Zesa to lay-off 1000 workers

via Zesa to lay-off 1000 workers | The Herald January 5, 2016

Martin Kadzere Senior Business Reporter
ABOUT 700 workers at Zesa Holdings will be left jobless after the power utility resolved not to renew their contracts to cut expenditure, sources at the company said.

Zesa also plans to lay off additional 300 permanent employees “deemed redundant”.

Sources said the current productivity levels were making it difficult for Zesa to sustain its strong workforce. Zesa Holdings, which has four subsidiaries, employs about 7 000 workers.

“The company is trying to manage staff costs to maintain viability in light of reduced generation capacity and low revenue inflows,” said one source who requested anonymity.

“The total figure will get up to about 1 000 comprising 700 contract workers and 300 permanent staff.”

No official comment could be obtained from Zesa by the time of going to print yesterday.

The most affected workers are from the Zimbabwe Electricity Transmission and Distribution Company and power generation subsidiary, the Zimbabwe Power Company.

Zesa is currently generating about 1 000 megawatts at its plants after significantly reduced production at Kariba Hydro Power Station from about 730 MW to 470 due to low water levels. This is far below peak demand requirement of about 2 200 megawatts.

Last week, Zesa said if water levels remains low, it will be forced to reduce production to 200 MW at Kariba. Generation at Hwange Power Station, its biggest plant with capacity of 920 MW has also declined to an average 420 MW due to recurrent breakdowns.

“This has become unsustainable. So the company had to take a decision not to renew the contracts and to dismiss some of permanent workers so that resources are saved for other critical areas such as operations and maintenance,” the source said.

To argument supplies, Zesa recently struck a power deal with Eskom of South and is importing 300 megawatts daily, a development that has improved electricity supply. The 50 MW are on firm contact basis while the remainder comes mainly during SA’s off peak periods. Eskom, whose Medupi plant delivered the first 800 MW in August last year generates about 35 200 MW at its power units. Zimbabwe also imports power from Mozambique while negotiation are ongoing with a Zambian private power company.

To improve revenue and support imports, Zesa sought regulatory approvals to increase tariffs from an average 9,89c kWh.

Energy and Power Development Minister Dr Samuel Undenge said Zimbabweans should brace for a significant increase in tariff to boost demand.

“Tariff adjustments are inevitable in 2016, but we make sure that these will be minimum,” he said. “The situation we are in is not normal and we therefore need to bite the bullet. Power is not going to come cheaply. We will have to sacrifice if we are to lessen our load shedding hours. Yes, things are tough but we should pay for the service.”

The average 9,89c kWh tariff being charged by Zesa is far below regional tariff level of 14c kWh.