BLANTYRE-(MaraviPost)-One of the county’s renowned economists Betchani Tchereni has described the 99 percent electricity base tariff adjustment application which the Electricity Supply Corporation of Malawi (ESCOM) submitted to Malawi Energy Regulatory Authority (MERA) as unjustifiable.
Tchereni agrees that the tarrif may have to be adjusted but not with 99 percent as proposed by ESCOM.
“Psychologically, the companies are hoping for an adjustment but not up to 99%, obviously. That is not justifiable,” says Tchereni.
He argues that the economic hardships the company is attributing to have pushed it for the tarrif increment decision are the same every Malawian is facing.
Tchereni is in view that one of the reasons being advanced by the tarrif increment with such huge percentages is the issue of cost recovery.
“When I look at that, I start to see what constitutes these costs. There are big cars, fuel, school fees, etc. To it, you can add things like the cost of poor service delivery.
“And then comes PML, a company which need overheads, big cars, etc for everyone,” he says.
The economist also want ESCOM to revisit its loss calculations as the one disclosed lacks some evidences.
He adds; ” The calculations of loss too might have to be revisited and suppose these electricity companies were generating enough electricity for all of us , wouldn’t that given them a much economies of scale position for them to not really bother or worry about such a huge tariff adjustment.”
Meanwhile, Tchereni wishes MERA to follow the following recommendations so as to make the the issue of tarrif adjustment more justifiable and understandable.
- Do an analysis of what the adjustment may be if PML costs are removed from the equation.
- Have ESCOM and its allies show a cost reduction plan which he believes they have not shown.
- Have EGENCO properly outlining the generation expansion drive without which the costs will remain high for all the companies.
