Consumers owe Zesa $818 million

via Consumers owe Zesa $818 million – DailyNews Live by John Kachembere

National power utility Zesa Holdings (Zesa) says it is owed $818 million by consumers — including government, domestic and commercial users.

It said the unpaid bills were hampering its operations and viability.

Last week, Zimbabwe Electricity Distribution Company (ZETDC) — a Zesa subsidiary — told a stakeholders’ meeting that the defaults were a major cause of the increased load shedding.

“If we had our way, we would have switched off everyone who owes us and it’s provided for in the law. However, the powers-that-be do not allow us to cut off defaulters and they have good reasons for that,” a ZETDC official said.

Figures released by ZETDC indicate that government owes the parastatal $15,8 million while local authorities, mining companies, commercial and domestic consumers owe $147,9 million, $140,3 million, $118 million and $276 million respectively.

On the other hand, farmers and other parastatals owe ZETDC $55,3 million and $23,5 million respectively.

The distribution company, which has over the years found it difficult to deliver its services efficiently due to vandalism and unpaid bills, said it was seeking a five percent tariff increase to help improve its operations.

“The said average expenditure has been than the average tariff awarded. Hence the tariffs we have been awarded in the past have not been sufficient to sustain the minimum activities of the utility,” said the ZETDC official.

The country’s electricity tariffs are currently pegged at 9,86 cents per kWh and are likely to be increased to 10,36 cents per kWh.

A tariff of 9,83 cents per kWh was awarded in 2009, but was reversed and replaced by a 7,53 cents per kWh in February 2009.

There was no tariff hike in 2010 while a 9,83 cents per kWh raise was approved for 2011.

However, the Consumer Council of Zimbabwe (CCZ) said there was no justification for the State-owned power utility, to increase tariffs due to lack of improvement in service delivery.

“Over the years we have not seen an improvement in power generation but increases in tariffs to consumers,” said Phillip Bvumbe, the CCZ chairperson.

Zimbabwe needs about  2 200MW of electricity at peak but generates just 1 300MW, importing the remainder.

The southern African country is currently introducing pre-paid meters to improve it’s the power utility’s revenue and avoid resorting to charges based on estimates.

In 2012, Zesa handed out more than 5,5 million power-saving fluorescent light bulbs to households across the country to curb consumption.

Industry experts however argue that there is need for investments to be made in order to increase the amount of reliable capacity.

“The increase in reliable capacity should be made available at a competitive price,” Douglas Chingoka, the Zimbabwe Power Company corporate executive assistant.

Gloria Magombo, the Zera chief executive said her organisation will deliberate on the tariff application, interrogate the costs of production of electricity and come up with a tariff that will ensure viability of the electricity supply industry but also affordable to all customers.

“It is also important to note that tariff application does not necessarily result in tariff increase.

“Several factors are taken into consideration before a final determination is made,” she said.



  • comment-avatar
    Vukani Madoda 8 years ago

    And of course as part and parcel of the review the Zesa executive’s salaries and perks will need to be examined as these impact on oeverall cost-if an adviser is being paid $500,000/year one shudders to imagine what CEO Chifamba is taking home.Is the CEO of ESKOM in S Africa paid anything near what these guys are looting since everyone is so obsessed with regional comparisons?The Gonernment needs to put a cap to salaries in parastatals as these people are insensitive to the predicament of poor people.Could all these managers be asked to pay their electricity bills like everyone else just for three months so they can get a feel of what ordinary people have to bear

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    John Thomas 8 years ago

    The article seems to indicate that in fact consumers, that is private citizens, do not owe most of this money. And we already know that those in power owe most of the money. This article is a lie to justify an upcoming price increase

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    Ephrain Gumbo 8 years ago

    For how much longer do we have to tolerate this gross mismanagement, corruption and could not care less attitude? Here, all of us suffer unbelievable pains as these fat cats conveniently blame everything on colonialism but enjoy privileges that no colonial ever saw or enjoyed. We have to follow China’s example and purge our ranks of the corrupt and inefficient…make examples of them by executing them in public. This nonsense has to stop right now.

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    Chatunga 8 years ago

    The country is on a free fall, the chief executive taking the lead, pocketing a cool US$500 000 on every foreign trip. He and his henchmen are the chief defaulters.If Zesa is genuinely concerned, it must simply expedite installation of pre paid metre than being a crybaby

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    Mlimo 8 years ago

    Why pay for anything when you can steal it? This is the legacy of zanupf who set the standard and a very high standard too. There is not a thing that has not been touched by corruption and graft from zanupf.

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    Do you want the paying public to pay 5% to subsidize the non paying big shots. Collect the money you are owed and then balance your books — you will need a lower raise. If you force the paying public to help the fat cats, then the paying public will stop paying. Chombo will step in and write it off again. Zesa will crush

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    Mutorwa 8 years ago

    What consumers have not been told is that it costs less than 2c/unit of power to generate it from Kariba, which supplies over 60% of our electricity. The balance is imported at 6c, while the small thermals supply less than 5% power at about 12c. Hwange power costs about 5c/unit. The average is 3c

    The average cost of power in Zim should be no more than 7c when all is aggregated. But ZESA losses about 28% of its generated power before it reaches the consumer at the end. These technical losses can be avoided if management were honest. But they are not. In their budgets last year, they included USD16M for energy savers. They ignored locally made ones and imported from China, substandard lamps which have since expired, even though they were fictitiously branded with a so called popular brand. They bought the low quality via a South African company owned by the ZESA bosses themselves and Tender Board officials.

    This, has contributed to the technical losses above and add to this, the financial losses. The South African company had its own high mark up of over 200% on the low quality lamps. Investigate and prove me wrong. This is happening for all parts installed in ZESA infrastructure. You never hear of successes, just problems. But we have employed managers who say they are electrical experts, who only report problems and no successes and then come to consumers to pay for their inefficiencies and corruption. THERE IS A BIGGER PROBLEM IN PROCUREMENT, SO BIG THAT THE SALARIES MATTER IS A SMALL MOUSE COMPARED TO THE BLUE WHALE IN PROCUREMENT. CHECK IT OUT. I COMMENT AS AN EXPERT. Power in Zim should not be more than 7c

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    Saddened 8 years ago

    If as is asserted that Zesa is owed $ 818m by consumers who refuse or cannot pay, how on earth is a 5% increase going to increase revenue inflow? It will only increase their debtors listing. Just doesn’t make sense!

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    Just install pre-paid meters. Only then can ZESA recover this debt, period!!

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    @MUTORWA-what you have stated is correct and I have in my home workshop analysed these Chinese lamps to find out that they do not meet the stated quality and energy saving.I have broken a few of them to discover that the control circuits inside them are similar to the cheap cellphone chargers and have many cheap components and poor workmanship eg dry joints which lead to high rates of these lamps failing.
    As I have stated before ZESA has its operational problems and it tries to justify revenue losses by increasing tariffs every year.Zesa should not penalise those who pay their bills all the time by increasing the tariffs because it makes no difference to those who just refuse to pay like government departments and some ministers whether you increase your tariffs or not.You admit that the law gives you the mandate to collect what the government and others owe you,so why not use it instead of punishing the good guys.
    If your company is running at a loss then your salaries and allowances should also be cut to cut losses.This is what they do in civilised countries when the company start running at a loss.

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    Johno 8 years ago

    The consultant is getting $500000 per month not per year!

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    masvukupete 8 years ago

    As an entity Zesa as a Zim citizen can go to the constitutional court to be allowed to use its rights to switch off defaulters in order to collect its dues. Then your job is done. Even if some people in power would then override your decision but your job is done. By not taking the issue further you are neglecting your responsibilities as a citizen of the country and this is tantamount to incompetency. Following the direction of those who are preventing you from switching off is pure incompetence. We need people to start raising above petty politics to get the country going again. Jealousy Mawarire did it why cant you did it too. Zesa as a citizen should challenge the constitutionality of forced debt write off and its ability to collect “its” money through switching off. The infringement on Zesa rights is also an infringement on many other citizens’ right access to power, since most of us cannot produce our own electrical power.

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    Us the poor masses had our meters switched to prepaid and if we had arrears we have since repaid. Those in power, we are helping sustain ZESA while they are busy feasting and not paying their bills.

    God help us!!!!!!!!!!!!

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    Panda moyo 8 years ago

    Still nothing about the top brass salaries i see.u shd see the way they fly in and out of the country supposedly at workshops,from which nothing is gained.