• The company's managing director has said Muwasco is unable to repay a Sh695 million loan taken before devolution to expand water connections.
• The company also faces closure over Sh8 million it owes Water Resource Management Authority (Warma) for abstraction fees.
REsidents of Murang’a may soon have their water bills inflated to pay a Sh695 million loan taken by their water supplier.
The Murang'a Water and Sanitation Company (Muwasco) on Friday held a stakeholders’ forum to collect views on the plan to increase tariffs to pay the loan.
Managing director Daniel Ng’ang’a said the loan, taken before the devolution, was used to establish Murang’a bulk water project that supplies Murang’a town with water.
Ngang’a said the loan was taken by Tana Water Services Board on behalf of government to help expand water connections in Murang’a town and its environs.
“The principal amount was Sh520 million for the water project and Sh175 million for sewerage,” Ng’ang’a said.
Ng’ang’a said since the water tariffs were lowered early last year from a minimum charge of Sh500 to Sh300, the company has been struggling to cover its costs of production.
The director noted that the low tariffs have also made it difficult for the company to pay abstraction fees to the Water Resource Management Authority (Warma).
“Locally, anybody who draws water from a water source is required to pay 50 cents for every one cubic metre drawn,” he said, adding that the debts have now accumulated to Sh8 million.
Ng’ang’a said that Warma has issued all water companies in the county with notices to pay the arrears or face closure.
Water prices, he said, are regulated by Water Services Regulatory Board (Wasreb) to protect consumers from exploitation by water companies.
The companies propose the tariffs and send them to Wasreb for analysis in accordance with its guidelines before they gazette them.
“But the first stage is to talk to stakeholders and it is why we organised this forum so that they can give their views,” Ng’ang’a said.
Residents asked the company to slightly increase the tariffs to help it continue with its operations, with many hailing it for the clean water it provides.
The majority of the speakers expressed concerns that the company may close down if it continues operating under losses.
Ben Kirathe, a Mukuyu resident, said the company needs to find a way to become self-sustaining and pay its debts.
The resident said he is ready to pay higher prices for the company to continue providing a clean and uninterrupted supply of water.
Nominated MCA Stephen Chege, however, said the county government is ready to pay the company’s loans if it does not increase water tariffs.
Chege said the majority of Murang’a town dwellers struggle to pay their water bills yet they have a constitutional right to clean and affordable water.
Chege also noted that the company should now be preparing to fold as per a directive issued out by Wasreb to all water companies to hand over to county governments in June.
Kiharu Deputy County Commissioner Etiyang Okaka said the county government should give the money to the company to help it subsidize water services.
“But if we ask for low tariffs yet the company has huge debts, it will close down,” he said, noting that the county government should put in place firm structures that will safeguard the future of the companies as it prepares to take over.
Mwangi Mutiria said the company should increase the tariffs but review them downwards once the loan is cleared.
Mutiria said though the county government’s help is welcome, it should first clear the loan and then ask the company not to increase prices.