Zesa fears collapse
By Everson Mushava, Staff Writer
Monday, 24 October 2011 08:01
HARARE – The Zimbabwe Electricity Supply Authority, Zesa risks a gradual
shut down if it continues to charge sub-economic tariffs.
Josh Chifamba, Zesa’s chief executive said the 31 percent tariff hike in
September this year was justified as it was necessitated by the need to
improve the infrastructure of the power utility that was dilapidated.
Chifamba said the country required 2 100 megawatts (MW) of power a day but
the country was currently producing only 1 300MW, 700MW short of the
required output.
He said the problem would be eased by the refurbishment of the Hwange and
Kariba power stations which was under way but needed over $2 billion to be
completed.
Hwange and Kariba power stations have the capacity to produce 600 and 300
megawatts respectively, when complete.
But Chifamba said, Zesa does not have the needed funds for it is owed more
than $449 million. Nearly half (46 percent) of it by consumers, 30 percent
by the industry and 10 percent by government.
According to financial results of the first quarter of 2011, the power
utility also suffered a $100 million loss.
“We are bold enough to tell Zimbabweans that we had to increase the tariffs
to improve the supply of energy in the near future. If nothing is done now,
there will be more losses to the economy due to loss of revenue when there
is no electricity.”
“If we do not do anything to improve the supply of electricity now, we will
not be able to respond to the user demand in the near future as industry
regains. The cost of doing nothing means people will have to go back to the
use of diesel,” said Chifamba.
He said there are also high chances that industry will be losing revenue of
about $4 a kilowatt hour if we don’t provide electricity.
“We are sensitive to what is happening, but if we don’t do anything there
will be more problems when we stop generating electricity,” he said.
The cost of using a generator when there is no electricity is 45 cents more
than that of what people are supposed to pay Zesa.
Most companies have been operating below capacity due to an insufficient and
inconsistent supply of electricity, torching a heated confrontation between
the power utility and the Confederations of Zimbabwe Industries (CZI).
The business grouping’s president Joseph Kanyekanye, accused Zesa of
impeding economic recovery through increasing tariffs while the hours of
load shedding increased.
The Commercial farmers’ Union of Zimbabwe said irrigation of crops had been
affected by lack of electricity while miners say they use a minimum of 5 000
litres of diesel to sustain their mining operations when they do not have
electricity.
Consumers had not been spared and with increased load-shedding hours, most
high density areas in the country are going for inordinately long periods in
the dark.
Parson Chitima, 34, a resident of Kuwadzana high density suburb said he lost
his refrigerator due to power cuts and like him, many people around the
country lost their electrical appliances due to the untimely power cuts.
The Combined Harare Residents Association, a ratepayer watchdog said the
only way Zimbabweans could get enough electricity is when it stops
exporting electricity to Namibia.
NamPower, the Namibian power utility, provided $40 million for the
refurbishment of Hwange Power Station in Zimbabwe in 2008.
The gesture would be paid by importing 150 megawatts of electricity
generated at the Zimbabwean plant to Namibia until 2013.
Zimbabweans are now left to pay the price of bad corporate governance by the
power utility and for a little longer until 2013, the industry and domestic
consumers will have to do with insufficient and inconsistent supply of
power.
Almost three years after a coalition government between President Robert
Mugabe and his arch rival Morgan Tsvangirai was formed, the country’s
future looks bleak, with erratic power supplies threatening economic
development.
Zimbabwe will experience its worst nightmare when demand increases with
increased production and attendant demand from manufacturers.
Currently, industry is operating at between 20 and 40 percent while trying
to lift itself from the economic rut invented by a near-collapse of the
economy during the past decade.