Inside irregularities which led to WASAC’s loss of Rwf19.1 billion?

On 16 May 2022 at 01:07

Water and Sanitation Corporation (WASAC) continues to experience losses and irregularities hindering complete distribution of water to all beneficiaries emanating from old infrastructures and other issues.

This was indicated in the the Auditor General’s report for the fiscal year 2020/2021 presented to the parliament on 12th May 2022.

WASAC was created in 2014. The Auditor General has indicated that the institution has been making losses since its creation that cumulatively stood at Rwf19.1 billion as at 30th June 2021.

Apart from losses in the management of WASAC, it is reported that the institution has unpaid debts including Rwf17.5 billion from Bank of Kigali to be repaid in 10 years.

The institution is also said to have another debt worth Rwf400 billion from the African Development Bank. The latter will be repaid in 16 years after a grace period of eight years at an interest rate of 2.5% per annum.

According to the report, this was exacerbated by the continued increase in non-revenue water from 44.1 % for the year ended 30 June 2020 to 45.6 % for the year ended 30 June 2021.

The Auditor General’s report showed that WASAC has in some instances paid the fixed cost of water at a treatment plant’s full capacity yet the consumption is below installed capacity.

From 19th January 2021 (being the service commencement date) to 31 March 2022, WASAC Ltd had incurred fixed costs amounting to US$ 3,825,232.66 (Rwf3.8 billion) for unsupplied water of 6,074,469.06 m3.

It has been also observed that WASAC’s water production reduced by 10% (on average, 6,392 m3 per day) which is related to its poor infrastructures.

Due to this reason, distributing water in districts of Kigali City is still a challenge where the institution has been devising water distribution policy from 2018 to March 2022 to the areas of Remera, Kanombe, Gikondo and Nyarugenge to address shortage.

Despite improvements in some areas, some parts of Kigali get water from one to four days per week.

According to Priority Area 5 of the National Strategy for Transformation One (NST1), the country is aiming to move towards a modern Rwandan household by increasing access to sanitation and hygiene from 87.6% in 2017 to 100% in 2024 and waste management systems were to be developed in cities, towns, and rural areas.

To support the realization of the above-mentioned objective, the Government of Rwanda acquired financing of US$ 440,442,000 for key investments from African Development Bank through Rwanda Sustainable Water Supply and Sanitation Projection (RSWSSP).

The City of Kigali has 1.3 million inhabitants but does neither have a centralized treatment facility for sewage nor a system of central sewer networks.

It has been four years since the project of setting up a sewerage system in Kigali City was designed. The Kigali Centralized Sewerage System was supposed to be completed in December 2021 at a tune of cost € 96 million as one of key investments to achieve the NST1 objective.

The completion period was extended to June 2023. However, at the time of the audit in March 2022, WASAC Ltd was still conducting the procurement process.

During field visits conducted in March 2022, the audit team observed that some water treatment plants were not operating. These include Cyunyu with the capacity to produce 1200 m3 per day. It was closed in 2017 due to high operating cost.

Another one is Gihengeli with the capacity to produce 3500 m3 per day. The plant does not operate during the rainy season and the infrastructure was old.

There are other plants that need to be rehabilitated with urgency to increase production capacity. These include Rwabusoro in Ngoma District and Nyamabuye in Gicumbi District.

The report also pointed out other anomalies including lack of water in Higiro-Kigembe-Mukindo water supply system along 104.3 kilometers. The system to distribute water to the districts of Gisagara and Nyaruguru was completed at a cost of Rwf3.5 billion. The issue arose five months after the infrastructure’s handover to officials.

Gaps in costly electronic management system

WASAC was created in 2014 replacing EWSA. To efficiently fulfill its duties, WASAC invested Rwf2.4 billion in a technology meant to facilitate service delivery and oversee water treatment, distribution and renovation of infrastructures.

The technology include the Oracle Enterprise Resource Planning (ERP) system used to enhance resources and projects management among others.

The institution also invested in Customer Management System (CMS), Geographical Information System (GIS) and Supervisory Control and Data Acquisition (SCADA).

The report indicated that the management of these systems are not promising to serve the purpose yet they took huge investments.

Moreover, it has been observed that there are former employees of the company who still have valid passwords granting them access to the systems which might provide loopholes for data leaks.

Among others, a total of 29,981 subscribers were reported to have water meters with similar serial numbers.

Kanzenze Water Treatment Plant in Bugesera District.