Private companies and government ministries, departments and agencies (MDAs) owe Electricity Supply Corporation of Malawi (Escom) about K42 billion in unsettled electricity bills, it has emerged.
From the bill, MDAs owe about K25.5 billion while private sector companies owe the utility firm about K17.3 billion.
In an interview on Tuesday, Escom public relations manager Innocent Chitosi said failure by the customers to settle their bills is frustrating the operations of the company.
He said: “We import most of the equipment and tools that we use. We have to pay tax for the sales that we make regardless of the fact that we have been paid or not by our customers.”
Chitosi said by failing to pay Escom, in essence the power utility provider is financing the operations of their customers; hence, negatively affecting the cash flow of the organisation.
He said Escom is in the process of migrating all MDAs and companies from post-paid billing system to prepaid accounts to mitigate the challenge of accumulated bills.
Chitosi said: “We have laid down 90 percent of the infrastructure to migrate MDAs to prepaid metering system.
“This will help them to manage their consumption. Most private companies are already migrating to the pre-paid accounts, so that challenge is being sorted out.”
The development is coming at a time MDAs are undergoing public sector reforms programmes to improve efficiency. The reforms recommend that utility providers should embark on prepaid billing system to deal with defaulting MDAs.
Despite payment of bills being the responsibility of each MDA, Ministry of Finance comes in to assist as records have shown that some MDAs do not prioritise the payments.
In an interview yesterday, Treasury spokesperson Williams Banda said government will only settle unpaid bills for security agencies. He said the National Audit Office is currently verifying the arrears.
However, he urged other MDAs to prioritise the payments of their unsettled bills to Escom.