Lesotho: LEC Goes After Defaulting Prepaid Customers

Lesotho Electricity Company (LEC) is preparing to kick-off a campaign to recover M90 million in unpaid connection fees from its prepaid customers.

LEC managing director Mohato Seleke yesterday said the company has so far recovered M80 million of the M175 million that was owed by postpaid customers through an ongoing debt recovery campaign which started in February this year.

He said the debt recovery campaign would soon include prepaid customers to bring financial stability to the company as it has been plunged into a financial crisis as a result of unpaid bills, Mr Seleke said.

Without a constant cash injection from its customers, the LEC could soon fail to purchase bulk electricity to service its clients, he said.

The company was owed M265 million by its customers when it embarked onto the debt recovery campaign which saw many of its large customers being disconnected to encourage them to pay.

Mr Seleke yesterday warned defaulting clients that the LEC was about to kickstart a similar campaign this time targeting prepaid customers with outstanding electricity connection fees.

The defaulting prepaid customers include households, small companies and large corporates.

"We will soon strengthen our debt recovery campaign to include prepaid customers for unpaid electricity connection fees," Mr Seleke said.

"We will call for such customers to come forward to work out how they can settle their outstanding bills as we do not want to appear like we are fighting them. All we want is for the LEC to be in a healthy financial state to support the economy."

Mr Seleke said the defaulting post-paid customers consist of government ministries and departments, factories, mining companies, private companies and international organisations among others.

Mr Seleke indicated that government ministries and departments had outstanding bills amounting to M50 million in February when the campaign started but it has now come down to M21 million.

Among these is judiciary which owes M1, 7 million. The debt forced the High Court and Court of Appeal to close last Friday after the LEC cut them off. The courts were only opened after negotiations with the power company.

The Maseru Magistrates' Court was cut off in February over a M1, 3 million debt which had accumulated over five years. This resulted in the suspension of trials and delivery of pending judgements. Power was eventually restored in March after the judiciary made an undisclosed part payment of the debt.

Mr Seleke yesterday noted that the LEC was facing challenges in collecting debts from essential service providers like public hospitals which force the company to be lenient.

"You will appreciate the conundrum we face when it is a hospital that owes us for many years and yet it has patients to take care of. We have a developed a code of practice to treat hospitals and old age homes among others differently and not disconnect them as lives are at stake," Mr Seleke said.

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