Revenue Generation Aspects That Influence Financial Sustainability of Public Water Utilities in Kenya: The Case of Homa Bay Water and Sewerage Company Limited

Abstract

Water sector reforms entrenched commercialization of water services and necessitated establishment of autonomous public utilities to cushion poor citizens from high market prices and guarantee access to water. The purpose of this study was to demonstrate how well the utility prepared its revenue generation operations to achieve financial sustainability in the commercialized water market. A cross-sectional design, with mixed methods approach, was applied, and primary data sourced in mid-2017 from water officers, users and committee members. Quantitative analysis techniques included cross-tabulation with Chi square statistic, Relative Importance Index and Kendall’s Coefficient of Concordance. The results show that non-revenue water was the most important aspect of revenue generation influencing the utility’s financial sustainability (relative weight = 0.879); followed by efficiency of the billing system (relative weight = 0.866); efficiency of revenue collection (relative weight = 0.853); and unaccounted for water (relative weight = 0.790). A strong and significant concordance of views expressed by different respondents implied that the revenue generation pillar was not adequately set to enable the utility achieve financial sustainability in the commercialized water market (Kendall’s W= 0.893, χ2 = 71.222, df = 4 & ρ-value = 0.000). The study amplifies need for the utility to control non-revenue and unaccounted for water; forge active partnership with community administrative structures and groups for early detection and reporting of physical leakages, pilferage and defective metering equipment; among other measures.