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Service providers failing public utilities

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Jomo Kenyatta International Airport. PHOTO | JEFF ANGOTE | NMG

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Summary

  • The pricing of some of the public utilities is very high and not regulated. And the public is always at the mercy of the service provider.

For the past decades, most public spaces in Kenya have offered efficient and quality services to the public. But most of these services, often seen as essential, always come with a price. At times the prices are hiked without a proper regulatory framework, leaving many consumers frustrated.

And this brings into focus the whole idea of public-private partnerships (PPP’s), a relationship formed between the private sector and public bodies, introducing private-sector resources and expertise to public spaces and delivering quality services. But, unfortunately, the pricing of some of the public utilities is very high and not regulated. And the public is always at the mercy of the service provider.

For example, the private provider offering services at the Jomo Kenyatta International Airport (JKIA), a public utility, have been hiking the parking fees several times since 2019. It is not clear if the increased charges are due to policy changes to discourage private individuals from parking their vehicles at JKIA or the agency is trying to manage the parking by just extorting the public due to the monopoly status it enjoys.

For whatever reason that informs the price increase, it looks like any policy direction does not disclose it, and it is wrong. The new charges, especially the current ones, were not published to inform the consumer and make a choice.

I was a victim of this mischievous way of dealing with consumers at the public utility. Unaware of the price hike, I parked my car at JKIA to travel to Mombasa for a conference. Twenty-four hours later, my parking fee was Ksh 2,450. My friend who had parked for 10 hours the fee was Ksh. 1,200.

In essence, they were earning a reasonable rent from a 6 square meter space because if I left the car there for a month, it equates to renting a two-bedroomed apartment in the up-market Riverside.

The Malls across the country have also been trying to charge an hourly fee for parking. However, they seem to have hit a dead-end. Consumers dislike variable parking fees. Behaviour patterns began to change. For example, some only go to pick the necessaries and leave within an hour.

So, in the end, they have had to review their fees downwards, and others are scrapping the parking fees altogether.

A similar fate might happen at JKIA if they don’t understand that price has limits. It is the demand and supply that determine it. At some price points, new competition might emerge to undermine their services, just as solar installations have begun to undermine KPLC’s money-minting tactics of raising consumer price at will.

For a moment, I thought that the high prices resulted from Kenya starting the implementation of the climate change proposal of limiting global warming to 1.5 degrees Celsius as suggested at the just concluded UN COP 26 Summit Glasgow.

The presence of private cars on Mombasa Road, especially from JKIA, always results in negative externalities such as more carbon emissions, increased air pollution, traffic jams, and a rise in car accidents.

It so happened that many of the pay points were not working on that day. In their frustration, consumers said all manner of things: poor service, high fees, exploitation, and more unprintable words. The public often complains about injustice, but their voice is never amplified for the change to happen.

JKIA is a public utility company built from the taxes we pay. Under normal circumstances, it is subject to general control and regulation. However, many consumers are unaware that their airline ticket price includes a special airport tax.

The problem is that such public utility companies never respond to complaints, as in the case of Kenya Power and Lighting Company (KPLC), where although the media raised the alarm, the management did nothing until it was too late. JKIA could end up in the same rot given that consumers like myself will no longer use the parking services since their pricing exceeds what I could pay taxi services to drop and pick from the airport.

Abuse of public utilities in Kenya is common, and private enterprises often fail these giant utilities. Although public servants take the blame for failure, it is time to name these private enterprises, the profiteers from public investments. It is equally important that such enterprises be regulated.

Since digitalization has contributed to the growing productivity in Africa, its most significant benefit, especially in public services, is its agility to change many things and offer more and quality services to the consumers than previously. However, in the absence of a proper regulatory environment, some providers have illusions of propagating monopolistic practices.

The writer is a Professor of Entrepreneurship at the University of Nairobi’s Faculty of Business and Management Sciences