a subsidised water connection programme for the poor.

Is Nairobi ready to experiment with a concession?

PRIVATISATION
In most of west Africa, urban water services have been subcontracted to private companies.

However, the results, in terms of efficiency and delivery of services, have been mixed.

I am not a supporter of privatisation of urban water services.

In Kampala, the water utility has demonstrated that financially sustainable water operations can be achieved in an urban environment even without privatisation.

WATER BILLS

Part of the problem here has to do with low willingness by customers to pay cost-recovery tariffs.

Non-payment of water bills by public corporations is also a problem.

If we can come up with a model with built-in safety nets for the poor, we may have, in future, to rethink tariff policy.

Does Mr Sonko have what it takes to deliver an efficient and financially sustainable water firm for Nairobi? The jury is out.

We must demand big, bold and new ideas from Mr Sonko.

EFFICIENCY

And, I say so because I know very well that as a society, we set very low standards for our leaders.

We allow our leaders to go to rooftops to celebrate gestures in place of solid game-changing ideas.

Water is life. The Nairobi Water and Sewerage Company must be turned into an efficient utility with a stable revenue base.

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