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Water firms ranking: Nyeri top for nine years with widest margin

Water firms ranking: Nyeri top for nine years with widest margin.
Overall top and bottom ten water services firms in Kenya.

Water Services Regulatory Board (Wasreb) is a government firm that sets standards for licensed water services firms. It monitors their work and publishes results in its annual Impact Report. Firms gets grades on nine key performance areas.

Nyeri Water and Sanitation Company has emerged number one in a performance assessment done in 2019. The company was top nationally with 177 points out of 200. It was 32 points ahead of the second placed Eldoret Water and Sanitation Company.

Nyeri Water has been the overall best performing water company over the years. It was the best firm for eight years in a row before 2018 when it tied in top position with Ruiru-Juja Water and Sewerage Company.

Where did firm get its marks?

Water firms earn marks on nine areas. Nyeri Water scored the highest score (good) in six out of nine areas. It scored “acceptable” in revenue collection efficiency, and operation and maintenance cost coverage.

The company received a “not acceptable” score on personnel expenditures as a percentage of total operation and maintenance costs. This measures whether staff related expenses are proportionate to overall operation and maintenance costs as set by the regulator.

Nyeri Water’s personnel expenditures as a percentage of total operation and maintenance costs was 44% in 2019. This is higher than the regulator’s recommended below 20%.

Eldoret scored “good” in five of the nine judged areas. The firm scored “acceptable” in water coverage, personnel expenditure as percentage of total operation and maintenance costs, and operation and maintenance cost coverage. It scored poorly on water loss where it got “not acceptable.”

READ – Nyeri Water: ‘We read meters every month’

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How did other water firms perform?

The second and third ranked water services firms were Eldoret and Nakuru Water and Sanitation Services Company. Kapenguria and Kwale were the lowest ranked firms.

Naivasha, Embu and Naromoru were top three most improved firms. To be considered as improved a firm must have increased its score and must have attained a score of at least 50%.

Notable firms, which are classified as “very large” such as Nairobi and Mombasa were unable to make it to top 10. Nairobi arrived at number 32 and Mombasa was number 69.

Mombasa was the worst firm in very large category for the ninth year in a row. Mombasa, however, marginally improved its score from 28 to 34.

For two years in a row, Nairobi county is the worst performing on personnel expenditures as a percentage of total operation and maintenance costs. It was at 64% against the sector benchmark of 20%.

Why measure operation and maintenance cost coverage?

Mr Robert Gakubia, chief executive officer, Wasreb, said a water firm attains full cost coverage when it reaches above 150%. At this level, a firm is able to meet its operation and maintenance costs, service debts and renew its assets.

The current sector average however remains unsatisfactory, he said. Compared to the sector requirement of between 130% and 150% required to cover justified operation and maintenance costs, undertake new capital works, renew its assets and pay debts.

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How were firms classified?

Water services firms are categorised on size and ownership. The size is the number of connections for both water and sewer. The number of connections is useful because it shows possible business size of the firm.

Ownership is given by the owner of the asset. This is either public or private. This categorisation seeks to ensure a fair comparison in performance. There are only three regulated privately-owned firms. The private water services firms are Kiamumbi, Runda and Tatu City.

Who participated in 2019 assessment?

84 public and three private water services firms submitted data for analysis. In private category, Tatu City is the new entrant having obtained a license to provide services within Tatu City complex.

Wasreb said it was worried about four counties which have water firms but have not reported for three years in a row. The counties are Mandera, Marsabit, Samburu and Tana River.

How were firms awarded marks?

Grades were given performance indicators. The indicators are water coverage, drinking water quality, hours of supply, non-revenue water reduction, and metering ratio. Other indicators are staff productivity, revenue collection efficiency, operation and maintenance cost coverage and personnel expenditure as a percentage of operation and maintenance costs.

What does the indicators mean?

Water coverage – percentage of people served with water services divided by people in service area. It should be more than 90%.

Drinking water quality – takes into account drinking water quality, residual chlorine and bacteriological quality. Should be more than 95%

Hours of supply – average number of hours water services are provided per day of all the zones served by a firm. For population of more than 100,000 it should be 21-24 hours; for population less than 100,000 it is 17-24 hours.

Personnel expenditure as a percentage of operation and maintenance costs – percentage of sum of personnel expenditure during reporting period divided by total operation and maintenance costs. For large and very large firms, it should be less than 20%; medium firms, less than 30%; small firms less than 40%.

Operation and maintenance cost coverage – percentage of total operating revenue divided by total operating expenditure. It should be at least 150%.

More indicators …

Revenue collection efficiency – percentage of total revenue collected divided by total billing. It should be more than 95%.

Non-revenue water – percentage of water losses from illegal connection, meter reading inaccuracies and leakages divided by volume of water produced. It should be less than 20%.

Metering ratio – percentage of total number of active metered connections divided by total number of active connections. It should be 100%.

Staff productivity – total number of staff in a firm divided by total number of active connections plus number of sewer connections. For large and very large firms, it should be less than 5; medium and small firms in less than 3 towns, less than 7; medium and small firms in three or more towns, less than 9.

About Kaburu Mugambi

Kaburu Mugambi is a veteran of business reporting having worked with two national newspapers in Kenya. He is a graduate of economics from Kenyatta University. He started his journalism career in 2000 with The People Daily as a business reporter before becoming a business sub-editor. He joined Daily Nation in 2004 as a business writer. He holds a post-graduate diploma in mass communication from University of Nairobi's School of Journalism and an MBA in marketing from the same university. In 2016, he founded Water Tower, a media firm focused on water, energy and climate. Its content cuts across water, energy and climate with emphasis on adaptation and sustainability.

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