Nairobi water users to pay upfront as billing goes hi-tech
An official from the Nairobi Water and Sewerage Company checks the level of chlorine in water from a vendor at the Mukuru kwa Njenga slum in the past. The company has introduced a pre-paid billing system in some city estates. The system will be used throughout the city if the pilot project succeeds. File
The Nairobi Water Company is installing prepaid water meters in selected estates in a move expected to reduce the mountain of unpaid bills and make the sector attractive to private investors.
The utility company will initially install 2,500 meters at a cost of Sh9,000 ($100) each in the pilot phase to be complete by year end.
The prepaid meters are similar to those that Kenya Power and Lighting Company (KPLC) has been installing in Nairobi since last year to deal with its own billing problems.
“Customers will be issued with a smartcard that they will load with units at various sale points and swipe through their meter sets for resumption of supply,” said Mr Josiah Gitu, the customer relations officer at the Nairobi Water and Sewerage Company (NWSC).
Mr Gitu said the limitation of having only two machines that can read balances and load units onto the smartcards has delayed the rollout to the North Eastern region of Nairobi.
The pilot phase of the project targets Nairobi’s Makadara, Jericho, Harambee and Kimathi estates where the utility company hopes to get a clear picture of its effectiveness before scaling it up to cover the entire city.
Apart from helping utility firms sort out their debt collection problems, installing prepaid meters should also render redundant the large number of staff employed to read meters every month, prepare and post bills to customers.
Prepaid metering should also help the water firm to phase out the army of staff that moves from door to door disconnecting defaulters’ supply and reconnecting those who have paid up.
This should ultimately cut down the company’s operating costs and minimise contact between consumers and field staff who have been the bedrock of corruption in the utilities industry.
“Since convenience is essential in such a service, we are in talks with the equipment supplier to improve the software so that our customers can use mobile money to top up their cards,” Mr Gitu said.
The meters are equipped with indicators that will warn the customers when their water units are running low. When the units are completely consumed, an internal valve automatically closes, disconnecting the water supply.
Mr Peter Kimathi, a financial analyst at Athi Water Services Board — the agency that oversees water supply in Nairobi and surrounding districts — said execution of the plan had been delayed by bottlenecks arising from the tariff-fixing plan.
“The tariff plan we have chosen is similar to that of the current meters and the only difference is that customers will now buy the units in bands,” Mr Kimathi said. No extra costs will be charged for the meter.
Mr John Mwangi, the managing director of the Nairobi Water and Sewerage Company, said the prepaid system was expected to bridge the disparity between projected monthly revenues and actual collections.
“We have a billing estimate figure of Sh420 million per month but our actual collections stand at an average of Sh350 million,” he said. According to him, illegal connections, especially in slums, were blame for the disparity.
Mr Mwangi allayed employee fears that prepaid metering would cause job losses.
“Meter readers will be accommodated in the monitoring teams because the meters run the risk of being tampered with,” he said.
But even as the utility firm remains upbeat over the possibility of resolving its billing problems, the Water Services Regulatory Board (WSRB) cautioned that outstanding issues, such as irregular water supply, will cause fresh challenges.
“If customers pay for water in advance but do not get regular supply, they are basically subsidising the water company’s inefficiencies,” said Mr Robert Gakubia, the board’s chief executive.
Data from the Water and Irrigation Development Ministry shows that only 22 out of Kenya’s 120 water companies met their expenditure budgets last year – a development that has made the industry unattractive to financiers such as private equity firms.
“Many have shied away from such investments since they have unpredictable annuity incomes and suffer massive revenue leakages,” Mr Paul Kavuma of Catalyst Principal Partners said.
Mr Kavuma reckoned that water was a basic commodity which, if managed and distributed well, presented a “massive market opportunity worth investing in.”
Erratic weather patterns have left most Kenyan towns with serious water shortages signaling the need for heavy investment in supply and recycling systems.
Rampant corruption at the water firms has also made a bad situation worse with some firms being unable to upgrade their ageing networks to keep pace with soaring demand.
The shift to prepaid meters will see the utility firm save millions of Shillings in operational costs and save consumers from having to spend time queuing to pay bills and reconnection fees.
Data from Nairobi Water Company indicates that demand for water in Nairobi stands at about 650,000 cubic metres per day against a supply capacity of 431,000 cubic metres.
