Government which split the Electricity Supply Corporation of Malawi (Escom) into two which led into the creation of Electricity Generation Company (Egenco) solely responsible for power generation, has also established yet another company – the Power Market Limited (PML).
The new firm will now be sourcing power from generators such as Egenco and other independent power producers (IPPs) and sell to Escom for it to transmit and distribute.
This has been done as the Escom parastatal is now heavily debt-ridden than ever before and it has failed to connect customers to the national grid and to manage blackouts.
In 2018 Escom asked for a bailout of K53 billion from Treasury, but was turned down. Thereafter, the parastatal borrowed K30 billion from banks to settle some of its debts, including the K17 billion it owed Egenco. Thereafter, Escom remained with a debt of K24 billion.
A confidential report titled Report on Building and Unleashing Escom’s Potential in the New Environment, dated February 7 2019, the task team, chaired by Comptroller of Statutory Corporations Stuart Ligomeka, detailed failure of the procurement, stores, distribution and financial management functions as well as indiscipline and poor organisational culture at Escom.
Besides Ligomeka , other members of the team included messrs Hilario Chimota, Patrick Matanda, Collins Magalasi, Professor Grant Kululanga, Chizaso Nyirongo, MacDonald Mwale and Headwick Banda, who was secretary, reported that Escom has significant weaknesses in governance and operations, leading to high levels of fraud and theft of public resources.
Since 2016, Escom wrongly procured goods valued at K8.3 billion, bought phased out wall-mounted three-phase prepaid meters worth K1.8 billion and items worth K122 million without local purchase order (LPOs) and Internal Procurement Committee (IPC) approval.
The parastatal’s board chairperson Thomson Mpinganjira, a highly regarded finance professional who founded and has been running multi-billion kwacha financial services group FDH Financial Holdings, raised the alarm about the Escom mess soon after his appointment in July 2018.
He lamented about bad procurement decisions which made the firm procure K18 billion worth if equipment that would not be needed for years.
Nonetheless, commentators argue that on eof the main problems that has been suffocating Escom is political interference.
Now new firm PML and IPPs ave the task of generating electricity in the country and will all be selling their power to Escom to feed the national grid.
But for purposes of regulations by Malawi Energy Regulatory Authority (Mera) Escom will be the major supplier of power in the country for both domestic and industrial use.
Escom Limited is a public utility incorporated as a private company under the Companies Act (Cap 46:03) of the Laws of Malawi in 1998.Follow and Subscribe Nyasa TV :