ZESA bows down to political pressure on debt relief

via ZESA bows down to political pressure on debt relief | SW Radio Africa by Nomalanga Moyo 11 September 2013

The Zimbabwe Electricity Supply Authority has finally bowed down to political pressure and cancelled utility debts amounting to $170 million. The power utility company is owed in excess of $600 million by ratepayers.

But according to a statement issued Tuesday, ZESA will be writing off $80 million from the total debt owed by the farming community.

For domestic users $90 million will be taken off their combined bill, which translates to $160 per household, according to the figures given by ZESA.

ZESA said: “The debt relief to customers was devised after extensive consultations with farmers’ representatives and other stakeholders as a way of contributing to the general economic recovery and success of the agrarian reform in anticipation of the new planting season.”

The energy supplier said the adjustments will be reflected on customers’ October bills, with prepaid meter customers getting electricity units equivalent to $160.

However, ratepayers are not convinced this move is for their benefit.

Combined Harare Residents association chairperson Simbarashe Moyo said it was clear that this was a political move meant to benefit politicians.

“We are surprised by what the government is doing. First it was water bills, now electricity. This is happening at a time when residents have been contributing significantly to the reduction of their debts to ZESA through a plan that is already in place.

“For us the benefit to residents is nothing compared to what the politicians, farmers and businesses stand to gain. These are the people who since 2000 have been consuming electricity without paying and owe ZESA huge amounts,” Moyo said.

Moyo further criticised politicians for sending out a wrong message through the debt relief schemes: “What this essentially tells ratepayers is that if you don’t pay and five years lapse you can have your bill written off by politicians.”

Moyo said residents were also concerned that as a result of the debt cancellation measure, ZESA may fail to service its own debt to energy suppliers such as Eskom of South Africa.

“We will be hoping that the government has also put in place plans to take care of what ZESA owes its own suppliers as well as banks – otherwise this is a recipe for disaster which will see 24-hour blackouts,” he added.

On Wednesday morning, Harare’s central business district was without electricity.

Last month outgoing Energy Minister Elton Mangoma warned that ZESA would be thrown into financial difficulties if the forced debt relief, driven by ZANU PF deputy leader Joice Mujuru, went ahead.

Mangoma said ZESA was running a breakeven tariff regime, and unless ZESA gets paid for services rendered, it will collapse.

Even before ZESA announced the debt relief, reports suggest that it was already experiencing cash-flow problems as ratepayers withheld payments in anticipation of the government directive.

SW Radio Africa correspondent Simon Muchemwa said despite ZANU PF spinning the debt relief as a philanthropic move aimed at the majority of struggling Zimbabweans, it was party loyalists and senior officials who were the winners.

“They are the real beneficiaries as they own most of these farms and businesses,” Muchemwa said.