Case for Runda Water Ltd Runda Water Ltd – WASPA Presentation – September 2011

Case for Runda Water Ltd

Runda Water Ltd – WASPA Presentation – September 2011

Runda Association was started in 1998 as Old Runda Residents and Plot Owners Association and was officially registered in 1999. Its sole primary aim was to bring all the residents together with a common goal for making Runda a better estate to live in.

Runda, being an up market Estate, houses many diplomats, United Nations staff, International organizations and high ranking Government officials including cabinet ministers.


The objectives of the Association are to promote, protect, improve and develop the estate for the general interests of its members including:-

The promotion of social interaction within the membership. The promotion of environmental awareness within the

membership. The protection and development of the common and

natural resources within the Estate and region. The improvement and development of infrastructure

facilities within the Estate and region. The promotion of social services within the state and

region. The enhancement of security within the Estate and

protection of common interests from external factors. Any other object related and incidental to the above which

the members may at their discretion consider capable of being carried out for the benefit of the Estate.


It is in the light of these objectives that Runda Association bought Runda Water Ltd from its previous owners, Pan Africa Insurance Company in 2003 with a view to:-

Rehabilitating and maintaining the water production facilities which were in a dilapidated state due to neglect.

Getting adequate apportionment and allocation of water resource from Water Resources Management Authority.

Involving residents in water management and conservation.

Ensuring adequate and continuous supply in future.

Protecting the quality of water resource. Recovering production costs as a means to

sustain the service.


HISTORICAL BACKGROUND

Runda Water Ltd (RWL) was registered in 1973 to provide piped water to the up market Residential Housing Estate (old Runda) of about 7km2 which Mae Properties Limited was developing at that time. This was necessitated by the fact that, Nairobi City Council’s Water Department was unable to extend their water supply network from UNEP Headquarters (Gigiri) to the new estate.


RWL was therefore granted a license as water undertaker within land block 7785/10 Nairobi by the Ministry of Water Development and started operating in 1975. Over the years, the company has developed and expanded on its core operations of water supply to offer four (4) other services to the residents which are incidental to maintenance of quality water supply . The four services are:-

a) Estate cleaning and maintenanceb) Domestic garbage collection and disposalc) Streets lighting and maintenanced) Security for water installations and the whole

estate in general.Runda Water Ltd – WASPA Presentation –

September 2011

From a consumer base of 82 households in 1975, the company currently supplies water to about 950 customers and has capacity to supply an additional 300 households.


a) Source of Raw Water RWL almost entirely relies on Ruaka River. Water

Resources Management Authority (WARMA) has permitted us to abstract a maximum of 2700M3 per day. We currently abstract 2500M3 of water per day and we distribute 2000M3 of clean water per day.

Monthly Water Data Abstraction 75,000M3

Distribution 60,000M3

Sales (Invoice0 44,000M3

Flushing Points 6,000M3

UFW 10,000M3 (16%)

We also have a borehole with a yield of 100M3 per day. We supply an area of 12km3 in Old Runda and Mimosa with a piping length of 30 Kilometers.


b) Expensive Treatment and Distribution System

Our scheme is expensive because it involves three (3) stages of pumping :-

We pump at Intake works, then use rapid filtration at the treatment plant, and supply using pressure pumps on daily basis. This cost us Kshs.1,000,000 (One Million) per

month on electricity alone


c) Steps being Taken to Reduce Costs

We have bought an adjoining piece of land to construct water recycling tanks from the treatment plant.

We are rezoning our supply system by supplying only elevated areas with pressure pumps and low lying areas by gravity from the water storage tanks.

We are in the process of starting rain water harvesting scheme with the residents subject to availability of land, we intend to construct a gravity filtration process instead of the current rapid filtration system which is very expensive.


d) Storage Facilities We have four clean water storage reservoirs. Volume (M3) Ground Tank 1,000 Elevated Steel Tank 440 Ground Steel Tank 270 Ground Concrete 600 2,014

We have a challenge in storage capacity because of constrains on land. The land in Runda Estate is very expensive but the Board of Runda Water Ltd is looking into this problem.


e) Customer Satisfaction All customers have meters and new connection is done

within three (3) days.

We have installed generators at the Intake Plant and the Treatment works so that, KPLC power interruptions do not affect the water treatment and supply.

Water is currently distributed 24 hours per day throughout the year but we are advising our customers to install storage facilities so that water is not pumped every day.

We have a laboratory where all required water tests are

done. Residual chlorine is carried out four (4) times per day.

Samples of water are sent to the Government chemist for analysis and issue of satisfactory certificates.


f) Use of Information Technology Our bills are sent electronically to all customers

by the 25th day of every month. We have a billing software which processes meter readings and sends bill via email.

g) Control of Un-accounted for Water (UFW) We do constant surveillance on the distribution

network to ensure there are no illegal connections.

Breakages are attended to very promptly. We are recycling water from the treatment plant.


h) Corporate Social Responsibility Runda Water Ltd has installed three (3)

community water kiosks within the estate where visitors and passersby can get water free of charge

i) Strategic Plan The company has a five year strategic plan in

which medium term objectives are clearly stated. The annual capital expenditure budget and the recurrent budgets plan for what is to be achieved in the next one year. The strategic plan is reviewed on yearly basis and this helps to measure performance against forecast.


1. Domestic Garbage Collection Garbage is collected from all residential

houses three (3) times a week, that is, twelve (12) times a month.

2. Street and Roads Cleaning and

Maintenance We have a team that operates all over the

Estate on daily basis. This service includes cutting grass on road verges, clearing blocked drains, cleaning roads and streets and clearing any rubbish which may have been left on the road sides


3. Lighting the Estate This is daily maintenance of street lights

within the estate by replacing bulbs, capacitors, chokes and cut-outs as well as replacing fallen poles.

4. Security Services This includes manning entrance barriers on

24 hours daily, 365 days per year. We also do patrols within the Estate and use VHF radios for communication within the estate to reduce incidents of insecurity.


In accordance with AWSB requirements, all the services have separate cost centers with water utility being ring fenced. The separate rates are agreed by residents in general meetings.

We have found the provision of these services to be very pertinent to the maintenance of high quality water arising from collections and disposal of garbage and rubbish which would otherwise end up in contaminating our source which is River Ruaka. The ever maintained security in the estate ensures there is no dumping in the wrong places.


Since the inception of Water Act 2002, RWL has complied with the institutional arrangements demanded by the new Law. RWL has signed a Water Service Provision (WSP) Agreement with Athi Water Services Board (AWSB) and we have an SPA signed by WASREB.

It has put in place water supply facilities for exclusive supply to the residents.

RWL has the exclusive right to provide water services within its approved area to avoid unhealthy competition.

The necessary water abstraction permits have been obtained from Water Resources Management Authority (WRMA) as per the requirements of the new Act.

RWL is involved in establishment of Water Resource Users Association (WRUA).


RWL recognizes water supply is a human right and should be provided to the residents. The company is a non-profit making entity and no dividends are distributed to the shareholders.

It is the duty of RWL to ensure natural resources

are shared equitably by all without discrimination. a)However, quality water supply will require the

following inputs:-b)Effective treatmentc) Secure distribution systemd)Continuous quality monitoringe)Regular maintenance of the distribution system.


Therefore, there are costs involved such as a)Replacement of aging pipes b)Expansions and renewals to cater for growing

population c) Laboratory expenses to monitor qualityd)Chemicals for treatment and electricity for

distribution pumps.

Every person (individuals) has a duty to co-operate with state organs and other organizations to protect and conserve the environment and ensure ecologically sustainable development and use of natural resources.


In the case of Runda Association, RWL fully understands the needs of the customers. There is a very strong relationship between the water company and the customers who are ultimately the owners. Customers’ needs are well taken care of and customer complaints are addressed promptly and without delay.

Customers are required to participate in cost sharing for sustainable maintenance of the facilities. It is in this light that tariffs requests are sent to Water Services Regulatory Board (WASREB) through Athi Water Services Board (AWSB) with justifications for approval.

Therefore, profits made by the Company are ploughed back into infrastructure development and maintenance for sustainable growth and improvements.

The residents who are the shareholders ultimately benefit

through continued utility service provision and enhancement of values of their properties resulting from adequate water service and other estate maintenance activities.


RWL diligently recognizes the mandate of AWSB and WASREB. It maintains assets in good and insurable working condition, fulfils performance targets and exceeds minimum service level and employs and retains right caliber of personnel.

RWL complies with all relevant laws and regulations, eg, from NEMA, AWSB, WASREB, WRMA and Nairobi City Council.


One of the problems we have is heavy dependency on electricity supply because of the design of our treatment and distribution systems which we are currently reviewing. When there is electricity failure, we resort to use of generators both at our intake and treatment and distribution plants which are very expensive.

Efficiency in the energy sector has therefore

a direct impact on our operators.


Incorporate New Runda and Runda Evergreen Estates into the water supply system so that the wider Runda can benefit from uniform supply of water and services and make it a clean and organized big estate.

The Association will benefit from economies of scale of its operations which will be ploughed back for further improvements.

RWL is actively investigating other sources of water supply to meet its anticipated growth in demand for its services. The future of the company is set out and monitored in its Corporate Plan.


Documents

Case for Runda Water Ltd Runda Water Ltd – WASPA Presentation – September 2011