NRWB in hot soup, sitting on over K100bn debt

 Northern Region Water Board (NRWB) is struggling to pay back loans it got to implement water projects due to debts that have piled up to over K100 billion.

The board’s senior officials revealed this

 yesterday in Lilongwe when they appeared before the Public Accounts Committee to explain the losses that the institution has been making over the past six years.

NRWB chief executive officer Francis Munthali attributed the poor performance to low water tariffs which he said are not cost-reflective.

He said since 2018, NRWB has been failing to generate enough revenue to recop expenses and investment in water projects.

For example, Munthali said the board spends over K19 billion a year to supply water.

He said: “We get loans to do projects so that we can supply water to people but we are supposed to pay back. We can only pay back if we are generating adequate revenue from the people and tariff is one key factor.

“We have requested government, officially, to look at these loans and restructure them so that we are able to pay them on a longer period because tariffs prevailing now are not able to allow us generate adequate revenue to pay.”

Munthali further revealed that NRWB has asked Ministry of Finance and Economic Affairs to consider having some of the loans restructured so that the board is given room to “breathe and pay for a longer period”.

According to him, the last time the board made a profit was the 2017/2018 when it made a profit of K247 million.

Munthali appealed to the committee to help the board in fighting for tariff adjustments.

He said: “In 2022 we made a loss of K1.7 billion but what is worrying is that up to now we have continued to make losses.

“In 2023 we made a loss of close to K6 billion and so too in 2024 we made a loss of around K6.1 billion and the real issue is that the tariffs are not cost reflective.”

Munthali said the board has also had challenges collecting revenue from public institutions as they always complain of low funding.

In response, Public Accounts Committee chairperson Mark Botomani cautioned NRWB that posting losses annually is not healthy for the institution and the taxpayer.

“Chances are high that someday the board will not be able to supply water to its clients and connect more people if the trend continues,” he said.

However, Botomani said the committee will come up with a report on the complaint of low tariffs on water as other water boards in the country are lobbying for an increase in tariffs so that they are cost reflective.

On restructuring of the loans, he said the committee will also engage Treasury to see how NRWB can be supported.

In his 2022 report, the Auditor General predicted that NRWB financial performance was too poor and would lead to further losses in the years ahead.