Maseru, March 27 — Minister of Energy Professor Nqosa Mahao is spending sleepless nights over the Lesotho Electricity Company’s (LEC) prevailing financial woes.
Prof. Mahao briefed the Members of Parliament saying LEC is in serious debt estimated to be close to half a billion Maluti.
He said drastic measures ought to be undertaken to address the impasse in order to save LEC’s imminent collapse, which he said contributes immensely to the economic growth of the country.
Furthermore, Prof Mahao noted with concern that after having a meeting with LEC staff in January, they expressed concern over poor corporate governance.
“They complain about conflict of interest during the procurement process saying it is not transparent,” he added.
Prof. Mahao also said the staff claimed that the tenders are being inflated for companies purchasing equipment on behalf of LEC, adding that there is insider trading in which some of the staff sell the company’s services for their own benefit and that some of the LEC clients pay services to the staff.
He also stated that LEC has not paid any debts owed by the company from those generating power like ESKOM and Ha Ramafothole as well as poor revenue collection by LEC.
The Minister said the Auditor General shared the same concerns with her financial audit report.
Prof. Mahao said it was clear that the company needs structuring in order for the focus on proper control in its system, saying while preparations are underway for the structuring, they need to know exactly the situation the company is facing.
He said the Ministry of Energy is currently preparing to conduct a forensic audit to LEC, saying as part of carrying out this exercise, they have agreed with the Ministry of Finance and Development Planning to cover the forensic audit costs.
The Minister also explained that negotiations between the Office of the Auditor General as well as the Ministry of Finance and Development Planning and his Energy Ministry have already been finalised.
He said the forensic audit will be carried out soon, adding that it will enable what kind of Government interventions ought to be like.
The Lesotho Electricity Company (Pty) Ltd (LEC) is wholly owned by the Government of Lesotho (GoL).
It has been registered in terms of the Companies Act of 1967 (as amended) and established in 2006 in terms of the LEC (Pty) Ltd Establishing and Vesting Act 2006.
The assets, liabilities, rights and obligations of the former Lesotho Electricity Corporation were vested in the company.
Previously as a Corporation, LEC was established in 1969 in terms of the Electricity Act of 1967 and the Electricity Regulations of 1970. The company assumes a separate legal persona, and can sue or be sued in its own right. It is licensed to operate under the Lesotho Electricity Authority Act of 2002, as amended.
