ESCOM Struggling to Execute Operations Due to MK35 Billion Debt from BWB
ESCOM struggles to execute operations due to K35 billion debt from BWB.
Blantyre, Malawi– The Electricity Supply Corporation of Malawi (ESCOM) has said it is struggling to execute some of its operations due to a K35 billion debt that the Blantyre Water Board (BWB) owes the corporation in unpaid arrears, writes Steven Godfrey Mkweteza.
Chief Operations Officer Maxwell Mulimakwenda said the unpaid debts have made ESCOM incur MK87 billion in additional costs, which has affected its revenue.
As a result of the revenue deficit in the 2018–2022 base tariff period, ESCOM underperformed in some of its key performance indicators, including new connections, adherence to customer service, and implementation of planned investments or projects.
Mulimakwenda said ESCOM has been engaging officials from BWB to try to recover the debt, but to no avail.
"This delay to recover the debt has indeed negatively affected our operations and subsequently made us fail to meet connection targets in the 2018–2022 tariff period," he said.
Mulimakwenda added that the poor performance was also mainly due to financing arrangements.
The fresh electricity tariff adjustment application would see 30 percent of the tariff go into total revenue collection.
Recently, parliamentary committees have pledged to help ESCOM recover about MK40 billion that government ministries, departments, and agencies (MDAs) owe it.
Of this amount, K35 billion is owed by BWB.
The fresh electricity tariff hike proposal comes against a background of water boards implementing an average 59 percent tariff hike on June 1 this year.
The spokesperson for BWB, Evelyn Khonje, could not be reached for comment.
In April this year, ESCOM applied for a 69.7 percent electricity tariff adjustment for the next four years (2023–2027) after the expiration of the 2018–2022 tariff period.