A Senate committee has summoned Nairobi County officials to explain damning financial and operational mismanagement at the Nairobi City Water and Sewerage Company Limited (NCWSC), which is now grappling with a staggering Ksh5 billion debt and massive water losses.
The grilling follows the latest Auditor-General’s report for the financial year ending June 30, 2024, which paints a grim picture of a utility firm on the brink of collapse. Auditor-General Nancy Gathungu declared the company technically insolvent, citing a deepening crisis driven by ballooning liabilities, revenue losses, and poor operational oversight.
According to the report, NCWSC’s liabilities stand at Ksh6 billion, against assets worth just Ksh4.3 billion. The firm’s negative working capital rose from Ksh2.78 billion in 2023 to Ksh3.49 billion in 2024, raising serious questions about its ability to meet current obligations.
Ksh8.5 Billion Lost in Unbilled Water
The utility company produced 185.8 million cubic meters of water but managed to bill only 90.3 million cubic meters. This means 95.4 million cubic meters—more than 51 per cent of the total supply—was lost as non-revenue water, amounting to Ksh8.57 billion in foregone revenue.
This water loss accounted for a staggering 78 per cent of NCWSC’s annual operating revenue of Ksh10.94 billion, underlining deep inefficiencies in Nairobi’s water supply system.
Senate Committee Grills Sakaja
Appearing before the Senate County Public Investments and Special Funds Committee, chaired by Vihiga Senator Godfrey Osotsi, Nairobi Governor Johnson Sakaja faced tough questions about the state of the water firm and the County’s oversight.
Lawmakers demanded answers on how the utility had allowed such waste and financial hemorrhage, with Senator Osotsi noting that the firm had “failed Nairobi residents” and was fast becoming a burden on public finances.
Bloated Payroll and Billing Irregularities
Auditor-General Gathungu also flagged NCWSC’s bloated payroll, with the firm spending Ksh3.26 billion on staff costs—most of which was deemed unnecessary.
Further revelations included:
- 15,320 customers were billed using estimates instead of actual meter readings for six months.
- 23,384 accounts, billed a total of Ksh344.4 million, failed to pay yet continued receiving water services.
- 10,192 active accounts were not billed at all for the entire year but remained in the system.
Senators described the situation as one of “systemic failure and operational recklessness”, calling for urgent reforms at NCWSC and accountability for top management.
Insolvency Warning
“The company is technically insolvent and may not be able to meet its current obligations as and when they fall due,” Gathungu’s report warned, urging immediate restructuring and financial discipline to salvage the utility.
Senators are now pushing for a forensic audit and full overhaul of NCWSC’s operations. Nairobi residents have long complained of erratic supply and inflated water bills, even as billions worth of water literally disappear down the drain each year.
The Senate has pledged further investigations and policy recommendations to help stabilize Nairobi’s water supply system.
