Nairobi Water MD bans staff foreign trips while in London
Nairobi City Water and Sewerage Company Managing Director, Nahashon Muguna, gestures during an interview at the company's headquarters in Industrial Area, Nairobi, on May 5, 2021.
Nairobi County Water and Sewerage Company Managing Director Nahashon Muguna has banned all foreign travel by employees, citing a cash crunch at the state agency.
Engineer Muguna, who issued the instructions while on a foreign trip in London, cancelled all “non-essential activities”, including training and “out of office” work. The utility company, which supplies water and sewerage services to millions of city residents, says it can no longer finance “non-core expenses” because of poor revenue performance.
“Kindly note that the collection for July was Sh911 million. This was far below the budgeted revenue of Sh1.3 billion per month and means we cannot meet all the expenditures as per the budget,” the memo dated August 7 and copied to directors stated.
Finance Manager Samuel Gachugia, who sent the memo on behalf of Mr Muguna, further cites the increased financial burden the agency faces this month due to the enactment of the Finance Act, 2023, which requires it to recover the backdated taxes and levies for July and remit them together with the August dues, as another factor that will hurt its cash flows.
“This requires we put measures to arrest the situation by increasing the revenue and minimising expenditures. Therefore, we are recommending the postponement of all non-core expenses, which include training, work out of office, among others, with exception of Wasco games and team building. The already approved activities should be rescheduled for a later date, with the consultation of MD and FD (finance director),” it states.
Sources familiar with the operations of the utility company told the Saturday Nation the entire top leadership, including Board Chairman Arnold Karanja, MD Muguna, Finance Director Paul Omondi and Human Resources Director Monica Tuli, were away on foreign trips at the time the communication was made.
Finance director
The sources, who sought anonymity for fear of victimisation, said the company has been wasting millions of shillings annually on numerous foreign trips that benefit only a clique of individuals close to the MD and the finance director. The group of employees has been given the moniker ‘sky team’ due to their frequent foreign travels. “As you are aware, I am out of the country. I will respond to your questions once back,” said Mr Muguna when asked about the financial position of the water company.
The board members and senior management are in London on a two-week visit. “Another group of senior executives, including the supply chain manager is in Turkey to ‘benchmark’. A third group of senior managers is scheduled to visit Sweden, Zambia and Dubai,” indicated our source.
“Overseas and local travel in Nairobi Water has become a major cash cow for managers who are rarely in their workstation and spend weeks on end from one destination to another.”
The memo indicates the company is struggling to raise enough revenues. In 2019/20, the Auditor-General raised several queries regarding its operations, including a case where more than half of the water the firm produced was not earning any revenues as it represented non-revenue water, with only 49 per cent of the water it pumped billed to customers.
The Auditor-General also said the company’s board overshot its budget without justification, spending a total of Sh50.2 million. More than Sh24 million of this amount was spent on bonuses without a basis.
“However, the company had budgeted an amount of Sh29 million in respect of board remuneration, resulting in an unexplained over-expenditure of Sh21,223,488. In the circumstances, the validity of board remuneration over-expenditure of Sh21.2 million could not be confirmed,” the Auditor-General stated.
