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HUGE INTEREST

Eldoret water firm faulted for failing to service Sh1.8bn loan

Auditor General Auditor Ouko says it was inherited from the defunct Eldoret Municipal Council

In Summary

• Eldowas faulted for hiring staff from one dominant community. 

• Firm lost more than Sh340 million for supplying non-revenue water that was not billed by the firm.

Governor Jackson Mandago at a public meeting in Eldoret on April 20.
Governor Jackson Mandago at a public meeting in Eldoret on April 20.
Image: MATHEWS NDANYI

Eldoret Water and Sanitation Company is on the spot for failing to service a Sh1.8 billion loan without proper explanation.

Auditor General Auditor Edward Ouko said the loan inherited from the defunct Eldoret Municipal Council continues to attract huge interest.

In his report ending June 30, 2017, Ouko said the penalties are now a burden to the company. "The management did not explain why the loan was not being serviced," Ouko said.

He said the company also lost more than Sh340 million as a result of supplying non-revenue water that was not billed by the firm.

Ouko said the company’s sales figure of Sh704.4 million included Sh479.7 million for the sell of water. However, he said, a review of records indicate the company produced 12.9 cubic meters of water out of which only 7.5 million cubic meters was billed.

The Auditor General said the balance of 5.3 million cubic meters representing more than 40 per cent of the total volume of water produced was not billed.

Ouko said this represented the non-revenue water which is 16 per cent over and above the Water Services Regulatory Board guidelines' allowable loss of 25 per cent.

"No verifiable reason was given for this percentage of non-revenue water. In the  circumstances, the company lost more than Sh340 million revenue," he said.

Ouko also blamed the company for failing to observe the one-third rule requirement for hiring staff. He said there are nine board members, out of which eight are from one dominant community in the area.

The management team comprises four members who are all from the same  community.

“This is contrary to Section 7 (2) of the National Cohesion and Integration Act 2008 and under the circumstances the management is in breach of the law," Ouko said.

Meanwhile, Governor Jackson Mandago said his administration is determined to ensure adequate provision of water to residents of Uasin Gishu.  

The governor said in Eldoret on Tuesday, the county has bought machinery to help in desilting and repairing of more than 300 dams in the county.

“The dams will help in the storage of water. As a result, we will be able to supply water to as many homes as possible. More residents will have access to clean, affordable water," Mandago said.

Edited by P Wanambisi