Laikipia County is under pressure to remit 49.8 million shillings deducted from employees of two county owned water companies but not paid into their pension schemes, with the Senate demanding clear deadlines for settling the outstanding amounts.
The Senate Committee on County Public Investments and Special Funds did raise the issue during a meeting with Governor Joshua Irungu and his team to review the implementation of resolutions arising from the Auditor-General’s findings.
The committee is following up on its report on county public investments and special funds for the 2024/25 financial year, which was tabled in the Senate in March.
Nanyuki Water and Sewerage Company accounts for 25.65 million shillings of the outstanding deductions, while Nyahururu Water and Sewerage Company owes approximately 24.14 million shillings.
The money had already been deducted from employees’ salaries but remained unremitted to the relevant pension schemes, raising concerns about workers’ retirement benefits and possible penalties.
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Senate demands clear payment deadlines
Senator Beth Syengo, who chaired the sitting as the committee’s vice chairperson, said the county needed to demonstrate that it was implementing the Senate’s resolutions and provide a clear schedule for clearing the arrears.
“These are deductions already taken from employees,” Syengo said, insisting that the county provide evidence of implementation and timelines for settling the outstanding amounts.
She warned against allowing the matter to recur in future audit reports.
Senator George Mbugua questioned why the companies had continued withholding employees’ deductions, warning that the delays could affect workers seeking retirement benefits and expose the companies to additional penalties.
He said deductions made from employees’ salaries should be remitted as required and called for a definite date for settling the outstanding debt.
Governor blames unpaid water bills
Governor Irungu attributed the financial difficulties facing the water companies to unpaid bills owed by government institutions, including security agencies.
He asked the committee to allow the county until the end of the current financial year to clear the outstanding deductions, saying measures had been put in place to address the problem.
“We do not want this matter to recur as an audit query. The challenge is that government institutions owe the water companies significant amounts, but we have put measures in place and intend to clear the obligations within the financial year,” Irungu said.
The proposed timeline will be crucial in determining whether the county can settle the arrears and prevent further delays in remitting employees’ pension contributions.
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Senators question water tariffs
The meeting also raised concerns over the difference in water tariffs charged by the two companies.
Laikipia Senator John Kinyua questioned why consumers in Nyahururu pay 120 shillings per cubic metre, compared with 68 shillings in Nanyuki. Irungu attributed the difference largely to electricity costs, calling for intervention on power tariffs affecting water service providers.
The issue adds to the financial pressures facing water companies, which must meet operating costs while collecting outstanding payments from customers and institutions.
County addresses KSh6.3m customer deposit shortfall
The committee also sought assurances over a 6.3 million shillings shortfall in customer deposits held by the water companies.
The county reported that an escrow account had been established and was receiving daily deposits to restore the missing funds.
The Senate’s review places Laikipia County under scrutiny over the management of public resources and the implementation of audit recommendations.
For the affected employees, the immediate concern remains when the 49.8 million shillings deducted from their salaries will reach their pension schemes, as the county works towards its proposed end of financial year deadline.
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