Call on Zesa to lower tarrifs

Source: Call on Zesa to lower tarrifs | The Herald June 2, 2017

Conrad Mwanawashe Business Reporter
INDUSTRY wants the power utility, the ZESA Holdings, to lower electricity tariffs to about six cents per kilowatt hour to be at par with power prices prevailing in the region. Furthermore, the industrialists under the banner of the Confederation of Zimbabwe Industries, called on ZESA to charge uniform tariffs to industry as a whole and not have different tariffs for different sectors.

For instance, ZESA has granted a 6,7 cents/kwh tariff to chrome producers and charges tariffs of around 9,83 cents per kilowatt hour to other consumers. However, strategic economic agents may negotiate a lower tariff.

“We all need $0,06/kwh because our products are struggling. The governor has given us massive incentives but we can’t reach that incentive because our costs are so high. Ethiopia has managed to give their industry three cents that’s why their leather is globally competitive. They are exporting all over the world, fastest growing leather sector and other sectors with them. Power is central and key and your 14 cents/kwh by 2023 does not inspire,” CZI immediate past president Busisa Moyo.

This came out during a discussion on energy supply at the CZI annual general meeting on Wednesday. Another industrialist questioned whether ZESA understands its position as a key player in making local industry competitive. “For the industry to be successful or to be competitive the cost of electricity has a major impact within our cost structure.

“You seem to emphasise that we are going to import, now if we are going to be importing we are not going to be competitive to South Africa . . . and South Africa is our major competitor. Does ZESA really realise that it is a key player in making the industry in Zimbabwe competitive?” asked Callisto Jokonya.

And yet Zesa is pushing for an increase in tariffs to guarantee power supply. Last year, the Zimbabwe Energy Regulatory Authority turned down an application by the Zimbabwe Electricity Transmission and Distribution Company seeking to hike energy tariffs by 49 percent.

Zesa Holdings projects manager Ms Ndomupeyi Chikonye who was representing her chief executive officer Josh Chifamba, said below cost tariffs should be backed by subsidy.

“There is need to review the electricity tariff to reduce losses by the utility and attract private sector participation in power infrastructure development,” said Ms Chikonye. Meanwhile, Sifelani Jabangwe was elected as president of CZI and will be deputised by Richard Chiwandire and Henry Ruzvidzo.

COMMENTS

WORDPRESS: 1
  • comment-avatar
    william mills 5 years ago

    Electricity is the only product consumed the very instant it is made—at approximately the speed of light as it were; and it must be paid for net 30 days. As africans do not understand the concept of ‘net 30’ believing instead that the economic curve can be bent to the desires of some ‘not very smart’ old communists (who still hope someone cares), they should not bother to read further.

    The fundamental truth is: ALL monopoly utilities, (Electrcity, Water, Railroad, Etc.) must be allowed to set tariffs (price lists) that reflect all of the costs of providing the product PLUS a profit of +-6% even when the government is the only stockholder. Utilities must also be kept out of politics. When the government wishes to subsidize a favored industry or rich bribe-payer (or whatever) they should send the check to the entity or the briber (or whatever). The utility must receive payment for their services by the receiver of the service NET 30 DAYS or have their service discontinued.

    There are a few other principles but enough for now as the africans are sweating and pondering all of this and finding it as mysterious and difficult as Algebra.