By Wezzie Gausi:
Treasury has agreed to take over a K23 billion debt that Blantyre Water Board (BWB) owes the Electricity Supply Corporation of Malawi (Escom), Times Business has established.
BWB Chief Executive Officer Robert Hanjahanja disclosed this yesterday in an interview with Times on the magnitude of the debt that his organisation owes Escom.
According to Hanjahanja, BWB does not owe Escom K40 billion as claimed by the power supplier but that it owes it K17 billion as the other debt was taken over by Treasury.
Last Thursday, Escom Chief Executive Officer Kamkwamba Kumwenda told the Budget and Finance Committee of Parliament that BWB owes the power supplier K40 billion in defaulted post-paid electricity bills.
According to Kumwenda, Escom is at risk of loss due to the unpaid bills and emphasised the need for timely payments from MDAs and the water board to ensure smooth operations.
“Last year, we received Promissory Notes from the Treasury to sort out these bill, but nothing happened. This year, we have faced losses partly due to unpaid bills,” Kumwenda said.
But according to Hanjahanja, BWB plans to clear the debt within this financial year and remain current with future payments.
“BWB is Escom’s largest customer, consuming a significant amount of power. Our bill is about 60 percent of our monthly revenue, which heavily impacts our cash flow.
“We operate below the break-even point, generating losses each month,” Hanjahanja explained.
He also emphasised the need to manage internal inefficiencies and implement a tariff that covers costs.
Hanjahanja said a meeting with Escom and Treasury is scheduled to address the payment plan and review the Escom tariff structure, which BWB claims includes unnecessary levies.
Secretary to the Treasury Betchani Tchereni was not immediately available for a comment.
Parliamentary Committee on Budget and Finance Vice Chairperson Ismail Mkumba expressed concern over the default payments and stressed the need for MDAs and BWB to honour their obligations for mutual operational stability.
“This is worrisome. Treasury funds the MDAs, and BWB generates revenue. Why is it challenging to pay these bills? We need to meet all parties involved,” Mkumba stated.
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