ESCOM angers parley for resisting single buyer model
The Parliamentary Committee on Natural Resources and Climate Change has expressed anger with the audacity of Electricity Supply Corporation of Malawi (ESCOM) to resist the unbundling process that led to the birth of a single buying company – Power Market Limited (PML).
The path which ESCOM is taking vindicates what happened in June, 2020, when ESCOM staff organised themselves and held protests to force the government not to proceed with unbundling of the company into a single buyer.
Lorries moved around Blantyre Central Business District loaded with some of the employees protesting the unbundling idea.
ESCOM staff opined that the idea, once implemented, would choke their operations, which they said would make Malawians suffer.
ESCOM cited the consequences of unbundling the Corporation in 2016-2017 when government removed generation function from ESCOM and established the Electricity Generation Company (EGENCO).
But in an interview with Nyasa Times, Chairperson of the Parliamentary Committee on Natural Resources and Climate Change, Werani Chilenga, said what ESCOM is doing is uncalled for.
“We have reported ESCOM’s behaviour to the Attorney General so that the company follows the law by bowing down to single buyer,” he said.
He said ESCOM still wants to be collecting money from end users, which is one of single buyer functions.
“Collecting money from end users is not their job that is the job of a single buyer company – Power Market Limited. We have asked the office of the AG to guide on the way forward because ESCOM is resisting change. They do not want reforms to take place actually they are resisting reforms and creating fear in these decision-making positions. There is no proper justification why ESCOM must be clinging to the Single Buyer Function. Moreover as committee we understand the single buyer is not impacting the cost of electricity,” said Chilenga
Chilenga said each licencee is accommodated in the tariff approved by MERA.
“So we don’t understand why ESCOM wants this function. If we allow ESCOM to keep the single buyer it means we are progressing on the electricity reforms and the Malawi Power Sector may never go through other phases of the power market in turn we will stagnate the power market growth and we won’t compete at regional level,” narrated.
But ESCOM Board Chairperson, Fredrick Changaya, insisted that the unbundling of ESCOM into single buyer will impact negatively on Malawians.
Changaya argued that the unbundling process would make electricity prices high.
However, single buying has been commended in ranking and tendering out of generation projects as the core responsibility of the single buyer (SB).
The SB is also responsible for conducting due diligence on all upcoming unsolicited IPPs.
Meanwhile, PML Director of Marketing and Corporate Services, Villant Jana, in an interview, said failure to sign contracts with ESCOM on projects is holding the organisation from being fully operational, two years after being licensed as a player in the power sector.
She said apart from technological and engineering quality of the projects, this includes an assessment of the potential power generation cost which, if done in a comprehensive manner, would translate into cost-reflective tariffs which are competitive.
She said all the processes are still being done by ESCOM this means things are not talking to each other.
Once the process is on, it will improve transparency and accountability.
PML is a government entity whose among the core objectives is to buy energy from investors and sell it to the masses.
One of the remaining contracts is for the settlement account, which is still being handled by ESCOM, which the single buyer under PML has no control over.
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