Honeymoon over for MDAs on unpaid utility bills

The honeymoon is over for ministries, departments and agencies (MDAs) which owe utility bodies billions of kwacha in unpaid bills as the bodies have embarked on a programme that will see customers including the MDAs installed with pre-paid meters.

Utility bodies in the country have been failing to provide efficient services due to lack of money to improve their operations.

But Information Minister Patricia Kaliati said the government will not be forced as regards to what system is installed in its institutions so that it does not compromise its operations.

In an effort to increase revenue streams, sole electricity producer Electricity Supply Corporation of Malawi (Escom) and the country’s five water boards have embarked on programmes to migrate from post-metering to pre-paid metering system.

While not disclosing how much Escom is owed by public institutions, claiming that is privileged information for its clients, it is no secret that government owes the institution billions of kwachas in unpaid bills.

Three months ago government directed the Escom and water boards not to disconnect power and water from the institutions without the express authority of the government.

Escom public relations officer George Mituka insisted in an e-mailed response on Wednesday that the electricity body will not relent in its efforts to migrate to the pre-paid metering system as long as it meets its classifications.

Said Mituka; “The migration project will not discriminate between government and private facilities. As long as the installations fit our specified categories, they will be migrated. The full impact of the migration in terms of improving revenue collection is yet to be realised as the exercise is still ongoing. So far, there has been a [decrease] in the default rate by about 2 percent from the quarter ended December 2015.”

According to Mituka, all domestic customers whether three phase or single phase including all commercial customers who do not fall in the maximum demand (MD) category, will be migrated to prepaid meter system. MD customers are those that consume more than 50KV.

Escom earmarked December 2016 as the deadline to complete the migration from post-metering to pre-metering.

At the same time several water boards have announced to migrate to the pre-metering system.

Blantyre Water Board announced in March that it has procured 7 500 metres to kick-start the migration process aimed at reaching 17 500 customers by the end of the 2016/2017 financial year.

On its part, the Northern Region Water Board (NRWB) which is owed K1.6 billion by its customers said the board was ready to roll out the pre-paid metres project in public institutions.

NRWB spokesperson Edward Nyirenda described the pre-prepaid meters as a permanent solution to the issue of defaulting of payments by individuals as well as institutions.

Said Nyirenda; ‘‘We have introduced prepaid water meters to some level within our operations and we are ready to install prepaid meters in these public institutions. However, government is still looking at its internal policy on prepaid services and it is our hope that the policy is developed and implemented soon so that we can install the prepaid meters.”

Southern Region Water Board (SRWB) chairperson John Kapito said the current civil service reforms being headed by Vice-President Saulosi Chilima had set out to improve efficiency of utility providers by ensuring that customers are put on pre-paid meters.

Said Kapito: “It is wrong to take utility boards backwards. We are aware that government has embarked on a project to put its MDAs on pre-paid metres and that should be a positive direction. There has been some movement as the government is gradually releasing some funds through promissory notes to offset its huge debt.”

SWRB has already embarked on a pilot project to install pre-paid metres to its customers.

But Kaliati said on Tuesday government was at liberty to choose which system to use for its institutions basing on its operational setup.

Said Kailiati; “As government, we look at several issues when making these decisions. You have to appreciate that funding in government is a rigorous process. Therefore, if we are to embrace this kind of upgrade wholesale, some MDAs might find themselves without electricity or water whenever their funding is delayed. This can have disastrous effects on government operations.”

Kaliati’s sentiments demonstrate government’s unwillingness to allow utility bodies to install pre-paid meters in MDAs which is not only watering down the spirit of public sector reforms but also affecting the performance of the utility providers which are struggling with cash flow problems.

But Principal Secretary in the Vice-President’s office responsible for Public Sector Reforms Nwazi Mnthambala yesterday said government had put down a policy that demands all public institutions to migrate to the pre-paid billing system.

“In the spirit of reforms, all public institutions are being urged to abandon post-paid mode and embrace pre-paid system. Many MDAs at the Capital Hill have already migrated including our office. Of course, it might not happen at once as the utility providers are working in phases. For this reason, we might see one or two MDAs still on post-paid system but they should eventually migrate sooner than later,” she said.

Mnthambala, therefore, exonerated the utility bodies saying they have the full support from her commission to implement the changes unimpeded.

In January 2015, Nkula B Hydro Power Station, which produces 100MW of the country’s total installed power of 351 MW was rendered dysfunctional due to flooding of the Shire River where Escom lost K2.2 billion.

Escom chief executive John Kandulu in February 2016 said the dependency on one river and one technology was a major risk to electricity generation in the country.

Malawi Government signed a pact with the United States of America (USA) for the country to continue being part of the Power Africa, a Washington presidential initiative.

The US government is partnering Malawi to expand the country’s access to electricity through the Millennium Challenge Corporation (MCC) Compact’s $350.7 million grant.

Escom has been bailed out by the Japan International Cooperation Agency (Jica) which donated a dredging machine to remove silt at Escom’s power generation plants.

Only 10 percent of Malawians are connected to the national power grid.  n