Botswana Power Corporation (BPC) has adopted new, stricter credit control measures, which include credit blacklisting of defaulters, as customer arrears now stand at over P400 million.
The bulk of customer arrears are from charges on new connection on homesteads and outstanding balances from the change over to prepaid metres.
BPC marketing and communications manager, Spencer Moreri said in an interview with Mmegi Business that they realised that their customers have not been faithful in meeting signed acknowledgement of debts and payments plans thus negatively affecting their plans.
“The amount over due in over P400 million. This debt has impacted BPC, as we are currently facing cash flow challenges in meeting the financial obligations and paying our major suppliers and face the risk of service disruption,” he said.
Moreri added that that this had resulted in the corporation up-scaling their stringent credit control measures on their clients.
Moreri further said that the newly adopted measures will include but not limited to disconnection, block from purchasing electricity units, handover to debt collectors, handover to lawyers for legal action, charge interest on areas at prime plus five percent as well as blacklisting with the Credit Bureau.
“We have registered with the Credit Bureau to be able to blacklist these people, it is just a normal standard credit control step in chasing debts,” he said.
According to BPC’s 2014 annual report, there has been an increase in the corporation’s debtor’s book.
In the financial year ended March 2014, the corporation was rescued from posting a P1.33 billion loss by a P1.49 billion government subsidy, which resulted in the parastatal recording a P114 million profit.
The BPC’s operating losses were pegged at P311.4 million in 2012, P153 million in 2011, P563.6 million in 2010 and P376.4 million in 2009 due mainly to escalating costs of imported power and the lack of cost-reflective tariffs.
Besides the tariff gap, the corporation’s 2014 financials indicate that rising costs associated with electricity imports and emergency diesel power, fuelled operating costs.
In the year to March 31, 2014, the BPC generation, transmission and distribution expenses rose to P3.62 billion from P3.42 billion the previous year, while government pumped another P450 million into purchases of emergency power during the period.
The increase in generation, transmission and distribution expenses recorded in 2014 is an improvement, unlike in recent years, when delays in the finalisation of Morupule B, coupled with the suspension of Morupule A, forced an almost total reliance on imports and emergency power.