Govt warned over Zesa salaries 

Source: Govt warned over Zesa salaries – The Standard March 11, 2018

The government should never give in to demands by Zesa Holdings workers who want a 75% salary increment as this will have serious repercussions on the economy, analysts have warned.


Zesa workers, through their various unions, are demanding the increment in salaries and allowances across the board, a move that will almost double the power utility’s monthly wage bill and cripple the economy in the process.

The workers also want the introduction of new allowances for every permanent employee such as a five-day holiday for six family members at any three-star hotel, full school fees payment for up to four of the employees’ children and cellphone allowances, among others.

Zesa employees also want an increase in existing allowances.

These include non-pensionable allowance (20%), housing (15%), retention allowance (10%), responsibility allowance (15%), transport allowance (from $70 to $160), and canteen allowance (from $25 to $120).

They also want overtime to be calculated using actual, not basic, earnings.

Investigations by Standardbusiness found out that a junior engineer at Zesa is getting between $2 800 and $3 000, excluding allowances, while a sweeper is getting around $300.

Analysts who spoke to Standardbusiness last week said salary demands by Zesa employees would have a huge bearing on electricity consumers, as a tariff increase would be effected to cover additional costs on the payroll.

“If salaries we are reading in papers are what the Zesa employees are getting, then it’s not really justifiable for them to demand such a massive increment of 75%.
“And the company has no capacity to pay such a massive huge wage bill, considering that it’s already in the red, swimming in massive debts,” an economist, Reginald Shoko, said.

Zesa reportedly owes its local and international suppliers close to $1 billion while its revenue fluctuates between $53 million and $59 million monthly.

Shoko said if Zesa gives in to the demands, the decision would have serious effects on the economy as the only way Zesa could raise salaries would be to increase tariffs, which will directly lead to an increase in prices.

Zesa tariffs, he said, are the highest in the region and the economy cannot afford another increase.

“The company must also consider cutting some duplication that was caused by the unbundling process,” Shoko said.

“The company does not need all that bloated senior management across the company.

“Zesa will be viable if a human resource audit is carried out and merge other line responsibilities.”

Employees in electricity-related positions are far better paid than employees in any other sectors like mining and finance, according economic analyst John Robertson.
This, he said, is because they can threaten strike action and disruption throughout the economy.

“The country has lost ground by not attracting investors or the latest technologies for many decades now and it has to catch up with the international changes to recover its ability to compete,” Robertson said.

He said higher levels of efficiency are needed to keep costs down. Robertson said that is the area most in need of the attention of all Zesa employees.

He said trade unions were making demands for wage levels that damage or destroy Zimbabwe’s ability to compete or to attract investment, create employment, generate tax revenues and export revenues.

A researcher and economic commentator, Eli Mtetwa, said the cost of living and production were already high and the situation would be worse if government gave in to employees’ demands.

He also said if reports that a junior engineer is getting around $4 900 are true, then salary increments are not necessary.

“In principle, it’s outrageous. You don’t get that from any country with a gross domestic product like ours,” he said.

“It’s totally unjustifiable. Our tariffs are already uncompetitive for our manufacturing industry.

“These high tariffs have increased the cost of production and cost of living.”

Zesa revealed recently that it had no capacity to adjust workers’ salaries as it had not obtained a tariff increase in the past seven years.

Zesa wrote to government in December last year lobbying for a tariff hike with effect from beginning of 2018 amid reports that the power authority was technically insolvent.

The parastatal has sought a tariff increase in the last few years arguing that it was charging a lower-than-cost tariff at a time it was expected to carry out major infrastructure development projects.

It said the 9, 86 cents per kilowatt hour (kWh) it charges does not allow it to break even.

Hence, it needed 14,64c/kWh.

But government, through the Zimbabwe Energy Regulatory Authority, blocked the move, saying Zesa should seek ways of reducing its cost structure while also enhancing its debt collection mechanisms.