Mombasa residents will pay more for water to foot 15-year-old World Bank loan
Mombasa residents will pay more for water to foot a 15 year old World Bank loan under new tariffs set to be implemented next month.
The Coast Water Works Development Agency told the National Assembly Public Investments Committee on Commercial Affairs and Energy led by Pokot South MP David Pkosing they will introduce a component of the loan in new water tariff set to commence in October.
The World Bank lent Kenya Kes4.5 billion in 2008 was repayable in 13 years with effect from 30 March. 2013 at an interest rate of 1.5 percent per annum.
Kenya was supposed to pay $4,906,636 that comprised of a principal sum of $3,168,030 and interest of $1,738,606. However, the Auditor-General could not trace records of the payments raising a query on the status of the loan.
World Bank loan has grown to Kes13.2Bn
Apparently, the loan has since grown to Kes13.2 billion as at June 2021 with Coast Water Works Development Agency stating they did not have enough money to repay the loan.
They claimed the Water Service Providers including Mombasa Water, Malindi, Kilifi, Kwale, Lamu, Taita Taveta and Tana River water, had accumulated arrears of up to Kes4.4 billion which made it impossible to service the debt.
The agency also said the cost of production and maintenance of the dilapidated infrastructure had also messed their finances making it hard to meet the debt payments.
“Loan repayment has never been effected on grounds of water tariff not being reflective of the operational costs related to water production. This is attributed to the following factors,” the Agency said.
“New water tariff has been Gazetted and is effective from October 2023 with a loan repayment component. Once implemented will set aside the component of loan repayment.”
The World Bank has been a key financier of Kenya’s water systems and the multilateral lender is now pushing the government to raise the cost of the vital commodity to meet its investments as well as attract private sector to the business of thirst.
The World Bank pushed the government to introduce 2021 water regulations as part of the conditions for funding which proposed an increase on regulatory charges for water companies tenfold and the introduction of a new 5 per cent conservation levy.
The water regulations 2021 will see water use charges increase from 50 cents per cubic meter to Sh5 for domestic use and livestock farming.
The WRA which allocates water use and controls pollution was charging 50 cents per cubic meter for water for homes, livestock and for irrigation while commercial use attracted a charge of 75 cents for use over 300 cubic meters.
Water bill to attract interest charge
It will now charge Kes2 per cubic meter for irrigation while commercial use attracted a charge of Kes6 for use over 300 cubic meters a day.
Late payment of water use charges will attract an interest charge of 2 percent per month and water providers will be require to install automated meters or face a penalty of 10 per cent of water used.
Water companies would then top up an additional 5 per cent of the charges as the conservation levy.
Introduction of fresh water conservation levies will see the service providers pass the additional costs to homes and businesses for piped water and sewerage.
Currently Kenyans pay an average of Kes93 per cubic metre or 1,000 litres for water piped to homes. The hike in water prices is also an emotive issue especially among irrigation belts like Mwea and Ahero who are sensitive on the cost of water on their produce.
The increase in water bills will add a new cost on consumers who already shouldering high cost of living as the country recovers from the Covid-19 pandemic, global upheaval, new taxes and currency depreciation that have pushed costs up and stifled incomes.
However, Activists and water companies have won first round battle to stop newly increased levies on water that were part of the World Bank’s push to increase regulatory charges for water companies tenfold and introduce a new 5 per cent conservation levy.
The 2021 regulations that were set to take effect in March this year have been suspended by High Court after the Mt Kenya Ewaso Water Partnership, Kenya Water and Sanitation, Likii Water Resources, Likiundu Water and five activists filed a petition to halt the changes on claims that the implementation of the regulations will put the cost of water beyond the reach of most Kenyans.
