Audit key to settling utility bills—Treasury

Ministry of Finance says it will wait for the National Audit Office to audit oustanding arrears government institutions owe the country’s water boards before making a commitment to clear the utility bills.

The ministry’s spokesperson Williams Banda said in an interview on Monday that currently, Treasury is consolidating arrears from ministries, departments and agencies (MDAs) to be considered for funding.

He said: “Currently, because the financial year has ended, institutions are supposed to submit their outstanding arrears to be audited and once that is done, we put them on the list to be funded and the financing will go through the MDAs.”

Banda said going forward, government will install pre-paid meters in all MDAs.

Treasury’s stance follows revelations of outstanding arrears in excess of K30.7 billion that MDAs owe the country’s five water boards in utility bills.

Figures from the Water Services Association of Malawi (Wasama) show that as at March 30 2020, Southern Region Water Board was owed KK9.4 billion.

They further show that as at June 30 2020, Lilongwe Water Board, Blantyre Water Board, Northern Region Water Board and Central Region Water Board were each owed K8.1 billion, K5 billion, K4.2 billion and K4 billion in that order.

Malawi Defence Force bill is at K19.3 billion, Malawi Police Service (MPS) at K5 billion and State Residences at K3.1 billion.

Wasama president Engineer James Chitete said they are talking with authorities to settle the bills while plans to install pre-paid water meters to MDAs are underway. 

He said: “The water boards have been negatively affected in as far as cash flow is concerned to the extent that the water boards are grappling to pay statutory deductions such as taxes, pension and even obligations to suppliers of goods and services.

“We have managed to install pre-paid water meters in hospitals, prisons and education institutions, but we have struggled to have meters installed at MPS. As for MDF, we are about to install pre-paid meters after signing of a memorandum of understanding to have their water systems reticulation upgrade done.”

He said once a pre-paid water meters are installed and there has been an outstanding bill, the water boards will deduct 50 percent of any amount paid by a customer, but with exceptions upon agreement.

The development comes in the wake of high levels of non-revenue water for water utility companies which the Japanese International Cooperation Agency estimates at around 35 percent. In an earlier interview, Malawi Water Boards Pension Funds Trustee chairperson Ben Kaluwa, who is also University of Malawi’s Chancellor College economics professor, said unless ownership and customer status for parastatals is delinked, issues of high defaults and poor performance will persist.