ESCOM's Management Change

Topics: Energy development, Peak oil, Electric power Pages: 5 (1649 words) Published: August 30, 2011

The Commercial Electricity Supply Industry Structure is dominated by a publicly owned and vertically integrated power utility. Electricity Supply Corporation Of Malawi Ltd, (ESCOM) which was established by an Act of Parliament in 1957 and was revised 1963 and 1998 respectively. (Power sector reform strategy 2003:27) In this essay we are going to explain the background of ESCOM, its Mission, challenges and the concept of intervention with reference to the interventions government has made to the corporation and also the strategies which government used for this intervention will be outlined.

The Electricity Supply Commission of Malawi (ESCOM) LTD is a public utility which was incorporated under the companies Act of the Republic of Malawi in 1998 with its own articles of Association. It is owned almost wholly by the Government of Malawi (99%), while the remaining shares of 1% are held by Malawi Development Corporation (MDC). Its principal business is to generate, transmit, distribute and retail electricity services nationwide through its interconnected and off-grid power supply systems. The utility handles large portfolio of electricity and civil works, projects of development and maintenance nature to meet electricity demand. Currently the company is undergoing major reforms to align it with the provisions of the energy policy 2003 which calls for the liberalization of the power supply industry. Power Sector Reform Strategy 2003:4)

The mission statement of the utility company is to generate, transmit and distribute electrical energy and provide related services, motivated by desire for excellence through the use of appropriate technologies, to satisfaction of customers and other stakeholders. It’s divided into four distinct business units namely: Generation, Transmission, Distribution and Holding. Power Sector Reform Strategy 2003:4)

ESCOM is faced with big challenge of meeting the ever growing demand for electric power. This challenge has seen ESCOM put in extra efforts to meet the growing demand starting from generation, transmission and all the way to distribution. These challenges have put ESCOM at a cross-road for deciding to move forward while moving from the comfort zone of having surplus electricity in the past years to a strained period. The major challenge is building new capacity to satisfy the higher demand for electricity that accompanies strong national economic growth. The corporation has three hydro-electrical plants: Nkula A and B, Tedzani A and B, Kapichira and Wovwe. (ESCOM annual Report 1999)

Access to electricity in Malawi is very low and demand is highly skewed in favour of industrial and large commercial customers who use nearly 60% of the total and this is according to the power sector reform strategy paper (2003) Domestic users’ account for 25%, and the remaining 15% goes to small commercial consumers. ESCOM’s records show very low coverage by SADC standards whose regional average access rate is 20%. The vertically integrated publicly owned Electricity Supply Industry Structure has proven to be neither effective nor efficient to this end, hence government of Malawi, has formulated the Power Sector Reform Strategy (PSRS) outlining priority action to implement reforms. The execution of the Electricity Supply Industry reforms is governed by an implementation schedule, which forms an integral part of this power sector reform strategy. The goals for the reforms are to increase the role of electricity in the national energy mix from the present low coverage to highest coverage by 2050. (ESCOM annual Report 1999)

The elements of Electricity Supply Industry Reform programmed planned by government are as follows. To expand and revitalize the Electricity Supply Industry and provide an adequate, affordable and reliable power supply which will assist in industrialization, rural transformation, sustainable economic development and...
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