NAWEC’s Financial Woes Increasing

NAWEC Head Office, Kanifing

The Gambia’s sole producer, transmitter and distributor of electricity, water and sewerage, NAWEC, is feared to “go under” amidst growing financial problems.

The state-owed company, which continues to operate on obsolete machines, is financially in jeopardy as the government continues to take loans and accumulating debts. NAWEC owes more than three billion Dalasi to lenders, financial institutions within and outside the country.   

Huge loans have been accumulated in the wake of new projects like water and electricity expansion; generators and rural electrification; network upgrading; maintenance; establishing stand alone power stations in major provincial towns, including the independent power producer (IPP) at Brikama, the administrative capital of the West Coast Region, among others.

Against this backdrop, NAWEC’s think tank who “seems to be running out of ideas” believe a 33 per cent increase on electricity, water and sewerage tariffs is the main solution to the company’s financial problems and keeps it out of the woods.

Currently, NAWEC charges from D7.20-D8.70 per unit for domestic, commercial, industries, agriculture, local and central government consumption of electricity; it also charges between D8-D10.62 per unit for water consumption; while prices per unit for sewerage are pegged at D2.2-D6.6.

A 33 per cent tariff increase on these essential social services will require at least an addition of D2.38. “If you look our debt, there is no way we can sustain the company if there is no increment on our tariff,” Mr. Nani Juwara, NAWEC’s commercial director said at a public hearing on March 17, 2012.  

The hearing organised by the Public Utilities Regulatory Authority (PURA) is the second in the space of one year. It gives NAWEC’s clients the opportunity to partake in the tariff review process by approving or disapproving any proposed increase on the company’s charges.

This year, the public again massively voted against the proposal. One consumer vehemently argued that NAWEC can never repay the D3 billion loans it had on its head. He suggested a swift government bailout hence a tariff increase is not the solution.

However, the irony is that the same government which owns NAWEC had accumulated huge debts and owed up to billions to the company as of June 2011. The company in a desperate move publishes in a media dispatch names of government institutions owing it voluminous sums of money.

From the office of the President, the ministries, area councils, public institutions to the president’s private businesses and a few private companies and individuals, NAWEC is jointly-owed over D2 billion all together.

During the hearing over the weekend suggestions were made to NAWEC, which enjoys domination in the production, transmission and distribution of water, electricity and sewerage services to go after all its debts, and set aside its proposal for tariff increase.

However, the commercial director, Mr. Nani Juwara revealed the company successfully collect 80 percent of monies owed to it monthly. But he fell short of admitting that the remaining 20 per cent has been proving difficult to collect from the government.

“It is only the government that we sometimes have to “maslaahaa” (compromise),” he said. “NAWEC is own by the government.”

The list of debtors “named and shamed” last year by NAWEC was submitted to the National Assembly in Banjul, but following an announcement by the Legislature that an extraordinary session has been postponed until “further notice”, nothing has been heard of it since.

“We are facing some financial problems and if we do not solve it, it will affect us a lot in our operations,” NAWEC’s finance director Mr. Alhagie Jallow said during the first public hearing on February 12, 2011. For the monies owed to it, he said “We do not see a way out if the necessary steps are not taken.”

Between 2008 and 2010, the utility company recorded an operational loss of more than D761 million, undoubtedly harming the revenue base of the company and its operational cost.

At the time, the company finds itself in a situation which could be described as being “between the devil and the deep blue sea” NAWEC owed its major suppliers D830 million in 2010 compared to D378 million in 2008. 

Author: Modou S. Joof

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