REVEALED: How plan to sell Nairobi Water company was blocked
It was the last scandal at City Hall under the watch of former governor Evans Kidero.
And hardly 24 hours after Mike Sonko took over as the new governor, the entire board of the Nairobi City Water and Sewerage Company was suspended.
Reason? They had attempted to sell the company to a French entity in the dying days of the Kidero administration.
When the company was set up, the main idea was to let the private sector have a say in the running of water and sewerage services in the capital. Its main role was to improve and expand the water infrastructure by de-linking City Hall accounts from those of the water department.
HATCHED A PLOT
But bogged down by debts and inability to expand, some officials seem to have hatched a plot to let a foreign company take over the management of the firm simply known as Nairobi Water.
At the moment, only 220,000 properties in the capital are supplied with water. Although Nairobi Water pumps 550,000 cubic litres a day to the city, officials say that 40 per cent of this is never accounted for. It is either stolen or leaks to the ground – thanks to aged pipes and illegal connections.
The intended sale of the firm turned stormy and the county assembly started investigating the matter.
In a bid to shield itself, the county government had dismissed the alleged sale as “politically instigated” and “propaganda”.
“There is absolutely nothing like that. State bodies like Nairobi Water have to be privatised and the process is controlled by the Privatisation Act, 2005, which was revised in 2012,” Dr Kidero had said at one time.
In the last several months, Nairobi Water has been facing industrial disputes as the workers’ union started protesting the intended sale. The union feared that its members would lose their jobs in the event that the company’s management changed hands.
While Dr Kidero dismissed reports of the intended sale as “rumours”, documents indicate that City Hall officials had approached a French firm, Suez Water Company, and an MoU had been drafted.
Soon after he assumed office, however, Sonko suspended the Nairobi Water board of directors and refused to renew the contracts of its managing director, Eng. Phillip Gichuki, the commercial director, Mr Stephen Mbugua, the finance director, Mr Johnson Randu and human resource director Rosemary Kijana for non-performance.
Nairobi has been undergoing a water crisis partly because of an inefficient system and partly due to lack of enough water reservoirs to supply to the growing population.
When county executives were recently summoned to explain the sale, Mr Peter Kimori, the CEC for Water and Environment in the Nairobi county government found himself in an awkward position.
At first, he had denied ever hearing about the French company. That was before union officials leaked the MoU.
After that, Kimori claimed he was introduced to the company by the Cabinet Secretary for Water and Irrigation, Mr Eugene Wamalwa.
However, he said that the CS introduced him to the French firm’s officials to discuss ways of partnering with them to improve services, not to sell the State corporation.
“The CS introduced me to them sometime last year in November. They paid me a courtesy call. We discussed and I sent them to the (NCWSC) managing director to listen to them,” said Eng Kimori.
He said they discussed issues relating to minimisation of non-revenue water, harvesting of storm water and recycling to improve supply to city residents.
What we now know from documents seen by the Nation is that Suez company had a drafted an MoU at its Casablanca office in Morocco where the NCWSC board of management, led by chairman Raphael Nzomo, visited.
It is not clear if they knew of the intended sale when they left for Morocco in February.
Mr Nzomo, like the other officials, had dismissed the MoU and the strike by the workers allied to the Kenya County Government Workers Union as malicious.
“The document was introduced to us in Casablanca, but we declined to sign it. We wondered how such a detailed document could be prepared without our involvement,” Mr Nzomo said.
According to him, although they identified areas where they could partner with the company to improve services, they declined to sign the document because it was not what had taken them to Morocco.
Some officials later said that plans to sell the company were hatched during a well-publicised event attended by both county and national government officials to ostensibly show their commitment to ending the ongoing water crisis in the city.
After they committed to drill over 40 boreholes in three weeks and according to Nahashon Muguna, the Nairobi Water Technical director, the officials were asked to remain behind for a presentation about the sale.
However, documents seen by the Nation indicate that while the launch was in February, Suez Water Company had been in contact with the county since December last year.
In a letter received at the office of the county executive member for Water, Environment and Natural Resources, Mr Kimori, and dated December 24, 2016, the Suez business development director, Mr Thierry Gillet, invited Nairobi Water officials for technical visits and working sessions in Morocco.
While the meeting was supposed to “focus on the best and most appropriate technologies for NCWSC”, how the Morocco visit was turned into a meeting to sign an MoU that would facilitate the sale of the firm remains a mystery.
The MoU — whose signatures, and other vital information have been blacked out and whose authenticity could not be verified — stated that Suez was duly organised and existing under the law of France with a share capital of $3.23 billion.
The matter of the sale appears to have been discussed several months before it became public.
In another letter to the county executive, Mr Gillet confirmed that they had held two missions together in the months of November and December 2016.
A team of five people — three from the NCWSC technical team, director of water at the county government, and a representative from the Athi Water Service – visited Morocco and compiled a report that saved the water company from eventual sale.
The technical director, Mr Muguna, said they found that Nairobi Water was far much superior in service delivery than Suez, hence the recommendation not to deal with the French firm.
But there was a row at the board level when the report was presented showcasing the different interests at play.
The former Nairobi Water MD, Mr Gichuki, said that after the report was presented to the board, the members who had accompanied the technical team rejected the report and demanded that the board make another visit to Morocco before making a final decision.
Five board members, the County Chief Officer for water and environment, Ms Christine Ogut and the MD again travelled to Morrocco where they attended a meeting. But instead of being taken around the Suez company, they were given the MoU for Mr Gichuki to sign. However, he declined.