The National Water and Sewerage Corporation (NWSC) has revealed that unpaid water arrears from government institutions have risen to UGX 100 billion, further worsening the Corporation’s financial crisis and hindering the extension of water services across the country.
Silver Mugisha, Managing Director of NWSC, made the revelation while appearing before Parliament’s Committee on Environment and Natural Resources, chaired by Harbert Ariko, during scrutiny of the Corporation’s 2025/26 ministerial policy statement.
“It is true that agencies owe NWSC a lot of money for water bills—currently at UGX 100 billion. The accumulation of these arrears is mainly due to under-budgeting. Government agencies budget less than what they consume. It’s not that they receive the money and refuse to pay, but rather, the allocated funds are insufficient to cover the actual usage,” Mugisha said.
Responding to questions from the Committee on why the Corporation hasn’t intensified the use of prepaid water meters to ease debt collection, Mugisha attributed the slow rollout to the high investment required for such systems. He noted that prepaid meters can be rendered ineffective if credit is not maintained on them.
“There was a time when we experienced a hack, and the prepaid water system stopped functioning. Fixing it was very costly. That’s why we’ve been slow to roll it out. We prefer to develop our own prepaid meter technology that we can troubleshoot independently. We already have a prototype and are working on scaling it up,” Mugisha explained. “We’ve also observed that acquiring electricity prepaid meters is much cheaper.”
He added that prepaid water meters require consistent credit to function. However, in some government ministries where these meters have been installed, the Corporation has faced challenges with agencies running out of credit. In such cases, the Ministry of Finance often advises the Corporation to reconnect services, thus rendering the prepaid system ineffective and a waste of resources.
NWSC also defended its decision to convert the employment terms of some staff to part-time as a cost-cutting measure, citing that employee-related expenses now account for 42% of the Corporation’s budget.
Mugisha stated, “NWSC is facing significant challenges, mainly due to non-payment of water bills by government institutions, which stems from under-budgeting, and the rising cost of operations. Additionally, employee benefit costs are high, currently at 42% of the total budget, compared to the industry standard of 35%. That’s slightly above the norm.”
He emphasized that the Corporation’s current trajectory conflicts with the National Water and Sewerage Corporation Act, which requires the entity to remain financially and commercially viable.
“This trend contradicts our mandate to operate in a financially and commercially sustainable manner. Our survival depends on maintaining financial viability,” Mugisha noted.
The Corporation denied allegations that staff are being forced into part-time roles. Mugisha clarified, “The NWSC Board of Directors approved this policy to help the Corporation remain operational and resilient, despite the prevailing challenges. If we can reduce staff costs from 42% to 35%, we will have more funds to invest in expanding water access.”
He added, “We’re not forcing anyone. We issued a call for expressions of interest for part-time roles. At contract renewal, we assess staff performance against our criteria. If someone’s contract expires, we offer new terms—for instance, three days a week. Can that be considered coercion? Isn’t it better than what MPs did during the rationalization process, which left many people jobless or underpaid?”
