National water: The hard to swallow facts

By Dr Robert Rutaagi

Muhairwe managed to achieve a lot with acme flair, managerial versatility, and fastidious expertise

By early 1990s, most Public Enterprises in Uganda were doing badly. They were greatly underfunded by the ministry of finance, planning and economic development and donors. They did not enjoy adequate political support. They lacked managerial and entrepreneurial skills. The managers and staff lacked motivation. Insecurity of tenure was common and political interference the norm. Their performance was dismal and supplies of goods and services were at their lowest, in quantity and quality.

The NRM government, under Lt. Gen. Yoweri Kaguta Museveni, was settling down to serious business with the World Bank, the International Monetary Fund and the International Development Association. These Bretton Woods Institutions had proposed to the GoU to adopt macroeconomic policies of Liberalisation, Privatisation, Decentralisation, Regionalisation and Globalisation.

By 1993, the Enterprise Development Project had been established to implem ent the policies. In his book, Making Public Enterprise Work (MPEW), Dr. William Tsimwa Muhairwe, ably elucidates this socio-econo-political environment of PEs in Uganda. I was inordinately impressed by his understanding of the challenges of NWSC, as a microcosm of our public sector, and the valour with which he and the stakeholders managed to turn it around. He demonstrates his personal and management’s capabilities in the 415-page book. It is one thing to understand Uganda’s public sector to microscopic detail, like Muhairwe does, and quite another, to marshal up all human and non-human resources, manage them victoriously and record them so brilliantly in a book.

Challenges

In order to understand the challenges NWSC Management faced between 1998-2010 and appreciate its dramatic success one needs to do a strengths, weaknesses, opportunities and threats analysis (SWOTA).

NWSC is a Public Monopoly which has enjoyed GoU and donor support continuously for over 40 years. That has been an enormous strength which no other Public Organisation has enjoyed. Some of NWSC’ donors include but are not limited to the World Bank, Germany Government Institutions (GTZ & KfW), the Dutch Government and the African Development Bank. From that enormous and protracted support, NWSC was able to wisely and diligently build strong basic infrastructures that are fundamental for every success in the water sector. These include, waterworks, buildings, sewerage-works, logistics and ICT and other forms of technical assistance. Another gargantuan strength is the raw material as well as the product – water. “Water is life” (says a UNICEF slogan) and, indeed, it is. Water is a natural resource and even, by God’s standards, it was fairly abundant in Lake Victoria until, recently, when, because of environmental degradation, water levels started dwindling. Water also, being essential for life, enjoys the economic privilege of inelastic demand, in the face of any adverse economic vicissitudes.

NWSC, unlike many other PEs, has enjoyed reasonable security of tenure of its chief executive officers and other Senior Officers, for example, Eng. Hillary Onek, Eng.  Openyto and Dr. Muhairwe, the CEO emeritus. That was and is very important for NWSC. The beauty with the security of a CEO’s tenure is that, if he has good vision, mission, policies and style of management, the organisation will benefit immensely.

NWSC’ weaknesses are many but I will mention only a few examples: State ownership,  political interference, scarce resources, unmotivated staff, rampant corruption, poor incentives, reliance on foreign skills and resources, negative attitudes of stakeholders, debt burden, inefficiency, poor corporate image, sabotage, lack of trust which the motivated, dynamic, visionary and indefatigable Muhairwe, tenaciously turned to strengths and opportunities, to engender the level of success that is elucidated in his book – never mind how he did it! No wonder hardly four months after his departure, metric tons of managerial problems are beginning to weigh heavily on the shoulders of the same team without its driver.

Dr Muhairwe had innovatively designed, initiated, negotiated and dynamically implemented the 100 days programme, the Service Revenue Enhancement Programme, the One- minute Manager, the Checkers System , the Corporate Performance Contracts, the Area Performance Contracts, the Internally Delegated Area , External Management Contracts and aggressive and productive Public Relations Programmes that included but were not limited to constructive engagements with Government bureaucracy, donors, foreign governments, PPDA, NWSC Management and Board of Directors, Staff and the Union, the media and the general public, including customers.

Regarding opportunities, NWSC has enjoyed government and donor support for a long time, through its Line Ministry of Water, Lands and Environment, Ministry of Finance, Planning and Economic Development as well as other multifarious Donors. Water is a natural resource which God supplies in reasonable quantity from Lake Victoria. The demand for water is always guaranteed.

Threats include: Privatisation, draughts that affect water levels of Lake Victoria, possibility of some donors withholding their timely support or giving unfavourable conditions, unprecedented debt burdens (Over Shs 150 billion), until they were written off to cleanse up the books, and possible Court action for delayed financial obligations to, especially, suppliers before solutions were found by the Muhairwe-led management and board.

All this success, Dr Muhairwe and his team managed to achieve with acme flair, managerial versatility, fastidious expertise and extraordinary motivation.

NWSC success is not only eloquently demonstrated in black and white in his book, it is also beautifully displayed on Dr. Muhairwe’s Office wall-niches with splendid Awards: East Africa’s most Respected Enterprise Winner 2007, UMA Best Exhibitor, E.A Star Performer, Best Employer of the Year (thrice), ITF Best Exhibitor, Energy Management Awardee (2008), Bentley (USA) Innovation Awardee , Golden Star for Management merit and URA Vantage Award.

NWSC, according to ‘Making Public Enterprises Work’ is an excellent case study and an eloquent exposition by the very punctilious actor and driver of the very team that has been responsible for the melodious music, dance, drama and the enjoyment of the good results, admirers happily talk about today.

Deeper analysis

Hardly four months after Dr Muhairwe ended his meteoric career when the Board of Directors advertised his job instead of renewing his contract, there emerged acrimonious debates in Parliament, the print and electronic media and Regulatory Agencies, that NWSC was laden with enormous debts. One newspaper which for over ten years had praised NWSC Management for excellent performance, carried a story which argued that:

“National Water pumps hot air to keep good image… National Water Agency is chocking on debts estimated in billions of shillings. It is said NWSC’s water treatment plant in Ggaba is no longer viable to sustain the needs of Kampala, yet the Corporation has continued to paint a rosy picture of itself. The Board allegedly accused top managers at the agency of being obsessed with maintaining a good image of the corporation to the extent of falsifying records to support the claim”!

According to Muhairwe’a book, only ten 10 percent of the Sewerage Services Sector, has been addressed, 70% of the water sector has been under Foreign Contract Management, leaving only about 30% to NWSC Management. This excludes the Water Sector resources handled by different Water Departments and Water Boards in different towns in the country under the central and local governments.

The cost of water, by global standards, is exorbitant. In his book, Muhairwe shows that the measures of NWSC Corporate success were:

• Stopping water leakages (loss).
• Provision of Consumers’ accounts accurately and effectively.
• Efficient and effective payment system (in Banks and by phone).
• Efficient and effective water supply regulatory mechanisms.
• Excellent customer care management.
• Polite responses to Customers.
• Punctual and regular bills.
• Amnesty for illegal consumers (100 days).
• General improved services.
• Positive attitude.
• In the corporate world, performance indicators usually include, interalia:
• The Balance Sheet Analysis.
• The Profit and Loss Analysis.
• Financial Ratios Analysis and Interpretation.
• Debt Analysis.
• Pay Back Period.

None of these indicators are discussed in the 415 page.

In 2005 Parliament wrote off Shs 154 billon debt from NWSC books. Six years later, it is still debt burdened! Unless NWSC uses different accounting standards, it is, technically, hard to reconcile that scenario. Probably, the best litmus paper for the good performance of NWSC would be to compute the total net profit earned (1998-2011) and weigh it against the Shs 154 billion and the accountability of how it was invested. Short of this, NWSC would turn out to be a legendary case study that is the epitome and embodiment of modern Pentecostal Management. It would be based on deceptive excellent public relations to achieve quick fix managerial solutions, using methods which are devoid of all canons of good corporate governance enshrined in transparency, accountability, equity, fairness and economic efficiency and effectiveness.