Zesa splashes 76% of govt disbursements on salaries

SECRETARY in the Ministry of Energy, Partson Mbiriri, told Parliament yesterday that power utility, Zesa Holdings, had used 76% of Treasury disbursements on salaries alone.

Source: Zesa splashes 76% of govt disbursements on salaries – NewsDay Zimbabwe October 25, 2016

BY VENERANDA LANGA

Mbiriri said the Energy ministry had, this year, been allocated $6 million.

Out of that, $839 845, which translates to a sixth of the total allocation, was disbursed, and of that, $640 392 went to salaries.

Mbiriri told Parliament that Zesa was owed $1 billion by consumers.

“We are importing electricity at $13,94 cents per kilowatt hour from [South Africa’s] Eskom and selling it at $9,86, which is the approved tariff,” he said.

“We need all our clients to honour their bills, and we had sought to have a tariff review which was not accepted last year and which is unlikely to be reviewed until 2018.”

Zesa Holdings chief executive officer Josh Chifamba said out of the $1bn debt, local authorities owed $270m and were failing to pay, claiming they had been severely affected by the 2013 debt write-off sanctioned by then Local Government minister Ignatius Chombo ahead of the 2013 harmonised elections.

“Local authorities owe $270m and it is growing and we need a lot of assistance in terms of how to deal with that.
We have proposed to government to escalate that debt to central government. Local authorities say they cannot pay that debt because they were asked to write off debts in 2013,” he said.

Domestic consumers were said to be owing $260m, while farmers owed $89m in unpaid energy bills.

“We have securitised the debt with Afreximbank [African Export and Import Bank] and whatever we collect now is used to pay off the debt at Afreximbank. We are discounting the debt. The strategy now is to put everyone including high user customers on prepaid meters in order to collect that debt,” Chifamba said.

“We also have close to $600m legacy debts which we owe. That debt is now due and is part of our current liabilities. It is a debt that was used to power transmission projects by the World Bank and other multilateral banks. This is a legacy debt, which needs to be hacked off our balance sheet. We are now in a situation where we are technically insolvent because that debt is due.”

Commenting on the current status of the fuel supply chain, Mbiriri said there had been significant improvements in supplies, although they were still experiencing challenges with foreign currency.

“Petrol blending continues at E15, but we would have wanted it to move to E20. The Mabvuku plant is already loading eight fuel tankers every minute,” he said.

Mbiriri said Zimbabwe consumed four million litres of fuel per day, adding he had noted abuse of paraffin, which was being mixed with diesel and sold at garages.

“We are going to introduce fuel marking at borders so that the traces of pure diesel will be there at all garages,” he said, adding the ministry was also investigating reports of fuel smuggling from Mozambique.