Namalomba, Mangochi South West legislator as well as Parliamentary Public Accounts Committee chairperson
* His court injunction case restraining ESCOM from debiting 91,825 kWh units as debt adjourned to June 8
* After ESCOM provides evidence of alleged fraud in its plea to vacate the injunction
* More than 30% of free-issue units consumed by Namalomba’s business premises violated tariff principles
By Duncan Mlanjira
The High Court in Blantyre has heard that more than 30% of free-issue electricity units consumed by Member of Parliament Shadric Namalomba’s Mulanje-based Nalipiri Eco Resort, violated tariff principles and that he effected transfers from domestic to business premises, which violated ESCOM’s tariff rules and resulted into a loss on ESCOM’s part.
This is the submission that ESCOM made on Wednesday, May 18 in response to the interlocutory injunction order which Namalomba — who is Mangochi South West legislator as well as Parliamentary Public Accounts Committee chairperson — applied in the High Court restraining ESCOM from debiting 91,825 kWh units as debt.
ESCOM submitted that the electricity units he had illegally consumed were treated as a debt after thorough investigations that found that the transactions were contrary to the Tariff Principles.
ESCOM also indicated that the units that Namalomba illegally transferred shall be credited to the rightful user, which is the meter that originated the transfer.
The hearing was adjourned to June 8 to allow Namalomba and his legal team time to to respond to ESCOM’s submissions, that provided evidence of alleged fraud.
Namalomba, who is also spokesperson for former Head of State Arthur Peter Mutharika (APM), is acting on his own behalf as owner of Nalipiri Eco Resort, which was found to have allegedly been defrauding ESCOM of power units.
He thus denies this and sought court intervention in disagreement to the action taken by ESCOM which is debiting Namalomba’s business place on meter number 37154401832 with 91.825.40 kWh units as a debt.
In his sworn statement, Namalomba — a former director of finance for ESCOM’s sister company, Electricity Generation Company (EGENCO) — indicates that in April, ESCOM employees claimed that some of the units used at Nalipiri were not paid for and went ahead to issue a reversal notice of the units at 91.825.40 kWh.
He claims that when he tried to follow up on the basis of their claim, ESCOM did not respond but kept deducting 80% of units on every purchase he made to recover the debt.
He claims that ESCOM has not disclosed which units were not paid for “considering that I use prepaid units which are paid before use” and only heard of free-issue units from the media.
He further explains that whilst working for EGENCO, he was being given free units as part of his fringe benefits — which were paid for by his employer and could be transferred from one meter to another through application to ESCOM for approval.
He says he was not an employee of ESCOM and never got free units from the power utility service provider and as such ESCOM “cannot just come to me and say they are reversing free-issue units for my meter as if they have issued me free units at any point”.
He also said he speculates that ESCOM could be referring to the free units he received from EGENCO “but even if that was the case, EGENCO pays for those units”.
“I strongly believe that it’s unfair for the defendant to punish me without full disclosure of the breach I have committed [and that ESCOM’s] actions are so arbitrary, unfair and are causing me great loss and inconvenience as I am failing to buy sufficient units to run my resort in Mulanje due to the huge deductions of the units that I buy.
“I am losing customers now due to lack of electricity as it has become extremely expensive for me to have electricity at the resort due to the huge deductions.”
In its submissions, ESCOM presented a sworn statement made by Morris Lingomanje, who is its revenue protection supervisor of investigations, and in his course of work in establishing why there was noticeable low consumption, he captured some customers who were not buying units and also those buying below a specified threshold.
Lingomanje submitted that customers who appear on the low consumption report are visited by the investigation team and that Nalipiri Eco Resort was visited twice on August 11, 2021 and December 22, 2021.
He disclosed that ESCOM’s system indicated that Namalomba’s meter received units from other meters, saying such transferring of electricity units violated internal procedure and was contrary to approved tariff requirements.
He indicated that their vending system called ESCOM Management Information System (WMIS) provides a platform for free-issue units, which is a refund of unused units to the contract holder.
Free-issue of units happens when the meter is burnt or faulty; transfer of contract holder from one premise to another; purchase of units on a wrong meter and other services.
He disclosed that Namalomba has three tariff categories of single-phase domestic — applicable to residential single-phase charging K92.30 inclusive VAT per kWh; single-phase general tariff — applicable to single phase business installation charging K136.65 inclusive VAT per kWh; and three-phase general tariff applicable to three-phase business installation charging K151.10 per kWh.
He further established that Namalomba’s premises had an initial meter number 37154442323 which was replaced with meter number 37154401832 — both being three-phase general tariff.
He established that 94,108 kWh units was transferred to the resort from meter numbers under domestic and single-phase general tariff category.
The transfers contravened ESCOM’s internal procedure and were contrary to tariff requirements as electricity units cannot be cross-transferred from one tariff category to the other and that transfers were made with neither supporting documentation and approval from relevant authorities.
He also submitted that Namalomba’s premises were fixed with meter number 37154442323 on May 5, 2018 and that from May to August 2018 bought 4,724 kWh of units at K499,000 but on August 28, 28,168.9 kWh units were transferred from single-phase domestic tariff meter number 37154152997 to Namalomba’s meter — contrary to tariff requirements as units of domestic customer cannot be transferred to a commercial meter under three phase general tariff.
The meter 37154152997 used to transfer the units belonged to Mada and Esther Malefula — both employees of EGENCO and ESCOM respectively— who are both beneficiaries of units as fringe benefits.
Mada Malefula of EGENCO wrote to ESCOM requesting transfer of 54,000 kWh from his meter 37154152997 to 37154442323 addressed to revenue manager but the transfer was made with the manager’s approval.
After the free-issue of 28,168.9 in August 2018, Namalomba did not buy any more units until February 2019 when he was changing the meter to a new one 37154401832 and that there was no documentation to support transaction apart from a record that the meter was changed.
“Ironically, the replaced meter was installed at Mwanga Clinic as the owner of 37154401832. The transaction of 28,168.9 kWh was considered fraudulent because there is no evidence that the initial meter had a balance of the transferred units [which] violated the delegation matrix as neither the Revenue Accountant nor the Chief Revenue Manager approved the transactions.”
Namalomba further transferred 16,324 kWh on May 21, 2021 from his ECO Brocks Factory meter number 37154312963 — also a single-phase to a three-phase without the approval and contrary to tariff charges.
The letter from ECO Bricks indicated a wrong meter number as the one belong to JS Namalomba but the electricity units were still issued to Namalomba’s meter.
He also established that ECO Bricks was not buying units but was also receiving from other meters in violation of tariff requirements.
The ESCOM system also indicated that on 19th October, 33,333.5 kWh was transferred from G. Makuta — another EGENCO staff single-phase meter number 54200065370 to Namalomba’s premises also contrary to tariff principles.
Thus Namalomba was charged on March 29, 2022 for all consumption that was contrary to tariff principles as a debt — the illegal consumption being 28,168.9; plus 12,281.9; plus 17,324; plus 36,333 — totaling 94,108 kWh “but due to mathematical error he was charged 91,825.40”.
Since the appointment of Kamkwamba Kumwenda as chief executive officer, ESCOM has been busting a syndicate of its and EGENCO employees who has defrauded the company of about K60 billion worth of pre-paid meter units since 2018 that were sold by pararell structures to companies and individuals.
In March, Kumwenda indicated that this has been going on since the company migrated to pre-paid meter billing system and preliminary findings exposed some Malawians of Asian origin and their companies, who would not have been buying electricity units from ESCOM for the next five years until they were discovered.
“We are losing K12 billion annually through commercial loss which include ESCOM and EGENCO employess selling their electricity allocations to these entities and individuals,” Kumwenda was quoted as saying back in March, when his team made a surprise visit on Kips Restaurant in Blantyre, which was accused of buying electricity from parallel markets.
Kumwenda told the media alleging that the restaurant had dubiously been buying units from ESCOM and EGENCO employees and they “will name and shame all people who are doing such illegal activities.
As all this was happening, EGENCO distanced itself from claim by ESCOM that it was involved in the syndicate through its employees who resell their allocated electricity units.
EGENCO stressed that it does not have any control of the system that issues electricity units, saying it is ESCOM’s responsibility for any sales and reissuing of the prepaid tokens.
The company also said it does not condone any form of abuse of any privilege or benefit that an employee gets as part of their remuneration — while at the same time acknowledging that it has taken note of the concerns raised in the media reports and was investigating of such abuse of the electricity units that it buys from ESCOM for its employees.
EGENCO also stressed that the electricity units tokens for its employees are paid for by the company and “therefore, the question of loss of revenue from these fully and duly paid for units does not arise” since it honours all payments every single month for the electricity units that EGENCO and its employees use.
In the same month of March, ESCOM CEO Kumwenda said they would embark on a nationwide inspection of the 461,000 properties that have been flagged in the fraud and those discovered shall also be named and shamed.
The door-to-door countrywide meter account verification and revenue protection exercise was rolled out to appreciate the challenges its customers face with such accounts and enhance service delivery and thus Kumwenda urged customers “to cooperate with the assigned employees who shall visit households and establishments during working hours by granting them access to their premises and assist them with meter account information when they seek clarification”.
The assigned ESCOM employees would be easily be identifiable as they shall be using branded ESCOM motor vehicles and have identification cards and Kumwenda also urged customers “who suspect or know that their meter functionality was tampered with to declare such issues”.
“Those who do not declare and only get identified during the exercise, will be named in the public media.”