Nzoia Water fails to remit workers' deductions amid claims of graft

Nzoia Water Services Limited (Nzowasco) company headquaters. [Nathan Ochunge, Standard] Joseph Matete died at the age of 54 - just six years shy of his 60th birthday when he would have been retiring and getting his pension. Matete worked with Nzoia Water Services Company Limited (Nzowasco). His death hit his family hard. He had 11 children, seven of whom were still in school. Matete who hails from Mwanda village in Sirisia constituency died on February 25, this year. "When my father died, we went to the Lapfund Pension Scheme in Kisumu to get a funeral grant of Sh100,000 given out when a member of the scheme dies," said Oaster Matete, the deceased's eldest son. They were turned away on grounds that his father's contributions to the pension scheme were not up to date. Oaster said that they protested the move but were informed that Nzowasco had not been remitting his father's pension. Oaster said their father had told them that he had at least Sh600,000 as his pension but Lapfund told them his retirement benefits were not more than Sh400,000. At Matisi village in Webuye West constituency, we met Joshua Walupuka, 62, who until his retirement two years ago was a Plant Operator (1). He was employed at Nzowasco in 2005. Mr Walupuka has two wives Mary Khakasa and Sussy Namasaka. Together they have 18 children. Walupuka who is ailing has resorted to selling shoe soles at Bukembe market to fend for his family. "When I retired, I was only given a million shillings. I bought a plot and gave it to one of my sons," said Walupuka. He said the company still owes him over one million shillings in non-remitted deductions to Laptrust. He said that efforts to get his retirement benefits from the company have been futile, saying that whenever he goes to demand it, he is just taken round in circles. Richard Kipkirui has hired Onkoba and Company Advocates to help him recover his pension that was deducted but never remitted. We have been retained by our above-named client who retired honourably in 2021 but was not paid by Lapfund," states a demand letter dated May 26, 2023, and addressed to Nzowasco management. Nzowasco wrote to Kipkirui a cheque of Sh384,466 (Cheque No. 016515) but did not include Sh76,893 as his interest on May 19, 2023, but when he deposited the cheque to Equity Bank, it bounced. "You cannot expose a retiree to such misery having worked for the company for all that time. Unless we receive the aforesaid amount of Sh461,000 plus our collection fee of Sh40,000 which totals to Sh501,000 within 14 days, our express instructions are to commence criminal and civil proceedings," reads the demand in part. The Standard wrote to Lapfund on May 8, 2023, and Laptrust on May 25, 2023, seeking information on why they were not concerned that Nzowasco was not remitting workers' pensions but the agencies declined to comment on the matter. Nzowasco is strategically located along the Webuye-Malaba highway in Webuye town. It was established on February 4, 2004, through an Act of Parliament but came into full operation on February 9, 2005. For over two decades, everything moved like clockwork but things went south between 2018-2022 after the change of top leadership at the company as well as the board of directors. Our five-month investigation has established that the water firm is now limping, with predatory cartels bleeding its coffers dry. There are claims of runaway corruption and nepotism at the company. On June 20, this year, the Senate Committee on County Public Investments and Special Funds, held a meeting chaired by Vihiga Senator Godfrey Osotsi, to address concerns arising from the Auditor General's Report, scrutinising the financial statements of Nzowasco from 2018 to 2021. Trans Nzoia Governor George Natembeya was present at the meeting but his Bungoma counterpart Kenneth Lusaka was missing. Nzowasco was represented by Mathews Maruti, the managing director. The Auditor General's report noted financial inconsistencies and instances of non-compliance at the firm during the 2018/2019 and 2019/2020 financial years. The company reported a profit of Sh7.9 million in 2019/2020 yet experienced a subsequent loss of Sh16.4 million in 2020/2021. Non-Revenue Water (water "lost" before reaching customers) surged to an all-time high of 56 per cent with board expenses increasing by 69 per cent. In the Auditor General's report, a number of financial irregularities such as unaccountable discrepancies in cash flows, unexplainable balances, and unsupported figures in equity statements were identified. Other issues were unjustified salary increments, neglected pension obligations and questionable management of surplus funds. The lack of an asset register added a layer of complexity to an already worrisome situation. The Standard has established that for the five months, money for the National Social Security Fund (NSSF), Pay as You Earn (PAYE) deducted from the over 200 workers payslips has not been remitted. The majority of the workers at the company are in default in servicing their bank loans and are suffering punitive penalties. Nzowasco Managing Director Mathews Maruti, in a letter dated March 28 this year and addressed to the Secretary General of the Kenya Union of Water and Sewerage Employees (Kuwase), acknowledges that the firm is in a financial hole. This is after Kuwase issued a seven-day strike notice. "Our Company pays salaries from its revenue. The collections have been low. During the months of December 2022 to Mid-March, 2023, there were no rains," Maruti's memo reads in part. In 2019/20 the arrears stood at Sh343.83 million, in 2020/21 fiscal year, the arrears rose to Sh367.693 million, in 2021/22 financial year, the arrears were Sh386.224 million while in the 2022/23 financial year, the arrears were at least Sh434.186 million. Efforts by The Standard to get a comment from Nzowasco management were futile. They did not respond to our emails and text messages. When reached on phone, Caroline Nalianya, Nzowasco board chairperson, said that she was not under any obligation to respond to the issues we wanted the company to verify. "I am not under any obligation to respond to anything you want. You wait until such a time I will summon a board meeting to discuss the questions. The managing director and the company secretary will then respond to you," she said. Nzowasco is also on the Ethics Anti-Corruption Commission (EACC) radar. Meanwhile, three employees of Nzowasco were allegedly sacked after demanding answers on non-remittance of statutory deductions. The three Joyce Mbone, Kennedy Wekesa and Erick Nasokho were sacked on June 16, this year. They went to the management seeking answers on why the company had defaulted in remitting their pension to either Lapfund or Laptrust pension scheme, and why their loans were not being serviced despite the same being deducted from their payslips. They also wanted to know why NSSF and PAYE deducted from workers' payslips were not been remitted. In a twist of events, they received show-cause letters that required them to appear before the disciplinary committee that later sacked them. Ms Mbone was summarily dismissed from work after being accused of causing unnecessary commotion, heckling a senior officer, insubordination and being disrespectful to persons placed in authority at the company. Wekesa, who had been on contract for more than 10 years, had his contract terminated. "Following your presentation before the disciplinary committee on May 11, 2023, with your representative and review of the evidence reports from the complainants, your contract is hereby terminated with effect from June 16," his termination letter reads in part. Nasokho was accused of causing unnecessary commotion and insubordination The three were given 30 days to appeal the decision.

Nzoia Water fails to remit workers' deductions amid claims of graft

Get Full Access for Ksh299/Week.

Stand With Bold Journalism.
Stand With The Standard.

Related Topics

Popular this week

Latest Stories

The Standard Insider

Digger Classified

GET OUR NEWSLETTER

CONNECT WITH US

FOR THE LATEST JOB ADVERTS

DIGGER JOBS

Digger Motors

Digger Real Estate

Nzoia Water fails to remit workers' deductions amid claims of graft

Get Full Access for Ksh299/Week.

Stand With Bold Journalism. Stand With The Standard.

Related Topics

Trending Now

Popular this week

Latest Stories

The Standard Insider

Digger Classified

GET OUR NEWSLETTER

CONNECT WITH US

FOR THE LATEST JOB ADVERTS

Stand With Bold Journalism.
Stand With The Standard.