Last week, Electricity Supply Corporation’s (ESCOM) CEO, Kamkwamba Wayera Kumwenda, addressed a press briefing where he announced his organization’s intent to raise the price of electricity.
Flanked by a pannel of senior officers from his organization, Kumwenda said ESCOM is currently operating at a loss.
He said since the unbounding of ESCOM in 2018, the organization continues to operate at a loss running into over K112 billion. He claimed that his organization is currently buying electricity at K140 per kilowatt, per hour from EGENCO, yet it is selling the same to consumer at K104 per kilowatt, per hour.
The ESCOM CEO described his organization as dead and said the only remedy for its survival is to raise its tariffs otherwise it will have to close. According to him, all variables are in place to fix ESCOM, and that the remaining variable is the price.
He disclosed that his organization has applied to Malawi Energy Regulatory Authority (MERA) to allow it raise electricity tariff by 99 percent. In other words, ESCOM wants to pass on the cost of whatever Kamkwamba is talking about to the final consumer. Umh?
Kamkwamba has just been ESCOM’s CEO for barely 6 months. He probably does not know that his organization is a mixed indigenous forest, and that he may think he understands it when he actually does not. Perhaps that is the reason why he has chosen the easiest and nearest panacea to its woes. To raise tariffs. Typical of an average, or below average, manager.
Unfortunately, Mr CEO that is not how this one will work. You ain’t gonna get what you are looking for this time. Maybe next time.
To begin with, ESCOM has always made headlines for all the wrong reasons from as long as we can remember. The organization has always been an epitome of a badly run parastatal. And for good reasons.
Any alias of executive who is politically connected is thrown at ESCOM, often as a front for politicians and their cabal to ‘eat’ free money through single source tenders. Kamkwamba himself is rumored to be a relation of the First Lady.
I wonder whether Kamkwamba is truly telling Malawians that ESCOM has done away with its management inefficiencies, and that the holes through which the organization has been losing huge sums of money have been sealed. For a long time, ESCOM has been jinxed with the devil of mis-procurement, which ought to be the first demon that Kankwamba must exorcise. Has he?
For example, ESCOM bought envelopes for used for the next 14 years worth millions of Kwachas. The organization has in its warehouse materials that it cannot use, and will not use worth over 14 billion Kwacha, and according to insiders this is just a tip of the iceberg.
On top of having so many employees on its wage bill who were employed without any interviews, ESCOM was also in the news not long ago for distributing fuel to political party fanatics who are not even employed at the organization.
Huge amounts of liters of fuel worth billions of Kwachas for running Aggreko generators, which ESCOM sub contacted for extra power generation, were also fond of growing legs and disappearing into thin air at the organization without trace. The contract with Aggreko itself is still shrouded in mystery with Malawians still in the dark about its contents.
What is known is that the contract was going to cost ESCOM in excess of 57 billion Kwacha over the period of two years, a bill experts said was unsustainable and could push electricity tariffs beyond the reach of the majority of Malawians. Today we hear the contract has been cancelled but ESCOM is still having to folk 1 billion kwacha per months for we don’t know what.
As we are talking now, ESCOM can only provide electricity to Malawians for only a few hours per day. In other words, there is just no electricity at the organization to distribute to Malawians. The question is: which electricity is which whose price they want to raise?
The point I am making is that there are so many management inefficiencies at ESCOM that have to be fixed first before the organization can consider raising the price of electricity. In fact, the company will realize that it does not need to raise tariffs if the bottomless holes that continue to drain resources are sealed.
For someone who came to ESCOM under a cloud of doubt and some loud contestation, Kamkwamba should have by now proven that he is the manager that ESCOM has been looking for. But if the ‘turning around’ was about raising electricity tariffs then this is the best time for him to admit that he has failed and resign.
As it is, even if ESCOM can raise tariffs with 1000 percent, it would still not make any profit because the organization is wrongly geared and making all the wrong decisions. Fixing ESCOM requires much more than just raising electricity tariffs. Kamkwamba may start by changing the attitude of employees at his organization.
The economy of this country is currently teetering on the tenterhooks of oblivion, and energy is critical in the daily survival of citizens. Kamwamba should, therefore, not toy around with people’s sensitivities. Already, so many people and organizations have voiced out against the proposed raise.
CAMA’s John Kapito says ESCOM is not justified to increase tariffs. He said Escom has failed to perform to the expectations of Malawians because of inefficiencies.
“Since the last base tariff was effected four years ago, Escom has failed to achieve any of the agreed key performance indicators [KPIs]. It is unfortunate that Escom expects to make money when it has no electricity and makes a lot of poor management decisions,” Kapito is quoted in the media.
The Nation came up with a rather chiding headline saying ‘BLACKOUTS TO COST MORE’. Currently, a consortium of human rights organizations is also planning to demonstrate against the tariff raise if ESCOM dares to. I would encourage these organizations not only to demonstrate against the raise but against the whole inefficiencies at ESCOM, and the removal of myopic managers.
