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National

Marep not audited for 23 years, blows K40 billion annually

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KAMBALA—I am waiting for my technocrats

Shocking revelations have emerged that Malawi Rural Electrification Programme (Marep) has never been audited for the past 23 years, despite blowing K40 billion per year from fuel levy.

Government authorities are dodgy to divulge more information on the matter but Malawi News sources have confirmed the absence of audits at Marep.

Minister of Energy, Newtown Kambala, said he was yet to get details on the matter.

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“I am waiting for my technocrats to furnish me with information on the status of Marep audits,” he said.

Office of the Auditor General could not give reasons why they failed to conduct financial audits at Marep for 23 years.

Auditor General spokesperson, Rabson Kagwam’minga, brushed aside the allegations, saying Marep has been audited but could not give more information on the audits.

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“Like all Treasury funds, Marep has been subject to audit by the Auditor General at least once in a fiscal year,” he said.

Minister of Finance, Felix Mlusu, said his Ministry would investigate the matter.

Malawi News investigations have uncovered that most of the people that have been awarded Marep contracts for the past years have no certifications by Malawi Energy Regulatory Authority.

Centre for Social Accountability and Transparency Executive Director, Willy Kambwandira, described the revelations as serious violation of fiscal and audit rules governing operations of government accounts.

“The revelations are shocking beyond belief and expose major weaknesses and lapses in the management of public funds and resources. This clearly demonstrates lack of stringent sanctions in management of public funds,” he said.

The 2018 Population and Housing Census shows that the national electrification rate in Malawi was at 10 percent, with 37 percent of the urban population and only two percent of the rural population having access to electricity.

The Rural Electrification Programme started in the 1980s with Electricity Supply Corporation of Malawi (Escom) Limited as the implementing agent, using donor and own resources. Since 1980, three phases of the Marep were implemented by Escom Limited.

Following reforms in the electricity sector, Escom was commercialised and mandated to operate as a commercial entity.

Escom could then not continue implementing Marep since most Marep projects were deemed not economically viable.

Faced with the obligation to provide social services to the rural communities, government took over the responsibility of Marep and the Ministry of Natural Resources, Energy and Mining, through the Department of Energy Affairs was mandated to plan and implement the Programme.

In 2004, government approved Energy Laws, including the Rural Electrification Act. Through this Act the Energy Fund, which finances Marep, was created. Sources of this Fund are levies from all energy sales including petroleum products and electricity sales.

The Rural Electrification Management Committee (Remac) was also established with membership from representatives of the Board of Engineers, Society of Accountants of Malawi, Ministry of Local Government, Ministry of Finance and Economic Development and Ministry of Natural Resources, Energy and Mining which chairs the committee.

Remac provides policy and an oversight to the implementation of Marep.

The selection of sites for Marep is based on a Rural Electrification Master Plan which was concluded in 2004 with financial and technical support of the Japanese Government.

The plan is founded on a three point criteria. The first element of the criteria requires that Marep activities must focus principally on the electrification of Trading Centers.

The second element of the criteria requires Marep to follow a strict equity principle where all districts in the country stand equal to each other, irrespective of their population size or level of electrification.

The third component of the criteria requires that for objectivity in site selection, targeted trading centres in each district be based on a rational ranking process following known economic sub-criteria. Currently, this sub-criterion is based on the potential demand of each trading centre, which is invariably linked to the level of economic activities.

Government, through the Department of Energy Affairs, has implemented four phases between 2002 to date as follows:

Phase 4 planned to electrify 58 centres, however, 39 other centres benefited at a total cost of K680.2 million. This was implemented between 2002 and 2007.

Phase 5 planned to electrify 27 centres, one per district except Likoma which is fully electrified. Implementation of this phase was from September 2007 to February 2009 at a total cost of K899 million.

Phase 6 planned to electrify 54 centres, two per district but ended up electrifying 91 trading centres. Implementation of this phase was from November 2010 to August 2012 at a total cost K2.4 billion.

Phase 7 targeted 81 centres, three per district.

The total cost of the phase was K8.3 billion.

While Marep Phase 8 targeted 81 trading centres, three from each District at a cost fuel levy of about K12.1 billion

The objective of Marep is to increase access to electricity for people in peri-urban and rural areas as part of Government’s effort to reduce poverty, transform rural economies.

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