When the donor community read a report like the one below, their first reaction is that the Enterprise is privatized, however, we have seen more tax payer resources go to privatized entities like the former Uganda Electricity Board, we way to go is to better manage enterprises like National Water. This enterprise has the salary structure that calls for review more so what the chief executive officer gets. Surely, if there is responsible auditing, areas like where it is reported that the chief executive’s car hire arrangement costs shs600,000 a day are abnormal! How does expert at management spend money that way? It is absurd, but the NWSC situation can surely be corrected.
Debts choke National Water
By Chris Obore
Posted Saturday, January 28 2012 at 00:00
More repercussions. The indebted corporation now cannot replace some of the rotten pipes at the main water treatment point in Ggaba. National Water and Sewerage Corporation once touted as an example of a good performing state enterprise is rolling on huge debts curtailing its ability to connect water to new users. Saturday Monitor can reveal that as at January 9, NWSC had only Shs2.7 billion as cash at hand yet its debts for only six months to the same date stood at Shs8.9 billion. The Corporation’s financial statements show that NWSC was expected to have paid creditors, including staff allowances, to the tune of Shs6 billion by January 15 but it has failed instead it has been drowning in ‘wasteful’ expenditure according to board minutes obtained by Saturday Monitor. Although the corporation has Shs10 billion in fixed accounts, this money accrued from the sale of its houses, other fixed assets and foreign loans and is not available for daily running of the entity. According to the Corporation’s financial statements, copies of which Saturday Monitor has obtained, creditors’ [suppliers] audited vouchers for cheque writing within 30 days amounted to Shs460.9 million, between 30-60 days amounted to Shs375 million while those above 60 days were at Shs2.02 billion. Apparently, water pumps at the Corporation’s main water treatment point in Ggaba are only painted neatly despite their performance having dropped by nearly 50 per cent thus costing NWSC heavy power bills and there is no plan to replace aging pipes soon to ensure steady water supply to consumers. The Acting Managing Director, Eng. Alex Gisagara, said: “By the first week of February there will be new meters in the country and we shall connect some clients. We are shipping meters from Italy but there was a delay in Mombasa.” He said he had only been in office for hardly a month. Every year, NWSC spends Shs3 billion renting cars from Victoria Motors. This money would buy at least 30 vehicles at Shs100 million each. The Corporation owes Victoria Motors Shs18.7 million for hire of a vehicle that was used by former Managing Director William Muhairwe in the month of October 2011 alone meaning that at least Shs600,000 was spent on the MD’s car daily. Other costs that reveal lack of frugality in the corporation’s financial management include DSTV subscription, air tickets and hotel bills [lunch] which amount to more than Shs15 million in one month. The e-water payment system, introduced to help clients pay their bills at the nearest bank branch is costing NWSC Shs600 million annually from the previous Shs100m in bank charges.
Now, the public utility’s board is accusing the Corporation’s top managers of falsifying accounts and presenting a skewed financial image to the public “Management was so obsessed to maintain the image that they had turned the Corporation around by falsifying facts/records to support the claim. Any issue that would portray NWSC as being in deficit would be fought at both institutional and personal level,” reads part of board minutes dated November 2010.
The board also accuses the managers of making it difficult for government to establish a regulator for the water sector so that an independent agency with technical competence could scrutinize the performance of the Corporation without undue pressure. According to the board, the government in 2007, through the European Union and GTZ, engaged a foreign firm, M/S Fitchner in association with Beller Accounts and M&E Associates to undertake asset re-evaluation in NWSC with the view of preparing the Corporation for public listing. “The firm did the assignment professionally on the basis of internationally acceptable best practices but the outcome showed that NWSC was already in deficit and would continue to be so for many years to come,” reads the document.