Blantyre Water Board (BWB) has registered a K4.1 billion loss in the year ended June 30 2017, the Ministry of Finance has confirmed.

In its 2018 Annual Economic Report released last week, Treasury said the loss was worse than the K3.5 billion recorded in 2015/16. The report further says in the half-year ended December 31 2017, BWB made a loss after tax of K699 million.

“Though efforts were being made in reducing non-revenue water and debt collection, high electricity bills continue to pose a big challenge to the Board, taking up almost 46 percent of the Board’s monthly operating expenses.

“This affected both profitability and the liquidity position because funds have been largely committed to the settling of electricity bill arrears. To reduce the backlog of electricity bill arrears, the Board agreed with [Electricity Supply Corporation of Malawi] Escom to pay K500 million every week while remaining current on new bills,” reads the report in part.

According to Treasury, non-revenue water was still high although BWB managed to contain it at 37 percent as at December 2017, from 43 percent in June 2017.

The report says BWB has intensified efforts to reduce non-revenue water further by undertaking major pipe replacement, installing ball valves in reservoirs, replacing faulty meters, conducting meter validation, disconnecting illegal connections and activating lost connections.

“The Board’s profitability was still poor as indicated by the operating profit margin which stood at -11.7 percent in June 2017 but improved to 25.9 percent in December 2017. However, the continued negative working capital position of the Board puts the Board at a disadvantage; resulting in lower creditability in banks, as well as creating a poor supplier relationship.”