Water companies: Government report finds most firms unprofitable

Water Services Regulatory Board (Wasreb) is a government firm that sets standards for water services companies. Its work is to monitor water services providers and publish the results in its report called Impact. The Impact for 2019 found that only one in four water services firm is profitable.

Report that less than a quarter of water firms has scored 50% in performance has worried the government.

Water Services Regulatory Board says that it was concerned that only 24% got 50%. The board said this causes fear because the law says that all water services firms with a licence must be profitable.

Assessing work and ranking water services firms ensures that water services are efficient and long-lasting.

The Impact report for 2019 tested 86 public and two private water services firms. They sent their data to be analysed.

The 2019 report shows that Nyeri Water and Sanitation, and Ruiru-Juja Water and Sewerage firms tied at first position with 163 points (82%). Samburu was the lowest firm with five points.

But compared to 2018 report, the highest score dropped by 20 points from 183 (2018) to 163 (2019) out of 200.

“These commitments will be monitored closely to ensure that set targets are met,” he says in Impact report for 2019. “It is also expected that the tools rolled out by the regulator will help improve sector performance.”

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What do they look for?

The board gives marks to water services firms on nine key performance areas. The board’s Impact report publishes the results every year.

The scores are from water coverage, drinking water quality, hours of supply, non-revenue water reduction, and metering ratio. In addition, are staff productivity, revenue collection efficiency, operation and maintenance cost coverage and personnel expenditure as a percentage of operation, and maintenance costs.

Operation and maintenance cost coverage looks at how a firm is able to pay its operation and maintenance costs from its own money. Operation and maintenance coverage is important because it is a first step to a firm paying all its costs.  It ensures long term financial sustainability.

READ – Two worst water companies scored zero in all indicators

Are all firms at same level?

Chief Executive Officer Robert Gakubia said the board knows that firms work under different conditions. This affects how they work. As a result, although some firms do good work, this may still not push them to top position, he said.

“Similarly, some utilities enjoy relatively better operating conditions yet they fail to exploit this,” Mr Gakubia says in the report. “A comparison of utility position at present against itself in the immediate past is therefore used to gauge improvement.”

The board reports a water services firm as “improved” if it scores at least 50% over the two-year period.

Mr Gakubia said an efficient water services firm helps attaining right to water.

“The regulator appreciates that sustained performance improvement is crucial for building consumer confidence in service provision,” he said. “The licences issued to the WSPs [water services providers] have been tailored to drive this goal.”