Zesa justifies tariff hike
By Everson Mushava, Staff Writer
Sunday, 04 September 2011 16:24
HARARE – Zesa holdings says its operations will be severely crippled to the
extent of a gradual shutdown if it is forced to reverse the new tariff
hikes.
The power utility said the new rates were the only way it could sustain its
operations.
Addressing a press conference in Harare yesterday, Zesa chief executive
officer Josh Chifamba said the power utility’s infrastructure had collapsed
and with “sub-economic” tariffs, Zesa risked a gradual shutdown.
He said Zesa needed to do a lot of maintenance work on its infrastructure
saying if that is not done, the power supply situation in the country will
further worsen.
“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.
“We are bold enough to tell Zimbabwe 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 loses to the economy due to loss
of revenue when there is no electricity,” said Chifamba.
Zesa introduced a 31 percent increase on tariffs which came into effect at
the beginning of this month.
The increase has so far faced resistance across the body with civic groups
and business organisations threatening to mobilise a massive boycott of rate
payments until the decision is reversed.
The Confederation of Zimbabwe Industries (CZI) and the civic society groups
led by the Combined Harare Residents Trust (CHRA) have also threatened to
take on Zesa to force a rethink on tariffs.
The groups argue that Zesa’s rate hike was unjustifiable given its poor
service record, which has seen many households and industries around the
country spending considerable time in the dark.
The Minister of Energy and Power Development, Elton Mangoma has since
defended the new rates saying they were approved by Cabinet and are
necessary to finance infrastructural development.
Chifamba said even if Zesa was to be dragged to court that will not help
because the only way to find a permanent solution to the crisis was to
effect sustainable rates.
The power utility boss said the country needed 2 100 megawatts per day but
was currently producing 1 300 megawatts, 600 megawatts short of the required
output.
He said he hopes that the supply of electricity will improve after Zesa has
completed refurbishment work at Hwange and Kariba power stations.
These two have a capacity to produce 600 and 300 megawatts respectively.
Chifamba said Zesa needed close to $2 billion to complete the refurbishments
at the two power stations.
“We know the anger within the people over the new tariffs. We are aware of
the pain but what do we do? We should also look at the long term gains,” he
said.
“There is a humane face in what we are doing. That is why we are
distributing six million units of energy saving bulbs to households.”
Chifamba said the power utility will by the end of September install a more
reliable billing system in Harare and Bulawayo and promised to cover the
whole country by December 2011.
“By the end of this month, billing problems will be a thing of the past in
Harare and Bulawayo,” he said.
Zesa is owed $449 million by consumers, government and business.
Of the $449 million, 46 percent was by household consumers, 10 percent by
the government and over 30 percent by the industry.