Blantyre Water Board choked by K10bn debt: Suspends cash outflows

Water utility lantyre Water Board (BWB), which was blacklisted by European Investment Bank (EIB) rom being a recipient of financing from the institution after an audit revealed irregularities ranging from fraud to poor documentation of project fund, is   now carrying a debt burden of  nearly K10 billion forcing the firm to suspend all outflows of non-essential items.

BWB acting chief executive Henry Bakuwa : BWB creditworthiness has inevitably been hammered by the huge debt

According to an internal memorandum  to members of staff dated September 8 2017 seen by Nyasa Times, said BWB had been forced to pay Electricity Supply Corporation  of Malawi (Escom) K1.8 billion of its outstanding electricity bill to avoid Escom from switching off their power.

The memorandum signed by  BWB acting chief executive Henry Bakuwa said  the payments to Escom need to be paid  from September 15 startingw ith K1 billion and  K8000 million to be paid  on weekly instalments of about K200 million per week by 30 September “  and thereafter as monthly instalements to December 2017.”

Bakuwa described in the  communication that the instalments arrangement as  “tall orders” for the BWB to fulfil.

“We had no choice but to accept to avoid the disconnection,” HE WROTE.

Bakula believes the board can “negotiate” with government for a  bail out  with K1 billion payment dues Friday.

In the memorandum, Bakuwa also informed staff that BWB paid K200 million to Old Mutual Malawi to reduce pension contribution arrears.

In the communication, Bakuwa said BWB has suspended items such as staff loans, travel and meeting allowances, conferences, furnuiture and general payment to creditors, among others, until its financial status improves.

BWB was also demanded to start  repaying the eight million euro (about K6.6 billion) loan from European Investment Bank.

The bank commissioned a PIR of the inspectorate general of the bank after BWB failed to explain on some of the issues which were raised.

According to the report, there was absence of original bid documentation, noting that 50 percent of the procurements examined were not supported by original bid submission documentation.

BWB employees were also reported to have been unable to trace and locate all documents for all the procurement files requested.

On strong indications of collusion, EIB found that bidding documents revealed similarities in the submissions of two successful suppliers and that the bid submission documents provided by the two were fabricated; hence, should not have been successful.

The loan had a maturity period of 33 years, including a grace period of 10 years.

EIB gave the loan to BWB in 2009 with a maturity period of 33 years, including a grace period of 10 years but because of the bank’s concerns of mismanagement of funds, it has asked the board to start prepaying the loan before the actual commencement dates.

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Nganya
Guest

Do we audit these institutions? Do we use the results after auditing? Malawi will never develop until we have a system that is genuine and working. A system that checks and acts when wrong things are done. ODPP nayo ntchito yawo ndikupeleka ma certificate not checking and verifying contracts.

james
Guest

wasting money on allowances and seminars especially senior management

james
Guest

Poor management, Blantyre water Board

Mbolo Sidwala
Guest

Pasavute. Let them hold ‘a Water night” at Sanjika Palace and invite DPP to attend. Upon attendance, DPP will have to be asked to sit next to the President and contribute to the course. Ntchito za chifundo izi a DPP, nanga zifike potimwetsa bibi a mchimbudzi boma losamalira anthu liripo?

Joe M
Guest

Mwaonatu, muli ndi ngongole thooo koma kumapereka ndalama ku DPP, ana anjoka inu osakonda dziko lanu. Mumamvera matchona cholinga choteteza ntchito zanu. Shame.

Zude
Guest

A Bakuwa 128 million munaba ndi anzanu aja inakatha kukuthandizani kubwezako ngongole zina.mbava iwe!

Nachipanti
Guest

Too much kuba anyamata aku BWB. I have no sympathy to BwB people. Kunamizira kuvuta mmakomo mwa ma customers kudula madzi ndi ma fake bills anu kumbaliku mukuba… am not surprized.

tony
Guest

Mavuto is Blantyre water board management is very disorganised, we have never heard blantyre water board in the papers for financial problems, there is something wrong the way it is run currently, Boma needs to take action or the current management will take this board to bankruptcy

andy
Guest

Chief Executive officers in Malawi. Koma ntchito yanu mumayiziwa osati nanuso mutimwese madzi abibi. Blantyre cant allow such madness

andy
Guest

Chief Executive officers in Malawi. Koma ntchito yanu mumayiziwa osati nanuso mutimwese madzi abibi. Blantyre can allow such madness

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