Source: Energy ministry secretary grilled over Zesa rebundling, tariffs – NewsDay Zimbabwe October 18, 2019
BY VENERANDA LANGA
MINISTRY of Energy secretary Gloria Magombo was yesterday grilled by Parliament over issues of rebundling of Zesa with MPs questioning why an institution that was recently unbundled was now being rebundled.
Magombo had appeared before the Joel Gabbuza-led Parliamentary Portfolio Committee on Energy to speak on her ministry’s 2020 budget proposals.
Gabbuza also asked her to explain the $8,6 billion loss by Zesa which was attributed to exchange rate losses and low electricity tariffs.
“After the $8,6 million loss which was attributed to exchange rate losses you were now given a new tariff and calculations show that this will enhance your revenue by $800 million per month, and it shows that you should be able to offset this loss within three months,” Gabbuza said.
Magombo admitted that the sharp increase in Zesa tariffs will boost the company’s balance sheet.
“We were operating in a situation where our tariffs were low, as well as issues of inflation – and because of this background Zesa has been operating in an almost impossible situation with revenues amounting to $98 million against expenditure of $1,2 billion,” Magombo said.
“The major issue that was causing the net loss were the sub-economic tariffs that were previously charged,” she said.
Bikita West MP Elias Musakwa then asked Magombo to explain the rationale of unbundling and then rebundling Zesa, and why she would need to get outside consultants to rebundle Zesa.
“You said you will engage consultants to re-bundle Zesa, but is this country suffering from lack of consultants? Do we not have technocrats in this country who can do that exercise without us paying all that money to foreign consultants?” asked Musakwa.
Magombo then responded: “The issue sounds simple, but rebundling means there are people who are going to lose jobs. There is a vested interest and the role of a consultant is to do an independent structure which is not based on individuals and personalities.”
Uzumba MP Simbaneuta Mudarikwa said unbundling of Zesa was done by consultants, and now they wanted to hire other consultants to rebundle. He said Zesa was concentrating on wrong issues instead of focussing on ensuring that the country had enough power.
“The unbundling exercise was the work of a consultant and we need to know if they were competent enough. The only things we see is the expansion of the Zesa car park. You are generating 1 300 megawatts with three boards. While the sizes of your vehicles are improving, there is no generation of power. Our focus must be on generation of power,” Mudarikwa said.
MPs suggested that Magombo should look at the issue of hiring local consultants — even at universities to look at the issue of the Zesa rebundling.
NOIC acting chief executive officer Godfrey Ncube said the major challenge affecting non-availability of fuel was foreign currency.
“We had 104 million litres up to August, but we only sold 76 million litres. On capital projects, we developed four projects in Mabvuku, Bindura, Warren Park and Masvingo. The major challenges that we are facing which are causing shortages of fuel is foreign currency, but in the short term I think it will be better because of pricing, and we also hope that in the long term there will be proper functioning of public transport,” Ncube said.