Malawi’s Parliamentary Committee on Natural Resources and Climate Change has told Electricity Generation Company (Egenco), the country’s main producer of power, not to renew the diesel-powered gensets deal with the South African company Agreco, saying it is too expensive for nothing.
Members of the committee said this on Tuesday when Egenco and Electricity Supply Corporation of Malawi (Escom) officials appeared before the committee.
The members noted that government was paying about K1 billion for the generators to power just 78 megawatts of power which they said was expensive.
The Aggreko Power Solutions Limited diesel-powered generators contracts comes to an end in January 2020.
Parliamentary committee members observed that Egenco also has the capacity to run the generators and that the company’s tariff charges are cheaper.
Apparently, Aggreko charges about MK202 per kilowatt while Egenco charges about MK156.
In addition, government, through ESCOM, spends about MK3 billion every month for the generators to produce electricity–with MK2 billion as payment for diesel to Notional Oil Company of Malawi and MK1 billion as payment for other running costs to Aggreko.
Cementing the call of the committee members, committee chairperson Werani Chilenga, who is also the Legislator for Chitipa South, said this exorbitant spending must stop because it is unjustifiable in view of the many challenges the country is facing.
“Let Egenco take over. This is our own company. Officials have assured us here that they have the capacity to do what Aggreko is doing and all we need to do is just to provide them with enough resources,” said Chilenga.
Escom Chief Executive Officer, Dr Alexion Chiwaya, told the committee that the Aggreko Power Solutions Limited diesel-powered generators contract would be renewed for a period of one year after which EGENCO will have taken over and found other sustainable sources of power.
He insisted that Malawi, currently, still needs Aggreko as the country tries to consider the proposal to let Egenco run such generators to produce electricity.
“If we suddenly let Aggreko go, it means the 78 megawatts they are producing will no longer be there, a development which will lead to a year of widespread cryout over persistent power blackouts due to massive load shedding,” said Chiwaya.
Egenco Chief Executive Officer, William Liabunya, concurred with Chiwaya, adding that his company would indeed require at least ten months to settle down for a real management of such generators in order to produce power.
“We have to start all the required processes that, among others, include regulations, approvals, purchasing and procurement. And what matters even most are resources to enable us to do the job,” said Liabunya.
Despite Chiwaya and Liabunya explanations and justifications, Chilenga insisted that it is the view of his committeee that Aggreko must go.
“It is up to them to take up the recommendation or not. But we have spoken as the representatives of the people of Malawi most who are rarely heard on crucial matters such as these,” Chilenga said.
In 2017, Escom leased 84 gensets from Aggreko to produce 78MW for six hours each day as an emergency relief, contributing about 10 percent of power to the national grid.
When he first broke the news in October of goverment’s intention to renew the Aggreko Power Solutions Limited diesel-powered generators contract, Minister of Natural Resources, Energy and Mines, Bintony Kutsaira, said looking at Malawi’s current power challenges, government has no option but to continue with the generators option.
“Government thinks it is better to have expensive power than having none at all,” he said.
Chief director in the ministry of Natural Resources Chimwemwe Banda said the government would consider the recommendations.Follow and Subscribe Nyasa TV :