The world over, the role and eligibility of the state in the provision of water supply is increasingly coming into question. Policy makers and analysts are advocating the abdication of the state in favour of private participation. Kenya is one of the developing countries that have endeavoured to privatise their water sectors. This was done by enactment and implementation of the Water Act of 2002. This paper critically examines the reforms proposed and implemented for water supply and sewerage services in favour of private sector players against the backdrop of privatisation policy. Specifically, it looks at the institutional options that are possible vis-a`-vis what the reformers have settled for. The paper finds that, contrary to the claims that the private sector is involved in the reform process, it has in fact been barred. The public participants' position, on the other hand, has been strengthened against the basic objectives of reform. The author's recommendations include that the government should go ahead with the enactment of the Privatisation Act and hence require all the sectoral reform initiatives to comply with the objectives of the Act. The Act will form a comprehensive national policy framework in which the water reform policy should fit. This will give the water sector a clear direction on how to proceed with market reforms. For this to happen smoothly, an overriding clause should be included in the Act to the effect that, past reforms not withstanding, all sectors should conform with the Act to the extent that these sectors need to privatise services.
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