Electricity users and other stakeholders Monday took turns in denouncing a proposal by the State-run Electricity Supply Corporation of Malawi (Escom) to increase tariffs by 69.7 percent in the next five years.
This came out during the first public hearing on the proposal organised by the Malawi Energy Regulatory Authority (Mera) in Blantyre.
Consumers Association of Malawi (Cama) Executive Director John Kapito said a review of the just ended base tariff (2018 to 2022) has shown that Escom failed in almost all its agreed Key Performance Indicators (KPIs).
He added that in the past five years, consumers experienced the worst delivery of electricity through prolonged blackouts, system failures, poor customer care and continuous corruption incidents, among other things.
“The parastatal continued to make losses which made the institution to have no capacity to invest and repair machinery and these failures created unnecessary challenges in the delivery of electricity that ended with unending prolonged blackouts throughout the period of the last base tariff increase.
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“We are looking for a balance where they can assure us that whatever they have included in the proposal will be achieved,” Kapito said.
President of Renewable Energy Industries Association of Malawi (Reiama) Sosten Chigalu said Escom must reduce losses within acceptable international benchmarks, stressing high technical and commercial losses, at 22.2 percent and the target of 17.4 percent, are not good enough.
He added that the parastatal should improve its operational efficiency and cut unnecessary costs such as hired vehicles, rented spaces, and extravagant sponsorships and that it should benchmark itself against both regional and international energy distribution companies as a yardstick of performance.
“Escom must act on buying materials from manufactures and outsourcing of construction and service connections to local private sector players. There is a need to bring an equity investor in Escom and eventual listing on the Malawi Stock Exchange for public and private investors,” Chigalu said.
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Escom Chief Operations Officer Maxwell Mulimakwenda said the application is made in line with its role as a single buyer.
“We have not had a tariff adjustment since March 2021 although significant economic changes have happened such as the devaluation of the Kwacha, inflation increases, among others, hence the proposal,” Mulimakwenda said
Mera Chief Executive Officer Henry Kachaje said a determination on the application will be made once a review of all the input from stakeholders has been done.
