CZI fights Zesa power hike
By Taurai Mangudhla, Business Writer
Tuesday, 06 September 2011 13:57
HARARE – Confederation of Zimbabwe Industry (CZI) says its lawyers are
consulting stakeholders to formulate a “strong” legal argument against a
unilateral 31 percent power hike by Zesa Holdings (Zesa).
Joseph Kanyekanye, CZI president told businessdaily that CZI’s lawyers were
also validating Zesa’s claims that it consulted relevant stakeholders,
through its distribution company — the Zimbabwe Electricity Transmission and
Distribution Company (ZETDC), prior to the tariff increase.
“There is a whole lot of confusion but our lawyers are clarifying whether or
not stakeholders were consulted. The Zimbabwe Electricity Regulatory
Commission (Zerc) should also furnish us with details of all proceedings
including minutes of their meetings to prove how they arrived at the
decision to raise tariffs, otherwise they will have to immediately reverse
the decision,” he said.
Zesa chief executive, Josh Chifamba, has however come out in support of new
tariffs saying the new prices will help fund rehabilitation of critical
equipment which, in future, will improve power generation.
Zerc is reported have now appointed a new board after industry challenged
the legality of the new tariff regime on the basis that the regulatory body
was not properly constituted.
CZI treasurer Canada Malunga was appointed chairman of the new Zerc board.
“One of our CZI board members Canada Malunga was appointed chairman of the
new board last week and he had to resign from CZI to avoid a conflict of
interests,” said the CZI boss.
Kanyekanye said the new rates were in reality going up by 50 percent, and
likely to see businesses increase prices of their finished products by the
same margin.
“We are going to fight the new tariff regime and I am certain we will win
the fight. If we fail, we are likely to see prices going up by at least 5 to
10 percent, depending on the company’s cost structure if companies review
their expenditure ethically,” he said, adding that some businesses could
cease the opportunity to hike prices further than the cost reflective
margins.
“We are also going to see rentals going up and people will demand more wages
to meet the high bills because if Zesa can increase charges by 50 percent,
other providers of social utilities can do the same,” Kanyekanye added.
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.