Govt contributing to utility bodies’ woes
The dismal performance by the country’s utility bodies reflects how the government continues to deny them the opportunity for total financial independence as ministries, departments and agencies (MDAs) default payment of bills which squeezes the boards to the bone.
Finance Minister Goodall Gondwe was quoted by our sister paper The Nation in June this year that MDAs alone owe public utility service providers in the country in excess of K10 billion in unpaid bills dating back to the 2015/16 financial year.
In a clear example, the Blantyre Water Board (BWB) which was said to be owed K1.3 billion by MDAs alone had its electricity disconnected last month for unpaid electricity bills of around K2.7 billion.
Sources within BWB told the Weekend Nation that the utility body has had to alternatively use diesel operated generators to pump water from its Mudi dam to supply various areas in the city of Blantyre.
On Tuesday, BWB spokesperson Pricilla Mateyu confirmed about the development, but quickly stated that it was a closed chapter as BWB had been reconnected after settling its outstanding electricity bill.
She, however, asked for more time to give an explanation on why the board accrues huge amounts of electricity bills.
In April, BWB disconnected police staff quarters in Blantyre and Limbe for an outstanding bill of K340 million while Chileka Airport suffered a similar fate for failure to square a K32 million water bill.
However, Treasury spokesperson Nations Msowoya on Wednesday acknowledged that government has been partly responsible for the scenario where utility bodies have been owed billions of kwachas by MDAs, a development that has cramped on their operations.
“Yes, the minister indicated that the government will be paying arrears for utilities [Escom and water boards]. Treasury has started paying off these arrears. Treasury has paid off for bills that were authenticated and audited. As for the arrears, we still require more information to do a proper reconciliation before we can pay,” he said.
Said Msowoya: “Payment of utilities is indeed the responsibility of each MDA, but in practice they find it very difficult to prioritise payment of utility bills. With a bit more sensitisation we hope this can be corrected in future. Institutions need to understand the importance of paying for their bills. The utility companies are also being encouraged to be more aggressive so that they collect what they have billed.”
The Ministry of Finance Annual Economic Report of 2016 records that BWB had reported losses from its 20/15 audited accounts of K352.7 million, which was a slight improvement from K424.614 in 2013/14.
Among others, the poor performance, according to the report, was attributed to poor sales volumes arising from the delayed completion of the Walker’s Ferry Project that resulted in lower water production than what was budgeted for including non settlement of bills by government institutions and private debtors.
As of June 30 2016 another public utility body, Lilongwe Water Board (LWB) was being owed K2.2 billion by various MDAs, including Malawi Defence Force (MDF), Malawi Police Service (MPS) and public tertiary education institutions. n
