Heads to roll at ZESA
http://www.financialgazette.co.zw
Friday, 23 March 2012 13:39
EXECUTIVES at ZESA Holdings have awarded themselves hefty increases in their
allowances of up to 75 percent, backdated to 2009, at a time the loss-making
power utility has intensified both its revenue collection and load shedding,
The Financial Gazette can exclusively reveal.
Ironically, allowances for non-managerial staff have been slashed by 35
percent to contain the ballooning overheads in spite of recommendations for
a 70 percent upward adjustment of the same by the National Employment
Council for the energy industry.
Pressure has now been brought to bear on the ZESA board and management by
unions and State bureaucrats to explain the inflationary adjustments that
are way out of step with the prevailing pricing trends.
Inflation, dubbed Zimbabwe’s Number One enemy, receded in January to 4,3
percent from 4,9 percent in December. The hefty salary increases are
therefore seen not only widening the disparities between salaries for
managerial and non-managerial staff but angering ZESA custo-mers who are
unhappy with the high electricity tariffs.
Business has been passing on the extra cost to the consumer in the form of
higher prices, worsening the inflation outlook. Impeccable sources at ZESA
said heads were likely to roll, starting at board level upon the expiry of
the office tenures of certain of its members.
Adding to the pressure is the suspicion within the corridors of power that
there could be a hidden political agenda behind an expose` naming and
shaming top government officials owing the power monopoly huge sums of
money.
The leaks came as a huge embarrassment to several government officials, who
are fuming over what they perceive to be a flagrant breach of client
confidentiality and the parastatal’s shambolic billing.
The anger has been directed at top ZESA officials who could pay dearly for
their perceived transgressions by losing their jobs.
ZANU-PF officials suspect that the matter was being handled in a partisan
manner given that the energy portfolio is presided over by a Movement for
Democratic Change appointee. They also fear that the shenanigans at the
power utility could spark public protests at a time the country is eyeing
fresh elections to bring closure to the shaky government of national unity.
It however, emerged this week that the leaks were masterminded by
non-managerial employees disgruntled by the reduction in their allowances
and the fact that their bosses had denied them salary increases.
The Zimbabwe Energy Workers’ Union (ZEEWU) this week said ZESA managers were
bleeding the parastatal, owed in excess of US$450 million by both domestic
and commercial consumers.
Representatives of ZEEWU, made up of ZESA affiliates — the Zimbabwe National
Water Authority (ZINWA), Green Fuel and the Rural Electrification Agency
(REA) — were yesterday locked in meetings with management at ZESA as it
emerged workers at the power company were increasingly getting agitated.
This week, ZEEWU told Parliament that government chefs’ failure to settle
electricity bills was a contributory factor to the poor salaries employees
were getting. It alleged that their respective companies — ZESA, ZINWA and
REA — were failing to pay them due to the huge amounts the utilities are
owed.
“The bad debtors who are not paying their utility bills are the big gurus,
and we feel if they were to pay the outstanding amounts our companies would
be able to pay us,” union president, Angeline Chitambo told the
Parliamentary Portfolio Committee on Public Service and Labour.
Energy and Power Development Minister, Elton Mangoma, confirmed this week
that the terms of office for some board members would be coming to an end in
June, but refused to divulge whether or not he would renew their terms.
“Any changes would have nothing to do with mounting pressure regarding the
issue of debts but some board members’ terms of office are coming to an end
around June,” he said.
But Minister Mangoma, who yesterday denied he was under pressure to fire top
managers, said as far as he was concerned there were no new awards at ZESA
as alleged by non-managerial staff.
“I have not seen or approved any increase. Any increase on salaries or
benefits has to be approved by the minister,” he said.
Mangoma, however, revealed that an investigation was underway to fish-out
the source of the leak to the media regarding individual debtors.
“That issue is very unfortunate. Obviously we are looking into it. We are
investigating to find out who leaked the list to the media,” he said.
Fullard Gwasirai, the ZESA spokespeson, also denied there was a 75 increment
on the allowances of top executives, saying employees were misrepresenting
facts.
“There is nothing like that (that executives awarded themselves increments).
As for non-managerial staff, you know that people will always want more
money. Generally people are not always happy with their salaries,” said
Gwasirai.
Economist, Willia Bonyongwe said while citizens should pay for services
rendered by the power company, ZESA tariffs were above normal.
ZESA is one of the utilities that has had the most rapid tariff increases
after the country adopted multiple currencies in 2009.
Cumulatively, these tariff increases are close to 100 percent, justifying
calls for their review given the liquidity challenges on the market and the
low profit margins business is getting.
“As for agriculture, there are limited credit facilities on the market and
farmers have to wait for a long time to get paid. Agriculture has always had
a tariff of its own, which was abolished last year. That is when bills shot
up. When you look at margins in agriculture, you cannot produce food under
these tariffs”, said Bonyongwe.
“Under the Short Term Emergency Recovery Programme, there was a proposed
discount of 20 percent on commercial rates, which would benefit farmers and
this was not implemented because the fiscus has no capacity for that
subsidy. A proposal to forgo value added tax (on the electricity bill) and
the rural electrification levy was then proposed to enable government to
effect this subsidy but again that recommendation was not followed through.
It is important to support local agriculture because depending on imports
and donors is not sustainable,” she added.
Power outages intensified countrywide this week with most of the businesses
and government offices running on generators.
There is also anger that ZESA has mainly been switching off ordinary
citizens, sparring so-called sensitive or classified government bureaucrats
some of whom owe between US$150 000 and US$350 000.
Industry, which is currently struggling to rump-up production, has also
taken the power utility to court over what it believes are unjustified
tariff increases.
Last August, the Competition and Tariff Commission ordered ZESA to write off
all pre-2009 bills and justify some load-shedding programmes as well as to
bill their clients on actual meter readings.
The power utility has since appealed the order at the Administrative Court.