Mozambique: former water officials arrested for corruption

Mozambique’s anti-corruption agency GCCC has arrested the former director and financial administrator of the central regional office of the government’s Water Supply Investments and Assets Fund (FIPAG).

José Duarte and Henriques Leonardo were expelled from FIPAG in mid-2011, but it apparently took over a year to compile the case against them.

Duarte is accused of creating a private water supply company, Recta, which competed with FIPAG to supply water to ships in Beira port.

The activities of Duarte and Leonardo are said to have caused FIPAG losses of 37 million meticais [US$ 1.23 million].

The IRC International Water and Sanitation Centre is supporting Cowater Consultores Lda. to develop an appropriate anti-corruption strategy and plan with the Direcção Nacional de Águas (DNA) in Mozambique [1].

In April 2012, the government decreed that FIPAG would outsource water distribution to the private sector and restrict its activities financing and managing water assets [2].

[1] Developing a water anti-corruption strategy in Mozambique, IRC, 29 Nov 2011

[2] Mozambique: government relaunches water supply privatisation, Agencia de Informacao de Mocambique / allAfrica.com, 04 Apr 2012

Related websites:

• FIPAG – Fundo de Investimento e Património de Abastecimento de Água
• Water Integrity Network
• IRC – Transparency and Accountability

Source:

• Mozambique: Former Water Supply Officials Arrested, Agencia de Informacao de Mocambique/allAfrica.com, 02 Nov 2012
• Diário de Moçambique, Gabinete de Combate à Corrupção prende ex-directores regional e financeiro do FIPAG, @Verdade, 01 Nov 2012

Admission of corruption in Kenyan Water Ministry by Ngilu

Minister Charity Ngilu has admitted that corruption is widespread in the Kenyan Water Ministry. The minister explains that a range of factors form the combined cause of the prevalence of corrupt behaviour. These factors include violent water cartels, illegal water tapping, mismanagement and a weak Water Act 2002. As a consequence she has put a notice on all of the officers in the Water Ministry and plans to launch four water boards, hoping to curb the problem.

More information can be found here:

• Alphonce Shiundu, Ngilu puts Ministry officials on notice over graft, Daily Nation, 28 Sep 2010
• David Ochami, Peter Opiyo and Alex Ndegwa, Ngilu admits corruption rife in water sector, The Standard, 28 Sep 2010

Ghana: Ghana Water Company under fire

The Ghana Water Company Limited (GWCL) is under fire from both the government and anti-privatisation activists for poor service delivery and corruption. In the wake of this criticism, Aqua Vitens Rand Limited (AVRL), the private operator which supports GWCL since 2006 as part of a World Bank-supported project, has launched an effort to collect unpaid bills. The World Bank maintains that the project is making significant progress.

Full story

The Ministry of Water Resources, Works and Housing has constituted a committee to review the management contract between Ghana Water Company Limited (GWCL) and Aqua Vitens Rand Limited (AVRL).

The review exercise was prompted by the problems hindering water delivery, especially in urban areas, and the implementation of the US$ 80 million World Bank sponsored Urban Water Project between GWCL and AVRL. (See also Wikipedia – Water privatization in Ghana).

Water minister Albert Abongo said the misunderstanding between the AVRL and the GWCL about their respective responsibilities in regard to water operations, revenue management and maintenance of systems was having a debilitating effect on water.

Mr Abongo said government was not pleased with the performance of the expatriate management operator, AVRL, which was contracted by the previous government to improve management practices at GWCL.

He said it was too early at this stage to recommend termination of the contract.

Mr Abongo said a steering committee to be chaired by him, would help to address inefficiencies that would be identified by the review committee.

Answering a question as to whether the public should expect a shake-up in the management of GWCL, Mr Abongo said a change in attitude rather than a massive clean-up of personnel would reverse problems facing the company.

He asked the GWCL to tackle the diversion of company property by personnel for their personal use, which he said remained a major drawback on the operations of the company.

Mr Abongo said some staff of GWCL also connived with the public to engage in illegal water connections, depriving the company of revenue.

The National Coalition against Privatisation of Water (NCAP) is considering dragging GWCL and AVRL to court for what it describes as poor service delivery, if all the petitions and interventions it has brought against the two companies fail to yield the desired results.

The group has already petitioned the Serious Fraud Office (SFO), and was in the process of sending another petition to the Commission on Human Rights and Administrative Justice (CHRAJ), to investigate AVRL’s inability to meet their performance targets, as well as the claim that they made about GH¢30million [US$ 21 million] profit, which has been denied by the GCWL.

One of the key issues NCAP has raised about the management contract between the GWCL and AVRL is the reduction of Non-Revenue Water (NRW) by 5% each year.

Per the contract estimation, this should have been 40% in 2008, but the NCAP claims that it is 51.7%, that is 11.7% higher than the target.

According to the NCAP there has been only a 2% increase in production, mainly due to expansion works at Dalum (Tamale), Sekyere Hemang and Bafiakrom in the Central Region, with only a 1% increase in installed capacity.

The AVRL appears to be taking the criticism to heart by announcing that debtors will be disconnected and prosecuted if they don’t settle their arrears. It is offering a GH¢20 [US$ 14] reward for all “who divulge [via a Toll Free number] information on unscrupulous and anti-social citizens who indulge in malpractices like illegal connections, self reconnection, the use of in-line suction pumps.”

The World Bank remains upbeat about the Ghana Urban Water Project. In the FY09 status of report of projects in Ghana, published in October 2009, the Bank says:

“Significant progress has been made towards achieving the objective of restoring long-term financial stability, viability and sustainability of the Ghana Water Company Limited by: (a) having already reached the target of recovering 100% of the operation and maintenance costs from the utility revenues; (b) having surpassed the efficiency target of less than 10 employees per 1,000 connections; and (c) having promulgated the National Water Policy.”

Source : Accra Daily Mail / allAfrica.com, 19 Oct 2009 ; Ghanaian Chronicle / allAfrica.com, 16 Oct 2009 ; Peace FM Online, 02 Nov 2009

Kenya: water ministry has lost millions

The Water ministry may have lost millions of shillings through unexplained payments to water drilling contractors.

The ministry is hard put to explain the debts, which now exceed Sh930 million [US$ 13 million] and is suspected to have been lost at the National Water and Pipeline Corporation.

In a report obtained by the Nation [newspaper], the Efficiency Monitoring Unit based in the Office of the Prime Minister accuses the corporation’s board of supervising the near-collapse of the firm due to the debts.

The report focuses on the period before the 2007 General Election, when large sums of money were paid out to contractors and suppliers without invoices or government Local Purchase Orders (LPOs).

The report comes after investigations on the corporation’s financial position. The board had held a special meeting on October 9, 2008, seeking the assistance of the Inspectorate of State Corporations in the probe.

According to the report, though the corporation has applied for Sh550 million [US$ 7.7 million] from the government to offset the extra works under the 2006/07 financial year, it has continued to find itself in debt.

The report recommends disciplinary action and in some cases surcharges against former managing director J K Muchemi, head of procurement Ferdinand Musakhala, finance boss Stanley Mombo Amuti, and the head of internal audit, a Mr Onguso, as “culpable for the financial malfeasance and poor management”.

“It is very difficult to ascertain whether the goods/services were actually delivered/rendered given the situation where invoices are raised without prior orders being issued,” said the report.

Suspended

According to the corporation’s chairman, Prof Stanley Shitole, two employees have been suspended and three others asked by the board to step aside to pave the way for investigations following the disappearance of more than Sh30 million [US$ 420,000].

However, he denied reports that Sh10 billion [US$ 140 million] meant for water storage dams had been misappropriated. Water minister Charity Ngilu said she was studying the report, which she received last week, and would soon announce the action needed to restore the corporation to firm footing.

Source: The Nation / allAfrica.com, 25 Oct 2009

Kenya: Coast water firms to be amalgamated to two

Water and Irrigation Minister, Charity Ngilu. Photo: Business Daily

Are women less corrupt than men? Kenya’s water minister Charity Ngilu seems to think so.  In the controversy surrounding the Mombasa Water and Sewerage Company, she said she would only approve a new board “if it was gender balanced and that the treasurer be a woman to help contain mismanagement of public funds”.

Read the full story below:

Mombasa Water and Sewerage Company which has been at the centre of controversy will be dissolved following planned merger of all water firms at the Coast.

The plan involves merging all the water companies in the Coast to form two — one for the North and the second for the South Coast.

The dissolution of the company which has been dogged by allegations of mismanagement would be a slap in the face of local mayor Ahmed Mohdhar who has been fighting for the formation of a new board of directors.

Three years ago the ministry of Water disbanded the firm’s board of directors following alleged mismanagement of funds and since then the company has been running without a board.

Water minister Charity Ngilu early this year was to inaugurate a new board but had to call off the meeting after fierce protests from residents who disapproved of the people who had been picked as directors.

Mrs Ngilu said she would only give a nod to the new board if it was gender balanced and that the treasurer be a woman to help contain mismanagement of public funds.

But as tension rocked the company, Coast Water Services Board (CWSB) chief executive officer Idd Mwasina said all the water firms in the region would be merged into two.

[...] The CWSB boss added that the Ministry of Water came up with the new regulation so as to improve the management and operations of water services in the region.

He said another reason for the planned merger which is expected to be in force before the end of the year was to save some companies which cannot sustain themselves.

“Some companies have been struggling since the revenue generated cannot sustain their water operations. The aim of the companies is to ensure the commodity reach of all residents rather than for them to make profits,” Mr Mwasina said.

[...] It has also emerged that Mrs Ngilu rejected the formation of the Mombasa water company board since the mayor had flouted the nomination of directors’ process.

Source: Mathias Ringa, The Nation / allAfrica.com, 14 Oct 2009

Uganda: water sector clogged by corruption, US$ 32.5 million lost over last 5 years

The policy debate on establishing an independent water regulator has re-emerged after the sector woke up to a survey finding last week that between $5 million and $10 million meant to improve access to safe water for drinking in Uganda is lost to corruption annually.

A World Bank sponsored baseline survey on integrity in Uganda’s water supply and sanitation sector found that between 10 and 20 per cent of money given to contractors is spent on kickbacks, which significantly reduces the extent to which the contract can deliver on improving access to safe water and sanitation.

Some 54 per cent of private water operators said they paid 10 per cent of the value of the contract to win it, while 46 per cent of urban consumers confessed to paying extra charges to be connected to the water supply network.

Going by the fact that national budgetary allocation to the water sector is an average of about Ush130 billion ($65 million) over the past five years, the country could have lost about Ush65 billion ($32.5 million) to corruption in that time.

[...] To address outright corruption as well as influence peddling by politicians, some stakeholders are advocating an independent regulator, and introduction of integrity pacts between the government and contractors, to be monitored by civil society.

The idea of establishing such a body first emerged in 2003 after a series of corruption cases — notably the valley dams project, which former vice president Specioza Kazibwe was accused of mismanaging leading to the loss of Ush4 billion ($2 million) to the taxpayer. Corruption at the time was so pronounced in the sector that some donors like the Swedish government withheld funds.

The Ministry of Water and Environment believes in the concept and indeed sent officials on a study tour to Germany to learn from the experience there.

However, the National Water and Sewerage Corporation (NW&SC) argues that a regulatory body would only increase water tariffs in the likely event that players under regulation fund the watchdog’s budget.

Besides, there is no competition in that segment of the sector meaning that the regulator’s eye will be fixed on NW&SC only.

“We have set up a unit within the ministry already to try out the regulatory idea we learnt from Germany because they have one of the best water regulation systems in the world,” said State Minister for Water Jennifer Namuyangu.

An independent regulator would ensure adherence to procedures in procurement — where most corruption cases were reported; operations and management. It could also set performance targets and approve tariffs for the water utility, which is used to doing these things on its own.

Currently, regulation is done by performance contracts only, drafted with anti-corruption components, although these are understood to be ineffective because the unit that awards a contract to, for instance construct boreholes in the countryside, is the same party that supervises the work, and is responsible for the assets.

With pressure to perform from the top, there is a tendency for supervisors to appraise positively even when work is shoddy.

The management of NW&SC is instead advocating a regulatory framework with guidelines to be implemented by a select committee and supported by the existing accountability institutions such as the ombudsman and the procurement regulator.

However, the national water utility, although making a surplus, dedicates most of its internal income on recurrent expenditure while money for development spending is usually provided by capital injections from the government and donors.

In 2007 a process was begun for the could to convert a debt of about $90 million the company owed it into equity, so that the money can be invested in water infrastructure rather than paid to the exchequer.

Observers [...] point out that existing regulatory authorities have not exactly reduced the amount of corruption or improved efficiency in their respective sectors.

The World Bank survey was commissioned following the Inspectorate of Government’s National Integrity Survey in 2008, which recommended that sector studies on corruption be done.

Unlike some sectors, water does not have a regulatory authority, leaving regulation to be done by contracts only, and some bureaucrats and development partners think that its establishment will reduce corruption and improve efficiency.

At a meeting where results from the survey were presented, a notable recommendation from the consultant was to establish an independent regulatory authority with urgency.

Source: Malingha Doya, East African / allAfrica.com, 07 Sep 2009

At the 2009 World Water Week in Stockholm, Donal O’Leary Sr. Advisor, Transparency International (TI)
and Maria Jacobsson Associate Expert, WSP-Africa, gave a presentation on the Status of Water Integrity
Studies in Uganda. They mention that the findings were to presented at a Water Integrity Workshop in Kampala on 2-3 September 2009.

See also the case study “Uganda: Citizens Action for Accountable WATSAN Services in the Slums of Kawempe – Kampala City” published in March 2009 by the Water Integrity Network (WIN).

Kenya: Nairobi water board sent packing, acute water shortages persist in cities

The entire board of the Nairobi Water and Sewerage Company was sent packing over alleged mismanagement on 8 July 2009. A full council meeting of the City Council of Nairobi made the move citing unfair water rationing and illegal connections that have seen millions of cubic litres of water lost even with the rains failing substantially. The council fully owns the water company which was constituted in 2004 to streamline water operations.

Several residential areas in the city have not seen a drop of water for the last four months. The crisis has prompted residents of Kayole Estate to hold a protest demonstration alleging corruption in water supply and management.

“We note with a lot of concern that there are staff members who are involved in the cartels that have illegally connected water, worsening the water shortage,” said Nairobi’s Mayor Geofrey Majiwa.

There have been warnings of an outbreak of water-borne diseases due to the acute water shortage with some residents resorting to using water from contaminated rivers and boreholes. Since late December 2008, there have been 4,000 confirmed cases of cholera and 89 deaths recorded in Kenya.

Water vendors have been making a killing with a 20 litre jerrican retailing at between Sh10 and 50. For a 5,000-litre lorry, one has to part with Sh5,000. Ironically, these vendors buy the water from the boreholes for Sh500 for the same capacity.

The situation is the same in Mombasa where many residents go for as long as one month without water. “Despite paying monthly bills to the Mombasa Water and Sewerage Company, we have to rely on water from vendors,” says Michael Embasa, a newspaper vendor living in Likoni.

In Nakuru, some factories, including Flamingo Bottlers, Coil Product Kenya Limited and Kapi Limited, have been shut down due to perennial water shortages, while here also residents increasingly depend on vendors.

But the problem is worse in some low- income estates like Bondeni, Kaptembwa and Kwa Rhonda, where the residents are struggling to put a meal on the table. The water is sold at Sh20 per 20-litre can.

Ms Mary Kamau of Pangani Estate said the water problem had made life more difficult given the current hard economic times. “Washing my family’s clothes has become very difficult because the water is expensive,” she said.

“You do not know whether to buy water or food. It is even worse for us because vendors sell water in large quantities only, which makes it unaffordable for poor families,” she added and urged the government to intervene.

The water ministry is however optimistic, promising Kenyans that the situation will improve by December 2009. In June 2009, the government signed an MOU with the New York-based firm, EarthWater Global, for ground water exploration, starting Nairobi before expanding to the rest of the country.

Source: Casper Waithaka, Daily Nation / allAfrica.com, 08 Jul 2009 ; KBC, 11 Jul 2009 ; Sapa-AFP / IOL, 08 Jul 2009 ; Dave Opiyo, Daily Nation / allAfrica.com, 12 Jul 2009 ; Daily Nation / allAfrica.com, 23 Jun 2009

Nigeria, Kano State: residents taste first clean water in 10 years

Officials in northern Nigeria’s Kano State have rehabilitated a creaking water plant in the small town of Wudil, 30 km south of Kano city in an effort to bring residents cheap, safe water, but some question if the price will stay affordable. Less than 40 percent of Kano State’s population of nine million had access to clean water in 2004.

95-percent savings

[...] Before the plant was rehabilitated, up to 200,000 people living in and around Wudil relied on a nearby river, open wells or 25-litre containers of water purchased from private sellers at 7 US cents each. Wudil resident Ali Nera, father of nine [said] he paid US$1.30 every day for water for his family and to maintain his garden, which amounted to 20 percent of his average monthly salary. Now [...] he pays a flat US$2 monthly rate – a 95-percent savings.

Initially local people were sceptical about the government delivering clean water, according to a DFID report about the project. But some residents report that even the water tastes different now. “We now have safer, cleaner and tastier and cheaper water than what we were getting from [private] water vendors,” resident Kamilu Musa [said, adding that] his children no longer spend three hours every day walking to the well or river where they wait to collect water.

Subsidies

The Kano government currently heavily subsidises the water it provides: it costs the state 13 cents to produce one cubic metre of water, but users are only charged one-tenth this cost, which is not sustainable said Yahaya Bala Karaye, managing director of the Kano State Water Board.

“If we charge a higher rate and cover our overhead, they [residents] will be discouraged from patronising us and settle for river water or private water vendors with all the inherent health implications in doing so,” Karaye [said].

Private vendors [...] said water quality depends on whether they get it from the river, or open or closed wells.

Eventually, Karaye said prices must increase. “We are gradually sensitising the people of the importance of clean and safe water and once the people…appreciate the dangers of consuming unsafe water, we would add a small margin on the cost of production of the water we supply the public,” Karaye said.

Corruption

Musa Abdullahi Sufi, project coordinator at the Kano-based NGO, Society for Water and Public Health Production [said] in parts of Nigeria, corruption keeps water prices artificially high. “In many cases clean water is supplied to the public at higher than real costs due to corrupt practices by water board officials”. “Expenditure for the procurement of chemicals and other [water] treatment requirements is usually inflated and the added funds siphoned by officials,” Sufi added. States are responsible for supplying Nigerians with water.

But Karaye from Kano state’s water board [said] people should not make assumptions. “Some people assume every government agency is corrupt and therefore make wild allegations without any concrete proof to substantiate their claims,” Karaye said. “Here in Kano, our books are periodically audited by the government and we have never been implicated [in] financial impropriety.”

Source: IRIN, 30 Mar 2009

Zambia: Corruption in Water Sector Makes Clean Water a Pipe Dream

According to the Zambian Anti Corruption Commission (ACC), Zambia’s national rural and urban water supply programme which funded the drilling of boreholes for rural communities, is a prime example [of corruption in the water and sanitation sector]. “Instead of making water available to most of the rural poor, most of the boreholes were installed on government officials’ private plots,” ACC public relations officer, Timothy Moon, told IPS.

Another case, which is currently under investigation by the ACC, is a multi-million government tender to drill boreholes at two public universities, the University of Zambia (UNZA) and Copperbelt University, to supply water to the institutions. The ACC noted irregularities, because the contract was awarded after only one company tendered for it – a company which is registered as a food processing enterprise, not an engineering firm.

Reuben Lifuka, president of Transparency International in Zambia, recommends that to curb corruption in the water sector, government should put in place legislation ensuring that public-private sector contracts meet minimum international standards. “We need transparent budgeting and participatory policy-making so that we can have public mapping of water pollution, public audits of projects and access to contract terms and performance reports,” Lifuka demanded.

Despite a January [2009] announcement from Zambia’s finance and national planning minister, Situmbeko Musokotwene, to allocate additional resources to the water sector, many rural and peri-urban residents continue to go without adequate supplies. [...] Sanitation-related diseases including cholera and trachoma are the second biggest killer of Zambia’s children after malaria. Cholera has claimed more than 500 lives since November 2008.

Source: Danstan Kaunda, IPS, 20 Feb 2009

Benin: Water sector corruption “enormous”

Corruption has limited access to safe water for more than half Benin‘s population, according to the Ministry of Energy and Water. Authorities told [news agency] IRIN cash-strapped consumers are paying the price for mismanagement of the multimillion-dollar sector.

Over the past 20 years donors have given US$87 million to water sector reform in Benin, more than half coming from the Japanese government, said Blaise Dossa, the Water Ministry’s program coordinator for Japanese-funded projects. But even with donor support progress is slow, he said.

[...] Once donor monies are released to build new water sources, the often murky way mayors award project manager contracts is open to corruption, Dossa said. “The cost of these [management] contracts is inflated. Since only the mayor’s signature is required [to finalise a contract], it ends up being the consumer who pays the higher costs.”

Corruption watchdog Transparency International estimated in its 2008 Global Corruption Report that in developing countries water sector corruption increases household connection costs by up to 30 percent and costs the industry $48 billion in annual losses.

Government coordinator Dossa said rural water connections cost 20 percent more than urban ones in large part because of the difficulty stemming corruption in disparate and decentralised contracts.

But he told IRIN even contracts negotiated at the national level escape oversight, such as for the purchase of water construction materials including piping, faucets and pulleys. The contracts often include “fake” costs and officials pocket the difference, according to Dossa.

State water officials told IRIN they are trying to go after offenders.

[...] Corruption in urban areas and lost water resources have limited the state water company’s means to improve people’s access to water, according to Jean Michel Klican, assistant director of the water company, SONEB. “We want to provide water to everybody, but we cannot.” Profit losses from corruption are so “enormous,” they “cannot even be quantified,” he said.

[...] “There are people pretending to be metre counters for SONEB. There are SONEB employees who sell stolen water,” said Martin Assogba with the local NGO, Association Against Racism, Ethnocentrism, and Regionalism.

SONEB’s Klican said it has not been easy to catch culprits. “We know people are doing it, but we simply do not have the money to pursue everyone.”

Source: IRIN, 17 Feb 2009