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A Senate committee has directed Nandi County Government to recover debt running into millions of shillings from water customers in the region.

The Senate County Public Investment and Special Funds committee chaired by Vihiga lawmaker Godfrey Osotsi told Nandi Governor Stephen Sang and Kapsabet Nandi Water Sanitation Company (Kanawasco MD Anthony Kiboy to recover the amounts owed if the water utility firm is to remain afloat.

During the examination of Auditor General’s report on the water utility firm, Sang told the committee that although they have been disconnecting water from the defaulters, rains have not helped much since during rainy season, debtors don’t care because they can harvest the rain water.

Nancy Gathungu in her audit of the water firm states that the statement of financial position reflects trade and other receivables balance of Sh22,541,130 as at 30 June 2021 available records revealed that debts amounting to Sh17,502,389 had been outstanding for over 60 days.

“This is contrary to Section 6.3 of the Kapsabet Nandi Water and sanitation company limited Financial Manual of March 2018 which states that the company may allow up to 60 days moratorium before payment for monthly bills. In addition, any other amounts due on contractual obligation; within 7 calendar days after each due date, the Company will dispatch a notice to all defaulters; and the Company will demand payment or an arrangement with the debtor through which payment will be made,” reads part of the report.

No evidence

The report notes that the management did not provided evidence of any recovery efforts made and strategies put in place to ensure timely recovery of debts.

“In the circumstances, the Company was in breach of its financial manual and regulations,” reads part of the report. But according to KANAWASCO Managing Director Kiboy admitted that there is a huge outstanding uncollected amount due to the company.

However, the company in the subsequent year collected Sh6,806,586, adding that the Company has put in place some measures including disconnecting defaulters as an effort to collect all the outstanding arrears.

“During the year under review, 954 connections were under cut off. During the year under review, the company disconnected connections who cannot pay in full, to enter a part payment arrangement with the Company. We are having issues with the defaulters because when it rains they don’t pay because they harvest the rain water,” said Kiboy.

Introducing waiver

He further told the committee that the company in liaison with the County Legal Department and CEC Finance is assessing the possibility of introducing a waiver of a certain percentage for those willing to clear their bills as well as placing notorious defaulters on Credit Reference Bureau (CRB).

According to Kiboy, the company has raised a complaint with Water Resources Authority on drilling of boreholes within its  service area without consultation.

This is after the Godfrey Osotsi led committee took the Governor to task why a Sh700million worth of assets including buildings, computers and printers, furniture and fittings, infrastructure and office equipment inherited from Lake Victoria North Water Services Board (LVNWSB) have not been transferred to the company.

According to the audit report,  the values of land on which the buildings in Kapsabet, Nandi Hills town, tanks in Kapsabet Boys, Kabutie Treatment works (old and new), Singorwa and Nandi Hills Bears Club stands are not included in the reported balance for property, plant and equipment as at 30 June, 2021.

“In addition, their ownership documents such as title deeds, leases or allotments were not provided for audit review. In the circumstances, the accuracy and completeness of property, plant and equipment balance of Sh20.5 million could not be confirmed.

But Kiboy defended his firm saying that the Company could not recognize the assets owned Lake Victoria North Water Works Development Agency for the Financial Year under review, because the assets still belongs to Lake Victoria North Water Works Development Agency as indicated by the ownership documents provided.