ESCOM takes on K65BN defaulters

ESCOM takes on K65BN defaulters

Electricity Supply Corporation of Malawi (Escom) Limited has embarked on a drive to recover K65 billion in unpaid postpaid electricity bills owed by government agencies, private sector players and individuals.

The power utility has since vowed to disconnect supply to the concerned customers, including government ministries, departments and agencies (MDAs) to get its money.

Escom first released a warning of the mass disconnection exercise last Thursday, indicating that once bills are settled with a reconnection fee, supply would be restored within 48 hours.

Reads the notice: “…will embark on a month-long countrywide disconnection exercise on all overdue postpaid accounts, including for government ministries and departments from Monday, 25th March 2024.

“Therefore, pay in full all outstanding balances. Check with Escom Limited if the current bill has not been received.”

An Escom employee disconnecting power in this file photograph

In a brief interview yesterday, Escom chief executive officer Kamkwamba Kumwenda said MDAs owe the parastatal “hugely”.

He said: “In terms of bills, MDAs owe us about K50 billion while for private entities, the figure is about K15 billion. I cannot provide other details because I am travelling, but that is how we stand.”

Secretary to the Treasury Betchani Tchereni, in a separate interview, said it was surprising that MDAs owe Escom that much as his office provides resources to them to cover obligations such as utility bills.

He said: “That is an issue for MDAs in particular. Ask them to tell you how far they are on these issues. Treasury is this eagle, which looks down and is able to distribute resources. When we do this, we don’t say how much money should go towards what.

“We simply give the MDAs their allocation and they decide how much should go where! It is not up to us to tell them how much should go towards phone bills, water or electricity. It is their responsibility.”

Parliamentary Committee on Natural Resources chairperson Werani Chilenga, whose committee has been engaging the Ministry of Finance and Economic Affairs on the matter, blamed Escom for “poor timing”.

He said: “They should have waited for the budget to pass because there could be allocations from the Ministry of Finance to off-set those bills. They should wait until funding for April.”

While not specifically mentioning if the budget has some allocation, Chilenga said they have been in talks with Treasury and during the Committee of Supply stage, they will engage the Minister of Finance on the allocation.

“We have different MDAs that owe Escom and its huge sums of money. It includes State Residences, Malawi Defence Force and Malawi Police Service. It is some huge money and we know the Treasury will do something,” he said.

But Consumers Association of Malawi executive director John Kapito differed with Chilenga, saying Escom’s action was long overdue.

He said MDAs should stop blaming Treasury over funding issues as they allegedly choose not to pay utility bills because they find utility providers easy to deal with.

Said Kapito: “Escom needs to stand up and ensure that it is viable. It is wrong to allow their money to be owed by certain individuals, institutions and MDAs, yet they have to borrow money from banks for operations.

“They must be able to collect money from everybody and every institution that owes them outside the agreed terms.”

Kapito said Escom cannot be run like a charitable organisation, and the parastatal needs to start biting to keep up with the high cost of buying electricity and transmission from producers.

Past experience has shown that whenever Escom and water boards disconnect supply to some MDAs, Treasury intervenes by requesting the service provider to restore supply.

The post ESCOM takes on K65BN defaulters first appeared on The Nation Online.

The post ESCOM takes on K65BN defaulters appeared first on The Nation Online.