The High Court in Lilongwe has set February 23 for an inter partes hearing on whether to grant an injunction to the Consumers Association of Malawi (Cama) restraining the Electricity Supply Corporation of Malawi (Escom) from increasing tariffs which it effected on January 1, 2016.
This comes after Cama on December 31, 2015 sought an injunction stopping Escom from effecting new tariffs after the company had advertised its intention to do so.
Both Escom and Malawi Energy Regulatory Authority (Mera) have justified the tariff increase saying it is due to the impact of inflation and exchange rate movement.
Mera chief executive officer Raphael Kamoto backed the decision in his affidavit while Mera’s board chair Dingiswayo Jere also defended the tariff increase, saying Mera approved the hike after considering the impact of inflation and exchange rate movement.
But Cama wants the increase suspended after the Mera board in December gave a go-ahead to Escom to increase tariffs by 6.6 percent-to K53.69 from K40.69 per kilowatt-hour in January 2016.
The increase came barely a month after Mera gave Escom another 13.7 percent increase in tariff.
According to court documents Weekend Nation has seen, Cama’s director for legal services, Yusuf Nthenda of Whitney and Associates, argues that the move to increase the tariffs is insensitive and ill-timed considering that in 2015, Escom failed to generate enough electricity and the country continues to be in darkness due to its inefficiencies.
Explains Nthenda in the affidavit: ‘‘There is no need to be told that the country is in a crisis in as far as electricity supply is concerned because Escom, almost on a daily basis, is advertising about load shedding due to insufficient generation.’’
He further disclosed that minutes of a board meeting held on September 22, 2015 show that Mera granted an overall 37.28 percent base tariff increase to Escom in April 2014 and that the increase which was supposed to be implemented in July 2016 has been effected in January which is against their own rules.
According to Nthenda, Escom’s report showed that it performed poorly on agreed key indicators in areas that affected consumers.
On quality service and supply, he argued, Escom scored 10 out 30; on system losses that are calculated to comply with acceptable business practices to ensure that the impact of losses due to inefficiencies and thefts are not overburdened on the tariffs, Escom scores 3 out of 20 points.
Cama said based on this, Escom did not meet the targets and, therefore, has no moral right and ground to increase the tariffs.
However, in their affidavit in opposition to the application for an injunction, both Escom lawyer Ted Roka of Kakeni Kaphale and Company and Mera defended the tariffs increase, saying it was necessitated by inflation, exercising the powers invested in both the regulator Mera and the implementer by the country’s Constitution. n