Senate asks EACC to investigate Sh100 million graft at Tavevo Water Company

Lab technicians at Tavevo Water and Sewerage Company undertaking lab tests. [Courtesy Tavevo]

The Senate County Public Investments and Special Funds Committee has asked the Ethics and Anti-Corruption Commission to investigate a Sh100 million graft at Tavevo Water and Sewerage Company.

The Committee Chaired by Vihiga Senator Godfrey Osotsi called on the anti-graft agency to take legal action against the staff at the Taita Taveta based Water Company who will be found culpable in embezzling public funds.

Osotsi told Governor Andrew Mwadime who appeared before the committee in Nairobi on Tuesday that the water company is bankrupt as it is operating on a negative working capital of Sh75.5 million and is besieged with debts to the tune of Sh545 million.

“We are asking governor Mwadime to work closely with the Ethics and Anti-Corruption Commission to ensure that all those who embezzled the funds are held accountable, since the organisation cannot be left to collapse as we watch,” said Osotsi.

The Committee also recommended the recovery of illegal allowances given to board members in the next 60 days besides asking for the total restructuring of the board of directors within two months as well as confirmation or recruitment of a substantive managing director.

The decision by the committee came up after Senators raised concerns over several audit queries during the tenure of former Governor Granton Samboja where the water company could only collect Sh262 million in revenue against a target of Sh937.6 million casting doubts on its sustainability.

According to an audit report for the financial year ended June 2021, the water company was pointed out for ballooned administration costs amounting to Sh390.9 million against revenues of Sh262 million.

The expenditure includes Sh102.3 million in staff cost and another Sh1.5 million in training expenses which could not be supported.

There was Sh6.8 million spent on emolument of board of directors where irregular allowances of Sh790,000 were seen.

According to the Auditor General’s report, there were also unsupported night-outs claims of Sh450,000 where the payments were not supported with evidence to confirm the night-out claims while the board held 55 sittings out of which 12 were full board meetings contrary to the law which sets the limit at a maximum of six.

Another audit query also centred on irregular composition of committees of the board where each had five members against the requirement of three while the firm was bogged with Sh254.2 million in stalled projects where in one of them, the company paid Sh2.5 million to a contractor before it started.

The report further  questioned Sh76.7 million paid for Nyangoro and Maktau water projects even though the works on the project had not been completed while there were unproven legal fees amounting to Sh750,000 where the company could not disclose the nature of legal services offered.

“In 2019, the company had a negative working capital of Sh208.1 million with liabilities of Sh489.1 million against assets of Sh280.5 million while in 2020 the liabilities were Sh441.6 million against assets of Sh366.1 million resulting in a negative working capital of Sh75.5 million,” the report quoted in part.

Nominated Senator Tabitha Mutinda said that from the audit report it was clear that the Tavevo Water and Sewerage Company is insolvent and depended on continuous support from the Taita Taveta County government and grants from donors which raised questions on its survival going forward.

Governor Mwadime confessed to the challenges in the management of the water company and that his administration was doing everything possible to correct the mess.

Mwadime said he had sent the substantive managing director on compulsory leave after realising some accounts were not balancing to allow for investigations.

The Governor informed the committee that the Managing Director however moved to court and obtained a stay order against the decision and that he also found out that the board was not constituted as per the law as some members were not even qualified to be in the board.

“I would like to inform this committee that since assuming office as Taita Governor, I have tried my best to address the challenges that have been there in the management of Tavevo Water and Sewerage Company and I believe that in the next few months everything will be in order,” said Mwadime.

The company’s acting MD Richard Kibeng’o said the firm is paying huge bills including Sh8 million monthly to Coast Water Works Development Agency for bulk water with outstanding bill now at Sh415.6 billion and Sh129.3 million in lease fees besides also paying Sh6 million monthly to Kenya Power as electricity bill.