CZI set for showdown with Zesa
By Diana Chisvo, Business Writer
Wednesday, 31 August 2011 11:20
HARARE – The Confederation of Zimbabwe Industries (CZI) is preparing a
lawsuit against Zesa Holdings in a bid to force the power company to reverse
its tariff increase which it says has far reaching consequences on business
and the economy.
Zesa, through its distribution company — the Zimbabwe Electricity
Transmission and Distribution Company (ZETDC), has announced a 31 percent
tariff increase at a time business and consumers are reeling from serious
power cuts.
The blundering power giant said the increase will not reduce load-shedding
but go towards rehabilitation of critical equipment which, in future, will
improve power generation.
But the CZI yesterday came out with guns blazing, warning that their lawyers
were preparing to fight the tariffs which it said are illegal.
“We wish to advise stakeholders that electricity tariff hikes distributed by
the ZETDC are unsustainable, unjustified and illegal. The proposed tariff to
be effected on 01 September 2011 results in a 53 percent aggregated
increase. This shows lack of understanding or empathy with the nascent and
fragile economic/industrial recovery
underway since 2009.”
“We are instructing our lawyers to take legal action to force ZETDC to
rescind their illegal tariff hikes,” said CZI chief Joseph Kanyekanye.
Kanyekanye said the increases have inflationary effects and might lead to
loss of competitiveness for local businesses and will lead to price
increases throughout the economy.
He dismissed reports that the increase was supported by industry and
consumers saying that the electricity distributor has a technical committee
with industry where the results have shown that the price hikes cannot be
supported by ZETDC’s reflective tariff principle.
“We believe the ZETDC is not properly constituted and the apparent use of
government officials as proxy for ZETDC is illegal and introduces the
inefficiency in the regulation of tariffs. “There has not been any change in
costs that warrant this increase in tariffs and CZI is asking the Ministry
to appoint an independent regulator that will set aside the proposed illegal
increases.”
“We remain committed to working with the power utility at all times. We ask
that the utility does some introspection with a view to reducing overheads
arising from a top heavy structure an unsustainable wages and salaries,”
Kanyekanye said.
Zimbabwe requires 2 000MW of power a day but the country currently produces
only 1 300MW and gets 300MW from imports, leaving a deficit of 400MW.