NYAHURURU WATER & SANITATION COMPANY LIMITED
JUSTIFICATION OF COST OF WATER SERVICES
After several years of constant charges for water services, the company has now received approval of its (RTA) regular tariff adjustment specifically developed as per established guidelines regarding tariff application as set by the regulatory board.
When the water services were transferred from the water department at the Municipal council to the company in 2002 upon operationalisation of the water Act, the company was faced with the challenge of low billing income since the tariffs in force were those that had been approved to operate only up to 1999.
Several attempts to implement new tariff had met stiff resistance across the board.
This scenario continued upto the late 2008 when after intense lobbying by the various water providers through the regulatory board, the minister for water & irrigation approved what came to be known as the Extra-ordinary tariff adjustment (ETA) through a Kenya Gazette notice of January 2009.
This tariff sought to cushion water providers against escalating production & distribution costs that had risen considerably over the years, while tariffs had remained constant. This tariff (ETA) was meant to operate for one year during which time; every water service provider was to apply for its own tariff that would address the fundamentals of provision of water services in their specific area of jurisdiction since the cost structure in different areas remained different. The tariff applied for has to be aimed at full cost recovery to enable sustained provision of services.
On its part Nyahuwasco developed its tariff application in 2009/010 and in doing so followed all the procedures set by the regulatory board to determine the minimum sustainable charges.
When doing this the following factors were considered.
(a) Change of costs of production over the years for the same size of operation.
(b) The expected service levels in terms service provision guidelines, targets and parameters set by the regulator.
(c) That the company does not have any other source of financing.
A glimpse into some of the major costs which had changed while tariff remained unchanged.
For the same size of operation, the costs had changed as follows:-
2002 2010 % change
Annual Electricity bill 6,105514 10,494,679 72%
Annual Chemicals bill 2,267,698 7,476,143 229%
Annual Insurance 185,148 576,444 211%
Annual Staff Costs 8,070,849 32,291,079 300%
Annual Vehicle running costs 360,572 1,402,675 289%
Annual Repairs 350,062 4,314,560 1132%
Water tariff per M3 16.00 33.33 108%
Upon receiving the application, the regulatory board approved only the minimum necessary expenditure.
Below find an interpretation of the approved tariff applicable for the minimum consumption of 1m3
Analysis of approved tariff.
WATER ONLY
Approved tariff (0-6m3) Kshs./m3
1 m3 33.33
1000 lts 33.33
1 lts 0.0033 = 3.33 cts
20 ltr Gallon (3.33 x 20 ) = 0.67 = 67 cts
Sewerage = 75% of water charge i.e 0.50 cts
Total = 1.17 for a 20 ltr Gallon
From the above, it’s clear that your bill is self-determined and is based on how much you choose to consume.
The major factor determining your bill is the volume consumed and this forms the bases for water tariff development. Water conservation is thus encouraged.
J.M. THEURI
MANAGING DIRECTOR:
JUSTIFICATION OF COST OF WATER SERVICES
After several years of constant charges for water services, the company has now received approval of its (RTA) regular tariff adjustment specifically developed as per established guidelines regarding tariff application as set by the regulatory board.
When the water services were transferred from the water department at the Municipal council to the company in 2002 upon operationalisation of the water Act, the company was faced with the challenge of low billing income since the tariffs in force were those that had been approved to operate only up to 1999.
Several attempts to implement new tariff had met stiff resistance across the board.
This scenario continued upto the late 2008 when after intense lobbying by the various water providers through the regulatory board, the minister for water & irrigation approved what came to be known as the Extra-ordinary tariff adjustment (ETA) through a Kenya Gazette notice of January 2009.
This tariff sought to cushion water providers against escalating production & distribution costs that had risen considerably over the years, while tariffs had remained constant. This tariff (ETA) was meant to operate for one year during which time; every water service provider was to apply for its own tariff that would address the fundamentals of provision of water services in their specific area of jurisdiction since the cost structure in different areas remained different. The tariff applied for has to be aimed at full cost recovery to enable sustained provision of services.
On its part Nyahuwasco developed its tariff application in 2009/010 and in doing so followed all the procedures set by the regulatory board to determine the minimum sustainable charges.
When doing this the following factors were considered.
(a) Change of costs of production over the years for the same size of operation.
(b) The expected service levels in terms service provision guidelines, targets and parameters set by the regulator.
(c) That the company does not have any other source of financing.
A glimpse into some of the major costs which had changed while tariff remained unchanged.
For the same size of operation, the costs had changed as follows:-
2002 2010 % change
Annual Electricity bill 6,105514 10,494,679 72%
Annual Chemicals bill 2,267,698 7,476,143 229%
Annual Insurance 185,148 576,444 211%
Annual Staff Costs 8,070,849 32,291,079 300%
Annual Vehicle running costs 360,572 1,402,675 289%
Annual Repairs 350,062 4,314,560 1132%
Water tariff per M3 16.00 33.33 108%
Upon receiving the application, the regulatory board approved only the minimum necessary expenditure.
Below find an interpretation of the approved tariff applicable for the minimum consumption of 1m3
Analysis of approved tariff.
WATER ONLY
Approved tariff (0-6m3) Kshs./m3
1 m3 33.33
1000 lts 33.33
1 lts 0.0033 = 3.33 cts
20 ltr Gallon (3.33 x 20 ) = 0.67 = 67 cts
Sewerage = 75% of water charge i.e 0.50 cts
Total = 1.17 for a 20 ltr Gallon
From the above, it’s clear that your bill is self-determined and is based on how much you choose to consume.
The major factor determining your bill is the volume consumed and this forms the bases for water tariff development. Water conservation is thus encouraged.
J.M. THEURI
MANAGING DIRECTOR:
