African Eye News Service (Nelspruit)
Hobbs Gama
22 May 2000
Blantyre (Malawi) — Private sector investors have ignored Malawi's attempts to privatise its national electricity utility, the Electricity Supply Corporation of Malawi (ESCOM), because of fears that the country's low tariffs would prevent any real profits, officials said at the weekend.
Documents submitted to the Consultative Group conference on foreign donors, creditor nations and 17 key financial institutions in Malawi last week but only publicly released on Sunday indicate the country needs to redesign its bid to find private sector strategic partners for the ailing public utility.
Malawi's commerce and industry ministry's submission told the conference, which included the IMF and World Bank, that the government was already restructuring and streamlining ESCOM in an attempt to make it more attractive to potential joint-venture investors.
The initiative forms part of Malawi's Private Sector Development Policy, which is meant to radically upgrade public infra-structure such as roads, power, water and telecommunications by identifying strategic private sector partners.
Malawi's Communication Regulatory Authority (Macra) issued public invitations for investors last year, but no one has yet expressed any serious interest.
"Investors appear to be discouraged by the low electricity tariffs in Malawi, which are currently the lowest in the whole of the Southern African Development Community (SADC) region," the conference report read.
The ministry confirmed Malawi would therefore fast track ESCOM's integration with the regional electricity grid, with new connections to Mozambique planned soon, as a way of boosting the country's power generation.
Malawi is meanwhile also still seeking strategic partners for its semi- commercialised Malawi Telecoms.
The commercialisation is designed to provide high-speed data transmission of at least 64 kilobytes per second and paging services.
Malawi Telecom was created during the recent split of Malawi's Posts and Telecommunication Corporation (MPTC) parastatal into a separate postal service and telecommunications company.
The country's Privatisation Commission will oversee the selection of private sector partners.
"Malawi has one of the lowest key performance indicators in tele- communications in the world, with one telephone line for every 300 people and an average waiting time for telephone connections of more than 10 years," the conference was told.
Similar attempts to commercialise Malawi's water utility have been hobbled by the parastatal's huge debts, outstanding client accounts and weak debt collection systems.
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