The Malawi Institution of Engineers (MIE), a local professional body of engineers, has said the K406 billion (about $1.6bn) 2012/13 budget offers no solution to the countryâ€™s intermittent power supply during its lifespan.
MIE president Dr. Matthews Mtumbuka reacting to the budget presented by Finance Minister Dr. Ken Lipenga last Friday, said while government has acknowledged power problems, no major short-term solution has been suggested in the financial plan.
In the budget statement, Lipenga said as an immediate option, government will speed up interconnection with Mozambique which will reduce power outages and begin to support industry which has suffered the effects of power outages.
He also hoped that $350 million Millennium Challenge Corporation (MCC) resources that have been withheld by the US government will be released following progress in addressing outstanding issues of governance.
But Mtumbuka countered that the Mozambique Interconnector project cannot be an immediate solution as claimed by the minister.
“This is, in fact, a medium term solution because it would take anything between 18 and 36 months or longer from implementation time to going live before benefits of the interconnector can be realised,” he said.
On MCC, Mtumbuka said the project is targeting boosting efficiency and reliability of transmission and distribution systems while the major solutions required for the rampant electricity blackouts is to increase generation capacity.
“MCC will only add six megawatts of additional generation capacity which is an insignificant amount considering that currently the shortfall is in the order of 100 megawatts,” he said.
The Malawi Energy Regulatory Authority (Mera) in May increased Escom tariffs by 63.5 percent but Mtumbuka said the hike has not been properly explained or justified.
He argued that the increase in the name of full cost recovery requires close scrutiny on systems efficiency to avoid lumping “unnecessary cost on the poor unsuspecting citizen”.
But Mtumbuka said much as the government has presented a “detailed and brave budget” to turnaround the economy, the consultation period was too close to the budget making it unable to reflect the views of those consulted.
“MIE made very important and significant submissions to the minister both verbally and in written form. The presented budget has neither included those major submissions nor alluded to the engineersâ€™ input and yet national development of any country largely depends on engineering. MIE finds this trend very worrying,” he said.
But MIE has commended government for removing tax on machinery and buses with a capacity of 45 passengers, arguing this will help accelerate the growth of the manufacturing industry and result in affordable public transport system, respectively.
A number of players have made their comments to the budget with the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) hailing it as pro-budget while the Consumers Association of Malawi (Cama) arguing it sidelines the poor.