The parliamentary cluster on Agriculture, Natural Resources and Climate Change has recommended that ministries, departments and agencies (MDAs) be installed with prepaid meters to prevent utility providers from being choked by unpaid arrears.
The cluster made the recommendation after noting that MDAs account for a large portion of the K54 billion owed to the Electricity Supply Corporation of Malawi (Escom) in unpaid bills, some of which have been outstanding for over a month.
Presenting the cluster’s report in Parliament, chairperson Tiaone Hendry said MDAs have demonstrated reluctance to pay Escom bills despite receiving utility allocations from government, hence the need to install prepaid meters.
Hendry said: “We have the Malawi Defence Force, Malawi Prison Service, MBC and all water boards, among others, failing to clear their bills with Escom, yet they have been allocated utility funds. How can Escom perform efficiently in such circumstances?
“Your committee, therefore, makes the following recommendation: all MDAs should be installed with prepaid meters. This will address the challenge of non-payment of bills.”
of non-payment of bills. | Nation
The cluster’s recommendation follows calls by Escom board director Welford Sabola for the installation of prepaid meters in MDAs to curb revenue losses that continue to affect the corporation’s cash flow.
“In terms of revenue collection, we need to consider scalable metering systems. We also need to address areas where Escom is losing money, including power losses in the system,” he said.
In an interview, corporate governance expert Jimmy Lipunga commended the move, saying in the current situation utility providers such as Escom are effectively financing MDAs.
“MDAs have approved budgets which include utilities, and it is a matter of using the allocated resources to purchase water and electricity. Without prepaid meters, service providers will continue financing MDAs,” Lipunga said.
In an earlier interview, Consumers Association of Malawi executive director John Kapito said the installation of prepaid meters was a precondition under reform programmes. While consumers welcomed the technology, he said MDAs removed the meters in what he described as “an act of sabotage”.
“What the parliamentary committee should be doing is penalising MDAs for not implementing reforms on the installation of prepaid meters, rather than continuing to make the same old recommendations that have been ignored,” Kapito said.
Earlier, Southern African Revenue Protection Association (Sarpa) president Kenneth Samolapo challenged Escom Limited to expand smart metering systems to reduce technical and revenue losses that could ultimately burden consumers through a pass-on effect.
Samolapo said: “Revenue losses vary from country to country. If you look at Escom’s revenue collection rate, it is less than 85 percent. This means there is a need to automate and modernise systems through smart metering.”
In January this year, the Malawi Energy Regulatory Authority approved the implementation of a 12 percent electricity tariff increase, the third for Escom under its four-year tariff adjustment schedule.
