Kenya - Local organisational transformation as the key to sustainable water service delivery in peri-urban areas

Organization(s): Isiolo Water and Sewerage Company (IWASCO); Nanyuki Water and Sewerage Company (NAWASCO); SNV Netherlands Development Organisation

Country(ies): Kenya

Primary thematic focus: Sub-national capacity development: local solutions, national strengths

In a Nutshell:
The ongoing water sector reforms in Kenya focuses on transformation of publicly managed water service delivery institutions into socially responsible commercial entities. This case describes how Capacity Development services have been instrumental in improving social and commercial performance of water service providers in two small towns of Northern Kenya.

The Story:
Background for SNV’s Capacity Development services Unsustainable water service provision: Until 2002, water service delivery in Kenya was under the direct control of public institutions, mainly the local authorities, the National Water Conservation and Pipeline Corporation, and the Ministry of Water and Irrigation (MoWI). These institutions lacked professionalism and customer focus. This resulted into a very low cost recovery, high water loss (commonly known as unaccounted for water – UfW), low water quality and inadequate funds for maintenance of assets. Limited resources were available for service expansion to poorer and under-served areas. At these trends, Kenya would not be able to reach MDG targets.

Sector reform and water act 2002:
In order to address the above mentioned challenges and to improve the overall performance of water sector, the government of Kenya initiated an innovative water sector reforms programme, leading to the enactment of the Water Act in 2002. The Act separated policy formulation, implementation, regulation, resources-management and service provision functions among new sector institutions: MoWI is left with policy formulation, and Water Services Boards (WSBs) and Water and Sewerage Companies (WSPs) with service delivery. The Act thus minimised government monopoly in water service delivery and provided a sound framework for community and private sector participation in the sector.

Slow pace of reforms:
Initially, the weak capacity of newly established institutions and the bureaucratic resistance of the old public sector institutions were major bottlenecks to the implementation of ambitious water sector reform and expansion of water services to the poor in Kenya. In this context, two newly established WSPs approached SNV seeking “capacity development (CD)” support so that they could become socially responsible and commercially viable.

Weak capacity of the two WSPs:
Isiolo Water and Sewerage Company (IWASCO) came into operation in February 2006 (registered in July 2005). IWASCO was mandated to provide water and sewerage services to Isiolo town with a water supply system that was designed (in 1983) to serve a population of 15,000. The current water demand of 6,000 m3/day far exceeds the company’s production capacity of 2,808 m3/day. High rate of UfW, low cost recovery, weak customer relationship, lack of business planning and accountability mechanism were major challenges faced by the company. The Nanyuki Water and Sewerage Company (NAWASCO) took over the operation of the water and sewerage system from Nanyuki Municipal Council in December 2007. Similar to IWASCO, the current water demand of 10,500 m3/day is higher than the production capacity of 9,460 m3/day. This capacity is inadequate to expand services to 64,500 people living in Nanyuki town. Challenges faced by NAWASCO were very similar to that of the IWASCO.

SNV’s innovative local solutions:
As a CD service provider, SNV facilitates a systemic process aimed at improving the performance of local organisations. We bring together a wide range of state and non-state actors to: i) jointly identify opportunities and challenges, ii) design and implement innovative and sustainable local solutions, iii) establish learning alliances and partnerships (public-private-CSOs) at the local level, and iv) provide policy inputs based on the evidence on the ground. Our CD services in water sector of Kenya are informed by Kenya MDGs, Kenya Vision 2030 and the Water Act 2002. As envisaged by the Water Act, SNV is facilitating the process of transforming traditional public water service institutions into customer oriented and commercial WSPs. We use participatory tools and techniques to facilitate all processes.

Results and Critical Factors:
SNV’s CD services:
Our support to IWASCO and NAWASCO included: i) Organisational strengthening (self-assessment, strategic/business planning, human resources policies, billing, revenue and reward systems), ii) Customer orientation (satisfaction surveys, pro-poor policies and accountability), iii) Conflict mitigation through multi-stakeholder platforms, and iv) Visionary leadership (strategic orientation, peer-learning and exposure trips).

Key outcomes and impact:
Improved customer orientation and accountability: customers are reporting leaks, bursts and illegal connections; complaints are reduced; services are expanded to poorer areas (e.g. Kanyoni, Likii and Sweetwater villages in Nanyuki). Local youth and women’s group are contracted for water kiosks management. Improved commercial performance: NAWASCO and IWASCO have reduced UfW from 63% to 43% and 65% to 41% respectively between 2007 and 2009. Revenue collection increased from approx. USD 8,000 to 36,670 per month for IWASCO and from USD 32,000 to 53,330 per month for NAWASCO during this period. Improved management of scarce water resources: NAWASCO’s collaboration with Water Resources User Associations (WRUAs) and other stakeholders has resulted into increased flow in Nanyuki river. Ripple effects and up scaling to national level: Inspired by the success of the mentioned companies, many new WSPs requested SNV for similar CD support. In 2009, SNV supported 18 WSPs, reaching approximately 180,000 people. Upon the request of the MoWI, SNV co-facilitated the process of preparing Kenya Water Sector Strategic Plan (2009–2014); SNV got opportunity to influence policy based on local practice.

Key lessons and success factors:
- Social and commercial gains of WSPs can lead to pro-poor impact and MDG achievement in water sector.
- A sound institutional framework and visionary leadership are crucial to organisational transformation.
- Multi-stakeholder platforms can mitigate resource based conflicts.

Conclusions:
The transformation of public sector institutions into commercial entities has led to sustainable water service delivery in Kenya. The case shows how small local CD solutions can influence the wider sector at the national level.

Name of Primary Contact Person: Chiranjibi Tiwari

Title of Primary Contact Person: Senior Advisor; Water, Sanitation and Hygiene Sector, SNV Kenya

City: Nairobi