By Taonga Sabola:
Malawi Energy Regulatory Authority (Mera) board of directors is this week expected to come up with the final verdict on Electricity Supply Corporation of Malawi (Escom)’s base tariff application.
Among others, Escom is seeking a phased four-year 60 percent electricity tariff adjustment of which 53 percent would come in the first year.
Last month, Mera engaged stakeholders in a public hearing to get their views regarding the tariff hike application.
Mera Chief Executive Officer, Collins Magalasi, said his organisation has finalised scrutinising the input from stakeholders regarding the matter.
During the public hearings held in all the three regions of the country, over half of stakeholders objected to the tariff hike.
Malawi Confederation of Chambers of Commerce and Industry (MCCCI) Chief Executive Officer, Chancellor Kaferapanjira, said a 53 percent once off tariff hike in the first year would crash the economy.
Kaferapanjira said, while increasing tariffs to attract investors could help Malawi, raising the charges by a whopping 53 percent would crash both industry and consumers.
He said such a huge increase would significantly raise the cost of living for the poorest of the poor.
“What this simply means is that if you are using K20,000 on power, the 53 percent hike would see you spending above K30,000 from September, which is too much,” Kaferapanjira said.
The industry chief said the development would leave industry with no options but to induce a sudden jump in commodity prices.
“And if industry decides to pass on to the consumer the impact of the increased cost of operation, the impact will be disastrous,” Kaferapanjira said.
Consumers Association of Malawi Executive Director, described the proposed tariff hike as unfortunate.
Kapito said it is unthinkable for people to be discussing raising the price of a product which is not available on the market.
He argued that it would have been better for Escom to make power available first before deciding to raise its tariff.
“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.
He added that allowing Escom to increase energy tariffs would fuel corruption at the institution.
Kapito said the problem with Escom is not shortage of financial resources but abuse which has resulted in the power distributor buying equipment it does not need.
“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,” Kapito said.
But Escom Chief Executive Officer, Allexon Chiwaya, argued that the tariff hike would help his fir m meet the charges levied by power producers