Govt arrears suffocate Escom

Malawi government has ordered Escom to stop disconnecting power from public institutions over unpaid bills to avoid embarrassing ‘political powers’, Nation on Sunday has learnt.

According to two well-placed Escom sources, the order was issued recently at a meeting government held with the parastatal in Lilongwe after the corporation disconnected power at some government offices.

But Minister of Energy Ibrahim Matola told Nation on Sunday on Thursday that he was not aware of the directive, but confirmed that Escom officials were called for a meeting.

“I am aware that representatives of Escom met government officials in Lilongwe. The meeting was chaired by either the Chief Secretary to Government or her deputy. Principal secretaries of several ministries also attended the meeting,” said Matola.

He said he did not know what was discussed at the meeting. But our sources said soon after that meeting, Escom managers issued orders that technicians and revenue officers on the disconnection campaign of government installations be recalled from the field.

The OPC did not respond to a questionnaire we sent on Wednesday while Escom declined to comment.

But observers warn that Escom’s failure to force government to settle bills transfers the financial burden from Capital Hill to households and private organisations, which are easy targets for the power supplier.

The development also means that government continues to bleed lifeless its inefficient and wasteful power utility firm, with figures in our possession showing that as at Monday, March 4 2014, public institutions owed the corporation a whopping K468 million in unpaid electricity bills.

In total, government departments, households and private companies owed Escom at least K1.1 billion in arrears as of March 4.

The unpaid bills only add more misery to a company that government abuses at will through political manipulation to support the party in power.

This is besides the massive transmission inefficiencies that lead to the sole power utility losing between 20 percent and 30 percent of the electricity it generates.

Although the US government Millennium Challenge Corporation (MCC) seeks to plug these gaping holes where Escom throws its money, it is a matter of debate whether the programme will achieve its objectives given the entrenched interests that benefit from the corporation’s inefficiencies.

While Escom does not hesitate to crack the whip on private companies and households over unpaid bills, government ministries and departments are having free meals.

In those rare cases where Escom cuts power to government institutions, arm-twisting eventually prevails and the power utility provider is forced to restore electricity even where government has not paid a coin to clear its arrears.

According to information we have seen, households owe Escom about K336 million whereas private companies have outstanding arrears of about K300 million.

Leading the line-up of top public institution defaulters is the Malawi Army whose debt with Escom stands at about K158 million, followed by the troubled Kamuzu Central Hospital (KCH) which is stuck in a K52 million debt.

Mzuzu Central Hospital is yet to settle K19 million in electricity bills whereas Queen Elizabeth Central Hospital (QECH) in Blantyre will have to raise about K16 million to meet its obligations with Escom.

Other culprits are Airport Development Limited (K15 million), Chiradzulu District Hospital (K10 million), Airport Commandant (K9 million), Rumphi District Hospital (K8 million), Chancellor College (K7 million), Thyolo District Hospital (K7 million), State House (K7 million) and Machinga District Hospital (K6 million).

A source at Escom, who did not want to be identified, said the principle is that the corporation should disconnect any customer who has arrears that have not been settled in 60 days regardless of the amount owed.

Escom public relations officer George Mituka refused to comment on the Nation on Sunday findings, saying the information is confidential.

“No comment. It is against our ethics to discuss customer information with third parties,” said Mituka.

But Consumers Association of Malawi (Cama) John Kapito said it is gross inefficiency for Escom to let government institutions go scot-free with huge debts when the company is always eager to penalise customers with small bills.

“We have been asking them why they want to adjust the tariffs when they cannot collect money from the customers. Ordinary persons are disconnected at will and they [Escom] are failing to collect money from government.

“Political and government interference has been affecting Escom’s performance. Escom must deal with this inefficiency and develop a proper business model,” said Kapito.

For ordinary Escom consumers, even a K500 bill is enough to leave them without power.

Chimwemwe Grant, a resident of Blantyre, queued for over an hour at Chichiri Shoprite Escom Pay Centre on Friday to clear a bill of K2 365. 23 after the power supplier had disconnected his house in Ndirande Township.

Grant, like scores of others queuing at the Chichiri pay point, was also expected to part with a penalty of K3 000 as reconnection fee.

But the anger that Escom vents on ordinary consumers dissipates when public institutions come into the picture, allowing government to hold hundreds of millions in unpaid electricity bills.

When the proposed 53-percent tariff adjustment rolls out, the likes of Grant will have to shoulder even a bigger burden to live in houses that have electricity.

Sadly for ordinary consumers and private companies who suffer the most when power charges go up, the money they pay Escom is not only for the electricity they use because they also pay for the cost of inefficiencies the utility provider passes on to them.