Press revelations on finances of water utilities last week calls for improvement of strategies. Of concern, is their profitability, which feeds to their sustainability and ultimately, deliverables to Wanjiku (common citizens).
The article, cited utilities are owed Sh 8.9 billion. Operational and financial statements of most water resource firms reveal why achieving profitability is hard. Their break-even is only through increased clients, yet current operational cost-levels suggest an uphill mission, unless reforms happen.
The starting point is board appointments, since boards adopt strategy and performance evaluation. The article indicated operational efficiencies at 43 percent, twice the industry standard of 20 percent.
While utilities cite illegal connections, aging infrastructure and meter reading costs as reasons for underperformance, without radically restructuring utilities, the ongoing massive water infrastructure investments will go down the drain.
Strategies to address revenue shortfall haven’t been embraced by utilities, with resistance to automation and better protocols on water connections dominating. The heavy political hand on most utilities is also visible, since professionals are unable to deliver on their mandate if political appointees have ‘tenderpreneurship’ targets.
Mismatches between existing guaranteed demand and supply abound, necessitating new sanitation market approaches. Alternative water delivery routes, maintenance strategies, staff outsourcing as well as technology adoption are key.
A fundamental question is whether water’s treatment as a public utility is good or if we have better chances by treating it as a subsidised tradable commodity. The simplest route is making the taxman a part of the revenue stream for water utilities. As an enforcer, no one has the tools, resources or her claws. Here, the sewer and water tax would help plug revenue leakages water cartels occasion.
Taking a positive lesson from Kenya Power’s shift to digital meters despite it hiccups, as trust issues show consumers prefer transparency and convenience in utility bills payment. Independent power producers’ efforts in increasing delivery to the grid suggest water supply could also flow this way. To back the supply side, especially in areas with the worst indicators, small grants to independent health affiliated organisations would not be a bad idea. The World Bank, African Development Bank and Agence Francaise Development affiliates, easily the top three WASH scene funders, have focused on the public supply side of delivery, without much effort to demand side interventions.
Other quick wins include legislation by Water Resource Management Authority (WARMA) mandating borehole owners to connect a minimum of twenty households and deliver monthly reports on utilisation. A two-fold strategy, it creates an avenue for ensuring participation of government as an enforcer since the Kenya Revenue Authority(KRA) and WARMA’s taxable income on utilisation needs this data. Here, Nyumba Kumi is a great avenue for tracking progress.
While access to water is been measured mainly on physical reach, a public health metric on quality should be added. To achieve our pledged SDG target on access to clean water and sanitation, these are doable.