The Constitution of Kenya under Article, 43 and 46, provides for consumer protection in respect to the right to safe water and reasonable standards of sanitation. It also defines the roles of each level of government in the development, management and use of water and sanitation services. Articles 189 and 191 provide direction on concurrent functions.
As lawful entities that have existed since 2002, Water service companies have creditors, debtors and legal obligations and relationships with other third parties which they must honour. Their amalgamation and clustering must therefore be within the law. This is to primarily give confidence to consumers on the safety of the services provided; lenders and donors on the governance of these entities; and suppliers that cash flows are guaranteed and that their debts will be repaid within agreed credit lines.
Therefore when county governments, as function owners, decide to cluster water service companies within their jurisdiction, they should do so according to the law in order to safeguard the viability and sustainability of the water services sector. The values and principles of governance under Article 10 bind county governments as well.
Wasreb has seen media reports on the planned clustering of water companies within Kajiado County. The vision of the county as articulated by its policy is legitimate; however it must be actualised within the law. According to the information within the purview of Wasreb, no communication has been received on compliance with legal requirements in terms of viability and sustainability of the new Kajiado Water Company with regard to the following laws:
- Companies Act 2015
- Insolvency Act 2015
- Competition Act
The following risks have not been addressed:
- Assessment of the commercial viability of the new entity
- Loans and debts repayment (to avoid a run on the assets of the WSP)
- Asset transfers and the interest of other counties in the running of bulk trans-county water systems
- Human resource management issues in terms of salary and pensions and arrears in various schemes
- Ongoing infrastructure projects under different funding mechanisms
- Funding proposals for infrastructure development at an advanced stage of the project cycle based on financial modelling of existing companies.
Since 2013, adherence to the law has ensured minimal disruption of water service provision to consumers. This is good practice we should seek to continue into the future. In respect to Kajiado, no concrete plans or winding up documents (including public participation reports) have been communicated on the publicly funded water service companies within the jurisdiction of Kajiado County. The companies in question include:
- Nol Turesh (Trans County) Water Company
- Oloolaiser Water and Sanitation Company
- Ol Kejuado Water Company
Consumers in the service areas of the companies above are therefore advised to continue obtaining services and paying bills to the respective companies. Suppliers owed by these companies are assured that the credit timelines they have with the WSPs will be honoured.
Wasreb will continue providing technical assistance and advice to county governments in pursuit of their visions to create viable and sustainable water service providers who must adhere to the precepts of the law.
Chief Executive Officer,
Water Services Regulatory Board