Products for EDM were charged up to 4 times above market price – CEO

Login

Register

http://www.clubofmozambique.com/

Products for EDM were charged up to 4 times above market price – CEO

2:21 CAT | 10 Jul 2018

File photo: Folha de Maputo

The purchase of prepaid electrical meters was made by Electricidade de Moçambique (EDM) at a price four times higher than the actual price, during several years.

EDM’s Chairman of the Board (CEO), Mateus Magala, further said that the company would pay double, triple or quadruple the [market] price for purchasing items as varied as toilet paper, tea, coffee, biscuits and even tools and large equipment which the company needs to buy.

As for the prepaid electricity meters, a suppiler has been found. “We therefore decided to change the procurement method. From now on, we will be buying directly from the manufacturers that sell better electricity meters at US$20 each,” Magala told newspaper ‘Domingo’, adding that “manufacturers will provide one million electricity meters later this year.”

According to Magala, the procurement process has not been following best practices. “Procurement is a means of reducing expenses and finding the best price in a process that involves competition and brings with it variety, innovation and consequently low costs. We have started a new type of procurement process,” he said.

With the new process, the company expects to gain 40 to 50 percent more than in the current costs, according to EDM’s CEO.

Magala says that the company’s accounts were redone and within the two year mandate, it was possible to address the “historical” problem of EDM, which owed the Cahora Bassa Hydroelectric Power Plant (HCB) US$118 million the supply of energy . “We are happy to say that, in these two years, we have paid US$104 million and only have to repay an outstanding US$14 million,” he said.

However, the happiness that springs from this result is partly marred by the fact that there are many state institutions who consume electricity and do not pay. “It is scary. I cannot say which entity owes more than the other one, but the value is close to US$50 million,” he said.

Source: Folha de Maputo