Parliamentary Committee on Natural Resources and Climate Change says it will engage Treasury to settle overdue water bills that government institutions owe water boards.
Committee chairperson Werani Chilenga made the remarks on Wednesday after touring Blantyre Water Board (BWB) projects in Mulanje and Blantyre where his committee learnt that debtors, including government ministries, departments and agencies (MDAs), are impeding the works of the boards.
BWB director of finance Paul Chiumia said MDAs owe them K4.5 billion while the private sector owes the board K3.5 billion.
He said this affects the board which is making losses because they sell their water at a loss, adding that customers are affected by issues of low water pressure and distribution.
Said Chiumia: “If you talk about debtors, these are affecting us because we need the resources to run the board and this is a working capital challenge, we don’t have money to run our programMEs, but we are engaging our debtors both private and public, as of 30th September in aggregate, government owed us over K4.5 billion and the private sector owing us K3.5 billion.”
Chilenga said it would be good if Ministry of Finance, Economic Planning and Development deducts directly from the votes of the MDAs, as funding them to pay on their own has not helped.
He said: “We will engage Treasury because they fund these MDAs and deduct their allocations which is frustrating efforts of the water boards. We have assured them [water boards] that we will come in.”
Government’s debts to water boards is said to have risen from K21 billion in June to over K26 billion, which some staff working in the water boards say has affected their operations.
About six key MDAs are said to owe the boards for an accumulated period of four years and the figures keep on swelling because government is not honouring the pledges it made years back to pay the boards.
Malawi Defence Force (MDF) tops the list with over K11 billion followed by Malawi Police Service with over K4 billion, State Residencies over K3 billion, Prisons over K1.7 billion, Health has over K1.1 billion and Education has K335 704 049.82, according to a Water Boards Management report.
According to the June edition of the Malawi Economic Monitor by World Bank unless there is autonomy of utility bodies in the country, both the water and electricity sectors inefficiencies will continue creating a hidden fiscal burden.
The report reads in part: “Water bill collection rates average around 80 percent, with[MDA’s] owing utilities large sums of money.”
The World Bank has suggested that government should mandate prepaid services for all MDAs to minimise the accumulation of unpaid utility bills and provide incentives to service providers to reduce operational inefficiencies by linking public financing for capital expenditure to verifiable improvements in efficiency, among other things. It further suggests that government should adopt a national electrification strategy that is in line with the National Energy Policy.