A Senate watchdog committee has called for the sacking of the managing director and board members of Kericho Water and Sewerage Company (Kewasco) over the misappropriation of funds.
Further, the lawmakers want the anti-graft agency to commence investigations into allegations of bribery and collusion among the staff of the water firm resulting in loss of money.
The company is staring at insolvency as it struggles with a negative working capital of Sh122.3 million and a string of operating losses, with the financial year ended June 2020 loss being Sh10 million.
Among a raft of recommendations by the Senate County Public Investment and Special Funds Committee led by Vihiga Senator Godfrey Osotsi was a total overhaul of the company’s human resource and board within 60 days as well as the introduction of performance contracting for staff.
The lawmakers told Governor Erick Mutai to sack the board and the managing director, Mr Kibii Siele, for incompetence. He was also told to work closely with the county assembly to ensure that the water company gets a proper legal framework to guide its operations.
The recommendations come after a damning audit report for the financial year ended June 2021 by Auditor-General Nancy Gathungu.
“This recommendation means that the managing director is walking out of this committee without a job. This will also apply to the board members,” said the committee’s vice chairperson and Kisumu Senator Tom Ojienda.
Mr Osotsi added that investigations into massive losses in non-revenue water should be prioritised, with officers found culpable prosecuted.
“The company is technically insolvent with the negative working capital, an indicator of a firm in an acute financial challenge,” said Mr Osotsi. “We, therefore, recommend that this company be restructured in totality, including the human resource, board of directors and any other restructuring that you deem fit in 60 days.”
Dr Mutai committed to taking necessary action to revive the fortunes of the utility. “We will not entertain any excuse for poor management and laziness by those in charge. Whatever needs EACC (Ethics and Anti-Corruption Commission) or my intervention will be done for the good of the Kericho people. I commit to walk the talk, however painful it will be,” he said.
Statutory deductions
Appearing before the committee yesterday, Mr Siele was hard-pressed to explain why the company has failed to remit employees’ statutory deductions of Sh55.9 million. He was also asked to explain what strategy the company has put in place to clear its huge debt of Sh204 million as well as the veracity of a write-off of Sh17 million in deferred liabilities.
In his response, Mr Siele told the committee that during the takeover of Tililbei Water and Sanitation Company (Tilwasco) in 2018, Kewasco was left with huge liabilities, which the county government committed to clear but is yet to. He said that as at the date of the takeover, Tilwasco had a liability of Sh90.5 million out of which Sh25,073,379 was to be paid by Bomet Water Company.
“The balance of Sh65,492,846 was a share of the liabilities to be paid by the county government of Kericho as of the date of the takeover,” he said.
However, Kiambu Senator Karungo Wa Thang’wa said the problem was incompetence in the management of the firm.
“There is a lot of incompetence in this water company. They take things so casually. We need to do something to turn around these water companies,” he said.
William Kisang’ (Elgeyo-Marakwet) said there was no need to run a company that was not making any profit.
“Governor, you can second qualified personnel who are already in the payroll from the county to help run the company as you figure out what to do,” said Mr Kisang’.
