Murang'a water wars: Wasreb stop bank accounts takeover

The Water Services Regulatory Board (Wasreb) has stopped Murang’a from taking control of bank accounts held by water service providers in the county.

In a letter to the county’s Finance Executive Secretary, Mr David Waweru, the regulator said the devolved government’s move was unlawful according to Water Act, 2016.

On March 28, Mr Waweru wrote to Equity Bank instructing it to change the trust and operations of bank accounts held by Murang’a Water and Sanitation Company Limited (Muwasco) and put them under two county government officials.

Mr Waweru said the accounts should be operated by chief officers Edwin Kimuyu (Revenue and Financial Operations) and Peter Kahora (Finance, IT and Planning).

The two should be the mandatory and alternate signatories, respectively, he said.

LEGAL BASES

Mr Waweru noted that Public Finance Management Act, 2012 gives the two officials the legal mandate and authority to issue banking arrangements, including instructions on operations and investment of funds.

“Please note that any transaction over the said accounts, undertaken otherwise than in strict compliance with the foregoing instructions, shall be null and void, and that the county government will not hesitate to take legal action to recover such loss and/or damage ensuing thereof,” said Mr Waweru in the letter.

The executive secretary further noted that the government’s decision was guided by Section 50 (1) of Murang’a County Water and Sanitation Services Act, 2019, that lists Muwasco as a devolved government’s entity.

Mr Waweru said that since the Act puts Muwasco wholly under the county government, all its assets, including cash held in bank accounts, also belongs to the devolved unit.

AUTONOMY

But Wasreb’s Chief Executive Officer Robert Gakubia told Mr Waweru that the change of mandate of the bank accounts could only be derived from the board of directors.

“There is no compelling reason to curtail the autonomy of financial management of water service providers as envisaged by Section 102 of Water Act, 2016,” Mr Gakubia added.

He also said Wasreb was yet to receive information from the county that would merit interference with the autonomy and ring-fencing of water service providers.

Mr Gakubia advised the county to focus on creating commercially viable water service providers in line with the national standards in article 191 of the Constitution.

EQUITY'S POSITION

Equity Bank, through its Murang’a Business Growth and Development Manager Benson Kinuthia, had refused to make the changes to the accounts.

The bank also told Mr Waweru that the approval of Muwasco’s board was required, and that the bank could be officially notified through a resolution.

In a letter, Equity added, “We also note that the Gazette notice issued on October 26, 2018, declaring the said entity (Muwasco), among others, as county government entities. However, this declaration does not legally dispense with the legal personality of the entities."