Nairobi City Water and Sewerage Company acting managing director Nahason Muguna is in trouble for allegedly giving false information regarding staff salaries.
Water Services Regulatory Board (WASREB) CEO Robert Gakubia in a terse letter to Muguna says the NCWSC had written to the board indicating there was no agreed salary increment deal signed with the staff.
However, WASREB has since learnt that NCWSC entered into a Collective Bargaining Agreement with the employees and the CBA is pending registration in court.
Gakubia said that Muguna asked NCWSC board to approve salary increments based on the CBA, which he says was negotiated against public policy and law.
He says Muguna’s action amounted to “blatant breach of water sector benchmark, license and tariff conditions”.
“At the licence negotiation meeting held on July 11, 2018, at WASREB boardroom, NCWSC management led by the acting MD did not disclose existence of a CBA and ongoing negotiations despite a clear licence requirement for disclosure,” Gakubia says in his letter.
“NCWSC, however, committed to ensure that as a licence condition, commercial orientation, staff productivity issues and efficiency parameters shall be considered during CBA negotiations.”
In April 2013, NCWSC workers won a case in which they were fighting for a 30 per cent pay increase.
Gakubia says NCWSC board of management should be concerned that the utility, which is responsible for supplying clean water to Nairobi residents, is operating outside the sector's benchmarks and tariffs when it is struggling financially.
“The foregoing is despite the material infrastructural improvement and rehabilitation undertaken in the last few years. This is a cause for serious concern from a consumer protection perspective and puts into question the ability of the utility to operate as a going concern in the foreseeable future,” he says.
Gakubia has also ordered NCWSC to submit to his office a copy of the CBA, minutes of the board meeting that approved the CBA, minutes approving expenditure for 2018-19, 2019-20 and an analysis report on the impact of the proposed increase in salaries.
He has also directed the board to recall and cancel all its resolutions that were made in contravention of the law.
“Please note that any decision made or implemented against what is required by the law in regard to matters raised, will amount to breach of public trust and shall constitute an offence under section 101 (4) of the Water Act 2016,” he says.
Muguna had in his March 17 letter to WASREB said the increase in the number of workers and the associated cost was due to projection of water supply from projects such as Kiunyu Deep Wells and the Northern Water Collector Tunnel.
He said these two projects were to be completed in 2016 and 2017, respectively.
“The 2015 staff costs were targeted to reduce from Sh2.3 billion to Sh2.1 billion but in 2014-15 base year, it was already Sh3.8 billion. Staff costs increased due to 2017-18 drought that led to increased operational costs and cushioning staff against annual inflation,” he said.
He said that to turn the company into profitability, NCWSC has since 2017 frozen employment and has also embarked on a business growth strategy.
Edited by A.N
