Escom taken to task on 68% electricity tariff hike: Kapito warns of demo, blasts ‘State capture’

The quasi-monopoly power utility provider Electricity Supply Corporation of Malawi (Escom) proposal to increase its tariffs by 68 percent has come under heavy criticism as an insult and infringement of the consumers rights in the country.

Kapito: State capture, rampant corruption and theft at Escom

Kalowekamo: Speaking at the public hearing

But during the public hearing organised by Malawi Energy Regulatory Authority (Mera) in Blantyre, the Malawi Confederation of Chambers of Commerce (MCCI) and Consumer Association of Malawi (Cama) argued that the utility firm lacks the moral justification to affect any increment.

Commentators also argue that hiking the tariff will be punishment to the law-abiding citizens to cover up for Escom’s inefficiencies.

Cam boss John Kapito said the increase could only be affected if the consumers were accorded with the new products or services on the market.

“Where is the electricity? Malawians are crying foul every day that they don’t have power. So do we want to raise the price of darkness? Kapito queried.

According to Kapito, his association recently conducted a country-wide consultation on the new base tariff increase whereby the results indicated that consumers were ready to pay the new base tariff if only the ESCOM improved its services.

“Honestly, we are in total disagreement with this proposal now until ESCOM improve its services. Why can they raise the tariffs when we have poor electric supply of the intermittent power outrages out there? We found this a mockery or an insult to the consumer rights,” said Kapito.

Kapito said his association was ready to mobilize people to go on the street to protest against the increase if the consumer concerns were not taken on board, saying the  electricity tariff must be increased based on country needs and expectations,

The consumer rights activist called for serious reforms within Escom if stakeholders were to appreciate the real cost of power generation and distribution.

He noted reports of “rampant corruption, theft and State capture and poor management” at Escom, which he said were major sources of delivery failures crippling the utility’s operations “and therefore distorting the true cost of doing business.”

Kapito challenged Escom to provide “realistic achievable performance indicators that must be approved and monitored by the regulator and consumers”

He said:“We don’t want to kill the people at Escom quickly by fattening them with our money. A tariff hike will only promote theft at Escom.”

However, director of energy in the ministry of natural resources and environment of Malawi, Joseph Kawolekamo, defended the increase, saying it would go along the way in boosting the private sector investment and bring about sanity in the energy sector.

“Increasing tariff need to be well understood. It will boost private sector participation by bringing about competition. This will in turn bring down prices due to competition on the ground,” said Kalowekamo.

According to Kalowekamo, Malawi was one of the countries with the lowest electricity tariff; a development that he said could not attract foreign investment.

Escom chief executive officer Allexon Chiwaya disclosed that utility body plans to undertake investments, disclosing that it has signed an agreement with the Mozambique government to supply 50 megawatts, South African government to supply 150 mega watts and, Zambian government to supply 20 megawatts within the next four years.

Chiwaya said ESCOM would have to invest a total of K157 billion in tariffs in the next four years.

“We want to upgrade several existing transmission lines from wooden to steel towers to minimise downtime, substations to accommodate demand growth in water pumping and commission new transmission lines and substations to accommodate load growth,” he said.

Mera boss Collins Magalasi said the energy regulator would come up with its detailed analysis of the applications after a review process end of this month.

According to Magalasi, as a legal requirement under the energy regulator Act of 2004 section 30 and the electricity Act of 2004 section 16{5} and 17 that the authority approves a new base tariff adjustment formula, the authority is required to publish the proposed tariff revision and call for public hearings to allow for stakeholders participation on issues that affect them.

The base tariff is reviewed after every four years, and according to Mera, Escom was proposing a base tariff increase of 68% for the 2018-2022 bracket.

 

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UNILIA
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UNILIA

This can really be a good deal in the long-run term however stakeholders will suffer the greatest in the short run term so for the sake of achieving efficiency at the market do not skyrocket the tarif please a Escom

opportunist
Guest
opportunist

Just increase the tariff for darkness so that you have excess money to eat. Anthu ozikonda

wakudya
Guest
wakudya

sizikunveka,,palibe chanzeru mukayankhula apa,,u people u thnink Malawians r fools pachaka magetsi muzikweza kangati?whch country in the way cn tak its customers for granted like tht,,magetsi akumalawi konkuno as if u r exporting,,u need to b serious and love ur country men,,ndalama boma likungodya azibwenza ndiamalawi?olo atakhala magetsi akuyaka thts not a justification kumangokweza magetsi,,escom ndi dpp mwatikwana chimodzimodzi ndi madzi madzi aulere a Mulunguwa kumakweza ngati zasatanic,,mukufuna anthu azimwa madzi a pampompi,,a boma mwatikwana we knw al these things r happening coz u r greedy,,tatopa nanu,,ma demo muzipangako saturdy amuzintchitofe tizipanga nawo

Kholowa
Guest
Kholowa

Mtsogoleli akakhala wakuba ndi chonchi basi. Kumene akuona kuti akhoza kubanso mkumeneko. Mocambique issue pipo said no and opted to generators. Atha kuba kumeneko mtimafuta tomwe tama generator now kumene akuona kuti atha kubano ndi kubweletsanso mocambique on the table asololenso.Poor malawians vote wisely!

LIPHAVA NAMANDWA NGOLONGOLIWA
Guest
LIPHAVA NAMANDWA NGOLONGOLIWA

Holy bullshit. Why don’t we just kill this company and start afresh with a new ESCOM as a private company with Government having minority shares? There are too many DPP suppliers supplying or pretending to supply materials to the company. They are colluding with the Procurement staff to to get paid for goods that are not matching with the quantity ordered and pocket the difference. Yours truly is enjoying the role I was sent to do: kill ESCOM. Give us contracts once you are on the seat. Pay us on time after our fake or outdated or unneeded materials delivered.… Read more »

DPP
Guest
DPP

Oh! So Mr kapito is still around? Atafuna banzi ameza akufuna chibanzi China.

Nkhani yobedwa mafuta amangidwa ndi alonda. Alondawo amatunga mafutawo muzigubu?

Who are these big fishes with Runners in Malawi?

Mafutawo sangagulutsudwe munsewu . Those big fishes should be named.

chayamba
Guest
chayamba

Abale, with prepaid meters we only pay the electricity which we have consumed and not hours of darkness.
If am wrong then let those without electricity also pay bills.

chayamba one
Guest
chayamba one

you have missed the irony in that statement my friend

#DzukaniAmalawi
Guest
#DzukaniAmalawi

This time around consumers will vote with their feet against the rate hike and in fact it may call for bill payment boycott for 6 months. DPP-led govt is not even embarrassed to steal from poor Malawians to fund their lavish lifestyles.

Agenda Setting Theory
Guest
Agenda Setting Theory

Increasing the price of darkness

Vinthumfumbenge
Guest
Vinthumfumbenge

Kukwedza magetsi kwa chani? Kufuna ndalama zopangira kampeni basi? Ndichifukwa chake tikuti bava zonse chaka cha mawa tikuthana nazo mosayang’ana khope. Mwachechenjera pouka tionana pogona.

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