Corporate News
Water suppliers get the green light to increase charges
Families and companies will pay more for water beginning next week in what the regulator says is targeting infrastructure upgrade. Photo/GIDEON MAUNDU
Consumers are set to pay more for water in major towns after the Water Services Regulatory Board (WSRB) approved new tariffs to allow providers build financial muscle to upgrade the ageing transmission network.
Water companies operating in Nakuru, Kisumu, Eldoret and Mombasa have secured the regulator’s approval to adjust charges and other tariffs upwards in a move that will raise bills by an average 20 per cent from next week.
This comes barely a year after water companies in Nairobi, and the surrounding districts increased tariffs by at least 50 per cent for small users and by larger margins for industries.
The service providers that have been campaigning for the review of tariffs that were last revised in 1999 in order to cover the ballooning costs of operation and maintenance were targeting at least 50 per cent tariff increase for small users and a larger margin for industrial consumers.
“Just like other commercial ventures, water sector can attract loans for capital projects but this will only happen once we prove they can take care of their recurrent budgets,” said Robert Gakubia, the WSRB chief executive officer .
This means providers is under pressure to increase tariffs to cover operating costs, capital costs, and administrative or regulatory budgets.
At the moment, however, WSRB officials maintain that a large number of water and sewerage systems in Kenya do not even collect enough revenue to cover their operation and maintenance costs.
Performance of the water companies is a national eyesore and according to the director of water sector reforms in the ministry, Peter Ombogo, out of the 120 companies formed in 2002 as part of the reforms, only 22 meet their expenditure.
More recently, however, soaring demand for water and poor weather has led to perennial shortages across most towns.
Nairobi has been experiencing acute shortage of water for the last three years and is on rationing.
The rationing by the Nairobi Water Company see residents get water at least once a week.
The rise in water costs will step up the frequency of high utility bills that have persisted as electricity prices go up.
The cost of electricity has increased by more than four shillings since last April due to drought that has hampered Kenya’s ability to generate electricity from hydro sources and forced it to turn to more expensive thermal sources to meet demand.
The combined impact of high water and power tariffs is expected to pile inflationary pressure in an economy where recently unveiled official data show that households have knocked off some goods and services from their budgets to navigate the turbulent economy.
In the new changes announced in Kenya Gazette of last Friday, all category of users — domestic, industrial, schools or water kiosks — served by Eldoret Water and Sewerage Services Company will from next month see bills increase by 11 per cent to Sh18.87 per 1.000 litres.
Beginning May, water vendors will face a charge of Sh35 up from Sh15 per 1,000 litres while bulk consumers such as manufacturers will see their bills increase from Sh20 to Sh33 per 1,000 litres.
In last week’s gazette notice, Rift Valley Water Services Board’s CEO Japheth Mutai said consumers will be asked to increase deposits from Sh1,000 to Sh2,500 for domestic users with kiosk owners paying Sh5,000 up from current Sh3,000.
Penalty on illegal connection will also go up to Sh15,000 for domestic users and Sh30,000 for commercial users, 10 times the current levels. Also doubled are connection fee and refundable deposits.
Mr Gakubia said more area-specific tariffs adjustments were on the way for users in other regions whose bills do not reflect current business realities.
“It is important to remember that water tariffs will vary from place to place depending on the kind of infrastructure needed to tap it from its natural source,” he said.
RSS