Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Zesa pre-paid meter project in mess

Zesa pre-paid meter project in mess

By Taurai Mangudhla, Business Writer
Tuesday, 22 November 2011 15:37

HARARE – Zimbabwe’s power utility Zesa has been forced to reverse a public 
tender for purchasing prepaid metres after it emerged that the winning 
bidder only intended to lease the equipment.

The smart metres are set to bring an overhaul to Zesa’s shambolic billing 
system through accurate reading and pay-as-you-consume costing.

Both domestic and industrial consumers have for long cried foul over 
unrealistic bills at a time power outages hit record levels in the decade 
long power woes.

Justin Mupamhanga, secretary for energy and power development, yesterday 
told Parliament’s portfolio committee on mines and energy that the tender 
hiccup was stalling the critical power management project.

“The winning bidder actually wanted to lend the equipment to Zesa at a cost 
of $0,65 per transaction which would  make power more expensive so they have 
gone back to the original list for reconsideration,” he said.

“We have not got official communication from the state procurement board and 
this delays a process we had hoped to start this year. We are now looking at 
starting it in the first quarter of 2012,” Mupamhanga added.

He said another power management project — set to see the country receiving 
about five and half million florescent bulbs — was also stalled on the back 
of the tender complications.

Mupamhanga said distribution of the energy saving bulbs, initially slated 
for the last quarter of 2011, will have to be done in the first quarter next 

“It was discovered that none of the companies met the tender specifications 
and a second bidding has been done.
Adjudication will come after December,” he said.

Zesa, which has struggled to collect revenue since dollarisation, argues 
that the current power tarrif is uncompetitive.

In October, Zesa effected a 31 percent tariff hike saying the increased 
revenue was meant to bankroll an ambitious $7, 8 billion rehabilitation and 
expansion of its Hwange thermal and Kariba  Hydro power stations.

The utility is currently reeling under a $500 million debt owed to 
international financing institutions like the IMF while it also owes $102 
million to other utilities in the region.

Zimbabwe’s government owes Zambia about $260 million for the shared Kariba 
Dam infrastructure the country inherited at independence.

Payment of the debt for infrastructure that Zimbabwe inherited from the 
Central African Power Corporation during the federation era — is believed to 
be among the reasons that have stalled the construction of the 1 600 
megawatt Batoka hydro-power station.

Although energy minister Elton Mangoma said the country currently has no 
capacity to settle the 30-year-old debt, there have been indications that 
Zimbabwe may be required to pay only $70, 8 — which excludes interest.

Josh Chifamba, Zesa chief executive recently said consumers are set to pay 
more for their electricity to meet the increase in operation costs arising 
from construction and rehabilitation of  Kariba and Hwange power stations.

He said electricity tariffs are low compared to production expenses and 
could increase by 47 percent in the coming five years to meet power 
expansion costs.

“We are currently retailing at $0,095 per Kilowatt-hour and this is low 
compared to production and you also have to factor in the transmission 

“As a result, we expect tariffs to go up by about $0, 04 to hit $0,14 in the 
coming five years,” he said, adding that tarrifs would go up to pay for the 
face-lift as is the case of neighbouring countries.

The two projects are meant to increase power output to 2 220 megawatt from a 
current 1 320 megawatt which leaves a 640 megawatt deficit.

The country has a total installed capacity of 1 680 megawatts, with 750 MW 
from Kariba South, 780 MW from Hwange Power Station and 150 MW from small 
thermals — but only 940 MW of this is currently available against a peak 
demand of 1 950 MW.


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