Regulator shelves Nairobi Water’s plan to raise tariffs

Increase in water tariffs in Nairobi has been shelved because the regulator has no board to approve the rise that would have seen households pay more beginning this month.

The Water Services Regulatory Board (Wasreb) on Wednesday said that the term of its directors had expired and the tariff approval would be done once new board members are appointed.

The Nairobi City Water and Sewerage Company (NCWSC) had sought the regulator’s approval to increase water tariffs by 104 per cent, but was only allowed a 93 per cent increase pending board approval.

“We cannot approve the tariffs because Wasreb has no board. It’s only the chairman and one director remaining and we need at least six directors for board approvals,” said Robert Gakubia, the chief executive of Wasreb. The review would have seen Nairobi residents – who consume an average of 20 cubic meters of water per month – part with about Sh1,674 up from the current Sh868.

This figure is inclusive of sewerage charges that are 75 per cent of the amount charged on water units consumed, and Sh50 as meter rent.

READ: Water consumers to pay more in proposed tariff

Low-income earners who consume six cubic metres of water and below would have seen their monthly bills go up from the current Sh187.10 to a flat rate of Sh204 – a nine per cent increment.

But NCWSC will have to wait longer to charge the new charges given that appointments of new directors in State agencies was put on hold awaiting the restructuring of parastatals.

The restructuring, pledged by President Uhuru Kenyatta in late 2013, seeks to slash the number of parastatals to 187 in line with the recommendation of a task force on parastatal reforms.

The Public Service Commission (PSC) in a recent report said more than 32 parastatals lack functional boards, making it difficult to implement financial decisions and consequently leading to mismanagement of the public institutions.

NCWSC defended the higher rates, saying they were necessary since the company urgently needs extra income to improve its infrastructure. It is estimated that Nairobi loses up to 50 per cent of its water to leakage in the aged pipe systems and illegal connections.

The tariff review process started in March last year when the company petitioned the regulator to allow it to increase water charges, arguing that operation costs had nearly doubled since the last review was done in 2009.

Water tariff reviews are meant to be done once every three years. NCWSC proposed that domestic and commercial consumers using between 0-6 cubic meters pay a flat rate of Sh200, while those using between seven and 60 cubic meters pay Sh56 for each unit. Those using over 60 cubic meters were to pay Sh90 for each unit.

In scaling down the company’s proposed rates, Wasreb took issue with the amount of revenue the company loses and also the fact that supply was still not optimum.

NCWSC collects about Sh560 million per month from its 280,000 customers but this amount would have been higher since the firm loses about 38 per cent of its revenue.