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Monday, 16 September 2013

Parastatal Madness, 20th Edition

North Western Water and Sewerage Company (NWWSC) is owed K7m by Government institutions or half of its annual billing revenue. The debt has built up over many years which has crippled the utility company to the point that it has failed to maintain many water leakages or replace burst water pipes. The company is also failing to meet its statutory obligations to the Zambia Revenue Authority and National Pensions Scheme Authority.

The story is the same in every utility company. Lusaka Water and Sewerage Company (LWSC) is is owed more than staggering K50m in unpaid bills. Sometime back the Southern Water and Sewerage Company (SWASCO) was ordered to reconnect water to all prisons in the province disconnected.

In short there's nothing utility companies can do. This is a political problem. The failure to pay parastatals the debt owed to them is one of the main reasons for their under-performance, as any careful reading of any Auditor General's Report on parastatal would reveal.

The Government does not really care about this issue because foreign donors have adopted utility companies as their poor babies. They are in effect ending up paying for Government's unpaid bills indirectly. And in the meantime poor service continues. It is classic parastatal madness.

When PF came to power it promised to end this madness. Bob Sichinga declared to the parastals : 
"Business as usual is over, we all have to pull our socks and roll our sleeves to sustain our institutions. You will be entitled to settle all your costs and build a fund that will enable you buy the equipment you require to operate to full capacity...To survive, there is need to change…from 2012 we expect you to be independent and if you want salary increment, work for it. Every deductions taking place whether National Pensions Scheme Authority (NAPSA) or Zambia Revenue Authority (ZRA) should be remitted.."
2012 has come and gone. Parastatal madness continues.

Chola Mukanga | Economist
Copyright © Zambian Economist 2013

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