Water sector reforms in Kenya: influence of the private operator model on financial sustainability of rural water schemes in Homa bay county.

Abstract

Water sector reforms focused on: reducing the Government‟s participation in direct delivery of water services, commercialising water market and encouraging participation of private operators, in order to enhance efficiency and sustainability of water services. Studies conducted in various developing countries show evidence of a significant relationship between the private operator model and financial sustainability of rural water schemes. Nonetheless, no such study had ever examined influence of the private operator model on financial sustainability of rural water schemes in Homa Bay County. Based on key concepts of the four pillars model, this study examined the statistical relationship between various attributes of Homa Bay Water and Sewerage Company (the private operator) and financial sustainability of its rural water services. The study adopted a cross-sectional survey design, with both quantitative and qualitative approaches. Primary data were sourced from the operator‟s staff, water users and water management committees in April 2017. Both quantitative and qualitative techniques were applied to process and analyse data. Quantitative techniques included cross-tabulation with Chi square tests, Relative Importance Index, Kendall‟s Coefficient of Concordance and Spearman‟s Rank Correlation Coefficient. Key findings of the study show a strong level of concordance of participants‟ views regarding organisational planning aspects (Kendall‟s W = 0.741); income diversification aspects (W = 0.686); management practices (W = 0.862); and revenue generation aspects (W = 0.893). The findings also show that the operator‟s performance in defraying O&M costs for its rural water schemes positively and significantly correlated with organisational planning (rs = 0.430; ρ-value = 0.000); income diversification (rs = 0.375; ρ-value = 0.014); management practices (rs = 0.430; ρ-value = 0.000); and revenue generation (rs = 0.568; ρ-value = 0.000). The study concludes that consistent implementation of strategic and financial plans; improving diversification of internal income sources; ensuring that procurement activities are strictly guided by relevant laws and policies; as well as reducing non-revenue water and unaccounted for water, are crucial for improving the operator‟s competitiveness in the commercialised water market; as well as performance in defraying O&M costs and achieving financial sustainability for its rural water schemes. The study amplifies the need for stakeholders to: ensure consistent implementation of the strategic and financial plans to guide water supply activities; diversify internal income sources to improve the operator‟s competitiveness; improve procurement practices by sensitising the operator‟s staff, Board members and tender committee on procurement laws and policies; initiate active partnership forums with community structures to facilitate early detection and reporting of physical leakages, spillage, illegal connections and defective metering equipment; as well as upgrade the billing system and promote mobile phone payment method to improve revenue collection.