New Zesa board will have its work cut out

Source: New Zesa board will have its work cut out | Herald (Opinion)

The new ZESA Holdings board will have to prioritise alternative energy sources

Beaven Dhliwayo Features Writer
The tough talk by Energy and Power Development Minister Fortune Chasi to appoint a new Zimbabwe Electricity Supply Authority (ZESA) board is a noble idea because the country has been battling acute electricity shortages for a long time.

Over the years, ZESA boards were not doing much to address power shortages, yet pocketing huge sums of money in allowances.

Considering the situation the country is in right now, the power utility’s board should have people who understand the situation at hand, and not those who wait for monthly or quarterly meetings to address the power challenges confronting the nation.

Electricity is vital for the country and if the power outages gripping the nation are not addressed swiftly, the economy could grind to a halt, further worsening the situation currently obtaining.

The relevance of the ZESA board is informed by the fact that the country is burdened with worrisome power outages that last up to 18 hours, hurting the economy.

Manufacturing companies are not spared in the massive power cuts, and if the situation persists production will keep plunging. This means many companies will lay off staff and disposable incomes will shrink.

When appointing the new ZESA board, Minister Chasi should undo previous cherry-picking of acquaintances by selecting a competent team that is capable of ending the power shortages in the country.

The board should be professional, with good mix of skills comprising engineers, information and technology experts, lawyers and human resources managers. There is need to improve on corporate governance at the parastatal.

Recent waves of corruption scandals in the power utility revealed serious corporate governance lapses, suggesting that the directors are sleeping on the job and failing to discharge their duties effectively.

Corporate governance is the system by which corporations are directed, controlled and held to account.

According to Sir Adrian Cadbury, corporate governance is “concerned with holding the balance between economic and social goals . . . the aim is to align as nearly as possible the interest of individuals, corporations and society.”

Corruption scandals at ZESA Holdings and its subsidiaries are derailing the very objective of its restructure, including Zimbabwe’s economic development agenda.

A few years ago, ZESA was unbundled into ZESA Holdings, a holding company which directly controls Zimbabwe Power Company (ZPC), Zimbabwe Electricity Transmission and Distribution Company (ZETDC), Zimbabwe Enterprises (Zent) and Powertel.

The objective was to improve efficiency in power generation, transmission and distribution channels while enhancing service delivery.

It should be known to future appointees that being in the board of directors is not about window-dressing or meeting the requirements of corporate governance best practices, but the need to safeguard the interests of shareholders and relevant stakeholders.

Zimbabwe needs electricity to achieve its vision of being an upper-middle income economy by 2030 as enunciated in the Transitional Stabilisation Programme (TSP).

New directors to be appointed should strive to serve Zimbabweans.

It is common knowledge that society demands transparency and accountability on how power utilities operate as consumers are paying for services which they are not getting.

ZESA’s operations, therefore, should be compatible with societal welfare.

Zimbabweans will be keen to see the new appointees end colossal corruption in the State enterprise and implement recommendations from the recent forensic audit.

ZESA handles huge chunks of public funds which require enormous capital outlays. The board of directors should comprise people of integrity and sober minds.

The billions of dollars that ZESA handles attract deviant behaviours from unethical and unscrupulous people, who then connive with insiders to loot public funds through corruption.

Going forward, the parastatal should follow procedures when awarding tenders to prevent cases such as that of Intratek Zimbabwe Private Limited  a company owned by businessman Wicknell Chivayo  which was awarded a tender in 2015 and was paid US$5 million by ZPC for pre-commencement work.

Up to this day, there is still to be meaningful progress in the construction of the 100MW Gwanda solar plant, prejudicing ZESA of more than US$50 million in unrealised revenue.

According to Minister Chasi, this project was supposed to have been commissioned by December 2017. Delays in implementing the project have resulted in ZESA losing the equivalent of 500 Giga-watt hours in potential sales.

As the country is experiencing acute power shortages, the solar project is crucial in addressing electricity challenges and reviving the economy.

ZESA should partner Government, and engage Intratek with the view to recoup consumers’ money or enforce contractual obligation.

However, it is not only the board of directors who are found wanting at ZESA, but all corporate governance facets have fallen at the power utility, from shareholders, management and employees.

Corruption has pervaded all ZESA structures to the extent that all tenets of good corporate governance have suffered. Recently, the ZPC secretary was reported as having gone to the extent of writing to the board as far back as November 2015 expressing concern over shady deals in the firm, particularly the Intratrek deal and how such shady deals were negatively affecting ZESA’s reputation.

No one cared to listen to the lone voice, showing the extent of rot involving directors at the parastatal. This should be put to an end forthwith.

ZESA should buckle up and improve on efficiency as the power outages are increasing the cost of doing business.

Many companies have resorted to the use of generators, which is not economical as it is expensive.

There has been a significant reduction in production which has affected investment prospects.

Additionally, Government should strengthen its oversight role and enforce good corporate governance at ZESA, so that directors adhere to laws and regulations that govern parastatals.

On the other hand, the Zimbabwe Anti-Corruption Commission (ZACC) should probe all graft cases exposed through forensic audits without fear or favour.

COMMENTS

WORDPRESS: 1
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    More snouts in the trough….