Opening Remarks by:Eng. David stower, CBS,OGW Permanent Secretary Ministry of Water and Irrigation during the closure of corporate governance workshop of Lake Victoria North Water Services board at Kakamega On 11th june, 2010
Chairman, Lake Victoria North Water Services Board,
Board Directors, Lake Victoria North Water Services Board,
Chief Executive officer, Lake Victoria North Water Services Board,
Members of staff, Lake Victoria North Water Services Board,
Distinguished Guests,
Ladies and Gentlemen,
It gives me great pleasure to be with you here this morning to share with you some of my thoughts on the subject of your training which has just come to an end. Before I proceed any further, let me start by congratulating all of you for having been appointed as new Board Members to the Lake Victoria North Water Services Board for a term of three (3) years. You bring to this Board a diversity of skills and experiences which should be able to steer the management to even greater heights of achievements.
Ladies and Gentlemen,
As you are aware, the government introduced far reaching reforms within the water sector seven (7) years ago with ushering in policy and legal framework anchored on the Water Act, 2002. Since then, a number of achievements have been realized by the government and stakeholders at large. All the institutions identified in the sector framework have been established and are functional. Secondly, we have witnessed improved efficiency in water services delivery, we have witnessed improved water catchment and new investments in major water programmes. A number of large dams are either under implementation or planning stages to scale up the water security of the country which as you all know falls far short of international benchmark. In this regard, the Ministry has earmarked twenty five (25) large dams for completion by 2015. These dams which are multipurpose will also support irrigation projects and be used as flood control devices and estimated to cost about Kshs.60 billion. May I also inform you that you should work closely with other water institutions in the region in order to optimize on resources. In this region of Lake Victoria North Water Services Board, there are huge water resources through rivers some of which have been a problem to control and hence flooding destruction. You have river Nzoia, Malaba, Sio, Yala and many more draining the region. One could look at this region as a water surplus region which is envy of other regions in the country. To take advantage of these enormous water resources, the government has allocated huge resources on water schemes. You have for instance the recently completed Nzoia cluster project funded by KfW and the World Bank which covers many towns in the region. There are also many shallow wells developed under the Kenya/Finland Western Water Supply Programme of 1990s. The challenge that now faces this Board is how to ensure that these water schemes are managed sustainably so that reliable water services are enjoyed by local residents. I say so because it is not enough to have abundant infrastructure in place. Efficient, organized and focused management is an absolute necessity if the impact of this investment is going to be realized. The legal and policy framework to assist in achieving this objective is in place. Sound corporate governance is the one fundamental factor that must be constantly in play if the investments are going to be translated into impact. The government has consistently emphasized a culture of good corporate governance in all public institutions including Ministries and State Corporations. Corporate governance rests on a number of pillars namely;
a) Discipline – a commitment by an institution’s governance organ to adhere to behavior that is universally recognized and accepted to be correct and proper.
b) Transparency – the ease with which an outsider is able to make a meaningful analysis of an institution’ actions.
c) Independence – the extent to which institution has put in place mechanisms to ensure that decisions made are informed, objective and in the best interests of the institution and society and that those decisions are not influenced by personal, group or other interests or by dominant influences.
d) Accountability – the extent to which the institution has put in place mechanisms to ensure that those who are entrusted with its power, assets and resources and constantly held to account for the exercise of the power for their decisions and actions and in that there is put in place processes to ensure that those who “cede”, delegate and entrust the power” are provided with meaningful mechanisms by which to asses, review and question the actions of “those to whom the power is entrusted”.
e) Fairness – balancing the systems that exist within the institution to take into account all those who have an interest in the institution and its future and acknowledging and respecting the rights of the various groups.
f) Efficiency and effectiveness – ensuring that whatever the proves or activity it achieves the best and highest quality product or service at the lowest possible cost.
g) Social responsibility – ensuring that all aspects of the social responsibility of the institution are brought under scrutiny and that the institution responds and is responsive to social issues while placing a high priority on ethical standards. A good corporate citizen is increasingly seen as one that is non-discriminatory, non-exploitive and responsible with regard to environment and human rights issues.
It is no secret that most of you do not require a lecture on these concepts of good corporate governance. What matters above all is your commitment to uphold and embrace these concepts and inculcate them in the management of the Board affairs.
Ladies and gentlemen,
As you are aware, corruption remains a big challenge in our public institutions and the government has been steadfast and remains so to rid of this vice. The Ministry will continue to fight this vice within its institutions so that the public can have value for money. The water companies in particular have had and continue to have major challenges related to governance weaknesses. For instance, Boards of Directors of these companies are so large that they are unsustainable and eat into the water revenues intended for sustenance of water services. In this regard, quite a number of water service providers/companies are unable to break even on recurrent costs let alone meeting the cost of capital investments as required by the policy. Some Boards have been known to squander financial resources for unnecessary Board meetings. A number of companies have serious institutional capacity problems and this is impacting negatively on service delivery. In this regard, it is therefore, your concern as a Water Services Board to scrutinize the service provision agreements (SPA) that you enter into with the companies to ensure that proper governance structures and principles are in place. You should also resist undue political pressure which is occasionally exerted on these companies to deviate them from proper governance. The Ministry on its part will ensure that appropriate policy guidance is provided to create an enabling environment for the Board and the Water Companies to function properly. For instance, some work is already underway to establish the viability of some water companies with a view to clustering those which are unsustainable into single entities. This policy guidance has severally been misconstrued by a section of stakeholders in the water sector to amount to interference by the Ministry which is false. The Ministry of Water and Irrigation has a mandate to ensure that water services are provided in the whole country efficiently and properly and that resources placed at the disposal of Water Services Boards and Water companies are properly utilized and not misappropriated. This mandate shall be exercised diligently so that the public is not taken for a ride by few individuals engaged in corrupt practices.
Finally, let me take this opportunity to congratulate the Lake Victoria North Water Services Board for achieving the high ranking in the just concluded release of the Performance Contracting Results. I hope that the new Board will build on this performance record so that next year the results will even be higher.
With these remarks, it is now my pleasure and duty to close the Corporate Governance Training Workshop.
Thank you.
ENG. DAVID STOWER, CBS, OGW
PERMANENT SECRETARY