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Gensets to make Malawians pay double for electricity

Electricity tariffs are expected to double once the much touted stand by diesel generators arrive in the country and are installed to supply extra power to the country’s shaky hydropower supply.

This may mean that on average, a household that spends about K30,000 to buy 500 units a month at the current rate of K58.80 per Kilowatt, will have to spend K60,000 or more for the same units.

A look at a leaked Bid Opening Result document for Electricity Generation Company (Egenco) shows that the service charge is as high as K1, 000 per kilowatt in some cases.

This comes amid extreme power blackouts which the country has been experiencing especially since September.

The power blackouts keep worsening by day, as consumers could now go 24 to 36 hours without electricity.

About a month ago, Egenco told our sister paper The Daily Times that electricity tariffs will definitely be increased but was not certain whether it will be the 25 per cent (which Escom earlier proposed) or not.

“We could only arrive at a tariff if we have made evaluation of the financial proposals. We therefore cannot wholesale adopt Escom’s proposed tariff, but we will come up with ours after evaluating the financial proposals and consultations with relevant stakeholders,” said Egenco’s Senior Public Relations Officer, Moses Gwaza.

President Peter Mutharika has been telling the nation at several podiums that the power outages will soon be history once the Gensets are installed.

He alluded to the same at the opening of the 47th session of Parliament yesterday.

The Bid Result document indicated that Egenco will also have to pay a total of $297,513 (MK218, 672, 055) as monthly lease for the emergency generators and all these costs will be financed by the consumers through the high tariffs.

The document indicates that nine companies were on the shortlist to supply the generators but only three were successful. The companies were Agrekko, SubSahara Power Distributors, Dezro Electric Service PVT LTD, EnCOMM+Histoto+Multicoms Joint Venture (JV), Green Heart Energy, Ben and Cargo, Aksa Energy, CFO Malawi Limited+AL Faris Equipment Rental LLC, Master Power Technologies+Hisco JV.

Agrekko, EnCOMM and CFO Malawi Limited emerged favourites after offering service charges of $0.1715 (K126.05), $0.015 (K11.025) and $1.6 (K1, 176) per kilowatt respectively.

It says Sahara and Dezro were left out because they seem to be the same bidders and one of them did not have the bid security. The other bid is non-responsive. Green Heart, Aksa and Master Power were left out because their charges were on the higher side.

“Ben and Cargo are out of question due to very high rates….. Seems to be spearheaded by a local politician who doesn’t seem to understand the project,” reads part of the Bid Result Document.

This company offered a service charge of K500, 000, a monthly lease of K2, 250,000,000 and a buyout charge of K4, 300,000,000

But we have observed that much as the bid results indicated that Master Power Technology had high rates, its service charge was lower than that of CFO which has been earmarked to be awarded the contract. Master Power’s service charged K683.55 per Kilowatt while CFO’s was at K1, 176 per Kilowatt.

The initial plan was to plant the emergency power generating equipment through a lease framework agreement at eight sites namely; Fundis Cross (Mulanje), Chigumula, Zomba, Monkeybay, Nanjoka, Lilongwe C (close to State House) and Telegraph Hill (near Mzuzu State Lodge).

According to the Egenco’s Minutes (Procurement reference: EGC 025/ICB/FY2017-18) of the Pre-bid meeting held on September 26, 2017 the contracts are for three years for each site.

“..The term shall commence on the day that the units in a particular site are ready for commercial operation. Each two Megawatt generator set shall be capable of continuously running and producing two Megawatts for up to 16 hours if called to duty,” reads the minute document in part.

As we went to press, Egenco had not responded to our questions on the cost of the generators and the high tariffs expected.

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