Merger not a solution

 

An I&M Bank branch. I&M Bank is seeking to raise Sh10 billion by selling a corporate bond. Photo/FILE  NATION MEDIA GROUP
By John Gachiri

Comprehensive reforms undertaken in 2005 envisaged strong regional water provision companies that would reduce wastage, collect revenue and plough back the proceeds into modernisation and expansion of the existing network.

This has not materialised and the only visible progress is on communities partnering with financiers on alternative sources like dams to ensure reliable supply, albeit at higher costs.

Few of the public companies have invested in the systems they found as earnings go into paying salaries and cosmetic changes like online interactions, electronic and agency payments.

The infrastructure has not been improved to reduce spillage, ensure continuous supply and expand access in both rural and urban areas.

The Water Services Regulatory Board is now proposing that the 102 firms be merged into 15 units because they cannot survive as commercial entities.

That would bring the financially weak ones under stable ones, spreading the malaise and threatens the very survival of all water companies.

Larger units would probably be more problematic given that only seven have their heads above water.

The struggling companies should instead be encouraged to review wages and other costs while investing in systems to ensure that less water is lost, more revenue collected and supply reaches more people.

With local banks increasingly looking to finance water projects, this would be more promising path to viability.