Shock as ESCOM imports poles

As Malawi’s foreign currency stockpile dwindles, the Electricity Supply Corporation of Malawi (Escom) could spend roughly $100 000 (around K56 million) importing 30 000 wood poles from Zimbabwe that can be sourced locally, The Nation investigations show.

Escom’s move has attracted frowns from its line ministry of Natural Resources, Energy and Mining as well as the Ministry of Finance, Economic Planning and Development. Both ministries have questioned the rationale of importing wood poles when supplies are available locally.

Industry players too—who have for decades supplied the product to Escom—are shocked at being sidelined now, saying they have tens of thousands of poles at the beck and call of the power parastatal.

But Escom—in an e-mail response—while not confirming the foreign currency amount that our well-placed source placed at $100 000 to be spent on the imports—this week defended its move, saying the local market does not have the capacity to meet demand and quality standards.

Two weeks ago, The Nation saw trucks with Zimbabwe registrations offloading wood poles—which Escom uses for transmitting and distributing electricity—at the parastatal’s Chichiri Power Station offices in Blantyre.

Escom spokesperson Kitty Chingota—in an e-mail response on Wednesday—explained that the decision to import poles was due to concerns of capacity and quality of local supplies.

“At the time the decision was made to order the poles through an open tender from outside the country, the local suppliers could not meet the demand that Escom required. Escom was getting wood poles from local suppliers in bits, which could not sustain its operations as and when required.

“The wood poles that were being delivered to Escom were treated with a chemical that reduced the lifespan of the poles, resulting in increased maintenance costs as the poles were regularly being replaced,” she explained.

Chingota added that government permitted Escom to import wood poles to enable the corporation to clear the backlog on new connections and other projects.

“This request was made following failure by local wood pole suppliers to meet our pole requirements and this had a negative impact on Escom`s customer service as we failed to connect new customers timely.

“Also due to poor treatment of the poles, termites were eating the poles; hence, reducing the lifespan of the poles than the properly treated ones, which take almost 25 years,” she said.

When asked in a follow up interview yesterday which specific government department granted the permission for Escom to import the poles, Chingota said she needed to check in files.

Chingota also said there were various ongoing and planned projects, including new connections requiring large supply of poles.

“The poles that were purchased are for both new projects and maintenances for both distribution and transmission divisions and going by the annual requirements the poles are not enough, for example 9m poles [size] 67 936 are required for distribution only,” she said.

Chingota said it was Wood Industry Corporation Limited (Wico), which was failing to supply poles to Escom.

For example, she said, on order number 049042 dated July 17 2013 for K88 932 839, Wico is still failing to supply due to insufficient capacity. Escom had to extend the order otherwise the only option was to cancel the order, she added.

She also said Wico is yet to supply 1 192 of nine -metre wood poles out of the 3 000 that Escom wanted, 18 of the 10.8-metre poles out of 100 that Escom wanted, 65 of the 11-metre poles out of 100, 19 of 12.3-metre poles out of 100, 23 of 13.5-metre poles out of 100, 62 of the 15-metre poles out of 100 and 91 of 16.5-metre poles out of the 100 that Escom wanted.

But in a separate interview, Wico production manager Aman Kunje disputed that his company failed to supply Escom, saying they are still holding onto an Escom Local Purchase Order (LPO) for the supply of 3 000 poles that the power utility has not come to collect for a year.

While confirming that Escom placed an order for poles with Wico, Kunje said his firm secured the poles in time and was only waiting for the parastatal to collect.

He said locally, a nine-metre wood pole sells at K12 179.66 while a 12.3-metre pole sells at K61.177.25.

He said his company has been supplying poles to Escom since 1956 and there have not been any communication from the power supplier indicating that they intend to stop buying poles from Wico.

“The last communication we had with Escom was in 2011 when we told them that we are changing the chemicals that we use to treat poles from creosote to tanalith. Escom gave us a go ahead. Since then we have been supplying them tanalith-treated poles.

“If they had an issue with us it could have been on this matter, but they indicated that they have no problem,” he said.

To emphasise his point, Kunje showed The Nation some LPOs from Escom for the poles and crossbars.

“We have expired LPOs from Escom because they are not coming to collect their items,” he said, brandishing a K3.8 million LPO that was issued on June 25 2015 and expired on July 25 2015.

“We have the capacity to supply Escom all the poles; we have been doing that for the past 59 years. Our relationship has been good all these years,” he said.

Ministry of Natural Resources, Energy and Mining public relations officer Sangwani Phiri said his ministry would not facilitate Escom’s importation of poles from a foreign country.

“Let us love Malawi and jealously support initiatives by our very own local or domestic companies and industries to improve the country’s national economy. [However, it] should also be known that Escom is an independent company and its procurement procedures are not controlled by government machinery,” he said.

Phiri said upon inquiring from one of the local wood pole suppliers, Raiply, the ministry was told that about 10 000 poles have been at Raiply’s Pole Plant waiting for Escom to collect since they had a contract with the company to supply the poles.

The ministry said according to Raiply management, there has not been any formal complaint from Escom about the quality of the poles.

“Raiply CEO says his company is more than ready to provide enough poles to Escom at any time they would want them and treated to whatever level with creosote to match Escom’s satisfaction and demand,” said Phiri.

He said Raiply has been maintaining high standards for poles certified by the Malawi Bureau of Standards (MBS). We could not get an immediate comment from Raiply.