‘GOL Owes LEC Over US$5 Million’

-- Says Management

The management of the Liberia Electricity Corporation (LEC) has disclosed that the Government of Liberia owes the corporation US$5 million for the supply of power subscription.

The disclosure was made in Monrovia recently by LEC following the visit of US Ambassador Michael McCarthy to its Bushrod Island facility -- after expressing frustration over unabated power theft and warned that the Government of Liberia put an end to power theft or risk losing donors’ support.

LEC is a public corporation owned by the government and is under obligation to contribute to the national budget.  Its revitalization to restore electricity was heavily facilitated by donors including the United States, the EU, Germany, Norway, and Japan, with US$257 million spent to rehabilitate the Mount Coffee Hydro Plant in Harrisburg. 

However, this heavy investment, which is expected to underpin economic growth and  generate revenue for the government, is being hampered by rampant power theft perpetrated by government officials and ordinary citizens alike.

More officials of government and business tycoons are reportedly receiving ‘direct power’ from LEC, meaning that they are connected to LEC via an unmetered power source, which is illegal. Whenever there is an attempt on the part of LEC to disconnect them, the agents are harassed by security officers. With regard to the government’s indebtedness to the corporation, the LEC, in a compiled document, stressed that the debt grossly inhibits its ability to expand power to other parts of Monrovia and beyond.

The donor community expects more residents of Monrovia to be connected to power at this time to enable the LEC to generate revenue. However, not many communities in Monrovia are connected since electricity was initially restored to Monrovia. In most instances, some potential customers, who desire to be connected and are willing to pay, blame the LEC for being unresponsive. This forces many to surreptitiously connect through bribing LEC field agents. 

On the government’s indebtedness, the LEC said at the end of June 2021, the energy arrears for some subscribing government entities, including the Liberia Water and Sewer Corporation, for which the Ministry of Finance and Development Planning (MFDP) is responsible to pay, stood at US$5,688,903, representing about eight (8) months of debt, plus the bill for June 2021, which is US$742,986. 

This situation, according to LEC, impedes its capacity to provide electricity for local residents of Monrovia, and it causes protests in various parts of the city daily.  Recently, the Finance Minister, Samuel Tweah, disclosed that the government has reduced its debt to LEC from US$9 million to about US$900,000, a statement that contradicts the statement of arrears according to LEC.

However, the LEC management said they need an injection of unencumbered working capital of US$29 million per LEC’s Business Plan (2019) to begin tackling commercial losses and implement the most basic of “planned maintenance regimens” in line with prudent utility practice. 

At the same time, the management said LEC is now and has been technically insolvent for many years. “LEC’s lack of funding, coupled with high levels of corruption and massive societal and instructional resistance to tackling power theft, has created an inertia that cannot be overcome without significant investment, support, and cultural change,” the management said. The management also observed that the sad reality is that power theft is robbing LEC of the ability to remit GST and payroll tax to GOL; further, it has become impossible for LEC to meet cross-border energy and CLSG costs. 

“It is only by withholding these payments that LEC has been able to maintain basic functionality and pay salaries,” LEC said. “It is unfortunate that, despite enormous efforts by the revenue protection team, none of the power theft cases currently in the judicial system have been brought to a successful conclusion.” 

The Corporation indicates in its report that some of those that are indicted for power theft are employees of LEC, while others are business people and public officials. Despite these impediments, LEC, however, said it has continued its downward trajectory in commercial losses first seen in 2019.